ERP, SaaS, AI – how to stay on track?

Conflicting demands

These days, we are meeting with business leaders who are feeling lost. They are caught between conflicting demands, such as the following:

• Their CIO argues that everything should be put into the ERP system—especially if the company is German and the ERP system is SAP. According to its advocates, ERP can do everything.
• Others advise them to reduce the scope of ERP to the role of the company's transactional backbone and to shift decision-making to specialized "best of breed" solutions (such as Intuiflow), whose adoption has been facilitated by the advent of SaaS.
• Finally, there is increasing talk that artificial intelligence will reshuffle the deck—why bother with all this when all you need is a well-crafted prompt for Claude/Gemini/ChatGPT or others to provide you with agents that automate your business processes? Some predict that this spells the end of Best of Breed solutions, and have even coined the term "SaaSpocalypse" to describe the effects. Anthropic's latest announcements have caused some software company valuations to plummet.

The business leader's perspective

Put yourself in the shoes of a manufacturing business leader exposed to these messages—a small, medium-sized or intermediate company, or a site within a large group. Their ERP system is a decade or more old. Updating it to the latest version is a major undertaking, which is likely to mobilize enormous resources for a couple of years.

There have been digitization initiatives with mixed results—we are still trying to take advantage of this MES or WMS, but the quality of the data and the discipline of use leave something to be desired.

This business leader organized a two-day seminar with his management committee to raise awareness of Artificial Intelligence. There was a lot of talk about possibilities, concerns about risks, and everyone was impressed by the scope of the analyses carried out by an LLM, while pointing out some glaring errors.

This entity is part of a multinational group. The group has an ambitious plan to deploy new solutions - the new ERP, or a market-leading APS. This program costs millions and will affect this entity in 18 months—or two years, or three years—or more, because we all know, without admitting it, that it will be delayed.

The temptation to wait and see

Faced with these uncertainties and caught up in a whirlwind of operational emergencies, regulatory constraints, new product and service launches, and difficulties in recruiting the right skills, it is very tempting for business leaders to do nothing for the time being. It is too confusing to launch a relevant initiative.

For those of us who are exposed to the reality of industrial companies in the 21^st century, we know that everyday life consists of ERP systems inherited from the 1990s and spreadsheets.

So doing nothing means letting your teams struggle with an obsolete ERP system, a maze of Excel files, and attractive but incomplete business intelligence. Decisions are slow, not necessarily supported by data, and operational results may suffer as a result: delivering on time, having the right inventory, and making good use of company resources. Incidentally, this does not provide teams with an efficient and meaningful working environment - it may have been acceptable for previous generations, but the digital natives who have joined our teams lately are not satisfied with it.

In my 40 years of experience in the industry, the risk of waiting has always been much greater than the risk taken in a transformation initiative.

Experimentation—with new practices and new tools—is the mother of learning and evolution, both in nature and in business.

Which direction should you take?

To sum up, as a business leader, you have three options for transformation:

• Continue down the ERP path. However, you are rightly concerned about the very slow pace of change of these dinosaurs. Is entrusting all these business processes and their continuous improvement to a system that evolves so slowly really the solution? By the way, do you have a single ERP system or a wide variety of different systems in your company?
• Take the quantum leap in AI. Build internal skills, or hire consultants, who will use AI to equip your business processes. Personally, it reminds me a lot of the era of in-house development around ERP systems, and those many "citizen developers" who, over the years, developed Excel or Access databases - for those of us who are a little older... This could well promise us a future of chaos with disparate AI agents, don't you think? Is the core business of your manufacturing or distribution company to deliver goods to your customers, or to deliver quality software to support your processes?
• Then there are the SaaS players, the publishers of Best of Breed solutions. Their core business is to translate business needs into software solutions, in an agile manner with frequent new releases, by bringing together information from various ERPs and benefiting from the feedback of multiple companies. These players combine teams of business experts and developers, and actively embrace the contributions of Artificial Intelligence, because they have the skills and agility to translate promises into solutions.

The real question you need to ask yourself is: what is the fastest, most effective, and least expensive solution to enable my company to progress quickly and sustainably?

The SaaSpocalypse will not happen, unless...

You might say that, as the publisher of the Best of Breed SaaS solution Intuiflow, I am biased, and I agree. However, my experience in the industry and with digital solutions leads me to believe that the future lies in refocusing ERP on its transactional function and entrusting decision-making to SaaS solutions.

This requires those SaaS software publishers to avoid a few pitfalls:

• SaaS solutions must integrate relevant AI tools. Not because it looks good, but because it enriches functionality and facilitates decision-making. With their business and technical expertise, these companies have the right skills to make this transition happen.
• SaaS solutions must remain agile, otherwise they will become the ERP dinosaurs of tomorrow. This is already the case today with certain "leading" supply chain planning solutions—originally innovative—that have become extremely expensive and not very agile. Choose a provider whose teams are large enough to have the capacity for technological investment, but structured into small, agile teams that can deliver value quickly.
• Solutions must be based on solid business principles. The mirages of technology should not obscure common sense.

Any resemblance to Algo would be entirely coincidental... but if you are looking for guidance, please do not hesitate to contact us to discuss your needs!