In the current generation of ERP systems, almost all functionalities are integrated into one system with a Single Point of Truth. Only for very specific processes was then a separate solution placed next to the ERP package. This is a big advantage. However, the disadvantage of a large, comprehensive system is that an implementation or modification can become more complex and it is more difficult to respond quickly to changes in the market.
The ERP cycle is also important. A major upgrade now occurs on average once every eight to 10 years at most companies. That period is far too long in today’s world, where developments are happening faster and faster.
The solution is obvious. ‘In a way, we are going back in time to the first generation of ERP systems,’ says Joop van Es – partner at KPMG Enterprise Solutions and active for more than 25 years in guiding ERP implementations and optimizations. ‘As with the first ERP solutions, with next generation ERP the system consists of a digital core of purchasing, sales, finance, inventory management and production, surrounded by components for additional business processes. However, the mindset this time is completely different from the first generation. The “best of breed” approach was all about functionality. But with the new generation of ERP systems, time-to-market is leading. The system is set up in such a way, using standard components, that a company can respond at lightning speed to opportunities or other changes in the market.’
That ability to respond to market changes comes in many forms. For example, a key feature of the new generation of ERP is the ability to collect data more efficiently and analyze it more quickly. Better insight into customer trends then makes it possible to tap into a new sales channel more quickly. Or to respond to changing needs in the market through product development. Next-generation ERP also plays a role in the transition from product-oriented to service-oriented sales. We also see this in the construction industry.
