ERP Entering All Facets of the Economy

Enterprise Resource Planning platforms have been around for several decades. Some people love them, some hate them. What is indisputable, however, is that organizations around the world are being continuously pushed to achieve greater efficiency and faster turnaround, and ERP is a way of achieving both goals.

According to Market Research Engine, ERP is expected to near $50 billion in total market value by 2024, infiltrating tasks as wide-ranging as sales and marketing to distribution management and finance. What’s interesting about the current phase of ERP development is the way it dovetails with a number of other industry requirements besides the perennial need to become more efficient. The rising acceptance of mobile and cloud-based applications, for instance, places greater onus on the need to build more flexible, user-friendly means of support. As well, as business processes become increasingly digital-oriented, ERP brings much-needed intelligibility to complex workflows.

Another factor contributing to the rise of ERP is that it has finally begun to trickle down from large enterprises to medium-sized and small organizations. In past days, ERP was considered a worthwhile investment only if the data enterprise was large enough and complex enough to warrant help. In today’s economy, even small operations find themselves dealing with geographically distributed infrastructure and multiple disjointed operations. All the while, the rise of digital services is putting all traditional business models at risk, large and small.

At the same time, however, the cloud is putting ERP solutions within the price target of SMBs, says SmallBizTrends’ Angela Nadeau. Traditional deployments often required not only high licensing fees but substantial infrastructure, in-house expertise and lengthy integration programs. The cloud does away with most of that, giving organizations the option to run ERP on a strictly operational basis that scales according to workload requirements and can be customized around key requirements.


Even public sector organizations are starting to jump on the ERP bandwagon, although in many cases they must confront different challenges than private enterprises. For one thing, say Mark Ressler and Jason Takenouchi, of law firm Kasowitz Benson Torres, public agencies might not have the leeway to craft customized solutions, since they must interact regularly with numerous other public entities. As well, the process of hiring outside service contracts is much more rigorous when public money is being spent, which means deployments tend to be slow and complicated. And let’s not forget the fact that most public agencies are dealing with legacy IT that is years behind anything found in the private sector.

Still, the ability for ERP to increase efficiency and drive down the cost of operations cannot be overstated, particularly when applied to a critical service like health care. HIT Infrastructure’s Elizabeth O’Dowd noted recently that simply applying a supply chain ERP solution to managing medical supplies can make a real difference in the cost of life-saving treatments. In a recent survey by Cardinal Health, 40 percent of organizations report having to cancel surgeries due to a lack of supplies, while nearly 70 percent say they’ve had to delay procedures for the same reason. In some cases, organizations have admitted to using expired products or otherwise placing patients in danger due to supply problems. ERP can vastly improve on this situation due to its ability to track and manage complex data sets and foster higher levels of visibility and collaboration throughout a wide range of business processes.

ERP is, and will likely remain, complex software. Organizations should not expect it to revamp their operational structures overnight. But in time and with the right strategy in place, it should go a long way toward transitioning processes from manual functionality to a more automated, intelligent basis that is more in tune with the needs of a digital economy.

Arthur Cole writes about infrastructure for IT Business Edge. Cole has been covering the high-tech media and computing industries for more than 20 years, having served as editor of TV Technology, Video Technology News, Internet News and Multimedia Weekly. His contributions have appeared in Communications Today and Enterprise Networking Planet and as web content for numerous high-tech clients like TwinStrata and Carpathia. Follow Art on Twitter @acole602.