Expandable ERP cores are paving the way for individualized digitalization (2023 Prediction #5)

When redesigning the business application landscape, many companies focus on application architectures with a cloud-based ERP core. This makes sense, as modernization is primarily aimed at setting up agile and resilient business processes and business models capable of adapting to rapid change and adversity in an increasingly digitalized world. To achieve this, homogeneous application landscapes are often no longer the first choice. However, past experience, especially with large SAP landscapes, has shown that implementing adaptations and innovations may be challenging.

The task for service providers and businesses in the next few years will therefore be to build application landscapes tailored to customers and employees, alongside the modernization of the ERP core with solutions from SAP, Workday, Microsoft, and Oracle. This requires a modular application architecture that allows for the easy integration of solutions in areas such as services, sales, commerce, personnel management, procurement, planning, and production. In segments such as CRM, HCM, SCM, PLM, and procurement, there are standard solutions available that can be connected via APIs.

In many organization-specific and vertical situations, however, integrating in-house developments also has to be an option. DevOps, containerization, microservices, low-code tools, and APIs are important components that enable both the connection of standard applications to the ERP core and individual extensions to the core. Above all, though, it is innovative capabilities provided by hyperscale public cloud environments that will enable user companies and service providers to leverage up-to-date technology and features such as scalability, mobility, artificial intelligence, blockchain, and data analytics in the development and operation of new vertical core processes.

With this modular approach, which is based on one or several platforms that cover specific functionalities such as ERP and PLM, supplemented by standard applications for further support functions, as well as customer-specific and vertical small-scale extensions, businesses can quickly and securely make changes to applications or reconfigure components to meet changing business needs, challenges, and opportunities.