The Relevance of Enterprise Resource Planning

Enterprise Resource Planning (ERP) is an umbrella term for automated systems that combine multiple functions of internal business processing particularly in the capacity of the organization’s resources.  Although ERPs have evolved over the past years to the point where a Rip Van Winkle may not recognize their current implementation, they still exist and are by no means obsolete.  As long as there are human resources being managed by the ERP they will continue to be a valuable part of any organization.  

Human capital is generally one of the most risky areas of business.  It’s estimated that “on average, supervisors spend 17 percent of their time — nearly one day per week — overseeing poorly performing employees.”  Today’s current ERP include algorithms to identify underperforming individuals as well as those at risk for retention.  People are not only a valuable resource, they are also a complicated one.  More data and better analyzation tools can help managers make better decisions about talent management.

Deciding what will replace ERP isn’t easy.  The current model of cloud based ERP allows for a great deal of talent pooling on the software engineer side to cater products towards their customers.  In that model a company like Workday can develop a tool for a specific client and then scale it across their business giving them an edge against competitors.  This model encourages an evolutionary change not a revolutionary one.  

Discovering what the revolutionary change could be isn’t easy.  The iPhone made a lot of sense to a lot of people.  Now that it’s been enough years since its release that it seems a bit obvious in hindsight.  Look at the gadgets folks are carrying around and try to find a way to consolidate them into one.  The next level of ERP will take the collection of items on the tool belts of businesses and consolidate them further.