90% Cos To See Integration Chaos In ERP System

by CXOtoday News Desk    Mar 02, 2016

erp

The increasing complexity of the enterprise resource planning (ERP) application portfolio is driving the need for a well-defined application integration strategy. However, Gartner’s predictions are somewhat grim. According to the research firm, 90 per cent of organisations will lack the postmodern application integration strategy by 2018, which will lead to ‘integration disorder, greater complexity and cost’.

“Postmodern ERP represents a fundamental shift away from a single vendor mega suite toward a more loosely coupled and federated ERP environment,” said Carol Hardcastle, research vice president at Gartner. “This new environment promises more business agility, but only if the increased complexity is recognized and addressed.”

Building a postmodern app strategy is no easy task, Gartner continues. The hybrid systems, in which many businesses operate today, are leading to greater complexities in the app portfolio, which might lead to an increased risk in failure. But the biggest risk is that businesses expect vendors to take care of this strategy, which they won’t.

The shift to the postmodern world continues unabated. The majority of organizations now operate in a hybrid reality, leading to greater complexities in the application portfolio with new integration, analytics and governance challenges that can increase the risk of failure. There is a dawning recognition among end-user organizations that postmodern ERP is no quick nirvana. Many organizations moving from an on-premises monolithic state acknowledge they have little or no skills to support postmodern application integration. They have no postmodern application integration strategy, naively assuming the vendors will take care of it. Vendors are not doing this, which has left many organizations scrambling to integrate applications when they finally realize this grim reality.

Gartner also predicted that by 2017, 75 percent of IT organizations will have a bimodal capability; only half of these will manage to avoid putting their ERP solutions at risk. Almost 40 percent of CIOs are on the bimodal IT journey, with the majority of the remainder planning to follow in the next three years. Bimodal will soon be a fact of life, but a large number of organizations will make a mess of this change, not by moving too fast, but by failing to understand where to apply the two modes.

The risks of making a mess with bimodal IT are substantial, particularly if it creates organizational, architectural, technical or process damage or dysfunction within the ERP backbone. This could disrupt business operations, seriously damage business performance and come with a high price for remediation and mitigation.

Until 2018, 80 percent of enterprises will lack the capability to successfully deliver on their postmodern ERP strategy, says Gartner. “Twenty five or more years after ERP solutions entered the applications market, many ERP projects are still compromised in time, cost and more insidiously in business outcomes,” said Hardcastle.

“Organizations need to resist the temptation to succumb to pressure from business leaders to get started before the enterprise is really ready (and without a business-agreed ERP strategy). Business leaders must understand what it will take to ensure success. The blame for this, however, does not lie solely with end-user organizations that lack the experience and expertise to avoid many of the pitfalls. System integrator (SI) and ERP vendors have to be accountable to their customers in this respect.”

Gartner also predicts that in less than 2 years, enterprises will insist on ‘postmodern ERP’ project deployments that deliver proven value. End user organizations are increasingly questioning the value of investment in ERP solutions and are looking for new solutions and new deployment models that can deliver value quickly.

“The poor practices of the past and the associated excuses for suboptimal business outcomes won’t hold water any longer. The focus of postmodern ERP is on improved business agility and flexibility for example, through deployment of solutions and services that are better targeted at the business capabilities and address other needs such as user experience,” said Hardcastle.

“It really is time that the significant investments enterprises make in ERP solutions reap real benefits. ERP vendors and SIs must raise their game on implementation approaches, renovating and revisiting their own implementation methodologies for speed and with greater emphasis on the benefits realization activities,” she concluded.