Last updated: Modern ERP: Companies that are thriving vs those that didn’t survive

Modern ERP: Companies that are thriving vs those that didn’t survive


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There were many “firsts” during the pandemic, but from a business perspective, it was the first time that office workers were forced to work from home for months, and global supply chains and buyers were brought to a near-total stop simultaneously.

In retrospective, we learned important lessons about who survives and who thrives amidst great change. Companies tended to fall into three categories, and those using modern ERP came out on top:

  1. The “flexible, agile” companies that thrived because they could adapt quickly and reinvent how they run and sell. Most were early adopters of cloud ERPs, which gave them the agility to switch gears. They did this by switching to backup suppliers, stepping up production at factories with local sources of supply, bypassing distributors to sell directly to customers, and seamlessly handling all transactions and closing the books because finance was running in the cloud.
  2. The “clay feet” companies that went out of business either because they had no flexibility to adapt or were locked into a monolithic mindset that “we only do things this way.” Most were running rigid ERPs and processes that locked them into one way of working. Changing an ERP-driven process meant costly, expensive customization that no one had time or budget for, anyway.
  3. The “blood, sweat, and tears” companies that barely survived, but did so out of sheer will and excessive overwork. They had inflexible systems and processes that made change extraordinarily costly and difficult to keep going, but they did – and they don’t want to ever go through that again.

Modern ERP software-as-a-service (SaaS) solutions are what enabled the flexible, agile companies to respond, innovate swiftly, and ultimately win.

SaaS ERP and cloud technologies, in general, are the great leveler. They enable businesses of all sizes and geographies to compete and win globally. If the pandemic had happened before the cloud, we would have lost more businesses.

Traditional ERP vs. modern ERP

Here’s why: Traditional ERPs have helped companies integrate and automate processes and run more transparently and efficiently. But making changes to processes – for example, to go from a distributor-based sales model to direct sales (using the web) and fulfillment – requires time-consuming, risky, and expensive customizations.

The resulting hard-coded changes can just make your organization’s clay feet even bigger, especially when software updates are needed.

In contrast, modern cloud ERPs are flexible and agile, and they impart these qualities to the businesses that run on them. Your ERP takes on a Minecraft-like quality, giving you standards-based, composable building blocks that you can use to make something new, integrate, adapt, and innovate.

This cultivates an agile mindset because changing your infrastructure doesn’t mean risk and cost. It means unlocking opportunities, accelerating innovation, and realizing better outcomes and customer experiences.

So, when disruption comes – whether it manifests as a new competitor, uncontrolled inflation, supply chain disruptions, wars, climate change, and more – you know you can adapt ERP-driven processes quickly, safely, and cost-effectively.

Maximum agility: Ready to run

For example, during the pandemic, we saw our SAP S/4HANA Cloud customers navigate through supply chain disruptions, extended work-from-home orders, the launch of new business models and customer service requirements, and more with speed, confidence, and excellence.

With modern ERP, they could modify how they run in a standards-based way so regular, automatic software updates from SAP could continue smoothly. They had enterprise-grade running shoes, not clay feet.

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What does your business need – and what’s holding you back? Maybe you need to build and run a new warehouse today because you can’t sell to Russia anymore and are pivoting to sell to new customers in Africa. Tomorrow, you may need to create new cloud self-services to differentiate the customer experience.

A year from now, you need to comply with new, complex, and cumbersome regulatory mandates and vastly expand your supplier ecosystem. The list goes on.

Modern ERP is all about flexibility: in your mindset, your business capabilities, and in your technology. Cloud ERP maximizes those benefits.

And going forward, the more flexible your business is, the better off it will be. Your ERP is the infrastructure of your business, and it needs to support and enable change in a safe, standards-based way in the cloud.

Things can change in a flash.
Is your ERP able to keep up?
Gaining a competitive edge starts HERE!


Frequently asked questions (FAQs):

ERP stands for Enterprise Resource Planning. It is a software system that organizations use to manage their business processes, including financial management, inventory and supply chain management, human resources, customer relationship management, and other core business functions. The goal of an ERP system is to integrate all these processes and provide a comprehensive view of an organization’s operations, enabling better decision-making and increased efficiency.

An ERP system is a software application that allows organizations to manage and integrate their core business processes, including financial management, procurement, inventory and supply chain management, human resources, customer relationship management, and other functions. ERP systems are typically modular, each designed to support a specific business function. These modules can be customized and configured to meet the specific needs of an organization.

An ERP system provides a centralized database that enables different departments and functions within an organization to share information and communicate with each other in real-time. It allows managers to track and monitor the performance of various business processes, identify areas of inefficiency, and make informed decisions based on accurate and up-to-date information.

There are generally three type of ERP systems that are differentiated by their deployment model, they are on-premise ERP, cloud-based ERP, and hybrid ERP.

  1. On-Premise ERP: This is the traditional type of ERP system that is installed and maintained on an organization’s own servers and IT infrastructure. The organization is responsible for managing and maintaining the hardware, software, and other IT resources needed to run the system.
  2. Cloud-based ERP: Cloud-based ERP systems are hosted on the cloud, which means that they are managed and maintained by a third-party vendor. The vendor is responsible for providing the necessary hardware, software, and other IT resources needed to run the system. Users access the system through a web browser, and the vendor is responsible for maintaining the system’s security, performance, and availability.
  3. Hybrid ERP: Hybrid ERP systems combine the benefits of on-premise and cloud-based ERP systems. They allow organizations to run some applications on-premise and others on the cloud, depending on their specific needs and preferences. This approach provides flexibility and scalability, allowing organizations to choose the deployment model that best suits their needs.

SAP (stands for System Applications and Products in Data Processing) is the most widely used ERP systems globally and is the market leader. It is used by many large, small, and mid-size organizations; SAP ERP is particularly popular in the manufacturing and service industries. Approximately 70% of organizations running SAP ERP systems are small and mid-size businesses.

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