Nate Clark, Donald Dawson, Kevin Heard, Muthu Manohar
November 25, 2014
New enterprise-grade applications are fast replacing old enterprise resource planning (ERP) systems as companies move to become more flexible and more mobile. These new applications can be integrated with traditional ERP software into “hybrid ERP” systems to enable specific functions such as human resources, supplier management, and e-commerce to operate with greater agility and independence from old-style IT organizations.
Companies looking to implement such systems, however, must look beyond the hype surrounding them, and consider them in the context of an actual business case. That should include the benefits, such as greater customer and employee engagement and faster implementation, as well as the costs, among them the shift to a subscription-based purchasing model, and the security issues involved.
The key to success with these new hybrid ERP systems is to focus on the actual business value they will generate. We expect that most companies will find that the benefits outweigh the costs.
The corporate world is fast moving beyond the era of traditional ERP, driven by the need to engage more closely with customers, suppliers, and employees alike, and by a desire on the part of companies to leverage that engagement to differentiate themselves from their slowermoving competition. Linking new cloud-based functional applications to their legacy ERP systems offers companies the best of all worlds — but that doesn’t mean they should jump in blindly. As with every major IT transformation, companies must create a full business case in which they carefully weigh the pros and cons of these new systems, and then continue to measure the post-implementation results, if they are to realize the true business value of these programs.