Why Customers Should Care Who Runs Their ERP In The Era Of SaaS Applications

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Claus Jepsen is chief product and technology officer at Unit4 , overseeing the development of intelligent software for service organizations.

In the rush to debate whether customers should move their ERP to the cloud or not, the industry has perhaps overlooked a significant consequence of this transition: the cloud means that ERP functionality will become pervasive, and because vendors are encouraging users to adopt standardized workflows, there is a danger that ERP systems could become increasingly commoditized. Even with the growing hype around artificial intelligence (AI), this automation may only further standardize processes so that the difference between ERP systems is even more negligible.

Looking at it from the customer's perspective and allowing the technology evolution to follow its natural course, there is a danger that customers could treat ERP systems as off-the-shelf functionality. If it is standardized, if it can operate invisibly in the background and if interoperability means customers can port their data easily from one vendor to another, why should they care who runs their ERP?

However, for the vendor, there is a very real question around differentiation in the age of pervasive ERP. The obvious answer is the user experience, but even with AI adding more sophistication to the customer interface and helping to personalize it even more, vendors must ensure it helps them stand out. Particularly with generative AI applications, the core large language models (LLMs) are being built by a small group of large vendors. If everyone relies on the same dataset, won't everyone produce the same results?

Data could be a decisive factor in determining who the winners are in the ERP market in the future. At a time when organizations should be able to integrate all the sources of information within their infrastructure to create a holistic view of their business performance, how they use that data (and how quickly they can use it) to form insights and make predictions could be critical to their success in highly volatile market conditions.