We asked some of our leadership team their predictions for the future of Cloud ERP industry. Themes were ease of ERP integration, the advent of artificial intelligence and RPA, consolidation in the mid-range firms, and the impact on business change.
Increased demand for plug and play integrations
Presently, in the ERP space, we see a lot of effort going into integrating different corporate systems such as Oracle, Workday, SAP, etc. Moving forward, these integrations should work in a plug-and-play manner. For instance, in the case of automobiles, especially cars, if a tyre needs to be replaced, one need not necessarily need to go back to the manufacturer or the maker to replace it. You can just take a tyre out, buy another of the right specifications and get it replaced. Similarly, if the engine oil or a valve needs replacement, it can be done easily. It is simple plug-and-play. In the Cloud ERP space, we are far from this scenario and humungous effort is needed to migrate from one environment to another. It should be straightforward to integrate different corporate systems and secure them, and we believe this is the direction the ERP industry should be heading towards.
AI and robotics
Further, it also should embrace artificial intelligence (AI) in a more meaningful way. One can contrast the AI system to the brain and robotics to the limbs—the better the knowledge you feed the brain, the better will be the reflexes and response. It is the same here—it is all about data. Presently, businesses that have adopted systems such Oracle Cloud or SAP are still in the early stages of AI adoption. For businesses to realise the full potential and value of Cloud ERP systems ten years down the road, they need to adopt AI and RPAs (Robotic Process Automation) today. The more the data you feed, the more mature and automated your processes will be in the future.
Presently, there are issues of trust in artificial intelligence, its usage, and its benefits. But now with driverless cars being a reality, with the ChatGPT being a reality, confidence and faith in AI is increasing. The ERP industry too will start embracing AI more and more and we foresee newer and innovative solutions coming up. More importantly, companies are looking at Oracle ERP or Oracle Cloud HCM implementation as simple as a Windows installation. So, service providers must develop pre-built solutions and tools for smoother implementation and not keep reinventing the wheel.
Consolidation and industry-focused specialisation
The Cloud ERP industry will witness significant consolidation moving ahead. SaaS is the way forward and large software providers will need to change their approach. They must shift their mindset from merely selling licenses to having greater interaction and collaboration with clients and the people who do the actual implementation.
This would also mean wholesale consolidations in the mid-range companies. While tiny boutique specialists will continue to thrive, mid-range companies that do implementations and support will have to become larger to reap the benefits of scale.
Adding value would become key. So, the days of smaller companies doing the same thing are numbered. While this may result in lesser choices for consumers and businesses, it will lead to the rise of hubs of expertise. For instance, there will be an increase in firms that focus and specialise in certain sectors such as financial services, higher education or the public sector. Companies will concentrate on different areas to set themselves apart rather than doing everything and trying to be a Jack of all trades
Rise of automation and analytics
There will be a focused drive to reduce manual work and build greater automation. For example, an organisation that works on multiple systems will seek to build interconnected systems—the investment management system should be capable of automatically communicating to General Ledger (GL). The same holds true for all the processes in a business. Automation will be key, and focus will shift from data entry to analytics to empower the team to spend more time analysing rather than just entering and reconciling data. This is important as focusing on analytics will offer valuable business insights.
In the last few years, there have been several changes going on in the environment. Businesses are coping with increased environmental pressures, mergers and acquisitions, rapidly changing technology, and the rise of AI. We believe that business change and looking at what can drive and help the firm overcome these newer challenges is going to play a much bigger part.