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May 15, 2013

Is ERP Dead? What to Look Out for in 2013

Enterprise resource management (ERP), as we know it, no longer matches the needs of the modern, highly-automated organization. Here’s a look at how the trend has changed and what to watch for in 2013.

Buyers still use the term ERP when describing what it is they’re looking for; however, that’s not what they actually need. Many companies require software as a service (SaaS) that is incredibly flexible and continuously upgraded with new features. The cloud platform is the best method of meeting this challenge, providing the ability to collect and measure a company’s revenue while managing its financials.

There are a number of companies who are set to carve out major positions in this field during 2013. Most of them are primarily oriented toward larger organizations, though small business has attracted some interest from these companies. has built its software on the Salesforce platform to provide customer service agents with access to financial transactions. The major benefit is it allows agents to quickly resolve issues without having to involve another party, such as accounting. This platform allows customers to integrate with other native apps running on the platform, allowing increased functionality.

Freshbooks is highly focused on providing small businesses with a simple way to invoice customers without needing a lot of accounting knowledge. With more than five million business owners using its service, it must be doing something right. Add-ons provided by third party developers provide increased functionality by creating a customized workflow.

Intacct is a well-known SaaS provider that has been effectively marketing its products through accountants. Their scalable offerings are available to both small and large business, whether emerging or established. With over 6,000 clients, the company has managed to almost double business during the past year alone.

NetSuite is the leading cloud ERP platform, according to number of customers and revenue. It offers customer relationship management (CRM) and eCommerce, along with financial management. NetSuite functions as an enterprise-wide live platform as opposed to a record-keeping system for the accounting department.

Plex Systems is the Rodney Dangerfield of ERP; this Detroit company gets no respect. However, the lack of attention may soon change with last year’s recent venture capital investment from Accel Partners. With several hundred customers primarily focused on manufacturing, they may be a force to reckon with in the coming year.

SAP may have a breakout year in 2013, after spinning off financials on demand as a separate product. Until now, they’ve suffered from a convoluted cloud line-up, due mainly to shifts in strategy and technology, and have wrestled to gain sufficient support in their partner channels.

Xero, the six-year-old company from New Zealand, received significant venture capital last year. This should allow this small-business QuickBooks competitor to offer its financial SaaS to the North American market in a meaningful way. They’re hoping to leverage their design and usability to accomplish this feat.

Workday completed an IPO in 2012 and is expected to make major strides in the near future. Primarily oriented toward human resource management (HRM), it has invested significant resources in improving its financial functionality. Though the customer base is relatively small, customer size is quite large. Therefore, Workday’s revenues could increase substantially in the coming years.

Zuora has bet its fortune on what can be best described as the “subscription economy.” As more businesses move toward subscriptions instead of product sales, they need an appropriate platform like Zuora to manage subscriptions and billing, recognize revenue and provide accounting functionality.

ERP has undergone such a dramatic change that conventional definitions are no longer in synch with what the majority of today’s companies need. Leading software vendors have responded by delivering software with far more capabilities than traditional ERP ever provided.

Stephen Jeske is an avid outdoor enthusiast with a passion for coffee. He frequently writes on a variety of topics including small business and prominent businesspeople such as Gary Crittenden.