12 Changes Prompting Global ERP Consideration – and Reconsideration
ERP use and spending is going to accelerate and expand well beyond most current estimates. One big factor driving this is the simultaneous occurrence of multiple business change events – any one of which traditionally pushes a firm to consider investing in ERP, or reconsider the ERP software it already uses.
My research since the early 2000s shows at least 12 types of business change events that affect how a firm operates, is funded, competes, and is managed. Such events directly affect how and where a firm does business. As such, they test the capabilities and adaptability of existing business management software (in today’s broad terms, “ERP”). That includes the software’s ability to gather and utilize business data from within and outside the firm.
The more events that arise – whether one recurring, or multiple occurring – the more the software’s capability and adaptability is tested. The more the software is tested, the more likely the firm is to consider or reconsider software to help manage busniess better. Right now, it is not unusual for a single firm to experience all 12 of these events in a short time. And all indications are that these types of events are going to recur with increasing frequency in most markets through at least 2024. That suggests consideration and reconsideration of ERP on a global scale.
Top 12 Business Change Events Sparking ERP Action
- Changed business strategy, structures, or model(s)
- Core supply chain disruption, including manufacturing and transport shifts
- Loss or gain of large customers or contracts
- Mergers and Acquisitions (M&A)
- Major funding transactions by investors or by the firm itself
- Major new facilities (e.g., HQ, plant, operations, distribution)
- More or different lines of business
- New CEO, COO, CFO, CIO, CMO
- New or unexpected competition
- Rapid workforce increase or decrease
- Significant national or international requirement changes
- Supplier/Customer-mandated IT change
Small Business, Big Boost
As noted in my previous ERP post, small and mid-sized businesses (SMBs) will be a massive booster of ERP spending growth through at least 2026. Reasons why include:
- SMBs are often more disrupted by change than larger firms
- More SMBs report looking at, and looking for, business management tools to minimize disruption
- Useful ERP software is now exceptionally easy to acquire, and easier to learn
- Freemium ERP offerings act as “gateway” solutions that firms quickly rely on – and grow out of
- Larger firms are increasingly expecting or requiring SMB trading partners to provide more and better business data
- SMBs seeking more opportunity and revenues are building cooperative marketplaces on even simple ERP platforms
Upcoming posts will address more of the data regarding ERP spending growth. I will also examine how vendors and channel partners will have to create effective differentiation to secure market share.