IT teams recently added a new phrase to their lexicon: postmodern ERP. This term is a software type and methodology that steps away from the one-size-fits-all ERP software model and allows you to customize modules that fit your business needs. This article explores postmodern ERP’s background, its benefits, typical features and companies that thrive with this system.

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What is Postmodern ERP?

There are so many postmodern ERP definitions floating around on the web that it’s hard to pinpoint one true meaning. To clarify this system’s definition, companies abandon traditional all-in-one ERP platforms and invest in a collection of standalone systems. For example, they could invest in separate but collaborative customer relationship management (CRM), business intelligence (BI) and accounting platforms.

Post modern ERP deconstructs ERP software into logical components from one extensive central program. This new methodology debunks the notion that companies need “one ERP to rule them all” or purchase solutions from one vendor. Traditional ERP approaches seem easy and safe but can sometimes hold companies back.

History of ERP

Gartner introduced the world to enterprise resource planning in the 1990s as integrated software tools that included financial, HR, CRM and manufacturing practices. These tools are still fundamental ERP components today.

From the ’90s to the 2000s, ERP was a hit because it merged with core company workflows. Eventually, people viewed ERP negatively because of high prices, lack of flexibility and higher failure rates in general and for projected ROI numbers.

Fortunately, ERP didn’t die. Just as we moved from old-school tools, like switching to Google from AltaVista for our search engine needs, ERP software leaped into the modern digital realm.

Cloud-based software and integration opportunities prompted a change from “all-in-one” legacy systems to picking and choosing modules that best align with specific business objectives. Many legacy ERP companies opted to keep up with this trend by improving their system’s integration abilities with other platforms.

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Pros and Cons

There are several pros and cons regarding post modern ERP investments. Let’s thoroughly review this system’s advantages and disadvantages.

Pros

Versatility

Enterprise businesses gravitate toward a postmodern ERP approach because of flexibility and easy customizations.

The cloud introduced significant contributions to this new model. Thanks to easy-to-digest subscription prices, it’s more accessible to purchase a cloud or hybrid system. Companies can cobble together a set of standalone products instead of buying a “Cadillac” ERP system with all of the bells and whistles.

One common postmodern ERP software argument is that companies get what they need instead of paying for unnecessary functions, reducing overhead. In the lean manufacturing age, this is a big draw.

During procurement, buyers look closely at ROI to determine ways to maximize operations while minimizing costs. Therefore, a postmodern system available at a lower price than a traditional ERP solution is increasingly attractive to businesses, even if they have to manage multiple software vendors.

Many companies find that postmodern ERP benefits outweigh the annoyance of dealing with multiple vendors.

Best-of-Breed Integration

Another reason why businesses pursue this solution is that they can get best-of-breed systems in place by integrating them with other components. Think of it as picking and choosing what you want to eat from a buffet instead of a restaurant menu with only a few select items.

Best-of-breed, like a buffet, allows you to pick what you want and combine elements to build an ideal program. A few approved solutions are available from a traditional ERP, but the features are a standard set.

Some industry professionals point out that although post modern ERP buyers can integrate individual best-of-breed applications, it doesn’t mean centralized ERP platforms that merge all desired components don’t exist in the market either. However, many companies prefer a postmodern solution because choosing from multiple vendors has a liberating feeling.

Personalized Solution

In addition to choosing your much-needed features, you can also select ideal vendors. Many legacy ERP software vendors acquire more niche software companies to integrate those specific solutions as modules in their programs. However, with a postmodern solution, you don’t have to settle.

You can choose from numerous software programs to find the method that aligns with your business’s practices. Additionally, there are several industry-specific platforms to choose from in your search.

Typically Less Expensive than a Legacy System

ERP applications are notoriously expensive to obtain and install. Postmodern solutions are usually cheaper because base costs depend on your business size and the number of modules you’re implementing.

Additionally, if you opt for cloud-based software, it’s less expensive to install than more traditional legacy systems because they usually offer manageable subscription plans. Also, understand that more companies are migrating legacy solutions to the cloud as another option.

Cons

Complex Integrations Between Systems

Legacy systems can be a lot easier to configure than best-of-breed postmodern solutions because separate ERP modules collaborate with each other in one environment. If postmodern ERPs have different programs from distinct vendors, it may be challenging to centralize these modules.

When speaking with vendors, it’s best to ask which external modules merge with their particular system for a more significant idea of platforms and vendors to select.

Difficult Upgrades

This disadvantage ties into the previous one. If your particular add-on features aren’t compatible, upgrading them could have adverse effects on the software. If your CRM solution, for example, isn’t compatible with your BI tools, you could receive inaccurate reports and information.

When updates occur, your IT team will need to verify disparate systems’ compatibility with each other.

Offline

It’s a well-known fact that cloud systems don’t typically work offline because they need the internet. Legacy systems, although expensive, offer on-premise solutions for your hardware that works offline.

However, you could find a system with the right offline cloud storage capabilities to help you store information on the cloud and access it later.

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Key Features

Like The Simpsons episodes, no two postmodern ERPs are precisely alike. You can personalize systems with your ideal modules ranging from CRM to accounting and HR. At SelectHub, our market analysts and researchers took time to study the most popular features postmodern ERP users typically lean toward and categorized them as administrative and operational ERP.

Administrative ERP typically means office and behind-the-scenes work, such as accounting, HR management, etc. Oppositely, operational ERP focuses on specific processes like manufacturing and supply chain management (SCM). Let’s review these modules in more detail.

Administrative ERP

Accounting/Finance

This module optimizes bookkeeping practices to enhance productivity while allowing accountants to focus on client-facing and consulting duties. This system can balance general ledgers, compile and distribute invoices, manage account payables and receivables, and establish automatic bill payments.

HR

It’s stress-inducing to maintain individual employee records, skills, PTO, benefits, sick time and other aspects without a proper, consolidated system. You can manage all employment data and develop effective talent management strategies to retain current workers while recruiting new ones, thanks to HR Tools. Some typical features and requirements include:

• Payroll Management
• Applicant Tracking and Recruiting
• Time and Attendance Management
• Reporting and Dashboards

Procurement

In a nutshell, procurement deals with finding, parleying and buying goods, services and supplies. Some top features include catalog buying, contract management, spend analysis, marketplace functionality and billing.

For example, if you own a clothing store that works with cotton, silk, polyester and other materials, you’d want to ensure that you’re managing partner suppliers for these items. Procurement tools can simplify and centralize information in one hub.

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Operational ERP

Manufacturing

Whether you specialize in pharmaceutical, food and beverage, technology or other manufacturing sectors, the ideal tools ensure you increase productivity, meet quotas, automate workflows, utilize the right resources and make on-time client deliveries.

Some popular requirements for this system include:

• Sales Order Management
• Bill of Material (BOM)
• Planning and Scheduling
• Governance, Risk and Compliance
• Mobility

SCM

Keeping your eyes on every supply chain facet is easier said than done if you don’t have the right software or tools. Supply chain analytics, transportation management, warehouse management, inventory management and other tools help you gauge how well your raw materials and finished products make it to their ideal destinations.

For example, if you own a furniture company, an SCM module can drill down with in-depth, real-time reporting to exhibit successful and failed deliveries. If the numbers aren’t up to your expectations, you can make the data-driven choice to remove a vendor. This system acts as a second pair of eyes to detect bottlenecks that you may have previously missed.

Order Management

Lastly, order management platforms ensure you track all order aspects from beginning to end. This tool also offers:

• Real-time inventory data updates
• Strong order tracking
• Forecasting

If you allow clients to order their couches, armchairs, coffee tables and other furniture online, you can track them easily to ensure they’re the right color and size. You can also monitor ordering and pick-up or delivery dates to ensure the product gets to the customer on time.

Which Types of Businesses Benefit?

Most companies and industries that benefit from traditional ERP software may also benefit from post modern ERP. However, business size and specific needs are relevant when opting for a legacy solution or a new approach. For example, small companies wishing to obtain an ERP system may decide to go with a legacy tool because there is less necessary integration.

On the other hand, enterprise businesses with complex workflows may prefer a postmodern strategy because of the diverse tools needed to conduct business. Enterprises usually have bigger IT teams that can help with complicated postmodern ERP integrations.

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Final Thoughts

Postmodern ERP offers businesses more possibilities in this vendor-diversified era. These benefits range from mixing on-premise and cloud technologies to building agile IT architecture. This solution also provides versatility instead of a one-size-fits-all solution that can cause growing pains in the future.

Do you find postmodern ERP strategy interesting, or would you rather stick with standard ERP software? Let us know why in the comments below!