As we have moved to virtual briefings, I have increasingly been excerpting short video segments (with permission) as part of my Analyst Cam series.
This time it is Geoff Scott, CEO of the Americas' SAP Users' Group. He has been a frequent guest in this series and on Burning Platform. Here he summarizes results from their recent N. American Pulse of Customer survey including:
- How does the COVID-19 pandemic continue to affect organizations’ operations?
- Who is making IT buying decisions today?
- Where are SAP customers placing their focuses in 2022?
- What technology is having the most impact on digital transformation efforts?
- What’s the status on migrations to SAP S/4HANA?
- What role is cloud playing in organizations’ current landscapes?
- Why does SAP talent and training continue to challenge SAP customers, especially with the “great resignation” affecting most talent sectors?
This truly is an abridged version, though as you will see I asked a number of questions. If you are an ASUG member you can access a much longer version here. And if you are not a member yet, as Geoff says you should definitely consider signing up here
ERP - Generation Next
I read Jon Reed's Diginomica interview with Rondy Ng, Senior Vice President, Applications Development at Oracle. He cites some very large cloud ERP customers - Bank of America/Merrill Lynch, FedEx, Kroger and Albertsons. Encouragingly, he also cites plenty of global coverage. Good to see that traction.
But what functionality have they deployed? I saw General Ledger mentioned a couple of times along with procurement and analytics. But no mention of manufacturing, logistics, banking/brokerage functionality, micro-fulfillment, or reverse logistics. I have heard Larry Ellison similarly use the ERP moniker in earnings calls and event keynotes, but never really discuss any operational functionality. Leads me to ask: Is that the new, shrunk definition of ERP - core financials and possibly human resources?
While I was pondering that, I found myself going down memory lane to 1995 when I joined Gartner. Gartner had coined the ERP term and they had made a conscious effort to bring in several new recruits with business process expertise. Tom Ryan, as part of the ILS service, brought warehouse management and broader logistics experience. Chris Jones, part of CIM, brought process manufacturing. As part of AAS, I brought financial and hr expertise from years at Price Waterhouse. There were several others who focused on PDM, MKT and other functional areas. We definitely contributed to a proliferation in TLAs but I know for a fact we drove vendors to sharpen their process breadth and depth. Talking of TLAs, I had coined one - AMM - Addressable Market Myopia for vendors who were narrow in their functional reach, but did not dare propose it to Gartner censors :)
When I left in 2000, I was confident Gartner would expand its ERP focus beyond manufacturing sectors. After all, in most western economies, nearly 3/4 of jobs were in the service sector. And each has unique books of record - insurance needs those around policies and claims, health care had unique clinical and compliance requirements and so on. The manufacturing sector itself was morphing significantly. The products are smarter with embedded software and sensors. The plant was becoming more autonomous. Asset management was no longer just about calculating depreciation for the CFO. It is about predictive maintenance, more sophisticated servicing via digital twins and augmented reality.
But Gartner has only inconsistently focused on this functional evolution. Many of the process experts they had hired in the 90s were gone by the end of the decade. If anything, it swung back to its IT comfort zone and has emphasized the architectural aspects of cloud computing. And, almost on cue, many ERP vendors made transitioning to the cloud their major focus of the last couple of decades. Functionality and process expertise took a back seat. No wonder, some vendors are shrinking their definitions of ERP to suit their limited functionality. And CRM, EAM and other categories have encroached on spaces ERP vendors have neglected.
I sense a new generation of ERP coming. The pendulum is swinging from a technology focus to a functional focus. The pandemic has sharpened industry specific needs. Telemedicine in healthcare, distance learning in higher education, virtual open houses and digital mortgages in real estate are just some of the examples.
Just last week, I had several reminders of the functional evolution. Zoho gave me a pre-briefing on its updated Zoho One suite. It will officially be announced in a couple of weeks, but the suite has now grown to 45 applications. SAP has lined up 9 briefings for me across its verticals. I met with Mike Ettling, CEO of Unit4 and we discussed how his verticals are evolving. I was part of a virtual event on Servitization and heard how automotive, construction and many other sectors are increasingly moving to "everything as a service".
Gartner coined the term ERP just prior to when I got there. But for a couple of decades companies had already been deploying MRP and MRP II functionality. We will similarly see a next generation. It may not even be called ERP - to shed the baggage the moniker has acquired with too many delayed and bloated projects.
But the market is definitely marching forward. One thing I am fairly certain of - the next gen of ERP will not suffer from AMM - Addressable Market Myopia.
Adding from a twitter thread with Jon
In fairness many other vendors have not evolved their functionality especially during the pandemic and with recent supply chain issues. Lots of brilliant architects but few process visionaries. Need both.
With brilliant architects but no process visionaries you would never get Amazon’s fulfillment center with chaos theory models, miles of conveyors and hundreds of robots. You would deliver the old process model.
October 11, 2021 in Cloud Computing, SaaS, Industry Commentary | Permalink | Comments (0)