ERP 2014… The Path to Greatness


As a new year dawns for the ERP market, the question to ask is: Is the ERP provider on the path to greatness – or not?



Both exciting and depressing developments in the last few months should evoke some thoughtful inquiry. Any technology purchaser, in any sector, but especially in the enterprise space where the stakes are so high, should ask this question: My future is dawning. Which company will enable my path to greatness through their innovation and execution excellence?

This is a difficult subject to tackle, since ERP is such a large, mature market and so many companies rely on and continue to adopt and upgrade ERP systems. From QuickBooks to SAP, we all rely on some form of enterprise system to keep our financial, HR and, potentially, other elements (customer, supply chain) in sync. To begin to shed light on the issue, let’s look at two dynamic aspects of the ERP market now: innovation and leadership.

1. Innovation — what is currently being developed and how well it is usable/implementable by the average user.

2. ERP company leadership — Leaders tell you a lot about where the company is going. How hard will they fight for progress? Are they on a path to greatness? Can they take their companies there?


Innovation should be the cornerstone of a technology company. Hats off to those who have continued to invest a solid percentage of their earnings in innovation over the years, as others have lost their way. The market is divided between continued investors/innovators, those left behind, and those in recovery. And size is not the determining factor. SAP vs. SYSPRO is a good example. SYSPRO, relatively speaking, may have outpaced SAP in many ways with their efforts to transform their software and user experience.

ERP providers have to deal with these 3 critical factors that should be driving their innovation:

1. Technology expectations — software buyers are looking for technology that reflects the state of the art, that is, what they already have on their smartphones.

2. Retiring population and entre̒e of the young — new employees are only reluctantly working on older generation technology. In fact, many young office workers or candidates for IT jobs will reject employment in firms that don’t have a systems portfolio that can support their own professional needs. Younger IT workers are often not familiar with older ERP or EDI-type systems. They won’t be coming out of college prepared to work on them.

3. Highly competitive ERP market — there are just so many offerings out there. Like the dowdy, depressing vs. the shiny, well-lit storefronts, a buyer’s first impressions of the technology will count for a lot, even though nuances of architecture may escape them. ERP providers should urgently address certain critical issues if they want to attract buyers and be players in the next decade.

So Where Is the Innovation for 2014?

User Interface (UI)

The UI is not just another pretty face; it has significant implications. New layers of technology isolate end-users (and some IT) from code, employing workflow and touch technologies to design new code, reports, etc. This is not just important to the new genre who doesn’t or won’t build custom extensions to your ERP, but also to the small enterprise that may not have resources. Purely from a user experience, elegant and easy-to-use systems trump the designs from the 80s that had multi-level menus and tons of data fields in dense screens. Those outmoded approaches are hard to understand even for trained users, what to say of new hires.

As ERPs extend their reach to both consumers and into industrial settings, the UIs will be more diverse. Users will be or are interacting with technology in very different ways — beyond keyboards and mice to a more mobile-like approach — motion, touch, and sensors. We already know that a change in light or temperature can turn on a system. We know that consumer apps allow you to remotely control your home while you are away. More 3D interactions and more immersive technologies for monitoring and control systems for industry are emerging. ERP has not been on the front line of these changes, which have occurred more from industrial applications and consumer mobile (think Siemens, GE, Honeywell, or Schneider on Android). But as ERP and operations systems converge, more innovation will be needed.1

But UI is more. That is, the user is the key: their actions and needs. A well-designed user interface makes understanding the technology easier from implementation on day one, to the day-to-day use to the day of reckoning — change. User experience either can be depressing or beautiful and functional. A good UI will be the key to positive user adoption (sales) in the future. Though one cannot boil down the momentum of the market and specific companies into one factor, developing an elegant and truly functional UI cannot be ignored if one wants to compete successfully for new dollars.

2014 — the Year of Social

In line with the user as the center of technology is the recognition that much of the interesting work we do is never recorded in ERP systems. Conversely, ERPs were not designed to enable people to communicate and conduct collaborative work on the data and analytics. Efforts to bolt on a social link fall short. Social has a radical impact on the way we work. Social collaboration will be a more integrative technology within the architecture of newer systems; however, it still needs to be governed by the enterprise in order to ensure privacy and security.


The cyber challenge is growing. We now appear to have reached the painful tipping point. This is not just an issue for retailers. One thing that news such as Target’s breach and Snowden’s expose̒ may have alerted business people to is how many times a day consumers, users, enterprises, and the government are being cyber-attacked with a great deal of success. Enterprises have under-invested in security. Although big companies get the press, it is the mid-market companies that are more often attacked. The relative impact to those firms is far higher than the large firms that can afford the surge in resources and money required to address the issues.

Data is at risk in motion as well as at rest. Many ERPs have outmoded sharing and collaborating technologies — their FTPs and other methods to move data are often homegrown and may not be able to keep up with the changing cyber challenges. Thus the enterprise software buyer needs to be certain that their ERP provider is investing heavily in security methods that secure their infrastructure and their data on the cloud and in motion. The ERP providers also need to keep developing novel technologies that will enable better security practices by users.

Visibility and External Forces

Our lives and businesses are impacted by the world in which we live outside the enterprise, the world of big data if you like to call it such. ERPs are limited in this area. The supply chain is beginning to reach out with visibility solutions,2 but most of those have huge limitations in their data models. Solutions that stream any format, providing geospatial and social information, are on the rise. These capabilities include event processing and analytics (CEP) that process these diverse data models to analyze and understand their impact on us. Some ERPs are looking to integrate some of these capabilities to help support remote operations. 2013 already showed the emergence of the Geospatial CEPs in the enterprise market. 2014 will show real market breakthroughs here.

More than Cloud

Cloud adoption continues to grow. But having a cloud application is no guarantee of capturing the market.3 However, as users experience the benefits of lower IT costs and reduction in disruption, demand has increased significantly. Thus ERP 2014 will show continued cloud adoption and concomitant growth in revenue.

Leadership — the Path to Greatness

One person can make a huge difference. Therefore, one has to ask, is the leadership on the path to greatness? (Of course, that CEO is most often a reflection of the team around them.) There are a few notable examples I want to point out that are highly important to where the ERP companies are going — or are likely to go in the future.

Recent events at Epicor — the replacement of Pervez Qureshi with Joe Cowan — have left the market and some customers in doubt about the owners’4 commitment to continued investment in modernizing the company, not just preparing to shuffle Epicor to the next PE.5 Pervez had inspired and built confidence in the customer base and put them on the path to progress — modernizing their solutions, yet providing the support required for those challenging enterprise upgrades. He had a strong commitment to employee and customer education to ensure full use of the software and return on investment for customers. We’ll be staying tuned to see what is next under the new management.

This last week, several of us attended a conference call with Jose Duarte, the new CEO of UNIT4. Jose became quite animated when one attendee asked him to contrast his life at SAP with UNIT4. He used words like “old vs. the future” and “agile.” What was most agreeable was his commitment to developing systems “ — that users want to use vs. have to use.” Clearly, he is jazzed about where UNIT4 is going (implementing many of the innovations mentioned above). Having met much of the management team over the years, I find these folks effervesce with inventive thinking and the progress they make in the market.

Jason Blessing,6 CEO of Plex Systems, was made famous by his statement, “The ERP market has enough zombie companies around, and Plex will not be one of those — ”7 (More on Jason Blessing’s talk). Since new ownership, investment, and leadership, Plex, which is a really progressive company to begin with,8 has expanded its product footprint and grown into a national and global player. IPO may be the path forward here vs. another flip to a YAPE (yet another private equity).

Another CEO of note in this discussion is Zach Nelson, of NetSuite. Zach, like many of his team, are vets from the Oracle and SAP worlds and are committed to the SaaS model of staying with the customer through the life of the customer, eschewing the drop-off model of on-premise. A fresh culture of relentless innovation has taken the once-ecommerce-focused company to a rich, multi-industry, full-enterprise (retail, wholesale and manufacturing modules) solution. Further, they have scaled from a smaller-company solution to claim some fairly large enterprises.

Conclusion — Recommendation

Sadly, and although there is a lot of market yet to be conquered, there are also probably too many ERP systems. Unfortunately, your company may have technology that will slowly and painfully go extinct. Thus beginning the journey to renewal and creating a path forward is imperative now. One never can rely on the word of one man — boards can remove the charismatic CEO who promised to keep your software on a respirator.


1 Read: IT vs. OT in Manufacturing: How Will Convergence Play OutReturn to article text above
2 Read The Journey to VisibilityReturn to article text above
3 You can enjoy these blog posts about news of SAP’s Business ByDesign, at AllThings D; at Plex’s Jim Sheppard’s blog:; and Cloud9 discussion with Zack Nelson of NetSuite. These blogs support my earlier statement about size a la SYSPRO. (In spite of large investments by SAP, Business ByDesign did not gain the big pop in the market that they had hoped for. Although never say die, as SAP invests more in cloud in the coming year. They did have overall solid growth on cloud, and, stated Snabe and McDermott, “ — we will accelerate the transition to the cloud — ” with more offerings.) — Return to article text above
4 Read Who Owns the ERP Market?Return to article text above
5 More on Pervez QureshiReturn to article text above
6 Plex Systems Raises $30 Million Strategic Investment from Accel Partners to Continue Transitioning Manufacturing Industry to the Cloud — Return to article text above
7 Read Plex Flexes Its MuscleReturn to article text above
8 Read Founding Fathers of the Cloud RevolutionReturn to article text above

To view other articles from this issue of the brief, click here.

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