ERP

The Future of ERP Systems: Trends for 2019

The technology industry never sleeps, so staying in-the-know is key. Blink and you’ll miss the latest trend. Tech buzzwords like AI, IoT and Machine Learning may seem like gobbledygook to your average Joe/Jane, but in reality, they are revolutionizing the space and on the cusp of transforming every industry.

ERP is no exception. In an industry where everything keeps getting bigger, better and smarter, vendors need to meet consumers where they are and satisfy their sophisticated needs with sophisticated technology. 2019 is on track to be a watershed year for innovation, and ERP needs to keep up. So, what does the future of ERP systems and business software look like?

Consumer expectations have shifted – they want more, and they want it now

The consumer is king. And an impatient, savvy one at that. We are less willing to wait for things, in large part because of the instant gratification that technology has enabled us. We can file our taxes online, compare airline tickets/sneakers/dishwashers, even meet a potential life match at the click of a button, and in minutes. What’s more, we’ve become accustomed to the ease of use that we’re getting on our smartphones and tablets, and even our desktops.

Look at Quickbooks – they’ve taken something complicated, and made it simple. Their accounting software is easy to use, accessible, and affordable. And they’re absolutely thriving, driving demand from the small end of the market, to the medium and large end. Subsequently, Intuit’s revenue, Quickbooks’ mother company, is booming at a staggering $5.2 billion, up 36% since 2012.

But… Quickbooks isn’t enterprise resource planning. And, you can’t possibly get the same level of use out of a big complex ERP. Scrap that thinking. 2019 consumers will be less likely to buy that line of BS. The savvy, clued up consumer will challenge the common wisdom that ERP has to be ugly, expensive and complicated. Instead, vendors need to keep up with rapidly changing and evolving consumer behavior, or be out of business. And the demand starts with seamless user experience and good design.

Improved UX/UI

ERP gets a bad rep for being costly, complex and clunky, but also for not adopting new tech and new UX standards at the same speed as other user-oriented applications. They are uglier, slower, harder to use, and they’re not really getting better very quickly. So how do we remedy this? A bottom-up process needs to be in place. As Jon Innes, a UX consultant, explains in his article: “User-centered design depends on regular, rich interaction with users throughout the development process. Better feedback loops result in better designs. Unfortunately, insufficient feedback from the user (note the use of “user” and not “customer”) is the norm in enterprise software today.”

If user-centered design rests on interaction between user and developer, this is not an easy feat. The development team is tasked with rolling out functionality as quickly as possible, with little to no user feedback and no time to solve UX issues. But if the user is faced with a frustrating barrier to information consumption, consumer experience suffers. ERP software design needs to be intuitive, easy to navigate, and user-friendly; after all, what good is powerful software if it isn’t empowering its users? So, many successful software companies have a cohesive product management team in place, bridging the gap between Software Development and Design, addressing what customers are asking for, and translating that into the software.

Another “solution” from the small company end of the market is to buy lots of little nice-looking-but-not-feature-rich applications and try to wire them together in a Frankensteinian model. But what good is a nice interface with limited functionality? It’s just adding more pieces to an already complex puzzle. We took the road less traveled, and rolled out a full featured ERP that is a pleasure to use. We’ve faced challenges of our own though – Jonar’s design philosophy is sometimes difficult to adhere to, given the extent of the functionality that we offer. Simple design with complex functionality? Well, we think we cracked it. Turns out brains and beauty is a thing.

Easily personalized workflow

Being able to quickly and easily make changes to your software without paying a developer to execute those changes would be ideal. Traditional advice would recommend that you need to either adapt your business functions to your ERP or pay (in time and in money) for these customizations. Others would advise that customizations are a necessary evil so the best approach is just to be aware of the bumpy road ahead. More recently, the industry’s solution to this challenge is what is called “low-code” or “no-code” application building.  

But what if there was a better option? We took this “no-code” concept and applied it to creating workflows, business logic and basic customizations within ParagonERP. We call it the Rules Wizard. We’ve put the power back in to the user’s hands, which is virtually unheard of in the space.

Integrations to ecommerce

The year is 2040, and 95% of purchases are being facilitated by ecommerce… yes, you read that right. There’s no escaping the ecommerce monster.

Shopify is predicted to become bigger than eBay; the Amazon marketplace will account for 31.3% of total ecommerce sales in the US this year, and even Google is catching on with its own ecommerce platform, unbeknownst to many (for now).

With a staggering number of sellers in the ecommerce space (we’re talking millions), it is only logical that a large percentage of them will need to make the move to inventory systems that will manage the back-end to their storefronts. As their businesses grow, they will start to ask questions about how to improve their business processes: How am I going to account for these sales? Manage my inventory? Fulfill this order? Sellers will require an ERP that allows a true omnichannel experience. Vendors need to be able to facilitate this move with ecommerce integrations at the ready. Robust, easy-to-install-and-maintain back-ends for retail platforms will move from becoming a competitive advantage to a competitive necessity.

The continued shift to SaaS

The shift to SaaS continues as businesses adapt to the digital transformation. It is expected that by 2020, 78% of small businesses will be “fully adapted” to Cloud-based applications. The adoption of SaaS will continue at scale, starting with smaller businesses who can afford the quick transition, while large enterprise businesses may take more time to adopt. As Forrester reports, the move from on-premise to SaaS is significant, allowing rapid deployment, increased flexibility and scalability, and “the ability to assimilate new features and technology improvements as soon as vendors release them.”

Importance of Compliance

There have been a multitude of data privacy scandals over the past years, but 2018 propelled it to the forefront of our attention. Following the Facebook Cambridge Analytica scandal, and even Google’s GDPR violation, consumers became aware of the sheer volume of data these firms had collected, and how they were handling it. With the shift to GDPR in the EU (giving marketers worldwide the heebie jeebies), data awareness has skyrocketed, rendering us even smarter and more data-savvy, and understanding that data is a prize possession. Software companies need to facilitate data protection through access controls and quality control, and of course a strong security policy, or risk paying a king’s ransom: huge fines and the loss of their customers.

APIs that make seamless connections

We continue to become more and more connected in our business world, where the pathway between supplier and retail customers needs to have fewer forks and bumps in the road. This is achieved by creating easy standards by which information systems can talk to each other. Open APIs are crucial in creating a ‘community’, where customers who want to create integrations are not beholden to you to create said integration, and on the other side, the open API’s publisher gets to expand its user base without having to spend any money to develop niche industry software. The concept is borrowed from the idea of open-source software: create it, open it up to users, then let them run with it.

However, APIs require extensive documentation and just like any other application released to the public, need to be developed well, be free of bugs and be secure.

Blockchain technology and ERP

At its core, Blockchain is not so different from a regular database. It is based on distributed ledger technology. It stores information across a network of personal computers, making it decentralized, distributed and time-stamped, which allows for a transparent audit trail of any changes made in the system. It also means means no central person or company owns the system, yet everyone can use it and help run it. It stores information on things that happened in the past, but with unique attributes, and ensures that data cannot be changed retroactively. But what does it mean for the future of ERP systems?

Blockchain enables the secure sharing of information between disparate companies. There is an increased interest in bringing blockchain technology to ERP to reduce supply chain costs, and using its technology for logistics and transportation to improve tracking and quality control.

As Bas de Vos, director of IFS Labs, explains, “[Blockchain] could create a single version of truth where all […] underlying IT systems go through a simplified integration through the blockchain, getting a transcript of the asset history into the blockchain to make sure all the systems […] talk through it [rather than to each other]. That leads to much simpler integration between IT systems. […] Blockchain will not replace ERP systems, but be a complementary application that can simplify integration between parties and reduce vulnerability because of its innate security.”

At Jonar, we are fostering in-house innovation with our own ideas incubator, Jonar Labs, whose mission it is to shape the technological landscape of tomorrow. Jonar Labs has been investigating how to better harness and monetize blockchain technology for different technology industries.

…All of that to say

The speed at which things are moving in today’s technological space means keeping your head in the game is the only option. Failure to do so equals falling by the wayside. Businesses are answering to a savvy, educated consumer base whose expectations and demands are changing and growing relentlessly. It is crucial for ERP vendors to maintain an understanding of the continuous trends of the industry, so they can shift and react accordingly, allowing them to stay ahead of competitors, and fulfill customer requirements. Acknowledging and recognizing customer demands is one thing, but acting on and catering to them is a constant work in progress.

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One Comment

  • Florand Z. H.

    Its the first time I came across your ERP options and looks pretty interesting. Being able to get feedback from the user itself, would open a golden-door to improvement and tailored solutions for the future.

    Very good article, indeed.

    Thank you Francesca R.

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