Postmodern ERP is a very new phrase in the IT lexicon. It’s something that’s been attributed to Gartner, created in 2014 as a way to describe changes in how companies implement and use enterprise resource planning tools.
What is Postmodern ERP?
While there are a lot of definitions of postmodern ERP floating around on the web, it’s generally defined and described as a situation where companies abandon the traditional practice of using single, monolithic ERP platforms for several individual tasks, and start adopting a collection of individual standalone programs instead. Experts describe this as a “loosely coupled decentralization” of traditional ERP suite systems. In the past, they were built to become comprehensive, to offer business users a wide range of services under one collective umbrella.
Some point out the progression of the ERP eBusiness suite from its early beginnings — when it was oriented toward MRP, HR and core financials — to an expanding industry where ERP added other kinds of components related to marketing, data analysis and much more.
In a sense, people call the new model “postmodern ERP” because it’s deconstructing the old way of doing ERP, breaking down one big central program into its logical components. Postmodern ERP breaks down the idea that you have “one product to rule them all,” and that you get all of your enterprise gear from the same vendor. This is an approach that seems easy and safe, but can end up holding companies back.
Postmodern ERP Strategy and Versatility
One of the big reasons that companies head toward a postmodern ERP approach is that it can be more flexible and easier to swap out or change components with a postmodern ERP system.
The cloud has made major contributions to this new model. It’s much easier to choose and buy standalone applications with a cloud or hybrid cloud strategy, with subscription pricing and all of the on-demand benefits of cloud vendor offerings.
In some cases, though, costs also play a part. Companies may be able to get the functionality that they want at a cheaper price by cobbling together a set of standalone products, rather than by purchasing a “Cadillac” ERP system with all of the the bells and whistles, some of which they might not need. In fact, one prevailing argument for postmodern ERP software is that companies get exactly what they need, and not too much excess enterprise software, which can lead to too much overhead. In the age of “lean manufacturing,” slimmed-down business plans and automated processes, this is a big draw. During procurement, buyers look closely at ROI, and figure out ways to maximize advantage while minimizing cost. If they can go with a distributed system at a cheaper cost, they’re likely to do that, even if it means foregoing the easy one-vendor relationship.
Postmodern ERP and Best-of-Breed
Another big reason to pursue postmodern ERP is that companies can get best-of-breed solutions in place by integrating them with other components. Think of it as ordering from a restaurant menu, instead of just getting one big box lunch.
Experts point out that although postmodern ERP buyers are able to integrate these individual best-of-breed applications, that doesn’t mean that there isn’t a central platform integrating all of these items. However, again, being able to choose from a menu of vendor options is very freeing for companies. With so many vendors trumpeting the high integration potential of their applications, this is getting much easier for companies to do.
Case Study: The Salesforce Boom
For a practical example of how postmodern ERP works, take Salesforce: a wildly popular customer relationship management platform that’s become a household name.
Salesforce takes a vital concept – CRM – and applies it to a platform approach that’s easy for companies to use. As a result, it’s taken off in the business world to an incredible extent, dominating the field even with other big vendors in play.
Over the past few years, tech journalists and others have weighed in about exactly how Salesforce became the dominant model for CRM. A 2013 Forbes article took a look at how Salesforce latched on to some of the big ideas of the new cloud era to propel the brand to new heights. Much more recently, in May of 2017, Gartner continues to list Salesforce as a top option for aPaas, or “Applications Platform as a Service,” and documented its breakout status in its magic quadrant report.
This often happens with one particular kind of technology — one of the most popular vendor offerings builds on itself, takes more market share and gets more press. Suddenly, everybody wants that in their system.
That’s a big part of what postmodern ERP is about: with a postmodern ERP approach, it’s relatively simple to integrate Salesforce (or whatever the best new software is) with whatever the company is already using. Many other technologies advertise Salesforce compatibility as a major benefit, compelling even more companies to join in. Then you have the benefits of economies of scale and user familiarity. It’s all part of how a particular standalone tool rockets to the top of the pile, and how companies can stand ready to take advantage of that.
In a sense, postmodern ERP offers businesses more of the neat new possibilities of the vendor-diversified era — of being able to mix on-premise and cloud technologies, building more agile IT architectures that’ll serve companies better as they change and evolve over time. That’s part of the appeal of postmodern ERP: that it’s scalable and versatile, and it doesn’t just put a particular “box solution” in place, which can lead to growing pains down the road. Consider how a postmodern ERP approach can benefit a business that’s always reaching for the newest IT solutions.