Says by 2016, the impact of cloud and emergence of postmodern ERP will relegate highly customized ERP systems to “legacy” status
By 2016, heavily customized ERP implementations will be routinely referred to as “legacy ERP,” according to Gartner, Inc.
Gartner said that as alternatives to monolithic, on-premises ERP and enterprise applications continue to mature, CIOs and application leaders must take action to address the fast-approaching reality of “legacy ERP.”
“The need for agility and responsiveness has led highly customized ERP implementations to an impasse, creating a subset of legacy ERP installations that must be dealt with constructively,” said Andy Kyte, vice president and Gartner Fellow. “Early ERP adopters, particularly large enterprises in energy, manufacturing and distribution industries, are paying the penalty of a decade or more of excessive customization. Businesses looking to improve administration today can take advantage of lower costs, better functional fit and process flexibility offered by blending cloud applications with on-premises applications in what we now refer to as ‘postmodern ERP.'”
The ERP suite is being deconstructed into postmodern ERP that will result in a more federated, loosely coupled ERP environment with much of the functionality sourced as cloud services or via business process outsourcers.
“When ERP was in its heyday, CEOs and business executives wanted reliable and integrated solutions, so they seized upon ERP as the way to provide this,” said Kyte. “Business stakeholders still want these same qualities, but now they assume that these qualities will be present in any software solution, and their requirements have switched to the twin concerns of lowering IT costs and seeking increased flexibility. A system that is not sufficiently flexible to meet changing business demands is an anchor, not a sail, holding the business back, not driving it forward.”
Gartner also made the following ERP predictions:
By 2018, at least 30 percent of service-centric companies will move the majority of their ERP applications to the cloud.
By 2017, 70 percent of organizations adopting hybrid ERP will fail to improve cost-benefit outcomes unless their cloud applications provide differentiating functionality.
