ERP isn’t dead yet – but most execs are planning the wake • The Register
Seven out of ten C-suite leaders see a life beyond ERP as businesses have come to know it, but are divided on what the future holds for this big-ticket item critical to organizational performance.
Research conducted by Censuswide among 4,295 CFOs, CISOs, CIOs, and CEOs worldwide found the majority of organizations (70 percent) do not see traditional ERP as the future.
However, opinion is divided on where to go next. Thirty-six percent say they think traditional ERP will become obsolete in favor of a “composable, modular, flexible, API-driven, best-of-breed model.” Meanwhile, 33 percent think the future lies in “agentic ERP [with] autonomous, AI-driven decision-making,” according to the study commissioned by Rimini Street, a provider of third-party support services for Oracle and SAP software.
Rimini Street CTO Eric Helmer said the first option was better for organizations trying to move from purely historical reporting into real-time decision support across a number of business applications including ERP.
“You can put all the AI within that one particular vendor, which means that you are relying on that vendor to give you those particular outcomes. But in order to be able to do that, it’s a complete rip and replace of everything that you have today, and then to move on to their subscription-based cloud,” he said.
However, he argued the value of the ERP, in terms of AI agents, lies in the data, rather than the application.
“If you come to that conclusion, then the version of that ERP becomes quite irrelevant, because you have the keys to the kingdom already today. Instead of looking at the ERP as the place to put your AI aspirations, start thinking of more of a data source. You take the AI outside of the ERP, you ingest that data, and you do the beautiful things,” he said.
According to the survey, the vast majority of C-suite execs (97 percent) were satisfied their current ERP systems met their business requirements for the most part, dispelling the idea that users are in any rush to get to the latest SaaS platforms.
In a market dominated by Oracle and SAP, users are also frustrated by vendor lock-in around their largest chunks of enterprise software: 35 percent of senior managers interviewed cited vendor lock-in with limited flexibility and forced upgrades and migrations as some of the most frustrating pressures.
In November, Rimini Street client Kingfisher – which operates 2,000 European retail stores including UK brands Screwfix and B&Q – eschewed an SAP upgrade and move to the cloud in favor of using third-party support to shift its existing application to the cloud and build analytics and new services around it.
However, the path Kingfisher has chosen – and Rimini Street prefers – leaves out the 33 percent from the survey who see the future as putting AI agents into the ERP platform, as vendors like SAP and Oracle prefer.
Dixie John, senior director of ERP strategy at Gartner, told The Register that while using third-party support to extend existing applications might be a good tactical option in the short or medium term, eventually organizations will need to upgrade their ERP. This is because certain foundational capabilities – cash management, accounts receivable, invoicing – work better in a single application.
Users are becoming more risk-averse to a mix-and-match approach to building an AI agent system and are looking to reduce risk by opting for solutions from their existing vendors.
“It gives users the opportunity of a low-risk project if, in some cases, the software is coming as part of an update, they may not even be paying [extra] for it,” Gartner’s John-David Lovelock told us last week. ®
