Enterprise resource planning (ERP) solutions are reaching a critical juncture in their development, according to a leading analyst at GartnerGroup/ Dataquest's Predicts '99 conference held in Sydney last month.
According to John Roberts, research director at GartnerGroup/Dataquest, the number of ERP implementations is decreasing due to the impact of Y2K issues and the looming challenge of having to take the model outside of the internal enterprise and into the bigger Web world.
Commenting on the limitations of any transaction-based system, Roberts emphasised the need for the creation of a virtual enterprise to meet the demands of commercial systems fuelled by the Internet.
"ERP solutions must emerge so they can consistently manage data beyond the enterprise," Roberts explained. ERP also needs to be able to generate revenue, rather than simply cut costs.
"In the end, cost cutting is a declining game."
In what Roberts coins an era of post-ERP integration, traditional ERP vendors are hav-ing to re-evaluate strategies and cust- omer relationships to include whole-of-business solutions and personalised customer relationships.
"Those who have experience in Web development and those who can create interoperability will be the ERP players of the future," Roberts predicted.
ERP integrators will also have to deal with customers demanding total-cost-of-ownership figures and post-integration support. "The technology itself is not a differentiator," Roberts said. "It is how you use it that makes a difference, and although 50 per cent of business in Australia have ERP solutions not many of them use them optimally.
"ERP integrators need to help customers get the most out of their systems' five-year life cycles and then they can help with upgrades."
The expanded ERP space will remain the domain of big players, with Roberts estimating that by 2002 the ERP market will be dominated by 10 vendors, a hypothesis Roberts expects will be consolidated through acquisitions.