Megaventory Blog - Online Inventory Management Software, Order fulfillment and Control System
This is the company blog for megaventory, an online software that helps small businesses that buy, sell and manufacture physical products to manage sales, purchasing, manufacturing and inventory. We blog about new features and updates but also about enterprise software, small businesses, cloud computing and the industry in general.

Wednesday, May 2, 2012

The Future of Business Software & ERP

If you do not know what ERP is, it is software that maps real-life business processes in the computer for analysis and reporting. A business process for a project manager may refer to adding a note to call a group of project engineers for a Skype meeting; for a salesman, a business process may refer to following up on last week’s sales leads; for a warehouse manager, a business process may refer to picking, packing and dispatching. So an ERP may have modules to support operations such as Project Management, Human Resources, Order fulfillment, Inventory, Accounting and so on and so forth. We’ve also wrote an introductory blog post about what ERP software is.

ERP has always been extremely expensive software. I never really understood why, but I guess it all starts because the cost of failing to deliver can be much much worse. It goes into the psychology of the ‘you get what you pay for’ so, if you were a manager you wouldn’t run a billion dollar company with a software that costs a few hundred dollars would you? And, if you are about to pay millions for a piece of software you might as well ask the software vendor for any customization that comes to your mind. No matter how crazy the demands, the vendor’s sales people always say yes and then, one thing is for sure: those customizations make the software more complex and difficult to work with. Your employees will complain and fail using it, the ERP will fail to deliver and the manager will run back to the vendor to buy some expensive after sales support. This deadlock process was -and still is- feeding dollars to huge companies such as Oracle and SAP. This IS their business model. This IS changing. How? Read on.

ERP will be cheap, even free

Business software such as ERP is getting consumerized. What does that mean? In a few words, it means that the software is getting simplified both in terms of user interface and operational complexity so that it can be used out-of-the-box without any training whatsoever by non-experts. This trend was set by web 2.0 pioneers such as (37signals) and ingenious hardware such as the iPhone or the iPad from Apple. Facebook has also helped by getting online software into nearly every home on the planet so people became subconsciously familiar with the Software-as-a-Service (SaaS) concept. Fewer and fewer pay thousands to buy complicated software that needs dedicated servers, runs on the desktop and requires 6 months of training to get things rolling; the SaaS model with its zero hardware requirement and online support communities will continue to push prices down.

Cloud based SaaS ERP will continue pushing ERP prices down

How low can the prices get? Well, even now, the cost of an online (cloud) ERP is around $5 to $10 per user per month which is a cost every business can more or less afford. The cost can get even down to zero from those cloud ERP vendors that will be able to offer Freemium plans. Not all vendors will afford to offer a free -limited feature- plan to their user base but some will definitely do.

ERP will be social

Yes, I know everyone is talking about this but, the truth is, no-one has really implemented that feature as of yet. Yammer is on its way of doing a great job by building a social communication platform that can integrate data coming from multiple business software on a single feed/timeline. This is the beginning of a whole new concept in business; social entities will not just be confined to chat and communication messages but operational information will get their place in the social feed/timeline: manufacturing processes, sales events, inventory alerts, EDI (Electronic Data Interchange) alerts et cetera can get a social substance and be distributed to the correct people inside the organization or even outside of it.

Operational information can appear in the timeline of the users of a social ERP within the organization

The social trend can get really interesting when a user -or a group of users- will be able to act on intra/inter-organization operational information from their social feed/timeline. Imagine for example that, as a user, you maintain a ‘friend’ status with your supplier so you get to receive -in your social feed- all those actions of your supplier that are related to your company. So, the moment that your supplier invoices you, you receive that invoice information in your social feed/timeline and you click to see and verify the correctness of the invoice. Then, when goods physically arrive, you click to log this invoice in your sales software to receive the invoiced items in your warehouse automatically. It is an EDI system on steroids!

Adding operational info in one’s organization social feed/timeline will bring collaboration to a whole new level introducing significant improvements both in terms of optimizing processes and minimizing mistakes due to miscommunication.

ERP will be fun to use

Business software makers have already began looking into concepts that exist for years in the gaming industry. By implementing user interfaces that dynamically interact with their users to offer virtual rewards under certain conditions (for example if specific key performance indicators are met), the otherwise boring business software can instantly get more interesting and fun to use. If users are happy using a software, their productivity will increase as well.