What ERP future trends should you watch for in 2023 and beyond?
Enterprise resource planning (ERP) systems are integral to small businesses, helping them streamline their operations and maximize efficiency. However, as with any piece of software, ERP industry trends are constantly changing. Therefore, it is important for SMB executives to stay informed of the latest industry ERP trends to ensure they have a system that meets their needs and helps them succeed through their digital transformation.
According to a recent survey conducted by Panorama Consulting Solutions, 81% of organizations are either in the process of implementing ERP software or have completed the implementation.
This article explores the top ERP future trends to watch in 2023 and beyond, which can help SMBs stay competitive in an ever-changing business landscape.
TREND #1: THE GROWING IMPORTANCE OF CLOUD ERP
One of the most prominent ERP trends is cloud-based ERP systems, which allow businesses to outsource their system management and infrastructure needs to a third party for cost savings purposes. The shift toward cloud ERP systems has been steadily gaining momentum, and this trend is expected to continue in the coming years. According to Gartner, by 2023, 65.9% of new midsize core financial application deployments will be public cloud technology.
For SMBs, cloud ERP software offer several advantages, such as lower upfront costs, easier scalability, and reduced IT maintenance requirements.
As more businesses recognize the benefits of cloud-based solutions, we can expect an even greater adoption rate, leading to increased innovation and competition in the cloud ERP market.
TREND #2: ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING IN THE ERP SOFTWARE
Integrating Artificial Intelligence (AI) and Machine Learning (ML) into ERP software is poised to revolutionize how businesses manage their resources, business data and processes. A recent report by McKinsey suggests that AI could potentially create between $3.5 trillion and $5.8 trillion in value annually across various industries.
The next big trend in ERP software is Intelligent Automation, which combines AI and automation technologies to improve process efficiency and help streamline repetitive tasks, such as data entry, inventory management, and order processing. By automating these core processes, SMBs can free up valuable time and resources to focus on strategic decision-making and growth.
For SMBs, the implementation of intelligent automation solutions can help reduce operational costs and increase productivity. A survey conducted by WorkMarket found that 60% of businesses believe that automation will save their organization at least 240 hours per year.
AI and machine learning can analyze vast amounts of data in real time, providing actionable insights and predictive analytics to drive better business decisions. These tools allow executives to access real-time data on key performance indicators (KPIs) and quickly identify areas for improvement. This capability is particularly valuable for SMBs that may lack extensive in-house data analysis expertise.
TREND #3: INTERNET OF THINGS (IOT) INTEGRATION IN AN ERP
The Internet of Things (IoT) offers the potential to connect various devices and sensors within a business, enabling real-time data collection and analysis while also allowing for preventive maintenance and improved asset management and operational efficiency.
As IoT devices become more affordable and accessible, their integration with ERP solutions will become increasingly important for SMBs. In fact, according to a report by IDC, the worldwide IoT market is expected to grow to $1.1 trillion by 2023.
ENHANCED SUPPLY CHAIN MANAGEMENT
IoT integration can significantly improve the supply chain for SMBs. Businesses can better understand their operations by integrating digital technology and connecting devices and sensors to track inventory, monitor equipment performance, and optimize transportation routes. By leveraging the data collected through IoT, SMBs can extend their supply chain visibility across all stages to identify potential disruptions and develop strategies to reduce costs and improve efficiency.
This technology provides real-time insights that enable businesses to respond proactively to customer demands, anticipate risks, and optimize operations. A survey by Gartner found that 61% of supply chain professionals believe IoT is a critical tool for gaining a competitive advantage.
PREDICTIVE MAINTENANCE AND ASSET MANAGEMENT
Predictive maintenance and asset management are the application of predictive analytics to identify potential problems that may affect maintenance schedules or equipment performance. This technology enables SMBs to monitor their assets continuously, detect any unusual behavior that could lead to future failure, and take preventative measures before costly repairs become necessary.
This is especially beneficial for businesses in the manufacturing sector, as predictive maintenance can help them reduce unplanned downtime and improve equipment efficiency. According to a study by McKinsey, companies using IoT for predictive maintenance saw a 20% reduction in equipment downtime and a 25% reduction in maintenance costs.
TREND #4: ADVANCED ANALYTICS AND DATA VISUALIZATION
Advanced analytics and data visualization is the application of sophisticated artificial intelligence algorithms to generate insights from vast amounts of data. By leveraging the power of AI, SMBs can gain a deeper understanding of their customer base and operations in order to make more informed decisions.
Data visualization further enhances this process by allowing businesses to visually explore their data. It can help SMBs uncover hidden patterns and trends, enabling them to make data-driven decisions that drive business growth and efficiency. A survey conducted by Accenture revealed that 79% of enterprise executives agree that companies that do not embrace data analytics are at risk of losing their competitive edge.
REAL-TIME DATA ANALYSIS
Real-time data analysis is the process of collecting, analyzing, and interpreting data in real time. This technology enables businesses to quickly identify changes in customer behaviors or operational patterns, allowing them to react instantly and take advantage of any new opportunities that may arise, as opposed to relying on historical data. This can be especially useful in industries where market conditions change rapidly, such as retail, manufacturing, and logistics.
Data visualization is the process of transforming data into a visual format that can be easily understood. For example, a business may use data visualization to create interactive graphs and charts that help executives quickly identify patterns and trends in their data. This can provide businesses with valuable insights into customer behavior, operational performance, and other metrics. Data visualization also enables businesses to uncover correlations between different types of data that would otherwise be difficult to spot.
TREND #5: EMPHASIS ON CYBERSECURITY
Cybersecurity is the practice of protecting networks, systems, and programs from digital attacks. Cybersecurity typically involves securing sensitive data, such as customer information or financial records, against unauthorized access. It also includes identifying potential threats and vulnerabilities in a system and taking steps to protect it from exploitation.
The increased use of cloud ERP systems and connected devices has made cybersecurity an even more pressing issue for businesses of all sizes. A study by the Ponemon Institute found that the average cost of a data breach in 2021 was $4.24 million, with SMBs being particularly vulnerable due to limited resources for cybersecurity.
ERP software vendors are continuously investing in improving ERP security measures, offering advanced features like data encryption, multi-factor authentication, and regular security updates. As the cyber threat landscape continues to evolve, we can expect cybersecurity to remain a critical focus for ERP vendors and SMBs alike.
TREND #6: INCREASED FOCUS ON USER EXPERIENCE
One of the ERP trends which you may have heard about is the User experience (UX), which refers to the overall experience a user has when interacting with an application or system. This includes factors such as usability, design, and performance.
ERP vendors recognize that an intuitive and easy-to-use interface is essential for SMBs looking to maximize their ROI on their ERP investment. As such, vendors are placing an increased emphasis on UX, offering features like personalized dashboards and interactive data visualizations.
A report by Forrester found that companies investing in UX initiatives can see a return on investment of up to 100%. As the workforce becomes increasingly tech-savvy, ERP vendors will continue to prioritize UX design, making it easier for SMBs to adopt and maximize the benefits of their ERP tools and solutions.
MOBILE ERP ACCESSIBILITY
Mobile devices are now ubiquitous in the workplace, and more businesses recognize that to remain competitive, they must offer mobile ERP functionality. This means allowing ERP users to access their applications and data from any device, regardless of operating system or location. ERP vendors are responding to this demand by developing mobile ERP applications and responsive web designs that enable users to access their systems from any device.
PERSONALIZED USER INTERFACES
Personalized user interfaces are user interfaces tailored to an individual user’s specific needs and preferences. This means that users can customize their interface, choosing features they need and hiding features they don’t.
ERP vendors are increasingly offering personalized UI options, allowing SMBs to create a UI that is tailored to their specific business processes. This makes it easier for users to find what they need quickly and reduces the time spent on training new employees. This can also enhance business productivity, as users can access the tools and information they need most efficiently.
A study by Adobe found that 48% of companies with a strong focus on personalization saw an increase in revenue of 20% or more.
TREND #7: VERTICAL SPECIFIC ERP SOLUTIONS
The demand for industry-specific ERP solutions has grown as businesses become more specialized. These solutions come preconfigured with features and processes tailored to the needs of that particular industry, making it easier for SMBs to get up and running quickly.
For example, an accounting firm might opt for a solution specifically designed for their industry, whereas a retail business might choose one tailored to their industry’s needs. This allows SMBs to maximize the benefits of their ERP system without investing in customizing the software themselves. According to a report by Allied Market Research, the global industry-specific ERP market is expected to reach $40.42 trillion by 2026.
CUSTOMIZABLE MODULES AND FEATURES
ERP vendors now offer more customizable modules and features, allowing SMBs to tailor their ERP solutions to their specific needs. This includes adding custom fields, modifying existing fields, and creating custom reports. This SMBs with more flexibility in managing their business processes and greater control over how their business data is structured and presented. This can help SMBs avoid the need for expensive and time-consuming customizations, ensuring their ERP system perfectly fits their business.
COMPLIANCE AND REGULATORY SUPPORT
ERP systems are increasingly being used to help SMBs comply with industry regulations and standards. This includes the ability to track, monitor and report on compliance-related activities, as well as support for automatic data encryption, secure login processes, and audit trails. By leveraging modern ERP solutions that offer out-of-the-box regulatory support, SMBs can ensure that they are meeting their requirements and avoid costly penalties without investing in additional software or services.
TREND #8: STRENGTHENED PARTNERSHIPS AND INTEGRATIONS
The integration of ERP data and systems with other third-party software and services is becoming increasingly important for SMBs and one of the emerging ERP trends. This includes the ability to connect CRM, accounting, HR, and other applications with their ERP system, allowing organizations to streamline processes across departments.
ERP vendors are now forging stronger partnerships with third-party software providers and offering tighter integrations out of the box, eliminating the need for costly customizations or manual data entry. This can help SMBs reduce costs while improving operational efficiency.
TREND #9: GREEN ERP INITIATIVES
Green initiatives are one of the top ERP trends which are increasing in popularity and gaining traction in the SMB space. ERP systems offer a way to reduce cost, improve efficiency and reduce environmental impact by automating processes, eliminating paper use, and reducing travel costs. For example, deploying an ERP system can help eliminate manual paperwork and facilitate remote collaboration among team members. This eliminates both unnecessary costs and carbon emissions associated with physical meetings or document transport.
In addition, as more companies seek to join the green movement, they’re looking for ways to track their own energy consumption and reduce their carbon footprint. An ERP system can monitor electricity usage throughout your different sites and departments to accurately assess energy consumption patterns and make improvements accordingly.
By incorporating green practices into their ERP systems, SMBs can improve their environmental footprint, enhance their brand image, and attract eco-conscious customers. A survey by Nielsen revealed that 66% of global consumers are willing to pay more for sustainable goods and services.
ERP systems are now being used to optimize resources and processes across departments. This is done by collecting data from each department and using predictive analytics to generate real-time insights. This helps organizations identify areas of inefficiency, improve enterprise resource planning and utilization, and avoid costly mistakes or bottlenecks. For example, an ERP system can track production capacity and help manufacturers adjust their output accordingly. It can also be used to monitor inventory levels to ensure that stock is always available when needed without overstocking—a key challenge for many SMBs.
Energy efficiency is using less energy to perform the same tasks, reducing resource consumption and cost. ERP systems are now being used to track energy usage across all business functions in all departments and locations, helping companies identify areas of inefficiency and make improvements accordingly. By monitoring electricity consumption, businesses can better understand patterns in their usage and take steps to reduce costs by switching to more efficient practices or investing in renewable energy sources.
In addition, ERP systems can help organizations identify new opportunities for cost savings, such as automating processes or introducing smart devices that monitor energy use in real time.
The ERP landscape constantly evolves, driven by emerging technologies and changing business needs. In 2023 and beyond, SMBs should keep an eye on future trends such as cloud ERP and mobile ERP and solutions, AI and ML integration, IoT connectivity, advanced analytics and data visualization, enhanced cybersecurity, improved user experience, industry-specific solutions, strengthened partnerships and integrations, and green ERP initiatives.
By staying ahead of these ERP trends, SMBs can ensure they are well equipped to face the challenges and opportunities of the future business environment.