Postmodern ERP has transformed a tightly integrated and inflexible environment into something that offers much more flexibility and potential business value. However, the agility and flexibility that postmodern ERP affords, also brings added complexity.
“The benefits offered by postmodern ERP are very real, but the complexity inherent in its deployment carries with it the risk of failure and mounting IT debt if best practices are not rigorously observed,” said Mike Guay, research director at Gartner. “Postmodern ERP requires a strategic, holistic approach that can support business outcomes.” Many organizations are still taking a tactical rather than strategic approach to postmodern ERP, and in doing so, are uncovering some ugly but undeniable truths:
Truth 1 - You Can Increase Flexibility and Agility, or Reduce Complexity, but You Can't Do Both
Postmodern ERP provides a fundamental shift away from a single vendor megasuite toward a more loosely coupled and federated ERP environment. While this offers more business agility, business objectives will only be realized if the resulting complexity is managed properly.
Despite the rigid nature of ERP suites, they solved some key issues, including the need for consistency and integrity of data and processes. Conversely, in a postmodern federated ERP environment, flexibility comes at the price of increased complexity and workload in multiple areas. Left unaddressed, these issues could quickly erode the value users expect to get from postmodern ERP.
Truth 2 - SaaS Applications Will Not Solve Every Problem With Traditional ERP Approaches, and Will Introduce New Challenges
Many enterprises fall into the trap of believing that software as a service (SaaS) will deliver innovation on its own. While SaaS provides a potential platform, innovation is a process, not a software application. A business process change mindset is essential to achieve value through the flexibility SaaS offers. Organizations must have a well-defined strategy to help identify where SaaS applications can truly provide increased value.