Evolving State Of ERP

Explore the evolving state of ERP and stay ahead of industry trends. Discover the latest advancements, innovations, and future prospects in ERP systems. ERP systems are ubiquitous in the Middle East, sitting at the core of many organisations’ IT systems. They are one of the first things a company considers implementing in order to manage processes, drive efficiency and keep operational costs down. Having been around for over 20 years, many organisations are already on their second generation of ERP solution. Uptake continues to rise, thanks to reassessment of current solutions, changes in technology and increasing demands for customisation from users.

Evolving State Of ERP

Analysts have seen adoption of modern ERP solutions accelerating over the past four years, as Dhiraj Daryani, research manager — Enterprise Software Solutions at IDC MEA highlights.

“The period after 2009 saw significant growth in adoption as various vendors that were not present in the region set-up direct local offices; others who already had local presence expanded their operational footprint. Lately, leading vendors have been investing in expanding their partner ecosystem [and] this had a visible impact on ERP investments, especially in the large and medium-sized companies.

“Prior to 2009, the majority of companies that were using ERP systems either had in-house developed applications that were often not comprehensive in their functionality, or had an old legacy ERP solution that hadn’t been upgraded. ERP companies have capitalised on this, and have been aggressive in capturing the opportunity to migrate or upgrade the systems of these companies,” he explains.

As far as competition is concerned, the market is presently dominated by global giants such as SAP, Oracle, and Microsoft, whose ERP solutions account for 60-80% of the total ERP revenue across the GCC.

In terms of sectors, enterprise, financial services and government industries are popular ERP customers. As many Middle Eastern countries transform from being more oil-based towards professional and financial services, there has been a significant rise in interest in ERP.

“Organisations in Qatar are spending significant money on ERP implementations, given that they have been bidding for larger sporting events in the coming years,” highlights Gurudatt Mudlapur, vice president and global head, Oracle Practice at Tech Mahindra. “While the collective spending between Dubai and Abu Dhabi may give the UAE the region’s highest growth, Saudi Arabia also accounts for a significant part of the GCC’s total IT spend. All these regions are predicted to spend in excess of a couple of billion dollars on ERP projects in future.

“In the United Arab Emirates, the retail sector alone is spending heavily on enterprise application software such as CRM, ERP and HRM solutions, spurred on by additional competition in the property management and retail space, businesses are beginning to invest heavily in these enterprise-wide applications. We have been noticing that the MENA companies are concentrating on transitioning from manual environments to full automation of back-office systems with aims to boost efficiencies,” he adds.

Over the last few years, the Middle East’s ERP market has also seen a shift from large enterprises to SMBs, with Frost & Sullivan highlighting that about 45-50% of implementations in Saudi Arabia and the UAE are coming from the SMB market.

“The sizeable apprehensions around ERP being only for large organisations, coupled with the comparatively higher rates of unsuccessful ERP deployments were amongst the major deterrents in the ERP uptake. [But] these have been duly addressed by leading ERP vendors by not only investing more in the training of their ecosystem and developing fail-proof methodologies for implementation, but also by coming up with scalable solutions that SMBs can also afford,” says Mansoor Sarwar, head of Pre-Sales and Support, Sage Middle East.

“SMBs have realised that working smart is the only way to scale and using tools like ERP and CRM are the smartest business tools around. Most of these organisations have second generation executives who have returned from a rich exposure of education and work in more developed markets bringing with them the awareness and knowledge that demystifies the world of ERP.”

There are three dominant trends in ERP right now, the first of which has been to strip away excess functionality that existed solely to enable vendors to claim that one size fits all. The focus is now on consolidation and optimisation.

“Consolidation is one development that is already underway in this region, and refinement and optimisation will be strong themes in the ERP sector over the next few years,” says Stephen Ardill, partner at AT Kearney Middle East.

“The driver for much of this work will be data to address questions relating to its integration, quality and value: how does data from disparate sources manifest and interrelate in the ERP system, how can data quality and the reliability of information be improved, and how can enterprise-wide information be exploited for business advantage?”

The second has been the undeniable impact of social media and collaboration technologies, be they mobile or office based.

“The ease of use of many mobile platforms, the rapid evolution of social media networks and the incredible functionality they offer have only just begun to map over into the business realm: but for complex and sophisticated processes such as those underpinned by ERP, they are nothing short of a revolution. It is incredibly easy to put it to work and a result, when the same concepts are applied to ERP, is a big uplift in productivity,” says Monzer Tohme, channel manager for the Middle East, Infor.

Lastly, mobile applications are a big factor in delivering complete ERP functionality.

“As users feel the ease-of-use with mobile apps, they expect similar experiences from their ERP application. Recently a user requested and successfully convinced us to provide a selection of accounts and products by typing anything that matches the string in between not necessarily starting with the typed letters, an experience he got used to in mobile apps,” highlights Ali Hyder, CEO, Focus Softnet.