Brian Sommer gazes into the crystal ball and doesn’t see a whole lot of good news for traditional, on-premise enterprise resource planning (ERP) vendors.
In a ZDNet feature called Troubling, Challenging 2014 ERP Predictions, the CEO of strategy consultancy TechVentive and research analyst with Vital Analysis argues that enterprises are tired of patching, maintenance, usage audits and licensing increases, and would like to banish them all to the cloud.
“These software buyers are tired of bad behavior, vendor indifference and old products,” Sommer writes.” Given a choice, customers will look for true love elsewhere. I know I would.”
Sommer sees baby steps into cloud ERP changing into leaps and bounds. Arguments to keep portions of the systems on premise, even in private clouds, aren’t holding water anymore. Sommer foresees “interventions” where CEOs dissuade CIOs from further on-premise investment; there’s too much money tied up in maintenance when a cloud provider can manage that as part of the subscription.
Traditional ERP systems tend to be rigid and oriented toward driving internal processes. The new ERP, Sommer says, has to incorporate all business constituencies, from supply chain to prospect to customer, exploit social content and big data, and understand mobile applications and how they’re used in a business context.
While there’s a drive to the cloud for ERP, there are also clean-up projects – on-premise initiatives begun as long as 10 years ago that were interrupted by the 2008 recession and never completed. Sommer foresees some frantic catch-up in 2014, as company’s bottom lines have rebounded somewhat.
And Sommer cautions companies looking for big changes to the ERP systems against putting too much trust in integrators; they’re generally tied too tightly to specific vendors to give truly independent advice. He recommends talking to consultants and independent analysts – and more than one to balance out any biases.