You might already know about the lifecycle of technology.
Let’s think about where Enterprise Resource Planning, or ERP systems, fit into this cycle. For that, let’s step back and look at the history of ERP systems. They started in the 1960s, more for academic interest than for use in businesses. In the 1990s and 2000s, they became very popular in the business world. But, by the early 2010s, people started to see big problems. Companies realized that managing an ERP system was more than just buying the newest technology. By the late 2010s and early 2020s, how people saw ERPs had changed a lot.
What used to be seen as helpful for business became a big challenge. ERP companies faced tough questions from customers. Some businesses even had major problems because their ERP systems didn’t fit well with the way modern businesses work.
- Mission Produce (2021) found itself in a tough spot when its ERP couldn’t accurately track avocado ripeness and stock levels. This led to a staggering $22.2 million loss in profits due to excess waste and operational issues.
- Invacare (2021) saw their ERP upgrade bring more pain than gain. The upgrade disrupted their online ordering and money collection. This caused such severe problems that they had to halt the project and change their leadership team, all while incurring ongoing costs.
- Ranpak (2022) implemented their ERP on schedule and within budget, but still suffered a $5 million profit loss. The new system’s teething problems couldn’t have come at a worse time, as global events demanded quick pricing adjustments that just weren’t possible.
So it’s clear: the industry is becoming a bit disenchanted with ERPs.
These examples also highlight a crucial dilemma for CTOs: Should ERP systems serve the business, or should the business be forced to adapt to the ERP?
Before we get into the specific problems of traditional ERPs, we need to understand why so many organizations wanted to invest in ERPs, what they thought they’d get out of them, and what actually happened.
The Decline of the Old School ERP
SAP, a leader in ERP systems, has its own way of explaining what an ERP is.
But let’s step aside the technicalities, and address the business side first.
Why Do Organizations Need an ERP?
Organizations need an ERP for a few main reasons:
- Keeping Track of Resources: It’s important to know what resources you have.
- Organizing Workflows Digitally: Having your workflows in digital form helps make things run smoother.
- Making Decisions Based on Data: Using data to make decisions is better than just going with a gut feeling.
When ERPs started in the 1960s, they mainly focused on finance and accounting. Even in the 1980s and 1990s, big industries like large manufacturing were the main users. Over time, ERP systems grew to include things like purchasing, sales, material planning, and inventory. They even added functions like HR and CRM later.
But, these systems have mostly stayed popular only with big players. There haven’t been many changes to make them fit well for smaller businesses or the newer types of businesses that aren’t about traditional manufacturing. And that’s where the decline is rooted.
What Went Wrong with Traditional ERPs?
Essentially, as the business environment demanded more flexibility, ERPs became stifling. These are the three major issues that modern businesses face with ERPs.
- Too Slow and Costly: Traditional ERPs are often seen as too slow and expensive for today’s fast-moving businesses.
- Not a Good Fit for All Businesses: Many modern businesses, especially those in consumer sectors, find ERPs too cumbersome or not very useful, especially if they don’t have their own inventory or factories.
- More Than Just Digitizing: Nowadays, businesses want their tech to do more than just put things online. They expect things like:
- Being able to work well on mobile devices and different channels.
- Getting the right information easily to make better decisions.
- Helping employees work better and more productively.
Can ERPs Meet the Demands of Modern Business?
ERP vendors have scrambled to create add-ons, bundles, and new products to meet these evolving needs, but the tide is proving difficult to turn. They’re struggling to keep up with what businesses now want.
According to analyst firm Gartner, between 55% to 75% of all ERP projects do not achieve their intended objectives.
A Deloitte survey sheds light on the potential reasons, identifying the top ten barriers to successful ERP implementation.
But this raises a crucial question for you as a CTO: Shouldn’t an ERP work for you, rather than the other way around? Why should the burden of managing change fall on you when your business is already successful and you’re seeking to enhance growth with technology? The promise of ‘growing faster’ shouldn’t morph into a mandate for you to change.
It’s precisely this issue that is leading many organizations to reconsider ERP systems and look for alternatives that align better with their growth and operational dynamics. This shift often involves using SaaS (Software as a Service) applications, which we’ll talk about next.
Promises of Saas
It’s become a popular choice for businesses to use different SaaS (Software as a Service) applications for various functions. These applications are quick to set up, sometimes in just a few hours or days. This makes them very attractive.
In today’s fast-paced environment, businesses must keep up with competitors and are quick to offload tasks to specialized vendors. Think about it: wouldn’t a CTO prefer a solution that’s fast and specific to a certain need rather than looking at the entire organization’s tech needs? While the approach seems promising, it’s not without risks.
The Problems with SaaS
However, this approach isn’t perfect. What are the downsides?
- Employees often find themselves juggling multiple systems.
- With different apps for different tasks, teams can end up working in isolation. This makes it hard to work together efficiently.
- These systems start to seem fast and user-friendly. But as they become more intertwined, the promised speed and ease of use can decrease. This defeats the purpose.
- Maintaining many SaaS subscriptions can become expensive. It’s a financial burden in the long run.
- Eventually, you might find your tech landscape is a mix of numerous SaaS products, manual steps, and temporary fixes. How sustainable is this?
So, if the goal is to avoid the constraints of a big ERP project, is loading up on SaaS apps the answer? It seems like this approach, while initially attractive, might lead to more complexity, not less.
Isn’t there a middle ground? A solution that combines the best of both worlds – the structure of an ERP and the flexibility of SaaS? In the next section, we’ll learn about this balanced solution.
Low-Code ERPs: Bridging the Best of Both Worlds
The Philosophy Behind Low-Code
We’ve seen that traditional ERPs are too rigid and a mix of SaaS applications is too scattered. So, what’s the ideal solution? It’s about blending the best parts of ERPs and SaaS. This means rethinking and redesigning ERP systems. We need a digital solution that suits businesses of all sizes. This is where low-code platforms step in as the modern solution for ERPs.
Why Low-Code Stands Out
Low-code platforms differ from traditional systems in several key ways:
- Simplicity in Design: Low-code platforms use ready-made components and app templates. Why start from scratch when you can use something that’s already been tested and proven?
- One Platform for Everything: Imagine having almost every part of your business on a single platform. That’s what low-code offers, unlike the disconnected nature of multiple SaaS solutions.
- Flexibility and Choice: With Low-Code, you can set up a variety of applications, tailored specifically for your business needs.
- Easy Connections: These platforms integrate easily with other software systems, keeping your workflow smooth and connected.
- Grow as You Go: Start small and expand as your business grows. Isn’t it great to have a system that grows with you, without the headaches of buying into a massive ERP project, or spreading yourself thin with too many SaaS applications?
There’s a caveat though: a development platform has to be truly low-code, for these promises to be realized. The market is saturated with platforms that claim to be low-code, but are merely high-code (where a dev team codes the application line by line), but with another layer of configurations, which create the illusion of low-code.
So, at this stage, your question becomes: where’s the low-code platform on which the ERP of today can be built?
Introducing Amoga: A Low-Code Platform For The Business of Today
When creating Amoga, we were driven by one vision: to build a system that brings the power of Low-Code to traditional business software. We knew that businesses wanted a better ERP, and they’d happily give up the option of stitching together dozens of SaaS tools as a replacement.
The answer was obvious: A Low-Code ERP.
How Low-Code ERP Excels Over Traditional and SaaS Options:
Our low-code ERP system is built on five foundational pillars.
- No more juggling multiple SaaS vendors – everything should be under one roof.
- Users should be able to quickly build in the app using a simple interface with templates and connectors.
- Tasks that took a month should now only take three days.
- What used to cost $1000 should now cost just $250.
- The ERP should be so user-friendly that everyone feels like they can customize it to work smarter and faster.
With these pillars to stand, you get a low-code ERP that can accelerate every task for every user, across crucial business areas:
- Sales and Order Management: Streamline sales with easy-to-use modules for orders, customer management, and invoicing.
- Inventory and Materials: Manage procurement and inventory effectively.
- Vendor Management: Keep track of supplier performance.
- Analytics and Reporting: Access real-time insights for smarter decisions.
- Human Resources and Workforce Management: Efficiently handle recruitment, payroll, training, and performance evaluations.
This is what Amoga’s low-code ERP offers. To understand it, you have to forget the ERP of the past. It’s not the ‘backend’ or a ‘record-keeping system’.
We built it on the pillars of:
Mobile-first design: Everyone in your organization can work seamlessly from anywhere, on any device, at their peak potential.
Omnichannel experience: You can stay relevant for every touchpoint that matters to your customers.
API-driven integrations: You break down silos and build a system of open collaboration between all digital power centres.
Citizen developer empowerment: Anyone can build custom applications and workflows and make technology the 10x multiplier for their work.
Future-ready: You can quickly experiment with new ideas, for instance, generative AI.
Essentially, Amoga’s low-code ERP is about making every part of your operation more efficient, more responsive, and more in tune with today’s fast-paced business environment.
Isn’t it time your business had an ERP that doesn’t just keep up but leads the way?