ERP Today speaks with EAP vendor Nextworld’s Vito Solimene, founder and chief software engineer, and Lyle Ekdahl, member of the board of advisors to discuss the future of ERP.
In an increasingly platform-led era, is ERP, as we know it, dying? And, if so, how can organizations give their ERP systems a second life?
We are at a time where many businesses are feeling pushed to pay out for an expensive upgrade to the cloud. They are feeling their legacy systems stretched or even being made obsolete and, at the same time, more vendors are heading into a ‘platform era’, increasingly offering more as-a-service solutions to the market.
Speaking to Nextworld, the enterprise application platform (EAP) vendor, a member of its board of directors, Lyle Ekdahl, presses that the old approach to ERP simply doesn’t work for the reality of today’s operations:
“If you take a purist, rigid concept: one system to automate, streamline, manage and improve all your core processes across every function and every consultant, as it was conceived about 30 years ago, I would say it’s outlived its usefulness.
“Today’s ERP systems are frankly just a rehash of what came before and was originally designed in the run-up to Y2K. All those big vendors are still around and they tout newness because they have really ported those systems into cloud computing. From our perspective, that’s really old wine in a new skin if you will.”
It’s a refreshing kind of straight talk from the Nextworld board, but this is not to say the Nextworld team are anti-cloud native. Ekdahl is quick to tout the cloud-centric benefits of the ubiquity of resources, less time and work spent and focused on IT infrastructure – but:
“There are also new costs associated with the systems, quarterly upgrades and, at the end of the day, there are very few breakthrough new business functionality or benefits in those systems,” says Ekdahl. “We live in an age where a fundamental change has already occurred – it’s created a discontinuity that requires more than just standards-based processes.”
Instead, the state of business today is inviting vendors like Nextworld to address how they create value, reimagining the business model so as to create more automation and sustainable competitive advantage. Now, most of Nextworld’s customers seek to solve their most dynamic business automation challenges and explore unique business differentiation opportunities outside of their ERP systems.
Nextworld’s founder and chief software engineer, Vito Solimene shares: “What we found with an enterprise application platform, is it is becoming increasingly popular. Ours allows you to take an asset that you might already have, something aging, and bring it alongside something like Nextworld EAP and use that to help modernize your business.”
The technology comes at a prime time. Businesses are now not so shy about creating a mixed technology stack to create the best fit for their business needs, but with many different service contracts, it can often be difficult to ensure they are maximizing their investments across their stacks. That’s not to mention that many big vendor systems are not as future-proofed as once promised.
“With the dynamic nature of business, the thing that you want to look for is a system that will change with you, stay current, stay modern, stay relevant,” notes Solimene. “Too often you take all this time to rip and replace an aging system, and that system then becomes aging in its own right. You’re setting yourself up for more pain in the future.”
In what has become a clean and lean core pressurized industry, with high costs for rip and replacement every few years, it has been only natural for businesses to seek out customization and spreadsheets on the side.
“We see it a lot,” says Solimene. “Businesses running spreadsheets because their old systems just aren’t nimble, agile enough, so people end up writing a bunch of business process work in spreadsheets.
“I think a lot of the incumbent systems really treat customizations as a bad word. They are not welcome, and they start to incur a ton of technical debt. A lot of why you would customize a system is to differentiate yourself, and I think a lot of these older systems force you into not customizing and, therefore, being more like everyone else and losing your differentiated value.”
The thinking here is frustratingly right, and many businesses feel trapped between a rock and a hard place when it comes to innovating their software stacks. For businesses not wanting to go through an expensive ERP upgrade or ripping everything out and starting net new, but wanting to give their legacy ERP core a second life, a no-code enabled EAP platform is the best option here, says Solimene:
“The platform enables you to come up alongside, to come into an incumbent system, something that has been there for quite a long time and help modernize it. It’s SaaS, so it makes it easy to deploy and uptake. You can use all the facilities, all the tooling, all the power of the platform to modernize and bring value to your business.
Nextworld is now boasting customers from all the major ERP’s, who Ekdahl terms, the “usual suspects”, including JD Edwards, Oracle EBS, SAP, Salesforce, NetSuite, and more. Taking in the perspective of this EAP vendor, it’s true that those using only the traditional ERP as we have known for the past 30 years, surely must be searching for pastures new.
