The Next Generation of ERP

Mention enterprise resource planning to CIOs, and you’re likely to get an emphatic response—either positive or negative. Depending on their experiences with ERP systems, they’ll either profess that it’s a game-changing technology that vastly improves enterprise processes, or claim it’s the centerpiece of an unwieldy project that consumes incredible amounts of time, money and resources without delivering on its initial promise.

Despite the divergent viewpoints, ERP remains a critical enterprise application for many organizations. That’s why CIOs must keep on top of emerging trends in this technology, which has changed significantly since the first platforms arrived in the early 1990s. (See “A Morphing Market”)

Two notable trends that could determine the future of ERP are the emergence of open-source solutions and the delivery of ERP applications as software services.

While open-source projects are not as mature as many of the commercial offerings, a growing number of organizations entrust key business applications to open-source software. And software as a service (SaaS) has already become a viable, cost-effective alternative for procuring applications.

If you’re a CIO planning to deploy ERP today, you face some key decisions. Should you choose a system from a well-established vendor, opt for a smaller player focused on specific vertical markets or implement a mix of applications?

Should you deploy commercial software or open-source ERP? Buy a license-based application or go with ERP on an SaaS basis? Get help with the implementation from a systems integrator or consulting firm, or do the work internally?

You also need to determine how much you can spend on the ERP implementation—not just for the application itself, but also for consulting, installation, maintenance, support and training. Other factors to consider include how well the ERP offering will integrate into your existing IT infrastructure, whether the application supports global operations, how easy it is to support the system on a daily basis and whether the ERP applications are easily scalable as the business grows.

It’s a complex situation, to be sure. But it also might be one of the most critical decisions a CIO can make.