ERP Predictions for 2019 by Sage

The Vice President for ERP at Sage, Robert Sinfield says that today’s digital businesses rely on all manner of software to help them maximise productivity and keep things running in the most efficient way possible – from processing payments, to gathering business intelligence and managing customer interactions.

One of the most important of these is Enterprise Resource Planning (ERP) software, which has come a long way since the age of the monolithic ERP of the 80’s and 90’s. Today’s ERP solutions are more powerful and capable of integrating all the processes essential to running a business, interpreting data and provide insights in real time.

Due to the various benefits, an increase has been noted in the number of businesses have now started to invest in ERP solutions across the region. The Middle East and North Africa (MENA) region has seen record-high enterprise application software reaching AED2.8 billion (US$760 million) in 2018, according to International Data Corporation. Cloud-based solutions are helping organisations of all sizes become more agile, efficient, and productive.

The market is expected to grow further as businesses reduce operational costs by implementing or upgrading cloud-based ERP software to drive their operations forward. But what exactly can we expect to see in 2019?

Here are our key predictions for the ERP industry over the next 12 months.

1. The cloud takes over
In a bid to optimize and streamline business operations, transitioning away from legacy ERP systems to cloud-based ERP has become increasingly compelling.

Businesses are recognising that cloud ERP offers the best solutions for today’s challenges, which is why the global cloud ERP market is estimated to grow to nearly AED139 billion ($37.8 billion) by 2021. The one industry exception to this trend is manufacturing, where analysts have predicted a slower cloud uptake.

In other industries, a whole host of factors are driving adoption, such as improving product quality, the need for greater mobility and providing real-time production and process monitoring. Given how fast modern businesses tend to grow, cloud ERP helps businesses cope with this growth and boosts business performance.

2. An AI upgrade
It is no surprise that artificial intelligence (AI) and machine learning capabilities are set to play key roles in the future of ERP software enabling businesses to make smarter decisions. Such tools offer a variety of benefits and insights, the ability to automate processes, increase efficiencies, generate insights and augment human decision-making.

For example, AI can save businesses valuable time by highlighting any abnormalities in company data, rather than employees having to go through reports thus eliminating the risk of human errors. Additionally, AI will help to identify potential issues before they occur, preventing downtime and resulting in time, money and productivity savings.

ERP software will also enable businesses to leverage drones inside large manufacturing plants. They simply read the data from RFID tags attached to machines and send this information to a connected ERP system, where AI tools generate reports on inventory levels through maintenance schedules.

With all this in mind, the integration of AI and machine learning tools with ERP software will accelerate in 2019 as businesses embrace the range of benefits on offer.

3. ERP moves to the edge
With the growth of the Internet of Things (IoT), manufacturers will invest more in ERP edge solutions to extend their core systems and boost their productivity in 2019. This investment will streamline communication between the ever-growing number of IoT devices and help to make sense of the collected data.

Linking edge solutions to internet-connected devices and products means IoT data can be automatically funnelled into the core ERP system. It will also enable businesses to monitor machine operations from anywhere in the world and perform real-time analysis to track maintenance and minimise disruptions.

Businesses will have better oversight into their supply chain operations and speeds up the decision-making process improving business intelligence.

4. Data, data everywhere
Data has become one of the most valuable assets for businesses in all industries. Therefore, having an ERP system that is data-driven and that offers the ability to access, analyse, and present that data in ways employees can make sense of will be more important than ever in 2019.

Organisations must be able to use collected data in the right way if they want to capitalise on the various operational benefits it has the potential to provide. For example, using analytics tools connected to their ERP software, firms can make predictions and forecasts that inform their future business strategies and meet customer needs.

Data cataloguing will also take on even more importance in 2019, as understanding where the data has come from and how it has been aggregated will help build confidence in data-driven decision making.

5. Blockchain emerges
Blockchain is garnering interest in many areas of enterprise software as the technology continues to develop, and ERP is no exception. Although still in its relative infancy, new use cases of blockchain in ERP will likely emerge over the coming months, especially in transforming the manufacturing industry.

Supply chain management is already proving to have significant potential as an early application of blockchain ERP due to the visibility and traceability it provides. Another benefit would be the automation of business processes through ‘smart contracts’. Similar to setting up automatic payments, smart contracts will remove the need for businesses to send invoices and chase payments, saving significant time and ensuring that everyone is paid promptly.

It’s still early days, but the ability of blockchain ERP to strengthen the integrity and automation of supply chains is already becoming evident, which will help it emerge as a hugely compelling option for businesses as we move through 2019.