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COVID-19 has created a global pandemic and caused disruptions across the enterprise computing industry.
Many companies are taking stock of ERP implementation projects and deciding whether to pause them, halt them entirely or keep them going. Some organizations are reluctant to continue with costly and complex ERP implementations when the future is so unclear. However, others may find a good opportunity -- and even a necessity -- to transition traditional ERP systems to the cloud.
In this Q&A, Andy Brockhoff, North American president at Unit4, discusses the current state of ERP implementation projects. Unit4, an ERP vendor based in Utrecht, Netherlands, focuses on project-based ERP systems for four industry segments: professional services, higher education, not-for-profit and the public sector. The company's systems, which are primarily deployed in the cloud but can also be deployed on premises, are best suited for small- to medium-sized "people-centric organizations" of around 500 to 10,000 employees, Brockhoff said.
Brockhoff has served as Unit4's North American president for the past year. Previously, he held executive positions at Anaplan, SAP SuccessFactors and SAP.
What is the state of ERP implementation projects now?
Andy Brockhoff: It varies industry by industry. A lot of people are still looking at the market and understanding what solutions are available. Many organizations are realizing that in the current environment, the type of solution that they have today is not purpose-fit for their future needs. For many projects that were under evaluation, there was a pause for a few weeks, but most of those evaluations have picked back up and are moving along at the same rate. Most projects that were already ongoing are still going forward. It's amazing how much more people can do remotely these days, and it's a bit of a technical reckoning that people understand that. Now it's about making sure that there's the right level of governance around those projects going forward.
Are companies caught between knowing they need to implement a modern ERP and having not enough budget to do it at this time?
Brockhoff: We are starting to see a survival of the fittest, but the smarter companies recognize that ERP can help you come out of this current environment. A lot of organizations are getting used to the new normal order, and many are looking far forward and saying this is an opportunity to work out what systems and processes they're going to need in the future to adapt to that new normal and thrive. It's been really interesting to see how quickly that has shifted from saying, 'We need to stop and reevaluate,' to saying, 'We've got a strong point of view on the future, and off we go down that road.' It's actually building up a lot of pent-up demand, and we're seeing a lot of queries. But the main thing is that no one's got the right answer and everyone's working out what this looks like.
The fact that so many people are working remotely is just honing that idea that they can't go on with old systems?
Brockhoff: People say the journey to the cloud has been a bit of a rush or a race, but I'd argue that hasn't really been the case until recently. Yes, cloud transformations are taking place and have been over a period of time, but this is one of those inflection moments that will really drive that forward, and everyone is realizing that this is a unique moment. Every organization's under a heavy amount of review; they're looking at all the projects they're undergoing; they're looking at all their systems. It's a real moment when everyone's had their brief pause and took a breath, and now they're looking forward and thinking about how they can be the organization they want to be in the future.
Are any companies saying that they just have to stop projects now?
Brockhoff: It's a good question, because it's not all roses right now and there are a lot of differences in various industries. The industry that may have the most hesitation or pause has been higher education, and that's because they don't know what the future looks like or when their revenue is going to come in. In the beginning, there were also a number of public sector organizations that were struggling with what the changes might look like -- a lot of them don't [provide] their own laptops, are not set up to work remotely, or don't even provide basic things like mobile phones. Although there was that brief pause at the very start, now even in the last couple of weeks people are starting to take a lot more interest.
Has the crisis affected the way implementation work is done, and has Unit4 or any implementation partners had trouble doing the actual work?
Brockhoff: We do a lot of the professional services work ourselves, but we also have a large partner ecosystem, and we haven't seen any partners coming to us under stress. There are differences in how they do their business day to day -- those implementation partners generally send people on site and get teams working on the projects. Now [the focus is] more around the project governance and how you can do things a bit differently online or over things like Microsoft Teams, and making sure to keep up with the cadence. It's really about reshaping how you engage on a project. There's always going to be a requirement for teams to go on-site, but it's going to be a lot less. Before COVID, organizations felt like clients expected them to be there; now I think there's a realization by the customer and the vendor or partner, that the business case and the model [for more remote work] has been proven. Yes, there will be peak moments in projects and times when they want to bring everyone in, [but] they'll get the majority of the work done remotely.
How will things look as we get beyond the crisis?
Brockhoff: If you look at the last few economic downturns, there's always been an uptick in technology adoption afterwards -- it's always a learning moment. This has been a time that proves that the cloud's moment is now. There's been a lot of pent-up demand and it will be interesting to see how it pans out in the new and better normal.