Key ERP Trends for 2022

ERP is not what it used to be, declared Gartner in a 2019 report detailing the fourth era in the evolution of ERP. The focus of ERP is no longer only on enterprise-wide planning but has expanded into a wider ecosystem encompassing customers, suppliers, partners, competitors and stakeholders. In fact, Gartner predicts that by 2023, a majority of ERP systems in the enterprise will incorporate at least one fourth-era functionality.

So, what will this evolution look like in 2022? As an open-source, license-free ERP system provider, at metasfresh, we are continually mapping the ERP market for new features, capabilities and trends that can enhance business value for our customers. Here, then, are some of the key trends that we believe will define the ERP market over the next year.

According to Gartner, being AI-driven is defined as a principal hallmark of the fourth era of ERP. However, a 2020 UK ERP Trends Survey from Accenture revealed that less than a third of UK CIOs had plans to create an intelligent ERP platform with under 10% indicating that intelligent technologies were already a core part of their ERP.

Modern ERP systems — call them Digital Operations Platforms or Composable ERP — will increasingly be augmented by intelligent technologies like AI, ML, and advanced analytics. In fact, the prediction is that 2022 will see the rise of iERP where advanced automation and intelligence are no longer optional add-ons but built-in capabilities of the new ERP model. iERP will enable organisations to innovate data processing, create new workflows, extend the automation of routine tasks, and convert complex, unstructured data into actionable insights. By 2023, ERP data is expected to fuel 30% of all AI-generated predictive analyses and forecasts in the enterprise.

As with automation and intelligence, mobility will no longer be optional. The shift to a predominantly remote work model has only highlighted the need for anytime-anywhere access to critical business data.

Mobile ERP will provide always-on remote access to real-time data and insights on all critical workflows, allowing employees to conduct back-end and front-end tasks from their phones. This shift to a mobile interface will also increase collaboration across a dispersed workforce, thereby boosting agility and productivity.

At the same time, mobile ERP also represents a new security challenge for CISOs. In order to secure mobile ERP access to a remote workforce, CISOs will turn to digital-era security technologies, such as multi-factor identification, to establish employee identity before enabling access to sensitive information, as well as to VPNs to validate unfamiliar devices and Wi-Fi networks and secure ERP data.

Conventional ERP systems are often seen as a hindrance to agility since even minor post-implementation customisations can be incredibly complex and costly. As a result, there is an ongoing shift to composable ERP with modular and packaged capabilities that enable even citizen developers to create and deploy new business functions and services.

A key development in this area is the growth of low-code and no-code ERP that enables even less technically experienced employees to optimise ERP applications. Low-code ERP platforms with accessible, flexible, customisable, and user-friendly dashboards and AI-based conversational interfaces will expand the value of ERP data and insights to all employees, thereby democratising enterprise ERP systems.

In 2022, deploying generic ERP solutions across disparate industries, different organisation profiles, and diverse business needs will no longer deliver universal value. Therefore, there will be a transition to hyper-niche ERP solutions that incorporate industry-specific knowledge and best practices, provide specialised features and functionalities relevant to specific industries, and enable seamless integration with breakthrough technologies such as IoT and advanced analytics.

When it comes to hyper-niche, the open code model provides the best framework for industry-specific development. Open source solutions like metasfresh ERP provide all the standard tools required for a company to plan, control, and monitor their business processes, completely free of any licensing fees. And businesses will have immediate access to all features, including a range of industry-specific developments, well into the future.

Concurrently, there will also be a significant shift from the conventional one-size-fits-everywhere approach to ERP deployment as CIOs evaluate the business benefits of a two-tier ERP strategy against that of a single-tier deployment model.

A two-tier ERP strategy enables large organisations operating across multiple locations and subsidiaries to integrate Tier 1 ERP solutions designed for conglomerates with Tier 2 ERP solutions designed for midsize and smaller businesses. The benefits of this strategy include the ability to address specific business needs and localised requirements more effectively, while achieving significant cost savings in implementation, maintenance, and upgrades, and enhanced user experiences across the ecosystem.

If the ERP industry’s marketing orthodoxy is to be believed, ERP re-platforming is the
essential first step to digital transformation, innovation, and a new digital future. For instance, two major software vendors are trying to convert their customer base over to new offerings. SAP wants its customers to transition from SAP R/3 to S/4HANA, a changeover with the costs and complexities of an entirely new implementation.

Meanwhile, Microsoft’s transformation of its Dynamics NAV solution to Dynamics 365 Business Central is putting pressure on customers to shift to the cloud despite there being “no option to individually customise the system to the needs of the customer.”

Customers, however, seem to be pushing back against this constant incitement to migrate, upgrade and/or re-platform. In the case of S/4HANA, a next-generation solution launched in 2015, a recent survey of the two of the largest SAP user groups globally revealed that less than 20% have gone live with the new solution. The reasons for this lack of interest include high costs, lack of a business case, lack of an immediate need, and uncertainty about functionality.

Take the case of T-Mobile, one company that decided not to move from ECC to S/4HANA three years ago due to high costs and an impending merger. Another key reason for the decision was because the company had already made a large number of code customisations in its existing environment that was no longer supported by SAP. Instead, T-Mobile terminated the contract with SAP and signed up for third-party support to manage its extensive SAP ecosystem.

Many businesses are now turning to a mature third-party IT services ecosystem in the broader ERP market to drive innovation around the core while retaining control of their ERP roadmap. This approach allows them to leverage emerging technologies and innovate around the edges without the cost and disruption of core ERP re-platforming.

However, whether managed by an in-house technology team or a third-party IT service provider, limited license proprietary ERP systems have inherent limitations when it comes to core innovations. This is where license-free open source ERP solutions like metasfresh offer a viable alternative to closed source solutions in terms of continuous ERP optimisation and innovation. For instance, with the constantly growing community and partner ecosystem of metasfresh, businesses can have their pick of specialist implementation and innovation partners. Plus, they can retain complete control over their ERP system while enjoying the full potential of digital sovereignty and long service life.

Migrating, upgrading, and/or re-platforming are options rather than mandates. The ideal approach should be to define a company’s digital strategy and then determine the best ERP strategy that can enable it. As one third-party enterprise software support services company puts it, even moving ERP to the cloud may not be as urgent as vendors would have you think. Instead, ERP customers need to relieve vendor pressure and take back control of their application roadmaps by leveraging independent, third-party support to optimise their existing implementation and free up resources that can be invested elsewhere for more immediate value.

In conclusion, these are some of the key functionalities and capabilities that will define best-of-breed ERP in 2022. Of course, the critical challenge for most businesses is to integrate these capabilities into their existing implementation without having to resort to risky, expensive, and time-consuming migration, upgrade, or re-platforming programs.

Talk to us here at metasfresh to learn more about the future of ERP. Since 2006, we have been developing our metasfresh ERP software non-stop with open source components and under the open-source licenses GPLv2 and GPLv3. Our mission is to enable each and every company to access a powerful ERP system that supports digital transformation and fuels corporate growth. Get in touch today for more information and insights.