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The year 2021 represents a new beginning for companies coming out of one of the most disruptive years in history. It’s expected to be a turning point for enterprise resource planning (ERP) business applications, as the pandemic has exposed vulnerabilities resulting from ERP’s functionally siloed architecture. As companies adopt “Business 4.0” technologies, cognitive analytics, and cloud-computing deployments, more of them will be seeking extended ERP transformations.
Companies adopting Business 4.0 technologies are using them to transform their ERP systems into a cloud-based, single-instance, enterprise application platform that features advanced analytics, a collaborative architecture, and digitization of physical data and processes.
Simultaneously, supply-chain leaders are transforming from “chain thinking” to enterprise supply network ecosystems. As they digitize data and processes, they implement strategic initiatives to develop digital twins, which allow them to harvest new sources of data, including mobility, internet of things, hyper-location services, sensors and monitors, and connectivity to external partners. By applying new algorithms, enabled by artificial intelligence and machine learning, to the digital twin, supply network management can deploy modeling and simulation tools to visualize various scenarios and network configurations, and support more optimized decision making. The mantra of the digital twin is resiliency and responsiveness to ever-changing ecosystem market and regulatory conditions.
As companies advance through the stages of resiliency maturity, connectivity brings the realization that the enterprise supply network is actually part of an ecosystem network of networks. New and independent ecosystem commerce platforms will emerge. ECP solution providers are realizing the value of the data they’re mining through their ecosystem data interchanges and marketplaces, and creating new opportunities for monetization.
Ecosystem commerce orchestration will require new applications, data mining and management, cloud computing, mobility, and the entire suite of Business 4.0 technologies. New monetization opportunities will come from federating ecosystem commerce data at the transactional and process levels.
ECPs are beginning to orchestrate ecosystem supply network material flowpaths and data. They’re developing application functionality in order to use ecosystem federated data to model the integration of enterprise supply networks. In the process, they’re able to optimize inventory, leverage supply-chain finance, manage order allocations, and optimize transportation consolidation and intermodal flows. The resulting federated model solution created at the ecosystem level is called ecosystem resource planning, or ERP 4.0. It represents the first major market-share threat to traditional ERP applications, not by taking markets away from them, but by extending the enterprise systems to an ecosystem commerce market. Think of how PCs eroded the technology market-share leadership of IBM, not by replacing mainframes, but by increasing the size of overall market offerings. It
Clients of ECPs will realize that they don’t compete on transportation channels, and ERP 4.0 applications will reduce total ecosystem supply network cost, while optimizing supply network resource scheduling.
The coming year will see the transformation of ERP into ERP 4.0, a market characterized by connectivity, collaboration, and new competitors. Ecosystem commerce orchestration will require new applications, data mining and management, cloud computing, mobility, and the entire suite of Business 4.0 technologies. Fasten your seatbelt: 2021 will be a transformative year for ERP systems, enterprise supply network management, ecosystem commerce platform solutions, and an overall exploding technology market.
Rich Sherman is a Senior Fellow with Tata Consultancy Services.
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