Gartner Redefines Highly Customized ERP Systems as Legacy
Highly customized enterprise resource planning (ERP) systems will be
considered "legacy" by 2016, according to a new report from
Gartner.
The report, "Predicts 2014: The
Rise of the Postmodern ERP and Enterprise Applications World," defines
legacy as "any system that is not sufficiently flexible to meet changing
business needs," which includes heavily customized ERP implementations.
According to the company, over the next 10 years the majority of
organizations will gradually transition their legacy ERP systems to "postmodern
ERP" systems, which will blend cloud-based solutions, business process
outsourcing and on-premises applications. Gartner predicted that 30 percent of
service-oriented organizations will move most of their ERP systems to the cloud
by 2018 and more than half of organizations will do so within the next 10 years.
But the on-premises ERP systems won't disappear right away. Rather, they will
remain static, while new functionality will be delivered by cloud-based
solutions that integrate with the legacy systems. Therefore, the challenges for
IT departments will shift from customizing in-house ERP systems to integrating
various cloud-based solutions with the legacy systems.
While administrators still want solutions that are reliable and integrated,
they also want to lower IT costs and increase flexibility, but according to
Gartner, by 2017, 70 percent of organizations adopting hybrid ERP solutions
"will fail to improve cost-benefit outcomes unless their cloud applications
provide differentiating functionality."
In some cases, Gartner predicted, shifting to a hybrid solution will
actually increase the total cost of ownership. "Most organizations still
fail to recognize and plan for the total lifetime costs of their ERP solutions,
whether on-premises, cloud or hybrid," said Carol Hardcastle, research vice
president at Gartner, in a prepared statement. Organizations need to consider
the cost of connecting solutions together and retraining staff or hiring new
staff to manage the data, integration and vendors.
The full report, "Predicts 2014: The Rise of the Postmodern ERP and
Enterprise Applications World," is available to Gartner clients on the
company's site.
About the Author
Leila Meyer is a technology writer based in British Columbia. She can be reached at [email protected].