The renewal of an ERP (Enterprise Resource Planning) system is critical for many companies aiming to optimize their business processes and meet modern technological demands. BearingPoint regularly conducts systematic market research on ERP systems, identifying and analysing the current situation, changes, and trends. This study was conducted through interviews with employees in managerial positions at industrial companies in Finland.
Picture 1: The industries of the participating companies and the job titles of the interviewees.
About the blog series
In this blog series, we present the findings from the interviews, which are divided into four key categories: Technology, Key considerations, Implementation Projects, and Change Management. This blog post delves into the solutions and features of ERP systems. The results of the interviews examine the planned ERP renewals, current architecture and as well as key drivers and goals for the ERP renewal project.
All participating companies are planning to renew their ERP systems in the near future. Although the timing of these updates varies, the common factor is the need to upgrade current systems to better meet business requirements. The findings indicate that companies believe their current ERP systems limit the efficiency and flexibility of their business processes. This necessitates the integration of new technologies and improvements to the performance of existing systems.
The Current ERP Architecture
The participating companies exhibit the following distribution of ERP architectures: 40% utilize a single ERP system, 40% employ a hybrid model, and 20% operate company- or country-specific ERP systems. Most of these systems were deployed in the early 2000s and are now approaching the end of their technical life cycle, necessitating updates. On average, renewal projects are scheduled to be implemented within the next 2-3 years, indicating that companies recognize the need for system upgrades and have commenced the planning process.
The most popular choice was hosting data in service provider data centers, accounting for 43% of the responses, while 29% indicated they are using their own data centers. Additionally, 14% of the responses showed that companies are using Hyperscaler cloud services (Azure, AWS, Google) for their data hosting, and another 14% indicated that companies are sourcing their data hosting as a Software-as-a-Service (SaaS) solution.
The results suggest a preference for outsourcing data management to specialized providers, as indicated by the popularity of service provider data centers. However, the significant use of own data centers shows that some companies still prefer to maintain control over their data infrastructure. The adoption of Hyperscaler cloud services and SaaS solutions, though less common, highlights a trend towards more flexible and scalable hosting options.
Drivers & Goals for the ERP Renewal Project
The primary driver of ERP system renewal projects is the end of the life cycle of the existing ERP systems. Other significant drivers include the inability of current systems to support modern business models, the lack and poor quality of data, and sub-optimal technical architecture. New systems must be flexible, adaptable, technically optimal, and capable of integration with other systems.
Among the participating companies ERP projects aim to achieve technical agility and adaptability, and to promote business continuity and sustainability. Additionally, the goal is to standardize and harmonize processes. Research indicates that these objectives are crucial for companies to better adapt to changing market conditions and technological requirements. The development of business continuity and sustainability is essential for ensuring the continuity of operations even in the event of disruptions, while the standardization and harmonization of processes promote efficiency and consistency.
Conclusion
In the modern era, ERP solutions are still a pivotal tool for all companies. Mobile ERP applications are essential to support the processes as they allow employees to access critical business information and perform tasks from anywhere, enhancing productivity. Integrating advanced technologies like artificial intelligence (AI) and machine learning (ML) will most likely also continue transforming ERP systems and processes within them, but renewing the core ERP renewal is a stepping stone which needs to be tackled first.
In summary, ERP renewal is about strategically positioning businesses for the future. By adopting new and efficient solutions, integrating multiple technologies, and ensuring mobility, companies can create a robust and adaptable ERP environment, staying competitive and agile in the face of future challenges.