5 ugly truths about postmodern ERP

Mike

Be prepared to tackle complexity to reap the benefits of postmodern ERP.

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. 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.

Truth 3 – Data Integrity Is Often Overlooked in Tactical Decisions

Maintaining data integrity is a top concern when dealing with a fragmented postmodern ERP environment. As digital business and the Internet of Things (IoT) move to the forefront, proper data governance and data quality will increase in importance. The usefulness of sophisticated high-speed analytics and algorithms will be undermined if the underlying data quality is not maintained.

Truth 4 – Integration Is Not Necessarily Easy, Despite What Vendors Are Saying and Selling

Integration has emerged as a critical component of postmodern ERP strategies, but solid integration strategies remain elusive for many organizations. As Truth 1 states, you cannot have both flexibility/agility and less complexity. So the ugly truth here is that there will be more integration challenges with postmodern ERP in hybrid and flip scenarios than with on-premises, monolithic approaches.

Truth 5 – Bimodal IT Provides a Great Approach for Postmodern ERP, but Few Organizations Have Even Considered a Bimodal Approach to ERP

The agility required to support postmodern ERP is not something that most organizations will have automatically; it must be planned for. Bimodal IT provides a great foundation to address that challenge. Many organizations consider bimodal approaches for smaller projects, but have not considered it as a means of managing postmodern ERP since ERP suites of the past were by nature not flexible and agile.

While bimodal IT adoption is increasing, a corresponding understanding of how to truly deploy bimodal capabilities is lacking. Enterprises must accept that bimodal is a must-have capability and influence a new culture of bimodal that applies to the whole enterprise, not just the IT organization – and consider adopting it as an approach to ERP.

Authored by Mike Guay, Research Director, Gartner

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