ERP is evolving as Innovation Gateways unlock creativity in enterprise IT

Profile picture for user Massimo Capoccia By Massimo Capoccia August 8, 2019
Summary:
ERP is evolving as Innovation Gateways bring new technologies that add flexibility to core systems, writes Infor's Massimo Capoccia

Graphic of digital teamwork and creativity © Jesus Sanz - shutterstock

In today's digital economy, organizations need highly flexible software solutions to support their agile response to transformational innovations. From escalating market demands to aggressive global competition, pressures from multiple directions are forcing enterprises to develop new go-to-market strategies and re-invent processes, top to bottom. This requires software that can adapt and evolve, as well. Legacy solutions, tangled in years of modifications and mired in on-premise storage limitations, cannot scale as needed to keep pace with change. A new breed of software architecture is changing the landscape, providing another option for companies that want to modernize and develop capabilities very specific to their industries.

Attuned to the future of business, some software providers are providing tools to help companies play a key role in molding ‘last mile', industry-specific functionality for their ERP solutions. Integration Platforms-as-a-Service (iPaaS), and Component-Based Development (CBD) architectures provide ‘Innovation Gateways' that open doors for making ERP solutions more extensible. These user-empowering tools also help IT teams create practical use-cases for Artificial Intelligence (AI), Machine Learning (ML) and the Internet of Things (IoT). Putting this creative power in the hands of front-line users will change the future of work.

The ERP evolution

ERP solutions today are vastly different than the rigid monolithic solutions of the ‘80s and ‘90s. For nearly a decade, the only way to obtain ‘last mile' vertical industry specialization was through costly and cumbersome modifications. These hard-coded features made upgrading a nightmare, though. Into the 2000s, the classic 80/20 rule prevailed. Nobody expected a solution to satisfy all their needs, and an 80% fit was considered acceptable. Trying to obtain that last 20%, though, resulted in invasive - and usually expensive - customizations that made future upgrades incredibly challenging. In some cases, a slew of disparate systems might be bolted-on, making seamless integration difficult to achieve.

Responsive software providers took on the challenge of creating and embedding industry-based last-mile functionality in their ERP solutions. This built-in ability, without having to resort to one-off modifications, gave enterprises the features they needed in one comprehensive solution. It also opened the door for multi-tenant cloud deployment. Forward-looking enterprises understood the opportunities and migrated to the cloud. Now, the challenge is how to build practical use-cases for technologies such as AI and IoT without spending months on building proof-of-concept initiatives that take years to deploy. Organizations need to be able to scale advanced applications easily and cost effectively.

Cindy Jutras, president of Mint Jutras, a research and advisory firm specializing in analyzing the value of enterprise solutions, recently wrote about this topic and drew some interesting conclusions:

A ‘one size fits all' solution is not the most effective approach to meeting the needs of a wide range of businesses. No software vendor can be successful in trying to be all things to all businesses. But with the right strategy, supported by the right technology, a single vendor can indeed address the needs of very different verticals.

Jutras goes on to cite an example of a software provider that has addressed these issues effectively - Infor. She explains that the Infor Operating Service (Infor OS) and the iPaaS model addresses a diverse range of verticals "in a way that avoids unnecessary complexity and eliminates the need for invasive customization."

What do business users want?

Enterprises expect a great deal from their technology solutions. Modernizing solutions requires substantial investment of financial resources, as well as time and commitment. The evaluation process can last months or years. Will last-mile functionality and flexibility meet all the criteria of enterprises? Do their internal IT teams have the capacity - and desire - to build their own use-cases? To answer this question, Jutras pointed to a recent survey on enterprise solutions in which business leaders were asked to rank evaluation criteria. The top two priorities named were:

  • User experience. Business users today expect the solutions they use at work to have the same intuitive navigation, highly visual content, and ability to personalize screens - just like the tools they use as consumers. Without a positive user experience (UX), the solutions simply will not be used.
  • Fit and functionality. The solutions must also be an appropriate fit to the person's role and the industry. Industry-specific features and functions are essential.

Usability and last-mile capabilities will only take an organization part-way to their goals. To truly optimize operations, exploit growth opportunities, and keep a step ahead of the competition, organizations need more advanced capabilities.

I want some more, please

Mint Jutras 2019 Enterprise Solution Study Table 1

Oliver Twist said it with an outstretched empty porridge bowl. Some enterprises have the same type of hunger-driven urgency behind their pleas for more tools, more applications, and more use-cases for innovative technologies such as AI and IoT. They know they want to modernize and take advantage of digitalization, but they need tools to help. Again, the Mint Jutras survey provides a view into expectations. Asked how important it is to add new features/functions without touching the core, 54% considered this important and 35% called it critical. The ability to personalize the solution without programming skills was also important, with 50% calling it important and 32% calling it critical.

Six components of modern ERP solutions and platforms

Enterprises considering ERP solutions should keep these six critical components in mind as they evaluate solutions. These attributes will help the organization remain agile and responsive to changing needs.

  1. Extensibility. Organizations can achieve ‘last mile' functionality with a focused solution that is built on component-based architecture and uses ‘loosely coupled' building blocks that can be assembled or personalized - without breaking the core network. This architecture and the Platform as a Service (PaaS) concept makes it easier to add specialized features and functions to the codebase - without risk of disrupting core functionality.
  2. Development platform. The organization's developers appreciate a platform that includes tools to quickly build and deploy apps optimized for desktop, tablet or smart phone.
  3. Middleware. It's important to be able to integrate certain legacy solutions with the new solutions. Middleware makes this possible.
  4. Data lake. A data lake typically resides in a cloud and an analytic-ready repository for data collected from people, colleagues, the Internet, or sensors embedded in machinery, fleet vehicles or the facility. Elastic and able to expand as needed, the data lake is commonly used in IoT applications to hold the vast amount of data collected from sensors. The unused data can reside in the data lake, in case it is needed during further fact-finding and analysis.
  5. Advanced business analytics. A cloud-native business intelligence (BI) solution with advanced capabilities for automating reporting and applying pre-built algorithms is important. Easy-to-use screens should guide users through processes, supporting those who may have minimal experience in data analysis.
  6. Artificial Intelligence. This may be one of the most important technologies to add to the organization's toolbox. AI solutions can combine Natural Language Processing (NLP), machine learning (ML), chat, voice and image recognition and a personal assistant to help automate tasks, predict and recommend actions.

Final take-away

As organizations strive to stay current and compete in today's digital world, their software solutions can either help propel them forward, or hold them back. Legacy platforms that are heavily modified or patched with layers of disparate solutions will not be able to meet the demand for advanced analytics, predictive science, AI and IoT applications, to name just a few of the transformative technologies now available.

Today's component-based architectures and Integration Platforms as a Service, or iPaaS, make solutions more extensible, providing enterprises with the ability to add or change last-mile functionality with less disruption to their core ERP systems. Enterprise IT teams need these valuable Innovation Gateways, so they can add apps and create industry-specific use cases.

It's all about usability, flexibility, and scalability. Organizations need to be ready for tomorrow - whatever it brings.

For more information on Infor IOS, here is a brief video.