What do buyers want from sellers of ERP?

• Effective functionality to support business processes within ERP scope.
• ERP application access costs that are a good value initially and over time.
• Implementation support that is professional and seems interested in the buyer's success.
• No surprises on ERP costs or access rights after a deal is signed.
• Respect in a commercial relationship that is full of risk for buyers.
• Mitigation of buyer’s risks wherever possible.

Today the ERP industry does not deliver on much of these objectives, and this has been a degrading situation for years. Most reasons for this current status are squarely the ERP industry's fault—although some causation can be traced back to the buyers. Notwithstanding how we got here, it's a mess for which comprehensive change is coming and will accelerate as more buyers push back.

The Future for ERP

In short, the age of the big ERP company will end. The typical self-interest and arrogance of such large entities drives most of the obstacles for buyers achieving items on the want list shown above. Further, options for relief are limited as the smaller ERP companies have adapted much of this same culture—especially multi-tenant Cloud ERP providers. This current situation is forcing innovation in next-generation delivery of enterprise business applications as generally described by the following.

Open-source ERP framework: A decentralized framework for thousands of developers to build business process functionality and metrics objects. The major database, security, and hosting components and standards to complement such a framework exist today. Further, there are a few ERP offerings currently presented in this way—but are unlikely viable for inspiring confidence for use in large scale adaptation. To solve this, there needs to be a coordinated effort from capable and interested entities to formalize such an ERP framework in a way that builds confidence with many businesses and organizations. This will attract increasing numbers of developers, early adopters, and support/implementation companies. Then it steamrolls.

Far more options for buyers: Instead of largely being constrained by options with an existing ERP provider, the buyer will have a universe of thousands of developers building functionality and metrics that address specific needs—but again are compliant to the open-source framework. This is because such an economic model removes classic barriers to development businesses participating as they don't need too many users to break even before becoming profitable and their potential prospect list will be much larger than in the current model. This environment of broad and rapid innovation substantially does not exist with ERP sellers today. Further, independent developers have substantial barriers for creating and supporting extended functionality and tools in the current ERP industry paradigm.

ERP access cost control: The decentralized framework described above eliminates nearly all the factors that cause ERP costs to be unnecessarily high and get worse over time. Basically, the single vendor that believes they have unilateral control is removed from the equation. And in its place is a transformed area of commerce in which there are viable options for ERP functional objectives even after a major core ERP is implemented. Further, the effort to add, remove, or replace small and major components will be vastly easier than it is today. This creates the required competition to put the buyer in excellent control.

Cloud access with complete autonomy: Such a decentralized ERP framework with thousands of developers and support participants must be in the cloud for many reasons. However, in the cloud does not need to mean loss of buyer control. In this light, such a system must be designed to (1) enable containerized instances of the ERP framework that still detect and apply any software updates, (2) run on a buyer-controlled database (such as PostgreSQL), and (3) be hosted and managed by a third party entity of the buyer’s choice.

Regulatory requirements: For example, requirements from the FDA are mainly met by having discipline and auditability in original process and data design. Therefore, meeting such requirements can largely be achieved by systemic discipline in business process rules and data ingestion of the open-source ERP framework. Based on this, specific process objects from developers could be more easily compliant by virtue of developing functions and metrics within the framework.

Implementation resources improved: The presence of such a decentralized open-source ERP framework would attract many companies and people to help implement and support the increasing community of users. And such implementation consultants would no longer be constrained to only engage based on one, maybe two, ERP that they know. Instead they could become sufficiently familiar with the framework standards and best practices, and then bring in subject matter experts on the independent functional and technical components as needed. This would revolutionize the consulting industry for ERP implementations.

How this Transition Occurs

Material change against entrenched existing interests starts by the sheer force of ERP buyer’s demanding better options and better treatment. Further, the change described here presumes there is no plausible scenario in which this change can be delivered within the existing ERP industry and culture. Therefore, this consumer force propels the free market to more formalize an open-source ERP framework and subsequently the expansion of developers of new applications and implementation/support services that fit this model.

Future blog articles will expand upon how such an open-source ERP framework becomes real both technically and politically. Also we’ll how ERP sellers, implementers and ERP users can migrate to it.

ERP - Arguably the hardest commercial relationship to escape . . . So get it right at the start.

Information in these articles is based on the experience of over 1000 ERP projects conducted since
1996 in which the ERP buyer's interests and well-being was the sole focus.