Blog: ERP or Postmodern ERP - Understanding the differences
A History of ERP
The term Enterprise Resource Planning (ERP) was developed by Gartner in 1990 and is defined as 'the ability to deliver an integrated suite of business applications' that would include processes such as those found in finance, HR, distribution, manufacturing, service and the supply chain.
Through the 1990s-2000s they became incredibly popular, with numerous corporations around the world implementing ERP systems into their organisations. However, the rapid rate of technological progression at the beginning of the 21st century left many ERP systems outdated, ushering in a wave of negativity towards traditional ERP systems as they became too expensive, lacked the flexibility to embrace innovative technologies that were being introduced to the market, in addition to their lengthy and disruptive implementations. Indeed, what topped it off was the number of failed implementations that were criticised in the tech press during the time.
In the last decade, we have seen the introduction of Postmodern ERP systems. Again, a phrase coined by Gartner to describe a more flexible technology infrastructure.
A postmodern ERP strategy is to use the best applications possible in each particular area of your organisation while ensuring they adequately integrate with each other when and where necessary. These systems may be hosted either on-premise or in the cloud, based on the organisation’s needs.
In the same way that a chef at a high-end restaurant will carefully choose their ingredients, identifying the best possible products to be combined to make the recipe that they require, postmodern ERP takes (for example) the most suitable system for their finance operations, the most suitable system for HR and the most suitable system for their supply-chain management. These three separate systems are then connected via Application Programming Interfaces (APIs), enabling the customer to create a collective system that is unique to their organisational needs.
Postmodern ERP enables you to leverage best in class technology across your organisation whilst still benefiting from the advantages that sharing data between systems via integration provides. It also ensures that in the future you can upgrade or replace one element of your technology ecosystem without upsetting the rest of the business that are still enjoying the technology available to them.
Gartner’s Denise Ganly writes that “using a traditional ERP system” in this day and age “is like building a house on sand.” She maintains that the benefits of ERP “should be preserved where it makes sense to do so,” but that businesses shouldn’t deploy an on-premise suite from a “single mega-vendor” just because that’s the way it has always been done.
Postmodern ERP vs ERP: Pros & Cons
When it comes to choosing the right technology for your organisation, there is still some debate as to the correct route to take. Some businesses still prefer the stability that a long term, fixed contract with a single vendor can provide, especially in the public sector. This, of course, means the organisation can plan ahead with a known fixed cost and only needs to manage one relationship.
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