Is the traditional ERP model on its last legs?

Phone books, paper maps, and pagers feel like antiquated relics of the past. Some executives think enterprise resource planning (ERP) software may soon join that list.

More than one-third (36%) of C-suite executives believe the current traditional ERP model will soon become obsolete “in favor of a composable, modular, flexible, API-driven, best-of-breed model,” according to a recent Rimini Street report. Almost the same percentage (33%) replied that they believe the traditional ERP model will evolve with an agentic makeover in the future, while 3 in 10 said the current model will receive “incremental enhancements.” The findings are based on a Censuswide survey of 4,295 global C-suite executives.

What exactly is ERP 2.0? IT Brew caught up with Eric Kimberling, CEO and founder of Third Stage Consulting Group, to understand how ERP models may evolve. Historically, he said, the ERP model was a single system that “pulled together” a company’s entire operations; however, this once-critical software may begin playing a smaller role.

“It’s gonna, in many ways, become more of a glorified database that tracks information and keeps it all in one place,” Kimberling said. “But, you’re [also] gonna have AI…end up being the the face of technology to the average person.”

Mickey North Rizza, group VP of enterprise software at IDC, said the next era of ERP models might feature companies building out their own agents to streamline manual ERP processes or tapping their cloud service provider’s AI functions to aid their ERP software. Pedrom Rejai, founder and principal of boutique consulting firm Elevate Growth Partners, added that businesses may choose to invest in specialized software to fulfill their ERP needs.

Some companies are even turning to the platform-as-a-service (PaaS) model instead of investing in a traditional ERP, Kimberling said: “What we’re seeing a lot of companies do is say, ‘We don’t want necessarily a system like an ERP system…We just want a platform that we can either build our own stuff and or use third-party apps that other developers have created within that platform.’”

Vendors are upgrading. Current vendors in the ERP industry are cognizant of the desire for enhanced ERP software, according to Rizza, who is seeing a push for AI-strengthened offerings at varying levels.

“What’s interesting to me is many of the vendors that are leading on the AI side are working with their clients to utilize their clients’ ideas to get to the next level,” Rizza said. “That’s a really good partnership.”

What this means for IT pros and businesses. Any upcoming shift in the ERP model means business leaders should be open and willing to adapt to change in the industry, Rejai said.

“The winners will most certainly be those that are on the forefront of this technology, not the leading edge,” Rejai said. “If you’re going to ride the wave, be at the top of the wave, not at the front of the wave, and definitely don’t be behind it.”