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The three areas that require a next-generation ERP system

In the midst of a challenging period for many businesses during these last couple of years, one notable development has been the surge in the adoption of digital technologies. These adoptions have enabled businesses to continue their operations and thrive despite these challenging conditions. In particular, there are a growing number of businesses adopting technologies that belong to the “fourth-era hallmarks”. These include AI, data-centric design, developer enablement, and customer-facing technology.

But while the fast pace of digital adoption has benefited many businesses, some are struggling to adjust quickly enough to stay competitive. This is because the traditional ERP systems that they have in place were not designed to meet the huge growth in e-commerce and have proven to be inflexible and slow to meet the demands of today’s markets.

Because of this, there has been a push to adopt next-generation ERP systems that facilitate migration to cloud platforms and the adoption of high-end analytics such as artificial intelligence to overcome the limitations of legacy applications and modernize their businesses.

Experts have identified three areas where traditional ERP systems are falling short and what can be done to make them

Workforce shifts

The COVID-19 pandemic has effectively put to rest any hesitation to shift to next-generation ERP as business staff found themselves working at their home-based offices across countless locations. At the same time, there is growing discontent towards traditional, on-premises ERP for not being as scalable as they would have hoped with the rise of remote work operations.

In addition, many businesses have been tapping the services of freelancers, who now make up 36% of the workforce, according to an Upwork survey. The HR component of ERP systems should be capable of handling freelance arrangements that are different from that of regular employees when it comes to rapid onboarding, unpredictable hours, and frequent turnover, among others. Many organizations are also looking overseas for staffing, which has implications for government reporting, taxation, and benefits, among other factors that the ERP system must take into account to ensure compliance at all times.


There is a growing demand for data-driven analytics, especially more comprehensive and easily accessible data so business leaders can make crucial decisions very quickly. Unfortunately, traditional ERP systems do not usually provide the information that they need.

By contrast, next-generation ERP offers a variety of capabilities and features such as reporting and dashboards, and KPIs, providing real-time transparency with respect to sales, inventory, production, and financials. With powerful data-driven analytics in place, business leaders can make more agile decisions. At the same time, a lean ERP core and its cloud-first approach help increase deployment speed.

Supply chains

The unprecedented and ongoing supply chain disruptions has underscored the need for greater visibility within the supply chain, more predictability in lead times, identifying alternative supply sources, and faster response to disruptions. Unfortunately, traditional ERP systems do not have most (if not all) of these capabilities in place, which has been a pain point for many businesses.

Next-generation ERPs look to fill the gaps left by traditional ERPs which can help businesses address the current supply chain woes and achieve optimal operations and growth.


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