Will there be a change in ERP customisation within the next decade?

For this first post I am asking a fairly broad question which I think is highly interesting these days. I will not claim to know a lot about all of the ERP’s of this world, my primary experience being with Dynamics AX. However, I do think Dynamics AX in the next few years is about to change significantly.

For all of us working with ERP, we know the last 4 years have shown that it was hardly the truth – so what will be different over the next 4 years? Well, I do not believe ERP will be dead, but I do believe the business model around implementing and deploying ERP systems will change significantly.

I have three claims which I believe support this:

First claim: Customization is going away

Ouch – as an employee at a company which makes its living partly by implementing and customizing ERP’s, this is a tough thing to realize. And of course this will not happen tomorrow. But it is my true belief that the level of customization which has happened to ERP’s such as Dynamics AX over the last decade will vanish during the next decade.

Reasons:

• Standardization
  Dynamics AX now contains so much functionality that enough is enough. Most companies could choose to “live” with the standard solution and get the benefits of continuous improvements without the upgrade nightmare.
• Accessibility
  In order for the systems to be accessible across geographies and different user groups (roles) the architecture of Dynamics AX needs to be changed drastically. The three-tier architecture implemented in the beginning of the 00’s is not how you would do it today. The best way to achieve this is by making the functionality available through a thin client web based experience. The optimal way to achieve this is a cloud based deployment. Microsoft is probably working on this already, and it will mean a lot to the customization capabilities of the solution (as in “they will not be there”).
• Competencies
  

  Microsoft Dynamics

  It is my impression that the average age of people working with Dynamics AX implementations are increasing. In other words, those who have worked with this product since we invented it in the mid 90’s will continue, but what is the incentive for young people to enter the business? I predict that there will be a significant lack of AX skilled resources in the near future. Simply because the original technology of AX is beginning to show signs of ageing.

• Cost reductions
  Companies are beginning to realize that having their own iron in the basement and the people above them to service it may not be sufficiently cost efficient. Especially in the mid-market it is problematic for companies to keep staff with the competencies needed to support the traditional on-premise solutions. Thus, solutions will slowly move to the cloud.
• Upgrades are becoming too costly
  As Microsoft continues to speed up the release cycles and amount of innovation put into the solution, it’s getting harder and harder for partners and customers to keep up. The trick will be to isolate customizations as much as possible from the standard solution in order to upgrade them swiftly at a low cost. This means customizations will gradually change into add-on integrations instead only leveraging (more stable) API’s.

Source: Flemming Louw-Reimer