Other IT systems may get the buzz, but the value of ERP remains

In the rapidly evolving tech world, where data analytics and cloud hype steal the headlines, the value of ERP is easy to overlook.

Reports of the death of ERP -- or rather, the death of the value of ERP -- have been greatly exaggerated. Again.

Every so often such claims surface, sounding the death knell for the value of ERP systems. Earlier this month a Forbes blog post, starkly titled "The End of ERP," triggered scores of comments.

Christopher Steffen, principal technical architect at Kroll Factual Data Inc. (a subsidiary of risk consultancy Kroll Inc. in Loveland, Colo.), wasn't privy to the Forbes post, but his reaction to the idea within the post encapsulated the consensus: "No way!" he exclaimed, laughing. (ERP isn't the coolest system out there, but industry folks are quick to champion it as the critical brains of the business.)

I'm convinced that a lot of the companies running ERP don't know what is really available.

Certainly there are "sexier" systems being put front and center by IT leaders. New York Life Retirement Plan Services is making a lot of investments in customer relationship management (CRM) and business intelligence systems, said Neal Ramasamy, managing director at the Westwood, Mass.-based division of New York Life Investment Management LLC, via email.

"Business intelligence is going to be the game-changer in our industry," Ramasamy said. "The better we manage and analyze data, the more effective we can be as service providers -- identifying trends and having a proactive, meaningful conversation with our client base."

Nowadays the value of ERP is clearly overshadowed; it's still holding the business together, however, and that's not about to change.

"These are things we use every single day in our organization," Steffen said. "We use Oracle for financial and accounting, and we use Salesforce.com for relationship management. Without those systems I don't even know where we would be, so the idea that ERP is dead is bizarre to me … it is a critical part of business processes in most businesses, not just our business."

Cindy Jutras, founder of enterprise applications consultancy Mint Jutras in Windham, N.H., shrugs off the recent resurgence of talk about the demise of ERP.

"If you define ERP the way I define it -- an integrated suite of modules that forms the transactional system of record of your business -- it ain't going anywhere," Jutras said. "You still need those transactions, and you still need an integrated solution to do that. Maybe you can get by with a bunch of piecemeal things, but that's not the optimal way of running your business."

The quiet evolution of ERP systems

Analysts say the value of ERP will remain intact as long as it evolves and that is happening. It's just not getting a lot of attention, Jutras said. "I'm convinced that a lot of the companies running ERP don't know what is really available [in the system] because all they see from day to day is what they're running," she said.

One sign of ERP's evolution is its expanding footprint. When Jutras began doing benchmark research on ERP, she used 24 modules. She now uses 34. Also evolving, she said, are different ways of delivering data contained in the ERP system to users and decision makers. New features and functions have to be made more user-friendly, and ERP vendors are responding with such elements as dashboards. 

For example, enterprise applications vendor Infor Global Solutions Inc. in Alpharetta, Ga., calls its dashboard a workspace. Users can access information in email, Microsoft Office or a CRM system, but they navigate from and work within the workspace, she said. "And when you do that, then it becomes less clear to the end user when they're in ERP and when they're not in ERP -- but that's actually a good thing, because it keeps them where they should be rather than working around the system."

Steffen, for one, is taking advantage of these evolutionary changes: the adaptability of Oracle Corp.'s E-Business Suite, for example.

"There are modules you can put on the [suite] that we have done and continue to do so," he said. "It's truly one of those things that can be as relatively simple or as complicated as you want it to be. It truly is a large-scale business finance and account system, and it serves our needs very well."

Let us know what you think about the story; email Karen Goulart, Features Writer.

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