The Rise of Postmodern ERP and its Impact on Procurement!

Since the advent of Enterprise Resource Planning (ERPs), organizations have achieved new heights of operational efficiencies.

Specifically in 90s, a multitude of large organizations started looking at ERPs for their core business functionality to bring all the isolated solutions under one umbrella and enhancing inter-functional harmony.

With time, as the processes become complex and macro-economic conditions changed, organizations are continuously expected to evolve and be agile and adaptive in their approach of running businesses.

Instead of depending completely on the legacy ERPs for incorporating the changes, they have to start looking at quicker SaaS (software-as-a-service) or cloud solutions in other words — The Postmodern ERP.

Gartner first coined this term in 2014.

As per Gartner “Postmodern ERP is a technology strategy that automates and links administrative and operational business capabilities (such as finance, HR, purchasing, manufacturing and distribution) with appropriate levels of integration that balance the benefits of vendor-delivered integration against business flexibility and agility.”

In simpler terms, a postmodern ERP is a customized set of cloud based architecture meant to simply a specific function.

Businesses looking to incorporate higher level of functionality or quickly improve operational efficiency can be benefited as postmodern ERP offers better functional fit, process flexibility and easy accessibility.

Being hosted on cloud application is an added advantage as it enables real time access and real time information feed.

In the postmodern ERP world, the traditional ERP systems are divided into a set of decoupled integrated module where each module addresses a specific business function.

To realize the difference in procurement world, a postmodern ERP could be anything ranging from a holistic source to pay solution to a small module like e-invoicing smoothly integrated with the organization’s existing ERP architecture.

At times, every specific function can deploy a customized application given the condition that each integrates seamlessly with another.

This forms the basis of a postmodern ERP and ensures quick adoption to latest technology utilizing all the latest technological advancements necessary for a business function.

Here are the few reasons which highlights the point why an organization should focus on ERP –

• In case of emergency transition or a functional requirement change, it is always cheaper to upgrade or change that particular module rather than updating or changing the complete ERP suite
• Postmodern ERP are more agile, lighter, faster and more suitable for completing the particular job given it integrates completely with the existing architecture
• A hybrid model having eProcurement and postmodern ERP will ensure single best-in-class software that makes it easy to implement business process changes, customize vendor management systems, and provide built-in requisition/bid/purchase order support

In spite of showcasing high potential, integration remains the biggest hurdle while it comes to implementation of postmodern ERP.

An organization planning to move from one complete ERP suite to SaaS application need to ensure adequate infrastructure investments and technological checks for a smooth integration among all the applications.

But with all the digital advancements, an organization needs to be highly proactive and can’t ignore the onset of postmodern ERP in its business.