Will the new generation ERP kill EPM solutions?

A new generation is here

A new generation of Enterprise Resource Planning (ERP) solutions is here. These cloud-based alternatives leverage in-memory database technology and offer front-ends on multiple devices. This new generation of ERP also provides analytical capabilities. What impact will these new capabilities have on the Enterprise Performance Management (EPM) arena? Will this new generation of ERP’s make EPM solutions obsolete?

Classic EPM and ERP, two separate worlds

Enterprise Performance Management (EPM) and Enterprise Resource Planning (ERP) have long been two different worlds. EPM supported management and compliance processes where ERP focused on running the operational processes. Companies trying to fit their performance management processes in a classic ERP solution soon found out that this system lacked lots of functionalities to support performance management processes. Also, EPM-users were confronted with broken analytical paths; a typical systematic way is interrupted when additional details are needed, which are not only stored in the ERP and not in the EPM-system.

Connecting the worlds

In a standard setup, the ERP and the EPM solutions are loosely connected. Typically, an interface, sometimes via a data warehouse, is set up to bring actual figures from the ERP to the EPM-system. Planning data are, in many cases, being transported from the EPM- to the ERP-system for operational budget control. EPM vendors have gone through great lengths to make the connection between the EPM- and ERP-world as transparent as possible. Functionalities with special storage of detailed transactions are a step to fix the broken analytical path, but true integration is something else.

In-memory engine drive new possibilities

The new generation of ERP systems leverages in-memory database technologies. These databases are the basis of the reduced complexity of ERP-systems. The new database technologies deliver performance levels without the need for optimized but very complex data structures. The performance of in-memory databases also offers analytical capabilities directly in the ERP landscape. Without the need for replication and pre-aggregation of data, they can be presented for analytical purposes with the right response times. This level of integration fixes the broken analytical paths for good and eliminates the replication of data and master-data between systems.

New component-based interfaces

The new generation ERP also uses new user-interface technologies. The new interfaces typically are component-based and can be used on a wide range of devices (e.g., tablets, smartphones, and computers). By using this type of interface, analytical components can be integrated directly into the ERP-interface. These analytical components can be visualizations like graphs or more advanced artificial intelligence-driven elements. For the end-user, these types of interfaces make it possible to navigate from analytical processes to operational processes in one consistent experience.

Will the new generation of ERP kill EPM solutions?

The question is, “will this new generation of ERP’s kill EPM solutions?”. The first signs are more than promising for the new generation of ERP. Their powerful in-memory engines and flexible interfaces are strong core-functionalities. But it is too early to tell whether the niche EPM-solutions will face serious competition. The focus of the ERP-vendors is primary on the shift from classic to new in-memory and cloud-based ERP’s. Vendors want to prove to their investors that they can make a move to subscription bases business models. In this transition, EPM doesn’t seem to be the highest priority yet.

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