Finance departments don’t necessarily need to start from scratch in order to draw better data from enterprise resource planning (ERP) tools.
What’s the only thing worse than trying to pull relevant data out of your company’s old, expensive, ERP system? It’s going to the trouble of replacing your company’s old, expensive ERP system.
Finance departments don’t have to be experts in IT to know how much of the technology they work with is organized today: there are monolithic systems like ERP within the company, enterprise reporting systems and software like Microsoft Excel on individual desktops. Much like co-workers in different departments who are working towards a common cause, these technologies often don’t perform as though they are part of a whole.
The answer, according to a number of IT experts, is what is sometimes called “hybrid” ERP or in some cases “postmodern” ERP. However you describe it, this refers to a phenomenon whereby traditional ERP is more loosely coupled with cloud-based applications that make it easier to address specific business needs. A recent article on TechTarget explained why the shift is happening:
“Enterprises that have spent hundreds of thousands and even millions of dollars on these on-premises deployments are often unwilling to spend even more money to rip them out and replace them,” the article said. “They can instead surround their on-premises applications with web-based services and cloud applications, creating hybrid ERP models where some pieces — perhaps ‘core’ financials — are left on premises and select functions moved to the cloud.”
A post on FEI Daily earlier this month pulled in data from research firm Gartner Inc. that supported this idea. According to Gartner, 78% of companies are planning to combine core on-premises ERP with cloud-based tools in the next four years. In contrast, investments in traditional large ERP suites is on the decline, with only 2% expecting to put money towards such a deployment by 2020. This was the summary:
The movement of ERP to the cloud is the latest phase in how organizations deploy this technology. ERP suites are evolving rapidly into a federated, loosely coupled environment with much (or even all) of their functionality sourced as cloud services or via business process outsourcers.
You don’t have to jump on this bandwagon – unless you, too, want the kind of agility and improved performance that Gartner predicts will come with postmodern, hybrid ERP. There was a time when making better use of technology meant starting all over again, from scratch. Hybrid ERP, and the benefits for CPM are a lot less painful – think of it as more of a reboot.