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​Are ERP ‘dinosaurs’ on the road to extinction?

David Gee (CIO) | Nov. 27, 2015
David Gee asks if the ‘big two’ ERP giants have seen their day and are making way for more nimble enterprise software players.

In a past life I was an IT consultant. During this time, I always found it rather interesting that the vast majority of organisations would invest millions of dollars into enterprise software marketed by the big three - Peoplesoft, SAP, and Oracle (before it bought PeopleSoft).

At the time, there was a constant stream of companies building business cases to make large investments in IT transformations.

Now, these projects were not easy; they were often delayed or not delivered at all. This is not surprising given that enterprise software is a complex beast.

But things have moved on since those days of client/server computing. Everyone's moving to the cloud and delivering services to their highly mobile user bases.

For the most part, the likes of SAP and Oracle have struggled to keep pace with this change. This begs the question: Are these ERP dinosaurs on the road to extinction?

Will the force awaken?

The release of the latest Star Wars film, The Force Awakens, reminds me that there's a new force that has woken up and we are now seeing a fresh class of apps that are attacking what was impregnable territory.

Vinnie Mirchandani discusses this in his 2014 book, SAP Nation 2.0: an empire in disarray. We are seeing pure cloud players such as Salesforce, NetSuite, Workday, and Ramco, taking on the ERP behemoths.

We've reached a tipping point as these new cloud and mobile-enabled solutions - which operate 'capital free' at third-party cloud service providers - gain in popularity.

Most enterprises started using cloud (to cut costs) and mobile (forced by BYOD). There also was a shift within these organisations towards customer experience and digitalisation.

This shift has been kick-started by many organisations that use cloud services for storage (through AWS and Microsoft Azure, etc) and CRMs such as Salesforce.

These are key core enterprise systems, not subsystems. Such change is not going to happen overnight as enterprises have made significant investments and are slowly depreciating old assets.

But there are compelling reasons to stop and look at an alternative world.

Clearly if you were starting a new business, you would have to think long and hard about using a dinosaur and instead start with one of the new breed of cloud apps.

Enterprise apps build for cloud and mobility

Recently, I came across a company named Ramco - which is a subscription offering just like Salesforce. The surprising thing was that it is a fully featured ERP and payroll system that operates in the cloud and with 'mobility by design.'

It is not a point solution but a fully integrated 'platform-as-a-service' that provides rich functionality just like SAP and Oracle.

 

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