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Contributed on October 12, 2017

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The future of ERP: Oracle Open World 2017 ERP summary

Blog: Capgemini CTO Blog

Oracle Open World is a yearly held event where around 60.000 Oracle specialists from around the world come together where Oracle presents the latest updates on its products and strategies.

Last week I had the opportunity to visit the Oracle Open World conference. In this blog I will share with you my main takeaways for the ERP topics that where presented.

ERP is around for a while now. The key function of ERP is to support the business processes, it has been and it will be for quite some time. However the way Oracle is doing that will be different in the future, according to what was presented.

As Mark Hurd stated in one of the key note speeches, in companies at the highest level there are always a couple of things which drive everything:

• Grow revenue
• Reduce cost
• Improve cash flow
• Manage risk

Let’s  focus on the reduce cost. In order to reduce cost your company needs to either improve efficiency or spend less or preferably do both. With the movement from On-premise to the Cloud the total cost for your ERP will go down. There are all sort of models confirming on that, so I do not want to go into detail about that subject.

The new world

Now let’s focus on efficiency. As mentioned the ERP function is to support the business processes, and to do that in an efficient way.

New innovative technologies in ERP are an enabler to create the ‘Next Generation Business’. In this Next Generation Business, business innovation is key and your company will start to apply the continuous innovation cycle. The Next Generation Business is able to support the challenges your business face in the new digital world such as changing and new business models. To support the Next Generation Business this also requires an new type of ERP.

This new ERP is no longer a monolithic ERP, as it is today, but it is going to be an standard ERP Core surrounded with other business apps and integrated with new technologies. It is with Gartner calls a ‘Post Modern ERP’.

The last few years Oracle has been busy to get that ERP core right. Oracle was going through a real transformation to transform their big on-premise ERP towards that new ‘Post Modern ERP’.

Oracle created a complete and comprehensive SaaS solution and extended it with a PaaS platform and Iaas basis. All with 1 purpose: To become the biggest and most complete ERP Cloud solution on the market.

After all the years of development and working on these new products Oracle is finally at the point where they claim to be THE biggest and complete ERP Cloud solution out there.

Oracle ERP Cloud is now a product which is seen as mature and complete. Not only Oracle has that view, but also in the market it is seen that way. Example is the Gartner report for Cloud Core Financial Management Suites where Oracle is mentioned in the top right corner (https://www.gartner.com/doc/reprints?id=1-43NIPNV&ct=170620&st=sb).

New technologies

So Oracle has done the ERP core and now it is time for the next step and the connection to the outside!

The focus for the next period is going to be on integrating new technology into the ERP Cloud solution. With the new technologies added to the ERP Cloud, your company is enabled to make the transformation into the Next Generation Business.

Some examples of the new technologies we will see popping up in ERP:

• Change to Human Interface (e.g. voice control)
• Augmented Reality (e.g. maintenance of production machines by detecting errors)
• Virtual Reality (e.g. showing and changing your business process in VR)
• Internet of Things  (e.g. detecting production issues based on sensors in the production process)
• Block Chain (e.g. putting the purchase order in block chain, instead of emailing back and forward to supplier)
• Artificial Intelligence (e.g. suggesting a supplier where to source from based on  internal and external information)
• Machine learning and thinking (e.g. automatic suggestions and population of fields in your ERP based on combination of previous data)
• Robotic Process Automation (e.g. generation of the standard AP invoices)
• Chatbots (e.g. order a new laptop through a voice chat with a bot)
• Social involvement (e.g. connect and interact over transactions in your ERP with others inside and outside of your company)

• 3-D printing (e.g. spare part maintenance; no more stock but print when needed)

Efficiency

All these technologies are an enabler for your business to start to work more efficiently.

For example one of the big things to improve is to reduce the transaction processing. Transaction processing still takes up to 50% of departments within companies. Let’s imagine what could happen if we were able to reduce that percentage to 10%! As an example let’s take invoice approvals. Within most companies all invoices are checked for approval but 90% is always correct. Why not bother with those and only focus on the 10% which really need your attention?

But how will your company work more efficiently by using these new technologies? Some examples of what you can strive for are:

• Straight through processing enablement (e.g. focus only on the exceptions)
• Touch less ERP processes (e.g. work faster by not opening the ERP GUI but use the human interface)
• Automate tasks (e.g. no need to spend time on standard repetitive tasks)
• Predictive maintenance (e.g. prevent downtime on your production)
• Provide insight (e.g. spend less time on searching for information and making decision)
• Connect the conversation to a transaction (e.g. spend less time on searching for all communication that occurred for a certain transaction)

Transform!

There is one important note with this: Technology is an enabler to transform and work more efficiently but humans are slowing it down. Therefore change management is key in a ERP Cloud transformation project. Humans have to transform as well!

We know we can do it since we are already using these technologies in our personal live. Somehow the technology gap between your personal live and professional live is still big. But if we can use the new technologies in our personal live, and companies transform into the Next Generation Business we can embrace them in our professional lives as well!

With that a true transformation to the Next Generation Business can start and it can help to work more efficiently in your company. Ultimately it will help you to do just that what your company wants; that is to reduce the cost.