When research firm Gartner introduced Enterprise Resource Planning (ERP) way back in 1990, little did anyone know that one day it will become so ubiquitous that businesses cannot do without it. Created as an extension to Materials Requirements Planning, ERP has come along way in the last two decades.

Though ERP applications have gained prominence across enterprises, web-enabled and open source technologies have emerged as serious challengers. Industry players say the future of ERP really lies in coalition. Gone are the days when a single technology played monopoly over the market.

End-to-end integration no longer means only integration of logistics, financial and HR processes. ERPs have come up with products in the areas of customer relationship management (CRM), supplier relationship management (SRM), product lifecycle management (PLM), manufacturing optimisation, environmental health and safety, etc and the trend points towards industry micro vertical specialization.

Also, it has been witnessed in the past few years that with the advent of service oriented architecture (SOA), increased flexibility of interfacing has made choices more open for customers. The increased penetration of business applications in the mid-market has also helped ERP implementation take shorter time. And it has helped the mid-size customers to a great extent as they cannot spare their scarce resources for protracted implementation making flexibility and speed part of the IT infrastructure blueprint.

What’s Next?
The evolution of new technology is reshaping the product offerings in ERP and enriching the user experience, increasing flexibility, and providing better insight. Software-as-a-service (SaaS) is starting to gain traction as a viable deployment option in some ERP market segments including India. Riding on the success of best-of-breed CRM and human capital management (HCM) applications, ERP providers are creating an environment wherein ERP is becoming a must-have for even mid-size businesses.

Keeping the drawbacks in earlier versions of ERP in mind, it is fair enough to say that model based, configurable applications based on SOA will be the next big change for ERP applications.  The key here is the shift of focus from the enterprise applications to end to end business process, and that is what going to drive the market.

The new business process will be mapped against today’s ERP functionality, but will be more than transactions – they will have rich analytics and will be supported by structured and unstructured data. Also the customers will be exploiting the applications to its maximum extent. “Companies that haven’t exploited the entire range of ERP offerings will now stretch the software,” says Subhomoy Sengupta, Group Director, Microsoft Business Solutions, Microsoft India

By end of 2010, experts say, buyers will be a lot savvier about SOAs, native web services, Web 2.0 technologies, business process platform and other application infrastructure products. Major application vendors are eyeing these technologies and will position their solutions as a non-disruptive technology for continued business. SOA is an area where most ERP product vendors have been investing and this is the future. Objective of SOA is to provide the customer with logical extensions to ERP systems. ERP biggies like Infor have also been investing a lot on employing SOA in its various business solutions.

The SaaS Saga
Delivering ERP on a SaaS model is a revolutionary approach in enterprise software and offers enterprises of all sizes a viable, scalable and flexible model that will take them to the next level in terms of benefiting from technology.

By 2010, Gartner predicts around 30 percent of new license purchases (in APAC excluding Japan) will be in form of SaaS, or delivered through the SaaS model. In a recent survey comprising 1,017 technology decision makers, Forrester found that worldwide adoption of SaaS in large enterprises is now at 16 percent, up 33 percent from the previous year numbers.

While SMEs have a viable option of monthly subscription in SaaS, large enterprises are bereft of flexible alternatives. But there are players who have started plugging the gap. Microsoft has a different view on ERP being deployed under the SaaS platform.

“The definition of SaaS has changed from Software-as-a-Service to Software-and-a-service,” says Sengupta while adding that best end-user experiences are delivered through a combination of hosted and on-premise software on a multitude of devices.

Reports from various research agencies suggest the worldwide SaaS revenue is expected to reach USD 14.8 billion in 2012 and the Indian market has the maximum potential. The commercial advantage that SaaS offers is that neither do the companies have to make upfront investments in technology nor do they have to devote time and resources on software deployment and maintenance.

Although utility of SaaS is expanding, the growth areas remain characterized by horizontal applications adhering to common processes, among distributed virtual workforce by using latest web-enabled technologies. Cloud can be delivered on a hybrid model. Some functions of ERP will be on premise (core operations) and non-core operations can be in the cloud. Decision making on this will rest with enterprises depending on maturity of IT model.

The web of convenience
Web-enabled technology most importantly gives customer an option to extend its access to multiple locations without getting worried about clients’ installation and desktop level management. Further, it offers options to build home pages, portal environment and more content rich pages to give user consolidated information in one screen.

ERP major Infor offers MyDay - a pre-defined web portal with separate home pages for various users like sales manager, account payable user, account receivable user etc. Being SOA enabled they can be deployed on multiple Infor solutions and it helps individual users to visit their own home page and get the work done.

With the Internet changing the rules of communication, business collaboration has brought a fundamental shift in how companies define and manage their business processes.

Companies no longer look at their business with unifocal attention; trading partners and customers are very much part of the game. As a result, they need systems that support e-business transactions, which is what web-enabled ERP fundamentally helps them with.

Web enabled ERP solutions have driven moved the organisational focus from administration to self-service, self-indulgence to collaborative approach, transactional to business intelligence. The solutions have now brought concepts such e-commerce, web-based procurement, business intelligence and CRM under its wings.

The focus is now on quick and simple reconfiguration of business processes, intuitive interfaces that require no training, real-time or near real-time data access, interactive and collaborative features such as real-time chat and white boarding, real-time analysis, and open access to any internal and external users. What is also important is the ability to dynamically re-configure and re-allocate assets on the fly based on current mission needs.

Single Intance Order of the Day
As the enterprises get more acquainted with the ERP applications, demands for single instance ERP solutions have become the need of the hour. Of late, enterprises have started preferring single-instance implementation over multiple-instance rollout.

“It is time that companies move on from the multiple systems their companies use today onto a one ERP system,” says Surya Bhardwaj, Vice President, India Applications, Oracle India.

ERP is an amalgamation of three most important components; Business Management Practices, Information Technology and Specific Business Objectives. ERP consolidation offers a single data store that serves the entire company, irrespective of its size and depth of offerings.

“Having a common, global and standardised platform not only reduces the complexity of multiple systems, which is the need of the hour, but also gives the flexibility required to expand into new markets,” he adds.

Rishi Bansal, the VP, Global Business of Merino Services, a global partner of ERP giant Infor echoes similar views. “We are deploying a single-instance implementation for Metito in Sharjah, Dubai, Egypt and Indonesia,” says Bansal.

Though single-instance implementation is being accepted by the organisations gradually, the adoption largely depends on maturity of the organisation.

“As long as there are provisions in ERP for consolidation across different business units, single-instance adoption will be a reality,” says S Sunderaraj, Senior Vice President, Indian Operations & Business Consulting Group, Ramco Systems.

gyana.swain@9dot9.in