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If we consider the history within finance/ERP systems, the development can be divided into several phases. During the early years around the 70s-80s, most administrative systems were called just administrative systems or financial systems when they also handled accounting. At this time, it was quite common to have standalone applications for, for example, bookkeeping, invoicing, inventory, and production.
At the end of the 80s and during the 90s, interest grew in so-called "integrated" systems where several processes were combined within a common application. This was also supported by the then-growing interest in "process development" where many organisations brought in external consultants to optimise business processes. The outcome and quality of all these consulting exercises were highly variable, but a lasting consequence was that "one should have a fully integrated ERP system." This also coincided with the millennium shift, where many organisations faced system changes. The result was that the majority of all organisations chose these somewhat larger and relatively complex ERP systems.
Having lived with so-called fully integrated ERP systems for the past 20-25 years, we can note that the view of these applications is changing. The conclusion regarding the "large and fully integrated" ERP systems is that they are well suited to coordinate large transaction flows but can at the same time be inhibiting for a changing business. Additionally, they often require an unreasonable amount of time and cost to implement. That is not to say, however, that all large ERP systems are not worth their investment.
Looking at Northern Europe today, it is again more common to accept a "broken up" (or open) application environment and also several different ERP systems within a group. In Southern Europe, the view largely still holds that centralised is best and that it is the "all-in-one" approach that provides the best governance and control. Northern Europe here adopts a more modern and open approach regarding principles for how best to develop a purpose-built platform for the future.
Considering the present and looking forward, we see clear signs that the trend with "Apps" is growing stronger. The consequence of this is that the landscape of support functions outside traditional ERP systems is expanding. For customers, this naturally creates new opportunities, while also requiring and presupposing that the customer takes control of their infrastructure and thinks through how system and information needs need to develop in the longer term. Simply supplementing existing systems with new apps does not solve the need for controlled and tidy information flows.
The purpose of this blog is to shed some light on the phenomenon surrounding apps and the model of supplementing one's existing landscape with cloud-based services. A consequence of the trend is that we once again begin to see the importance of strong and specialised financial systems that do not carry a heavy burden of many other subprocesses that complicate implementation, regardless of whether all pre-systems are used or not.
As a result of years with integrated ERP systems, financial systems have partly been overshadowed. However, we are now starting to see that these have a role in the market again. In a future where many of the process needs can be supported by external cloud services and apps, specialised financial systems can also gain significance in the chain. It is important, however, that they have well-developed interfaces to be able to import and export information via a wide range of communication methods without requiring third-party integration tools, not least open accounts receivable and payable to collaborate with several external systems that handle invoicing, purchasing, service, etc.
Just in the last two years, we can note a noticeable increase in the number of procurements concerning financial systems instead of ERP systems. And this is hardly a temporary trend but a clear indication that it is beginning to brighten up for financial systems again moving forward.
