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ERP: Why the Time Is Right to Redefine the Acronym

By Mike Ettling, CEO, Unit4

Enterprise resource planning (ERP) systems trace their roots to the manufacturing sector. They first emerged decades ago as a way to plan for and keep track of the materials needed to create products. It was a breakthrough concept at the time. ERP systems connected data from across the organization and allowed users to streamline planning and decision-making.

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ERP systems evolved over the years, making inroads from manufacturing into virtually every type of industry, and expanded to encompass and account for a broader spectrum of resources — including human resources. As the years went by, companies relied on their on-premises ERP systems to manage just about everything.

We need a better approach. It’s time to recognize what’s really important in modern business: that our people experience real purpose (ERP), so that they deliver value. And since businesses are at a crossroads in their digital transformation efforts, there’s never been a better time to redefine ERP in the cloud and rebuild our organizational cultures around our purpose.

We’re not widgets; we’re humans

Since traditional ERP systems were built around materials and processes, it limits what they can do. That’s why HR applications housed in old-school ERP ecosystems tend to revolve around hierarchies and procedures. They are designed to manage a resource — a human resource, in this instance — rather than connecting people to their purpose within the organization.

But we can and must do better. When we redefine ERP, we open up new possibilities because we can choose a system that centers around the employee experience and facilitates the connection between our people and customers. As Richard Branson said, “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”

So, if you create an ERP that elevates the employee experience by connecting them with their purpose, your people will be more engaged and productive. Designing an ERP around humans rather than widgets transforms the employee experience on an individual level, and transforms the organizational culture by centering everything on the service you deliver.

To overcome challenges, adapt and thrive  

We find ourselves at a perfect time to make this transition because the economic and technological conditions are in flux. If you think about the significant business downturns that have occurred over the past 40 years, you’ll see that each was followed by a technological shift. The companies that adapted were in the best position to thrive.

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In the 1980s, the client server was adopted by cutting-edge companies of the day. In the 1990s, it was the internet. In the early 2000s came the shift to mobile technologies, and the Great Recession of 2008-2009 was followed by migration to the cloud. What’s the innovation of our time? What will change the way you do business in the post-pandemic world?

I believe it will be software that connects people with their purpose. To cite another acronym — software as a service (SaaS) — we need to emphasize the service, not just focus on the software alone. I believe that the future belongs to companies that focus on and are powered by their people, and purpose-focused ERP software can create the path to that future.

Software isn’t eating the world – it’s saving it

Speaking of software, remember Marc Andreessen’s prescient “Why Software Is Eating the World” essay from nearly a decade ago? One of the takeaways was this: the most innovative companies he wrote about weren’t just using new platforms to streamline existing processes; they were reimagining what was possible.

I’d update the formulation to this: “Why Software Is Saving the World.” We’re all experiencing it in real time. Software is why at least parts of the economy are able to operate during the pandemic, preventing a complete economic collapse. Software is critical to our fight against the virus. Software is keeping us connected to family, friends and colleagues.

Additionally, software can help us reimagine HR. Our ultimate obligation is to create a workforce and facilitate a culture that drives company success. And, as Branson noted, the company’s success depends on its customers’ success. That’s where software comes into the picture. As we reimagine what’s possible in this new normal, it’s time to connect people to their purpose.

Instead of a traditional ERP approach that makes employees stop engaging with customers to fill out forms and create reports, software can free them to focus on what really matters. It can automate tasks that don’t directly add value. With the right software, your people can keep thinking about how to make customers successful instead of worrying about filing expenses.

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The economy of the future will be all about work, meaningful work, otherwise known as “purpose.” Humans are a resource — it’s right there in the acronym “HR.” But unlike widget materials, employees are a resource capable of creativity and striving and dedication to the service of others. And that tells us how we need to redefine “ERP” going forward.