During a recent visit to an Oracle Partner Summit in Denver, Colorado, I had an opportunity to attend some very impressive presentations and learn everything there is to learn about the product direction of JDE World and Enterprise One.

Oracle will often invite a customer or Industry expert to speak at these summits and provide the audience with a third party “unbiased” perspective on the Industry, Oracle products, or Oracle as a company. More often than not, it’s at this point of the day that most of us usually head for coffee, or our cell phones, only to return to our seats when a more relevant topic is being presented.

I normally include myself in the aforementioned category but for some reason on this trip I felt compelled to listen to every speaker no matter how mundane or trivial their topic may have appeared at first glance—and luckily I did.

Tom Harmon, an analyst for Forrester, gave one of the more interesting presentations that I’ve heard in several years. He discussed what he considered to be the Top 10 Trends in ERP for 2010. Some of these trends I agreed with, and some I didn’t, but I thought that I would share these opinions with you and give you something to think about for the remainder of 2010.

I think that you will find Tom’s opinions interesting and my rebuttal, where applicable, equally provocative. In order to give each trend adequate consideration I will break this discussion into three parts so that we can explore each trend in detail.

Top 10 ERP Trends for 2010

Part 1

1. Upgrade and footprint expansion activity.
   ERP decreased 24% in 2009 but it is expected to grow 8% per annum over the next 5 years. I disagree. I think that growth should be slightly higher. I believe that as organizations consolidate and look to get more out of their IT operations moving to a single vendor ERP system only makes sense. Moreover, as the industry continues to consolidate vendors are going to standardize on one technology platform and begin to replace many of these multi-system platforms that currently dominate most environments.In a recent Forrester survey^[1] 26% of the respondents felt that updating/modernizing key legacy applications was very important and a high priority. 20% of the respondents felt that consolidating or rationalizing enterprise applications was very important. 22% of the same respondents also indicted that they had plans to Expand/upgrade existing ERP implementations. Consequently, I interpret this data to suggest that an 8% expected growth is too conservative; I anticipate double digit growth.What we do agree on, however, is that maintenance revenue and service revenue will grow at a higher rate than license revenue over the next few years and that the majority of all ERP Revenue will be maintenance^[2]. Moreover, I expect this trend to continue into the future as services and support continues to outgrow license at a higher slope.
2. Open Source
   The use of Open Source Technology will continue to increase except for ERP Applications. I Agree. Open Source technology really doesn’t have a large play in regards to ERP. SaaS and Cloud are more relevant and the trend is more towards these uses than it is towards Open Source.
3. Small businesses going ERP sooner.
   Small Businesses will be moving to an enterprise level ERP system sooner. In 2005 the average company had at least 29 employees before adopting an ERP system; this number is expected to decrease to 18 in 2010. I’m 50/50 on this. I can see how many small businesses wouldn’t have the revenue, cash, or credit, to purchase and implement an ERP system in this economy so I would disagree with this trend. On the other hand I can understand how economic conditions would dictate the need for cost savings that can only be generated through the increased efficiencies that ERP can bring. Consequently, many small firms may view ERP as a tool to stay competitive in tough economic conditions. Unfortunately, I don’t have a feel for which theory is more prominent so I can neither agree or disagree with this assertion.Please feel free to comment and contribute your opinion on where small business is trending.
4. Mobile ERP.
   Mobile ERP will grow in use and importance. I agree. With the emergence and popularity of the i-phone, i-store, and mobile applications, the next evolution in ERP will be a mobile client interface to ERP systems. Oracle already has a mobile client and Oracle Lite for disconnected applications but Tom and I both feel that the next evolution in mobile ERP will be interchangeable and downloadable mobile interfaces. That is, depending on the business area of interest – HR, Finance, Procurement, etc – you will be able to select a mobile interface that corresponds to that business area and a specific business process.In surveys conducted by Forester companies have already implemented some form of mobile ERP application: Sales Force applications (18%), Field Service applications (15%), Logistics applications (15%), Inventory Management applications (22%), Customer-facing applications (15%), and Enterprise Asset management (15%). Moreover, Forrester also found that these same companies had plans to either implement/expand their use of mobile applications: Sales Force applications (10%), Field Service applications (10%), Logistics applications (5%), Inventory Management (5%), Customer-facing applications (15%), and Enterprise Asset management (5%).This data supports what I have seen in the field, and more importantly, it is representative of what an ever increasing number of customers have been asking for. Moreover, I foresee this trend not only continuing, but increasing each year as we go forward.

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^[1] Forrester’s Enterprise And SMB Software Survey, North America And Europe, Q4 2008

^[2] Source: company reports and Forrester estimates