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Unit4 2022 Predictions: ERP's New Look - Tailored vs. Off the Rack

vmblog predictions 2022 

Industry executives and experts share their predictions for 2022.  Read them in this 14th annual VMblog.com series exclusive.

ERP's New Look: Tailored vs. Off the Rack

By Dmitri Krakovsky, Chief Product Officer Unit4

Since their inception decades ago, enterprise resource planning (ERP) systems have functioned as a general-purpose tool. Companies that use them make tweaks and create workarounds to address their specific business needs but building custom ERPs at scale is cost prohibitive.

That's changing now. ERPs are evolving on a track similar to that followed by tech-forward companies that make customized products at scale for consumers, like Invisalign braces or mass-produced fashion brands offering a custom fit - both made possible by 3D scanning and printing technology. In the case of ERPs, modern cloud architecture, low code tools. machine learning and automation are the game-changing technologies.

Last year in this space, we talked about four trends in automation that were driving efficiency. Automation makes an appearance in a different context this year, along with other developments that signal ERP's evolution as we look ahead to 2022. Here are three trends to watch.

1.       Greater ecosystem awareness: ERPs used to be the center of the universe. Traditionally, ERPs operated as if the dozens or even hundreds of other systems companies use don't exist. That saddled customers with enormous integration costs since they needed a holistic view of their data.

Watch for more ERP systems to move toward greater ecosystem awareness in the months ahead, acknowledging that they need to coexist with and seamlessly connect to other products. It's a necessity because users must pull information from multiple systems that may be specialized by country, vendor information, etc. So much cost is associated with integration, and this trend will provide some relief.

2.       Smarter decisions with cleaner data: Decisions are only as good as the data they're based on, but as information flows in from the edge of the ERP system from users, it needs to be cleansed and validated. Simple data validation rules like matching cost center numbers from fields in an expense report aren't sufficient -a more holistic and nuanced approach works better.

Look for ERP solutions to integrate machine learning, enabling smarter decisions with clean data. Machine learning can predict the validity of data by quickly analyzing information in context, considering multiple factors to predict accuracy. This expedites the progression of data that enters the system from the edge (i.e., where users input the information) to the center, where it can be analyzed in context to enable faster, smarter decisions.  

3.       Automate everything: Another trend to watch in 2022 - full or partial automation of every ERP process that involves humans to approve forms or validate basic data. For example, ERPs have traditionally processed expense reports by checking data fields against a list of rules (cost centers, dollar amount limits, etc.) and either kicking the form back to the person who submitted it if it fails the initial check or forwarding it to a manager for approval if it passes.  

For example, we know from analyzing data that the manager approval process is largely pro forma; sometimes time-wasting while at other times not vigilant enough and opening the door for fraud and errors. Machine learning-enabled ERP solutions can automate approval or flag documents for escalated review using probabilistic judgment, automating the processing of timesheets, expense reports, paid time-off requests, bank statement matching, and other vital functions.

These trends will be especially meaningful for people-centered organizations in industries like human resources, education, the nonprofit sector, professional services and the public sector. ERPs were originally developed to manage resources in a production setting, and it's easier to automate processes that involve products than it is to customize processes that revolve around people.

But machine learning and automation technologies are providing breakthrough capabilities to enable ERP customization at scale, just as 3D scanning is revolutionizing orthodontics and bespoke tailoring. In 2022 and the years that follow, that will give people-centered organizations an edge by streamlining processes and planning so that they can focus on what they do best: serving others.

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ABOUT THE AUTHOR

Dmitri Krakovsky

Dmitri Krakovsky is a recognized technology leader with over 20 years of experience building business applications. As the Chief Product Officer at Unit4, Dmitri leads and facilitates the development of the ERP product suite vision as the company applies its pioneering technology to help organizations plan their long-term digital futures.
 
Dmitri has held a variety of senior leadership roles including Vice President of Products at Google and CPO at SAP SuccessFactors.

Published Wednesday, November 24, 2021 7:30 AM by David Marshall
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