ERP-as-a-platform?
In my 2 years as an ERP implementation consultant, I have worked with both Microsoft Dynamics AX and SAP ERP systems. Where a lot of different software programs are making a transition to subscription-based programs, I feel like ERP systems and offerings are making two transitions of which one is already ongoing.
ERP in short
ERP is the acronym for Enterprise Resource Planning and in short is a big computer program in which most electronic data from a company, for example financial data and product stock information, can be recorded and tracked. It consists out of different modules that communicate with each other through interfaces.
The ongoing transition
A real transition is that of the ERP system offering. The implementation of an ERP program is making the transition from Software-as-a-Product (SaaP) to Software-as-a-Service (Saas), where both Microsoft and SAP are prohibiting the installation of the newer (cloud-based) software on private client servers, making it easier for both companies to control their revenue stream by hosting the software e.g. also a subscription-based program through hosting and licensing
The future transition?
From a BIM perspective, this transition might be more interesting. Where the subject on platforms has already been discussed in class, I have a feeling this transition could also be possible in ERP software programs. In the earlier days ERP systems were more like a blackbox where data was the input and reports rolled out. Nowadays the data streams are real time and this asks for more comprehensive analyses and reports which the ERP suppliers cannot provide because of the specific knowledge needed. This is why a platform approach for ERP (EaaP) might be more value adding for both ERP customers and suppliers, because all software suppliers can focus on there own speciality.
I think the ERP core system can be seen as the platform itself. It exists out of the basic functions an ERP system needs e.g. basic financial and sourcing/sales possibilities. The producers can be seen as app developers that create add-ons (modules) for the ERP core system for specific analyses. The only requirement is that the interfaces between the ERP core system and the add-ons are standardized.
I’m really curious where the ERP systems will stand in 5 years. That it will be a “cloud-party” is obvious, but I’m waiting eagerly on the platform transition as just described as I believe it will generate more competition and more value for everyone.
Source:
https://www.microsoft.com/en-us/dynamics/erp-ax-overview.aspx#HowToBuy
http://go.sap.com/product/technology-platform/hana/implementation/deployment.html
Dear Rens,
Thank you for your blogpost, it was very interesting. I think most of the programs are now switching to platform-based systems, I do indeed also think that in a few years everything will be done cloud-based. However, I don’t know if it will create more value for *everyone* as a transition to any kind is usually paired with a downsize somewhere else.
Other than this, great piece!