As 2023 begins, many companies are looking for improvement opportunities and exploring how they can do more with less. Yet, with the constant flux of complexity in doing business, there’s a growing need to transform operations by investing in robust, scalable solutions.
You might wonder how you can invest in technology and save money simultaneously. The answer is simple; it’s the only way to keep pace in today’s markets. The best business applications in 2023 enable agility and cost-savings, in addition to functional improvements. This blog examines six game-changing trends that will set the industry standard this year.
1.) Increased demand for low-code/no-code development tools
When Gartner coined the term ‘ERP’ in the early 1990s, it was to capture the inclusion of enterprise-focused processes in manufacturing resource planning software. Today, the role of ERP software is to provide a stable core that supports the seamless integration of composable and modular business applications, accelerating the acquisition of emerging capabilities and technologies.
One of the main ways these ‘composable ERPs’ will increase interconnectivity is by leveraging low-code/no-code interfaces. Gartner predicts that, by 2025, 70% of new business application developments will centre on low code, and 50% of all new low-code clients will come from business buyers outside the IT organization.
Since you no longer need to be a programmer to create a custom business application, companies can take advantage of a host of benefits that were previously inaccessible. The lower cost of development and reduced barrier to entry empower citizen developers to rapidly build out and adjust customized products to address niche challenges. This ultimately improves company flexibility and agility, enabling deployment of new solutions based on changing markets and business requirements.
Monolithic ERP vendors that cannot break the mould will be left in the dust as demand increases for solutions that enable data-driven decision-making and high usability. Microsoft’s Power Platform is a perfect example of how this trend is already lowering the barrier to entry and discovering untapped value.
2.) Widespread adoption of the ‘hub-and-spoke’ model
As businesses prioritize cost-savings and agility, ERPs will embrace different architectures that enable companies to quickly adapt to changing markets and, ultimately, do more with less. One of the methods most likely to experience widespread adoption is the “hub-and-spoke” model. Also known two-tier ERP or the star model, it provides a cost-effective way for enterprises to harmonize communication and security requirements across entities of varying sizes and geographies.
It’s particularly useful for those facing the following scenarios:
- A rapidly growing entity requires ERP software
- The legacy ERP system from a merger or acquisition is outdated or unsupported
- A subsidiary’s industry is not reflected at the corporate level
The ‘hub’ represents the top-tier application used at the corporate level, while the ‘spokes’ represent specialized software managed by the subsidiaries. The hub creates a centralized environment, storing the common service components for spokes to access and enabling the centre of excellence to monitor and control access and usership.
It’s also possible to manage complex multitier workloads by nestling hub-and-spoke architecture within interconnected spokes. Spokes connected to other spokes effectively create a miniature hub. Therefore, a subsidiary can function like a miniature hub with radiating spokes representing different departments or entities.
Further reading: 5 steps to reduce and assess security risk in mergers and acquisitions
3.) Further cloud migration, maturation, and verticalization
Although cloud computing isn’t new, its expanding prevalence is a growing ERP trend. Traditionally, users have been fearful of storing their data in the cloud, citing concerns about cybersecurity and compliance. However, recent advancements have quelled these anxieties and modern ‘Cloud ERPs’ boast many advantages, including:
- Lower operating expenses
- Better data security
- Real-time analytics
- Easier scalability due to few technical requirements
- Worldwide accessibility, enabling fully remote work
According to Gartner’s latest forecast, international end-user spending on public cloud services is predicted to increase 20.7% to $591.8 billion in 2023, up from $490.3 billion in 2022. Throughout 2023, more companies will migrate their ERP to the cloud or upgrade their Cloud ERP. One of the ways clouds are maturing further is by becoming verticalized.
Microsoft’s latest cloud initiative offers better security and cloud services segmented by industry. Microsoft’s Industry Clouds cater to challenges inherent to certain verticals like industry-specific regulatory compliance. It’s also likely that companies will move away from using generic solutions in favour of systems that streamline industry-specific requirements.
4.) Mobile apps facilitate an immersive experience
Laptops, phones, tablets—mobile devices have become integral to today’s workforce. Accompanying the rise of remote workers and digital nomads, demand for a mobile app connected to company software is skyrocketing.
A natural extension of cloud-based ERP, mobile-friendly ERP empowers staff at all levels of seniority with real-time access to company information and customer communications. Global Market Estimates predict the global mobile ERP market will grow at a CAGR of 9.2% from 2021–2026.
This ERP trend is already being implemented by Microsoft, who’ve announced that Dynamics 365 Business Central is integrating with Teams. Business Central users can quickly look up contacts, share details, and respond to enquiries within Teams.
5.) Improved AI and ML augment human productivity
In recent years, artificial intelligence (AI) and machine learning (ML) have greatly improved, maturing beyond optional modules to the point where they play key roles in enterprise software. All ERP trends mentioned in this blog are made possible by these innovations.
AI and ML are invaluable tools that augment human productivity through expanded data analytics capabilities, empowering teams to make data-driven decisions faster and with fewer errors. Smart functions like interactive assistants and zero-touch automation allow the software to shoulder the burden of tedious, repetitive tasks.
In 2023, these technologies will continue to evolve, aiding in many departments and industries. For example, AI and ML facilitate digital twins, a digital representation of a real-world product, system, or process. Manufacturers can optimize supply chain management by visualizing their logistics network and tracking shipments using integrations with the Internet of Things (IoT), mitigating global risks and enabling just-in-time delivery.
Further reading: Give your finance function a health check with this simple questionnaire
6.) Push for creative finance and XaaS (anything as a service)
The booming subscription economy produced a ripple effect that can be felt in virtually every industry and the ERP software market is no exception. Software-as-a-service (SaaS) has expanded in many directions from platform-as-a-service (PaaS) to infrastructure-as-a-service (IaaS) to device-as-a-service (DaaS), etc.
Anything-as-a-service (XaaS) re-envisions business capabilities as a collection of cross-functional, horizontal services liberated from their discreet silos. In the ERP space, this translates to more ERP products purchased over the Internet via subscriptions. This wave of subscription-based business will continue to transform companies, opening the possibility for anything to become finance.
It’s unlikely that end users will replace their ERPs immediately, but many can use modular components and ‘microservices.’ Budget-conscious companies can benefit from lower upfront costs, reduced overhead, no maintenance fees, and ongoing customer support, allowing in-house IT departments to focus on more pressing matters.
Discover ERP products embedded directly into Microsoft Dynamics
Embedded directly in D365 Finance, D365 Business Central, and GP, the following products will take your business processes to the next level:
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- Property Lease Management. Digitalize your lease portfolio and discover unprecedented flexibility for property, plant, and equipment lease management.