IoT ERP-Enterprise Resource Planning (ERP) systems have always been limited because they mainly look at the data being managed inside the four walls of a company. The rise of the Internet of Things (IoT), however, is having an impact on enterprise applications. And while most enterprise application vendors are talking about how the IoT will impact current applications, many are not looking past the current system’s design and operating models. In reality, the IoT will fundamentally change ERP applications. Current approaches to managing enterprise data will literally be turned outside in.
The IoT will allow for data to be sent in real-time from all manner of external touchpoints back into the internal business systems. No longer will organizations struggle to connect these internal ERP business systems and processes to the external data. The data collected from IoT devices will take on primary importance for managing the health of a business.
As Satya Nadella, CEO of Microsoft, said in his address to an event in London, “Digital technology, pervasively, is getting embedded in every place: everything, every person, every walk of life is being fundamentally shaped by digital technology — it is happening in our homes, our work, our places of entertainment.” The result is that ERP systems, as they exist today, will be less important as these new business models take hold. It is the external data from the IoT that will be the fuel to drive the next generation of business systems.
Background on ERP
ERP systems are business management systems that have been developed to track, manage, and report on a company’s operations. Today’s dominant ERP systems have their roots in software that was developed in the 1990’s, when ERP centered around a combination of financial and manufacturing management processes. See TEC’s article on ERP History: Origins and Evolution for more background.
ERP software has since been built out to encompass every aspect of a company’s operations. ERP systems manage financials, human resources (HR), customer relationship management (CRM), inventory, manufacturing operations, sales, marketing, field service management, and almost every imaginable business process that can be tracked in a system.