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ERP Trends and Predictions for 2011

I may very possibly be the last to blog on the theme of technology trends and predictions for the 2011 with seemingly every blogger worthy of a following already having done so. But you know, in my role at Epicor, this is not something I think about each and every December. On the contrary, there’s hardly a day that goes by where I’m not on the phone talking to prospective and existing customers about Epicor’s strategy for the next 12, 36, or even 60 months, discussions that always include reference to emerging trends and how Epicor plans to contribute or exploit them on behalf of our user community.

So here are five areas that I believe will substantially figure in and shape the ERP world in 2011, plus some additional observations on how 2011 will deal with three of 2010’s big trends.

1. 2011 will be the year that ERP in the cloud finally comes of age

It’s certainly taken a while, lagging CRM and HCM, and although the debate continues amongst the media and analyst community about the “correct approach” and “businesses readiness,” demand has slowly been growing. Epicor was amongst the first of the larger ERP software companies to launch an end-to-end multi-tenant SaaS ERP solution with Epicor Express, and I blogged on the semantics of cloud versus on-premises back in September. Expect 2011 to be the year that ERP in the cloud joins other applications as a real deployment option, and for more businesses to expect rapid, secure, low cost access to new capabilities via the cloud as a standard app strategy.   

2. 2011 will be for HCM what the last few years were to BI

It will not have gone un-observed that Epicor re-entered the M&A world this month with our own acquisition of Spectrum Human Resource Systems, which was quickly followed by the acquisition of Enwisen by another ERP company. True, the larger “tier-1” or big iron ERP companies have been making moves in this space for a while acquiring companies like Workbrain, Temposoft, etc. This is not unlike what’s happened in the business intelligence space where companies like Business Objects, Hyperion, and Cognos have all been swallowed up as enterprise software companies seek to “embed” BI capabilities as core competencies, seen as too important to be offered as a third party. Expect 2011 to see more consolidation in both the BI and HCM space, but more importantly, look for how ERP vendors, Epicor included are making such acquisitions count for your business.

3. 2011 will see the emergence of smarter applications driven by industry best-practices

Earlier this month I took the topic of best practices to task, always a hot potato and so worthy of debate. I have also taken to heart some of the thought leadership coming out of analyst firm Forrester that discusses the emergence of what they call “smarter computing,” suggesting that ERP software will expand its capabilities along four dimensions as it becomes increasingly specialized to address complex industry-specific business processes. One of these dimensions “verticalization to fit industry needs” you could argue is not new. Granted, Epicor is already built to meet the needs of manufacturers, distributors and service firms and supports a number of key industry capabilities out of the box. Expect to hear more and see new approaches to this from vendors in 2011 including packaged best practice models for how best to implement and use ERP. These investments must continue in order to deliver even greater support for businesses' need to innovate (new product and service introduction) and improve business execution within industry.

4. 2011 will bring enterprise mobility to center stage

Unlike some of my peers I had been one of the staunchest members of the “mobile is not ready for prime time business” camp, with every year passing demonstrating another false dawn – until now. We technology folk are all too generous in our liberal use of the term “inflection point” but I have to agree that for mobile technology in the enterprise, 2010 was just that. We saw the acquisition of Sybase principally on grounds of mobile technology (as well as in-memory technology,) and Epicor also launched a portfolio of mobile solutions based in part on technology we acquired in 2009. Mobile devices like the Windows Phone and iPhone are no longer (as my Polish mother in-law calls them) just “interesting toys,” they are rapidly becoming, if not yet principle, indispensable computing devices. Expect to see new developments in this area in 2011 including a proliferation of easy to build, easy to use, quick to value and low cost apps increasingly delivered via the cloud.

5. 2011 will see the emergence of new user experience and user interface wars
    
This is an area I have tweeted about a fair bit and made some reference to in my blog post on Enterprise 2.0 but I have a feeling that in 2011 we will begin to see a paradigm shift in what we have come to think of as “user experience” and a resulting new breed of intuitive user interfaces. There has been much talk about rich internet applications (RIA) or business software that adopts many of the concepts we are now familiar with on the consumer and social web, and in gaming environments, but not much has actually appeared other than a few Silverlight controls in applications from Epicor and others. Slightly more perverse (not sure that’s the right word but it’s what came to mind) is that some ERP vendors have used modern RIA technology (e.g. HTML 5, Silverlight, Flash, etc) to simply recreate something akin to existing user experiences. Maybe that’s a natural step but expect to see some fairly exciting developments in this area in 2011. 

Additional observations and developments to existing themes.

1. Enterprise 2.0 moves from over-hyped to table stakes

Epicor has worked harder than many to be at the forefront of Web 2.0 adoption for the enterprise, and has tried hard (marketing needs aside) to demystify it for customers by showing the business value of such technology. However, we are not alone, and any ERP system that doesn’t accommodate the now common RFx requests for Social CRM, Enterprise Search, Data Tagging, Presence, Mashups, Activity Streams, Multi-channel Collaboration (or unified communication),and Wiki technology to name but a few will start to find themselves out in the cold. Will there be more innovation in this area? Maybe, for sure one can envisage some M&A activity as ERP vendors seek to make engagement platforms core to their architecture, but expect 2011 to be the year when vendors start demonstrating real business value from these investments as users begin to report on the benefits they are seeing.    

2. Two-Tier ERP strategies begin to mature via packaged offerings

The global financial crisis (GFC) more than anything helped precipitate a “popular uprising” amongst users of tier-1 ERP systems, who began to question the value they received for their (slated to increase) maintenance dollar, and the value of continuing to rollout multi-year single instance ERP projects. This resulted in the reinvigoration of the Two-Tier ERP strategy, which you can read more about in my post from June. In 2010, several ERP vendors found themselves, by virtue of their global and functional footprint and scalability, to be players in this newly resurgent market. However, many of them, Epicor included, helped service demand in a more “ad-hoc” fashion, almost treating each company’s need as a one off engagement and focusing more on enabling middleware than plug and play distributed business processes. Expect 2011 to deliver more cost effective and packed solutions to meet the growing demand.

3. Government adoption of electronic reporting/submissions reinvigorates XBRL

I couldn’t sign off without tackling this one (again) and okay, so the GFC put a lot of things on hold for a while, but don’t get too comfortable as governments will continue to increase demand for and in many cases mandate electronic submission of all manner of financial reports and documents in 2011. This is not just a US thing or a UK and Australia thing; it’s a worldwide shift that’s set to challenge businesses from China to Mexico. Expect to see the re-re-emergence of XBRL or derivatives as vendors seek to create standard approaches to help business tackle this ever burdensome requirement.     

Of course, as is the case with all my posts and stated elsewhere on this blog, the opinions provided here are my own and do not necessarily reflect the opinions, actions or planned actions of Epicor Software Corporation.

Happy New Year!

Posted by James Norwood, Senior Vice President, Worldwide Product Marketing, Epicor

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