ERP: back to the future

by bold-lichterman

Summer is here. An opportunity, since you will have a little more time to read, to offer you a fairly long article on the history of ERP and especially on its… future.

Indeed, although the ERP is one of the most structuring solutions of the company, and therefore over time one of the most adopted and widespread, it also remains one of the most commented and sometimes criticized. So what about his future? In what form will it appear tomorrow?

ERP, born out of chaos, to structure it

First of all, let us recall that in theory, the ERP is rather called ERP in good French: Integrated Management Software. The name ERP was in fact born from the English name, Enterprise Resource Planning. What should be remembered above all is that the PGI emphasized the integration allowed by this solution, while the ERP highlights the notion of planning of resources.

It should be remembered that at the origin of corporate IT, in the 1970s, each department or sector of activity of an organization developed, as best they could, its own “solution” (at the era we used to say software package or software), intended for its own needs.

Hence a situation which very quickly became quite “chaotic” in large companies because it saw completely independent software packages coexist for years. They were unable to communicate let alone exchange data.

We therefore very quickly sought to make the various internal systems communicate with each other, by developing specific interfaces. Before realizing that this was a kind of dead end, because efficiency was not necessarily there. This led to significant maintenance and updating difficulties, each software being independent, not following the same pace of development and not being designed or maintained by the same team. An endless puzzle.

1980s, on the way to unification

The number one objective of companies (for those who had the means) at the dawn of the 1980s: to make all the data coexist in a unique base. Which, at the time, was not easy. Consideration was only just beginning to be given to entering data once, to ensure consistency and avoid redundancy where possible.

Fortunately, ERP presented itself as an almost miraculous solution, with its ability to unify work environments and act on business processes and company coordination.

It was therefore welcomed with open arms, even if it was still heavy and complex in terms of deployment and possible adaptations, which was still in its infancy.

We then began to reason in terms of optimization, management of both stocks and human resources, and this even for large accounts (the ERP was not really within the reach of SMEs) who were starting to relocate their services to multiple national and even international sites.

1990s: the start of the technology race

Until now, IT in general and ERP in particular were reserved for companies of respectable size, with sufficient financial capacity and a team dedicated to the management of their information system. But two technological events of considerable scope will change the situation: the democratization of microcomputing, and the birth of the Internet.

Microcomputing, already present in many companies, will now be installed in the smallest SME, with the development of high-performance equipment for the general public: who could claim to use a computer at home, without having it on their premises. working?

This is when the ERP will give its full potential: ideal for large accounts, with the possibility of being consulted and supplied by the dozens of terminals now in operation, but also adaptable to SMEs / SMIs who will be able to benefit from its power with ERP solutions specifically designed for their needs or their sector of activity.

In this promising context, the Internet will end up giving ERP its legitimacy and its letters of nobility, by allowing it to communicate over long distances and to manage data even more easily. Here it is, ready to start other revolutions.

Available in different forms, knowing how to put itself within the reach of SMEs, it became the pillar on which many industries built their success and development.

But here it is at the dawn of the 2000s, facing new challenges: the Internet and network revolution, the wave of smartphones and mobile phones in general, the birth of the Cloud and SaaS, the Big Data tsunami. How did he react, how did he adapt? And above all, how will it now continue to evolve?

The ERP of the 2000s: communicating by nature

If the arrival of the Internet and the opening of the company on communication networks were a revolution for all computer systems in the first decade of our new century, not all solutions have been housed in the same holds true in terms of adaptability.

Indeed, some software packages or software commonly used (take the basic example of word processing) were not intended primarily to communicate and did not benefit in a dazzling way from the generalization of access to networks on the all workstations. Having access to an online library of “Templates” or illustrations is an interesting addition, but it does not fundamentally change the capabilities of Word or Powerpoint.

Conversely, all the solutions which are natively based on communication and data exchange have found in the Internet and TCP / IP communication a royal road to spread their wings and demonstrate their power.

This is particularly the case with ERP, which it should be remembered that it had from the outset the ambition to communicate all (or most) of the company’s departments, and to centralize data for better analyze and consult them. Hence the French name of ERP, management software Integrated.

ERP is therefore not negatively impacted by the surge of all-out communications which profoundly modified the IT of the 2000s: it only found reasons to be more efficient and efficient. What companies have understood, welcoming this development with a constant growth in sales.

The ERP of the future: the same and better?

With the multiplicity of collection and consultation terminals, including Smartphones which are now more widely used than computers, ERP has reached its full potential since the beginning of the 2010s. If the quantity of data to be processed increases exponentially , what gave birth to the concept of Big Data, it is not necessarily to displease the ERP, for which the Data is an essential raw material.

ERP does not seem ready to leave its place as the backbone for a large number of industries and all recent technological developments even seem to bring water to its mill.

We have just seen the case of Big Data, which rather reinforces the centralizing role of ERP within the company, as long as it is able to “digest” this additional quantity of data. But the same is true with other technological advances.

So, Internet of Things (IoT) is a tremendous source of power for ERP, a source that is not about to dry up if we are to believe the projections made by institutes such as Gartner. It is even tempting for an industrialist to equip himself with a new generation ERP in order to take full advantage of the plethora of information that smart connected objects can provide: how to really exploit this data without this centralizing axis?

Likewise, Artificial Intelligence (AI) Without doubt, it can only strengthen the ERP in its capacities and prerogatives. Because here again, it is in its original role: to analyze the data, to centralize, to report and to manage. The massive influx of data will certainly be difficult to manage by information systems, but the contribution of artificial intelligence could be preponderant to supplement the human factor in making relevant and rapid decisions … from the ERP.

Finally, the development of the Cloud and SaaS solutions gives ERP new avenues of evolution, which in no way condemns it, but perhaps gives it new wings. Because, limited to a localized infrastructure (on premise), it could experience difficulties related to the processing power necessary for new uses (Internet of Objects, Artificial Intelligence). But now, especially with the hybrid cloud, nothing prevents us from seeking even occasional additional power in the Cloud.

Finally, should we not conclude that ERP could still have a bright future ahead of it, since it feeds natively on all technological advances as long as they aim to better communicate and collect data more broadly? and more precise?

The contributor:

thomas-cattelain-silog-2016Thomas cattelain is responsible for sales at Silog. He is a marketing expert, particularly in inbound marketing.

With a sales background, he set up a marketing and communication department at SIlog. He is now in charge of aligning sales and marketing in order to generate hot leads. He manages the production of content as well as CRM monitoring.

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