What can the Internet of Things learn from 1990s ERP?

The 1990s were an exciting time to be in the software industry. Companies were waking up to the idea that reinvigorating business processes could boost productivity and streamline operations. Integrating business operations became top of the CIO’s list in the 90s and subsequent decade. However, it was not without its problems. Early IT implementations overran, under-delivered and cost companies millions. In one famous case, Hershey’s was unable to deliver $100 million worth of its chocolate on Halloween due to its failing ERP, which caused the company’s stock to dip 8 percent.

[easy-tweet tweet=”Early IT implementations overran, under-delivered and cost companies millions.” hashtags=”tech, cloud, IT”]

While many of those early implementations were complex and costly, the resulting integration and visibility had never been seen before. For example, real-time, accurate information enabled businesses to provide Available to Promise (ATP) commitments to customers and end-to-end processes became transparent.

Fast forward to the present day, and the ERP industry has not only learnt the lesson of its early days, but it has evolved. While ERP systems of the past were developed for specific functions, the new wave ERP-as-a-platform exists to open the platform up to allow developers and business users to make it their own.

So what has ERP’s journey got to do with the Internet of Things?

As Peter Sondergaard, SVP & Global Head of Research at Gartner recently put it; the IoT is where ERP was in the 90s. It’s new, hot and exciting and continuing to grow. But to ensure IoT lives up to its potential, it should look at the journey ERP has taken, and see what lessons it can learn:

Real-time analytics is key

Real-time analytics is crucial for ERP, for businesses to optimise their business performance. It allows companies to see as and when, what’s going on – from economic fluctuations to the best way to complete an operation given numerous variables.

Real-time analytics is also critical for IoT. Take driverless cars for example. Although not commonplace on our roads, they soon could be. If they are to be successful, there will have to be data flowing between cars, people, streetlights, mobile phones, etc. It will be real-time analytics that use this data to make the important, real-time decisions for the driverless cars.

[easy-tweet tweet=”Real-time analytics is as critical for IoT as it is ERP” hashtags=”tech, cloud, IT”]

Integration is a top priority

Gartner has cited a lack of application integration strategy and related skills as the biggest problem facing cloud ERP. To avoid this, organisations cannot forget about their existing systems outright. It’s important for companies to look for a vendor who will provide guidance on application integration strategy when transitioning to the cloud, or risk reaping none of the benefits.

In the same way, connected devices will need to integrate seamlessly into an environment which, right now, will be dominated by non-IoT devices. When choosing to invest in IoT devices, ideally, neither the business or their customers will notice the switch. It’s only with a good integration strategy that this will be made possible.

Security is important

Security should be paramount for IoT devices, especially in light of recent attacks which potentially utilised IoT devices to shut down major websites in the US, such as Twitter and Yahoo.

ERP, as it has grown and developed, has also had to place a heavy focus on security. Companies use ERP to store valuable, private data, so it has to be able to prove it can keep it all secure. If it can’t provide this assurance, ERP will struggle to attract users. Likewise, if the IoT can’t keep the hackers out, consumers, businesses, and investors, will shy away.

Agility and flexibility have an impact

If the IoT wants to profit from all the data collected from ERP, it has to be both agile and flexible. The IoT would have to be adaptable, intelligent, and be able to process and generate real-time information, in the same way ERP does.

[easy-tweet tweet=”As long as IoT devices are flexible, they won’t disrupt business operations” hashtags=”cloud, tech, IT”]

As long as IoT devices are flexible, they won’t disrupt business operations, or constrain a business as it tries to grow. This is especially pertinent for smaller companies, who face very different challenges to larger businesses and often have to react faster to remain competitive. Mostly, IoT needs to look at the flexibility and agility of modern day ERP and strive to do the same.

As with the dawn of ERP over 25 years ago, the defining characteristic for the IoT’s success will be integration: with existing business processes, people and systems. Thankfully, the post-modern ERP we see today will play a major role in extracting this value.

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