What companies expect from sustainable ERP systems
First the COVID-19 pandemic, then the Ukrainian war, and now the energy crisis – the crises of the past and the present have left their marks in all industries. They have an impact on both the daily business and far-reaching strategic decisions. What does this mean for the future demands on ERP systems? We've discussed this question with Professor Norbert Gronau, Holder of the Chair for Business Informatics, Processes and Systems at the University of Potsdam.
How have the current crises affected (manufacturing) companies?
The current crises only highlight the fundamental requirements that have been observed by science and practice for some time now:
- The COVID-19 pandemic has mostly advanced the issue of digitalization and working from home. Most ERP providers already had a solution for this, but the companies' security concerns often got in the way of progress.
- The energy crisis has led to the development of new functional requirements that primarily address providers of ERP systems. For instance, it has become more important to attribute the energy costs to machines and processes.
In the big picture, most companies have one main goal: to make ERP systems more flexible and customizable. Only this way will companies be able to better prepare for current and future challenges, for example by adjusting processes, supply chains, and the spaces on the production floor and in the storage facilities.
Obviously, all of this has to be harmonized with the functionality of the ERP systems. Companies are therefore looking for a functional system that is tailored to their industry. Moreover, companies are attaching more and more importance to flexible technology, be it for hosting their software, the modular structure or the scaling of capacities.
What must ERP systems be capable of in the future?
The statutory regulations are becoming ever stricter. For instance, the supply chain has to be completely reported as of next year. Proof of company-specific carbon emissions will also gain significance in the future. These changing regulations must also be mapped by the ERP system, which is why the software has to be well selected.
Approximately 60 percent of the companies are already involving a selection consultant to consider all dimensions of the decision. The main goal is to carefully weigh the various goals of your own company. Reasonable compromises are only possible when these goals are clear since there is no "Swiss-army" ERP system that meets all requirements. Furthermore, all employees – and that includes the management – should be aware that the implementation of an ERP system is always accompanied by process changes. Companies should consider various aspects when choosing their software so they can get the most of it.
What trends can we expect in 2023?
In production, we can expect versatile trends, with respect to both functionality and technology. The crises of the last years and the related interruptions of supply chains in particular have made companies realize that they want to have better control of their supply chain. They also want to add transparency to the energy consumption in their own company and relate it to the product. This calls for changes and extensions of specific functionalities in ERP systems.
Another trend of 2023 will be artificial intelligence (AI). Today, the Industrial Internet of Things (IIoT) provides companies with a variety of data sources and volumes for analysis purposes. Moreover, hardware and algorithms are constantly improving. All of this paves the way for AI-optimized production processes in the future.
Resilience will also be an important issue in the various industries. The central question here is: how can companies run the best possible production program despite limited (financial) means and resources and interruptions in the supply chain. They key to success could be a renaissance of production planning.
And last but not least, updates of the ERP systems also play an important role. Only companies that frequently update their ERP system can benefit from innovations and new functionalities and thus comply with statutory regulations in the future.
