If the first wave of ERP implementation was akin to an old-style cell phone — a useful but limited and inflexible tool — the second wave is like a smartphone, unleashing the tool’s full potential. Second-wave ERP systems are more versatile and agile, allowing organizations to adapt to rapidly evolving strategies and operating models. They support and encourage innovation rather than constraining it.

Second-wave ERPs can improve operational efficiency and customer satisfaction and potentially boost revenues. They cost less and are easier to configure and update, while better accommodating remote work — a post-pandemic necessity.

Cloud ERP is also a key enabler for operating model optimization and finance transformation. Along with standardized, improved processes and automation, these cloud-based systems can expedite the closing process and provide consistent, near-real-time data — a “single source of truth” that increases accuracy, efficiency and speed.

In contrast to on-premises ERP migration that can sometimes take years, cloud implementations can be completed more quickly thanks to preconfigured workflows and built-in industry best practices. Cloud implementations are easily scalable, enabling organizations to expand into new markets and territories — moves that were frequently constrained by the limitations of old-style on-premises ERP systems.

Contemporary systems are rapidly expanding the frontiers of business. They are opening up new realms of opportunity and innovation and reshaping corporate processes and strategies. They enable low-code and no-code development, empowering workers without coding skills to develop, build and customize applications. These days, they typically include AI and machine learning, deriving greater business intelligence from the wealth of data that organizations collect and improving process efficiency by optimizing inventory acquisition and labor scheduling.

Organizations are integrating cloud ERP systems with other technologies, such as the Internet of Things (IoT) and third-party AI-driven applications, to streamline and automate core processes, improve the customer and employee experience, and greatly expand business visibility, both internally and externally. For instance, ERP systems integrated with mobile scanners and smart conveyors can track the location of goods within a warehouse (SAP). Additionally, AI-driven predictive maintenance technology integrated with an ERP system can help reduce downtime and save costs (Precise Business).

Organizations are increasingly adopting cloud-based vertical-specific applications, such as e-commerce systems in retail and enterprise risk management in financial services. These can be integrated with cloud-based ERP platforms to improve data flow and operational efficiency, linking sales directly to fulfillment, inventory, accounting and customer management (Netsuite). Vertical-specific applications typically embed industry best practices to optimize the organization’s return on investment.

Finally, by connecting the ERP with social media, organizations are getting a clearer understanding of their market so they can improve their marketing and customer experience.

In the next article, we’ll share expert guidance on how you can overcome key implementation challenges, accelerate time to value, and maximize your ROI.

Is a cloud ERP migration part of your business strategy? Let’s talk!