8 Predictions on The Future of ERP: 2024 and Beyond
Explore 8 intriguing predictions unveiling the future of ERP systems. Stay ahead of the curve with expert insights into the future of ERP.
Explore 8 intriguing predictions unveiling the future of ERP systems. Stay ahead of the curve with expert insights into the future of ERP.
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For decades, the ERP has mostly stayed out of the spotlight, but what is the future of ERP systems?
Organizing and orchestrating from behind the scenes, ERPs have long been a steady source of support for all digital strategies.
While ERPs are clearly very important, they’re not exactly “disruptive,” let alone “trending.”
But, there are some signs that things might be changing for the ERP.
Advancing technology is breathing new life into the foundational platform and unlocking new opportunities for orgs. That is, if they know what they’re doing.
Forrester predicts that, in 2024, the ERP will finally shed its reputation as a “lethargic enterprise platform” (their words), and, finally, move into an active, value-driven role.
In this article, we explore eight emerging trends in this space and what they mean for your business in 2024 and beyond.
In 2020, the coronavirus pandemic shone a light on the value cloud ERPs bring to the table — remote work and business continuity. This, of course, spawned a mass exodus away from on-prem systems that, four years later, is still going strong.
Cloud adoption wasn’t exactly a new trend in 2020. Yet, in 2024, it’s on the rise and it’s gaining momentum.
According to recent data from Research & Markets, global cloud spending will reach the $130B mark by 2027. That’s almost double its 2022 value (a still impressive $64.7B).
Market research firm TechNavio predicts the global ERP market will grow at a CAGR just under 10% for the rest of the 2023 to 2027 forecast period.
Statista’s numbers look a little different, but researchers are definitely on the same page. Analysts predict the global cloud ERP market will hit $40.5B by 2025 – growing at an annual rate of 13.6%.
It’s easy to look at these numbers and write them off as a continuation of COVID-era mass-migration. But, that’s not what’s going on here.
Cloud adoption looks a lot different than it did in 2020. Most companies aren’t scrambling to move operations to the cloud. They’re already there. Today’s IT leaders are shifting toward holistic, integrated ERP strategies that allow them to move faster and get more from their data.
For example, a recent BCG survey found that many orgs are prioritizing investments that help them build resilience in the face of significant challenges. Think — the rapid rise of AI, inflation, climate change, the usual.
Some respondents admitted they were reluctant to invest in technology during a downturn. But, analysts pointed out that carefully-chosen investments in next-gen tech (aka: AI) are paying off. They’re helping orgs manage risk, drive growth, and keep up with changing conditions.
In Gartner’s Tech Trends: 2024 report, analysts predicted that, by 2027, over 50% of orgs will use industry cloud platforms (ICPs) to fast-track business initiatives. For context, that’s up from less than 15% in 2023.
ICPs combine cloud ERP, CRM, and other tools with PaaS, IaaS, and SaaS solutions. This creates a cohesive platform designed to solve for industry-specific needs.
That way, you can tap the niche capabilities you need for critical business functions without losing the agility and flexibility found in most “standard” cloud ERPs.
In a March 2023 blog, CIO’s Paula Rooney explained that industry clouds aren’t pre-made kits you can use to bypass critical parts of your DX journey. Orgs must think about choosing an existing industry cloud or building their own. This involves rethinking how you approach the entire tech stack.
Rather than orchestrating processes within a single department, you’re designing workflows that span many different assets and functions. This allows you to unlock the value in data coming from many sources.
Gartner advises IT leaders to look at ICPs as a complement to their existing stack. The core ERP should still function as a framework for supporting all line-of-business operations. ICPs help companies introduce new value-added capabilities via template, as opposed to starting from scratch.
As far as orchestration is concerned, you’ll still need to put in the work (mapping processes, identifying dependencies, designing cross-functional workflows, etc.).
Your best bet here is working with a partner. They can help you create custom rules that help you leverage ICP solutions to extend and enhance existing processes.
Another “hot” item on the Gartner Tech Trends list is platform engineering. If you’re not familiar with the term, platform engineering is an emerging strategy focused on designing and building an internal developer platform (IDP).
IDPs are curated environments that contain a collection of self-service toolchains, workflows, and reusable components , as well as knowledge, support resources, and services.
The IDP includes everything needed to support most development and deployment operations across an app’s entire lifecycle.
Orgs can design workflows aimed at improving developer efficiency, productivity, and UX — whether that’s streamlining setup, providing easy access to the infrastructure, or automating testing and deployment tasks.
For obvious reasons, platform engineering is becoming a critical lifeline for overworked IT teams. It helps them manage CI/CD pipelines, perform routine maintenance, and stay on top of other mundane tasks.
That said, the strategy is about more than simple automations and accessible toolchains. It’s about building an internal platform that “paves a golden path” for devs so they can reliably deliver a specific set of outcomes. The idea is, it aligns IT infrastructure with developer journeys and relies on dev feedback, process insights, and other data sources to drive targeted improvements.
Gartner predicts that, by 2026, 80% of large software engineering orgs will have internal platform engineering teams in charge of managing reusable components, tools, and services to accelerate app delivery.
This trend underscores the need for companies to get ahead of complexity and get the most from the resources that they have.
With generative AI and natural language processing, non-technical users might finally be able to reduce the burden on IT/dev teams.
We’re starting to see more vendors offer embedded AI and low-code solutions that make development accessible to more types of users. We definitely wouldn’t be surprised if platform engineers soon found themselves designing IDPs that serve a much wider audience.
When looking at the future of ERP, it’s no secret that ERP platforms have gotten a lot smarter in recent years.
Lots of companies are already using built-in AI and machine learning capabilities to deliver high-impact outcomes for their company, customers, careers, and communities. For years, they’ve been using AI to augment human intelligence, automate tasks, and optimize key processes.
Generative AI platforms like OpenAI, ChatGPT, and MidJourney have been in the news nonstop since late 2022. As a result, business leaders are familiar with AI and the possibilities it might unlock for their enterprise ERP strategies. For example:
If 2023 was the “year of AI,” 2024 will be the year AI adoption takes off — and, hopefully, AI strategies start to mature. TechTarget Analyst Mike Leone says that, already, early adopters are shifting away from GPT gimmicks and generic use cases and pursuing more targeted outcomes.
Microsoft put together an “AI year in review” highlighting several examples of companies already leveraging the latest AI innovations in hyper-specific ways. While this resource focuses solely on MS solutions, it does an excellent job showing the breadth and diversity of AI use cases.
Again, out-of-the-box is no longer cutting it. More companies are looking for more flexibility to tailor those platforms to fit their org’s unique mix of needs, pain points, and preferences.
For example, your finance team has different data requirements and responsibilities than, say, HR or customer service. Why, then, should all of their ERP experiences look the same?
Custom widgets and personalized reports embed into individual workspaces – connecting end-users to the data and functionality most relevant to their roles.
We predict that ERP vendors will continue enhancing and refining these tools – with more embedded intelligence and more user-friendly tools that anyone can use.
AI, of course, will also play a significant role in driving the human ERP experience. According to Accenture’s Technology Vision 2024, AI unleashes the next level of human potential. A few examples:
Accenture analysts also predict that emerging technologies like spatial computing and biometric tracking will also play a role in designing more human digital experiences.
Complex conditions are here to stay. Personalization makes it easier for the real humans on your team to embrace the agile, data-driven strategies you need to keep your business alive through the 2020s and beyond.
In 2024, ERP mobility doesn’t exactly qualify as a proper “trend.”
For many organizations, mobility is a basic utility – a key enabler for remote work, field ops, and mobile sales teams. Most ERP vendors have included mobility features in their “default stack” for at least a good decade.
That said, we predict that orgs will lean more heavily on mobile ERP capabilities to tap the benefits of a broader ecosystem.
With new challenges brought on by rapidly advancing tech, economic volatility, cyberthreats, the never-ending data deluge, and countless other variables, mobility has never been more important.
Per TechTarget, mobile ERPs capture data from end-users and sync that data across all docs, devices, and apps in the network in real-time. This, in turn, improves data quality, drives profitable decisions, and allows you to deliver positive customer outcomes.
Now ERPs have generally been able to do these things for years. What’s changed, is that companies can design platforms that bring in a lot more data. With tighter integration, orgs can connect IoT-enabled assets, intelligent workflows, chatbot conversations, customer insights, etc. with existing mobility solutions.
Orgs can design role-specific, data-rich workspaces that empower everyone to drive improvements — from any location or device.
Generative AI, self-serve analytics, and low-code tools take mobility benefits even further.
Generative AI platforms like OpenAI, ChatGPT, and Midjourney have been in the news nonstop for the entirety of 2023. It doesn’t look like the generative AI train will be slowing down anytime soon.
Markets & Markets estimates that global AI spending will reach $1,345.2 billion by 2030. IDC predicts that, by 2027, global AI spending will hit $500 billion. Gartner, on the other hand, estimates that figure to be closer to $3 trillion (also by 2027).
Within that same timeframe, IDC analysts forecast that 40% of existing jobs will either be eliminated or redefined due to rising generative AI adoption. They also warned that underfunding AI reskilling efforts will prevent roughly 65% of orgs from capturing the full value of AI investments through 2026.
Markets & Markets predicts that by 2025, we’ll see more advancements in areas like content generation, model training, and AI transparency and Edge AI will start gaining traction.
By 2028, edge AI will come into its own, improved gen AI models will produce better, more diverse outputs, and federated learning systems will improve in terms of scalability, security, and performance.
By 2030, explainable AI will emerge as a standard requirement for AI systems in every industry. AI-generated content will reach human-level sophistication and creativity, while advanced edge AI will be used across a wide range of environments.
Within the next year or so, It’s hard to say what any of this means for your future ERP plans (or – the future just in general).
Another emerging trend is that ERP vendors are teaming up – with each other and with suppliers, partners, and 3rd-party providers – to make it easier for customers to build the ecosystems they need to address specific needs.
ERP providers are increasingly designing systems that seamlessly connect with apps and services outside their own ecosystems.
Rather than forcing users to switch between apps like Microsoft Teams, Zoom, Slack, Workday, etc., these tools can now be embedded within the same centralized workspace they use to access data/features connected to their ERP.
Microsoft and SAP have a partnership that goes back more than three decades. But – the two software giants recently announced a new collaboration focused on integrating SAP success factors with Microsoft’s AI-enabled solutions – Copilot for MS 365 & Viva Learning and Azure OpenAI.
Eric Kimberling of Third Stage Consulting Group brought up an interesting point in his own ERP predictions post. He says that this big push toward vendor collaboration and interoperability could “deteriorate” the ERP system as we know it. If you can get what you need from alternative software platforms, without undermining cohesion or performance, why invest in an all-in-one ERP like a NetSuite or a Dynamics 365?
Eric doesn’t think the conventional ERP market is going away, but it does stand to lose market share to new entrants in the space.
On the whole, interoperability seems like a win for customers.But, it’s worth considering how any major changes in the market might impact future ERP plans.
It might be harder to find a partner that can support your exact stack. You might also face some challenges while designing your ecosystem and processes. Though, it’s not like industry cloud implementations are any easier.
ERPs have long empowered business leaders to chase opportunity, take on new challenges, and pivot when times get tough. And, that’s not changing — no matter what lies beyond the horizon.
At the same time, we’re in the midst of some serious disruption. With the rise of AI and the influx of data that comes with it, orgs must reimagine ERP investments, ecosystems, and strategies.
For more than 30 years, Velosio has helped clients streamline, modernize, and optimize operations. We offer a range of solutions, including: ERP consulting, custom implementation, and long-term support plans. Contact us today to learn more.