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Is ERP alive or dead? Schrödinger's cat & the future of ERP

Just yesterday a number of us within Mavim were having a discussion about the future of ERP with one of our strategic partners. Looking simply at our customer base and their needs, you would presume that ERP is and continues to be a huge problem for business and IT leaders – from the design and (re)implementation to lifecycle management and value realization phases. However, our sparring partner (correctly) pointed out that ERP—even the post-modern variant—fails to address the actually issues for which it was initially intended. In our collective failure as a society to master ERP, other technologies (a la blockchain) will surpass and replace enough pieces of the current ERP landscape to warrant either the total removal of ERP or at least bring about the advent of a post-postmodern ERP that looks nothing like its extant brethren.

So what does that mean for the future of ERP? Is ERP alive or dead?

Further research led me to an interesting hypothesis by a couple members of the Gartner analyst community: until further information has been gathered, ERP should be considered to be the famed cat of Edwin Schrödinger—simultaneously alive and dead.

The Case that ERP is Dead

ERP as a concept failed to deliver on the central premise from which its name was derived – Enterprise Resource Planning. Not only did such tools fail to adequately cover the entire enterprise or address all the resources within the organization, but they often did not plan well. Furthermore, the idea that all organizations do enterprise resource planning in any monolithic sense was flawed from the outset. ERP has always been a rocky fit for public or not-for-profit organizations whose enterprise goals diverge wildly from the private sector. While most organizations do need a system to help facilitate the transactional activities that comprise business operations, the ERP systems of the last 30 years have not given organizations the diversity of options they need and taking the best of breed approach to ERP can be disastrous. Even Gartner admits their own fault in promoting ERP as a monolithic concept, saying " In our definition of postmodern ERP, we are essentially saying that the strategy encompasses whatever business outcomes the organization deems to be relevant or needed, and that its constituents can be included in its definition of "ERP," which increasingly means customers/citizens, suppliers and other external agents. Coupled with digital business elements and the IoT, the "enterprise" focus becomes less relevant." Rescuing the cat from its untimely demise requires a documented, agreed upon ERP strategy that comes from the business. The monolithic, functionality first approach to ERP killed the concept as we know it.

The Case that ERP is Alive

There is a case to be made that ERP is alive because the problem it was initially created to solve still exists – namely, the need for a system to support the transactions that characterize business operations and run across departments. In essence, ERP survives because enterprise still need to plan, execute, and measure business activities. In a rapidly advancing world, how we deliver this support may change, but that it needs to be delivered hasn't. The ERP of the future needs to take into account that most "enterprises" are no longer comprised of the contents contained within their four walls, but have reached a higher level of abstraction. The standard ecosystem of customers and vendors has been augmented to include a vastly complex network of partners, stakeholders, and competitors that are constantly shifting in their relationships to one another. For example, today you no longer walk into a music store to buy a record or CD. Instead, as you hear it on the radio, you use an app on your phone to identify the song, which you proceed to download and store either locally or in the cloud. For you (the end-user), the only bill you received was the small bill attached to your download which also may have been part of a subscription service depending on your level of interest. Today's world requires tight cooperation between multiple providers collaborating on individual customers in real time, which traditional ERP can't support.

What do you think? Is ERP alive or dead?

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