Back to Basics: 2023 ERP Trends and Predictions

In a year marked by uncertainty, organizations are looking for ways to reduce operating costs and streamline processes. Efficiency is on the mind of every business leader. Deploying automation to reduce manual work will continue to be a top consideration to achieve this. Company leaders will also consider new ways to build and maintain software and accelerate digital transformation. They’ll also contemplate continuing to move more workloads off-premise and into the cloud — including Enterprise Resource Planning (ERP) functions.

But this will also be a year when businesses get back to basics. They’ll rethink decisions they’ve made in the past and add new talent to manage the growing complexity in their fields. Here are five predictions to watch for in 2023 and what they mean for CIOs and CTOs.

AI/ML will take a back seat to ERP integration.

CIOs will focus more on ensuring that their companies have sufficient data discipline instead of chasing overhyped technology solutions. This includes having the right structures and policies in place to manage data. It is dawning on leaders that, while AI/ML technologies have promise, rigorous data discipline is a prerequisite. Without it, they will struggle to identify what they need to build algorithms or create new solutions.

Many companies still have data silos in their ERP systems and have not yet made data management a top priority. So, AI/ML-driven hype will take a back seat in 2023. These tools haven’t fully delivered on their promise to create business value, despite copious investments. In the coming year, look for more companies to take a step back and try to solve more immediate problems.

Over the next couple of years, a new breed of enterprise solutions will emerge.

During the pandemic, digitization accelerated as more people worked offsite. Automation projects tend to focus on eliminating manual work and automating manual tasks like keying in timesheets, invoices, purchase orders, etc. This level of implementation of automation will continue as long as companies still have manual tasks.

But there’s also a growing realization that backbone ERP systems supporting enterprises were built for a different age. They were designed for the way people thought about problems 25 to 30 years ago. A new breed of enterprise software is emerging that’s better suited for the present age, and it will require a whole new level of automation and interoperability. A core enterprise solution that is pervasive but doesn’t require daily user engagement will likely emerge.

DevOps will live up to the hype for some but not all, companies

Enterprise software tends to be thought of as old school, so merging development and operations has been a heavy lift. This is especially true in companies where the software itself hasn’t significantly changed. Many companies said they were moving to a DevOps approach, but this is a difficult journey that requires a different mindset.

So, the companies who started the journey to transform their software to fit a more cloud-native approach will put more emphasis on combining the operations and engineering teams. This is challenging as there are two distinct disciplines within the engineering domain that require the participation of highly specialized software engineers.

A “de-PaaS-ification” trend will emerge.

Many companies will move off hyperscale services in 2023. The realization is growing that not everything needs to happen on a hyperscale or public cloud. Plus, there are higher costs associated with their use. The more companies use hyperscale services, the higher the level of the abstraction and hidden “tax” (less utilization of compute) burden. So buying hardware instead can make financial sense in some cases.

There are different levels of hyperscale options, including big players like Amazon, Google, and Microsoft, and smaller vendors that offer similar but less expensive hyperscale services. But companies who understand their compute and storage resource consumption needs for their applications may decide they don’t need dynamic scaling after all. They will opt to purchase their own private data center hardware and use hyperscale services for peaks only in a hybrid approach.

More CTOs will be appointed alongside CIOs

Complexity is increasing in the technology landscape — it only moves in one direction — and this is raising the demand for people with highly specialized skills. Demand for these workers is up for digital-native companies and those that aren’t digital natives alike. In medium to large companies, the CTO role will gain more influence in the operation of the company.

It may seem counterintuitive that CTOs will be more influential as new enterprise solutions emerge that require less user engagement. However, the pervasive systems humming in the background are complex, and companies need specialists to ensure these systems are integrated and operating correctly to support business objectives.

The technology landscape continues to evolve and become more complex. With insight and guidance from people who have a deep understanding of technology, business leaders will be less likely to pursue the next new, shiny object. A dominating trend will be returning to basics, such as sound data management and right-sizing the technology stack.

We will likely see more innovation in the months and years ahead, particularly around enterprise solutions. They are on the verge of leaving old problem-solving methods and coming up with fresh approaches for a new age. Regardless of how these trends play out over the next year, it will be an exciting time.

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