The rapid rise of artificial intelligence last year was difficult to ignore – and, if there’s just one key takeaway for business, it’s that remaining competitive in the modern landscape means making faster, smarter decisions. Whilst AI might grab headlines, however, no organisation can fully harness its power without a solid reliable foundation: interconnected data. This is where enterprise resource planning (ERP) systems come in, providing both the agility and intelligence organisations need to thrive in a fast-paced, ever-evolving, tech-first market.
Integration is everything
For years, ERP systems have been criticised for their rigidity, with companies often stuck in inflexible setups they couldn’t adapt to their unique needs without complete, cost-heavy overhaul. The integration of and communication between bespoke, purpose-specific tools designed to tackle tasks like HR and payroll, for example, was simply too difficult within the traditional ERP system, rendering progress impossible overall. Thankfully, this challenge is now a thing of the past, particularly with two key transformative trends – two-tier ERP strategies and composable ERP systems – turning problems around.
Two-tier ERP strategies
One-size-fits-all solutions rarely work, and ERP is no exception. That’s why two-tier ERP systems have proven so revolutionary, changing the game by striking a balance. Put simply, whilst a primary ERP system operates at corporate level, smaller, tailored systems continue to support individual business units, businesses and departments. This means companies are no longer forced to choose between local flexibility and global consistency.
As local teams adapt to specific market conditions, cultural nuances and regulatory requirements, the overarching ERP system ensures they stick to broader organisational alignment. A business operating in both Europe and Asia, for example, is able to respond to regional demands, whilst maintaining consistent reporting practices across the board.
Two-tier ERP strategies likewise integrate more seamlessly with mobile ERP solutions, allowing employees to access critical data on the go. At a time when agility and responsiveness are everything, these strategies empower organisations to meet diverse needs, whilst remaining cost effective and efficient.
Composable ERP
If flexibility is the future, then composable ERP is another critical development. The rise of composable ERP is changing the way businesses think about their systems. Instead of relying on a rigid, all-in-one solution, composable ERP allows organisations to assemble various software components as needed. This approach uses application programming interfaces (APIs) and middleware to connect specialised software applications to one another, in a cohesive, tailored system.
Whilst the APIs enable different apps to share data and functionality effortlessly, middleware serves as the glue, ensuring everything operates together smoothly. This means organisations can cherry-pick the best tools for them, whether it’s for functions like accounting or inventory management, without compatibility issues ever being a problem. What’s more, when data can flow seamlessly in such a unified platform, processes remain efficient, there’s less chance of data getting lost or mis-recorded and businesses can adapt more quickly to new challenges, because they can incorporate new tools and functions into their arsenal at any time, without needing to rethink their whole technology.
Rethinking integration
Whilst middleware integration is pivotal in enabling communication and interoperability, in-house management presents challenges: complexity and diversity; security and compliance; time to value; maintenance; and specialist resource requirements amongst others.
These factors are influencing organisations to lean on third-party experts to develop and manage their integrations. The goal is to replace the in-house management issues with a cost-efficient outsourced integration service that harnesses the power of cloud services; provides access to the latest technologies and expertise, as well as turn-key solutions to provide unparalleled flexibility and scalability.
Scaling made simple
Cloud-based ERP solutions have already enabled thousands of businesses to achieve this, as part of a solution that is just as flexible as it is cost effective.
Unlike traditional infrastructure, cloud-based systems allow organisations to scale up or down easily. If a company expands rapidly, additional capacity can be added almost instantly, whilst, during quieter periods, cost can be reduced by scaling unused services down. It’s this flexibility that’s driving the cloud ERP market, which is projected to exceed $130 billion in value by 2028, according to research from MarketsandMarketsTM.
Beyond scalability, cloud solutions also streamline deployment, enhance collaboration and boost team productivity, as real-time data sharing means people can work together more effectively, regardless of where they’re located in the world. Plus, with enhanced security and compliance features to boot, cloud ERP systems prove particularly attractive to companies operating in complex regulatory environments.
The AI revolution
Naturally, no report on the future of tech would be complete without discussing artificial intelligence – with McKinsey revealing that 72% of organisations now use AI, with a further 65% regularly using generative tools. This rapid adoption highlights just how central machine learning and AI have become to modern operations.
AI-powered ERP systems are thus the next big thing, offering users unrivalled benefits. Far more capable of processing large data sets than humans, they allow enterprises to analyse much greater databases of information, for instance, leading to deeper insights and faster decision making, particularly when these outcomes are checked and backed by experienced humans. From optimising inventory levels and forecasting demand to adjusting price strategies based on consumer behaviour, AI transforms operations for greater end-user satisfaction. Predictive analytics and AI-driven workflows furthermore reduce human error, freeing up teams to focus on more creative tasks, such as bolstering innovation, adding value and fostering strategic growth.
Hyper-automation
Hyper-automation takes things one step further, combining AI, machine learning (ML) and robotics process automation (RPA) to create fully automated workflows that extend across entire operations. Automating repetitive tasks like payroll processing and compliance reporting not only reduces the chance of errors but frees employees to focus on high-value, creative work. Finance teams could spend less time reconciling invoices and more time strategizing for progress, for instance, thus benefiting the entire organisation by making things more future-proof, agile and adapted.
From reactive to proactive
Ultimately, data is no longer a byproduct of business but a driving force behind proactive decisions. Advanced analytics and AI-enabled tools allow companies to anticipate trends, mitigate risks and seize opportunities before they emerge – staying ahead of the curve by making the most of their own data, carefully managed through ERP.
Allowing for strategic growth, modern ERP systems are made up of composable architectures, scalable cloud solutions and AI-driven intelligence, reshaping the way we operate. By embracing these innovations, organisations can create systems tailored to their unique needs, unlocking new levels of connectivity, efficiency and competitiveness in 2025 and beyond.
Faye O’Connell, Chief Product Officer at Embridge Consulting
