For entrenched ERP vendors to survive, they’ll have to find a way to innovate around the holy trinity of cloud computing, mobile apps and social media, three meta movements that are transforming computing far beyond the world of ERP. That means not just paying lip service to these transformative technologies, but internalizing their meaning and innovating from a new perspective. For example, any new ERP ecosystem that doesn’t recognize that desktop computers are in steep decline and that doesn’t make mobile devices the core of its transactional platform is missing the mark.

The Future of ERP:

Things Will Be Very Different. (Part 2)

Mobile devices have become the de facto mode of interaction with ERP systems for millions of users. The modern worker is mobile, often working from home or, more accurately, from anywhere. They may even be a contractor, not an employee and have no interest in working in a cubicle or sitting in front of a desktop computer. And, increasingly, they are working with apps created by tiny one or two-person software “companies” and downloaded at minimal cost using the model pioneered by Apple Inc. for the iPhone and iPad, and adopted by Google for Android phones. These developers don’t force their users to purchase a million dollar database or spend millions more hiring an integrator to connect their new apps to an old ERP system.

Cloud computing brings big benefits to fast-moving enterprises in today’s world. It’s inherent dial-up, dial-down flexibility is the antidote for the volatility of modern markets. Multi-tenant applications dramatically cut the total cost of ownership of ERP, and spell dramatic changes for the world of hardware vendors, as well as software companies.

Social media may have evolved to let Harvard undergrads know who was “hot” and who was not, but it has adapted perfectly to the collaborative, interactive nature of the world of business today. In fact, one innovative new name on the ERP horizon, Kenandy, has created what they are calling a “social manufacturing” platform. Kenandy is taking the old world of industrial manufacturing into the new world of the cloud. Sitting atop Salesforce.com’s cloud software, Kenandy is creating a service that combines the nuts-and bolts of manufacturing software with cloud technology and social media. Their solution provides core manufacturing functionality, such as inventory, shop orders, purchase orders, and material planning, especially for firms that source, manufacture, and distribute products through contract manufacturers and channel partners. Kenandys insight is that in the past two decades, manufacturing has moved from a vertical operation — where divisions within the same company all interact to build something — to a horizontal one, where various companies work together to make a product. Existing ERP software isn’t well suited to deal with this new reality.

Another ERP solution that has a unique take on ERP’s role is from a company called Workday. Workday is an entirely new product created for the event driven business. Traditional ERP revolves around accounting and business transaction processing. Workday recognizes that companies in today’s fast-paced marketplaces primarily have to respond to external events, such as competitive moves or changes in their supply chain. The essence of their innovation is to harness cloud computing, with a multi-tenant solution, mobile computing and social media.

Keep an eye on ERP.com to learn about the inevitable reformation of the ERP landscape.