Top 3 Overrated vs. Underrated Digital Transformation Technologies

Written By: Eric Kimberling
Date: February 19, 2022

When evaluating potential technologies in a digital transformation, it is easy to see how overrated they can be. Some are not good fits for a specific organization, which may cause those underrated technologies to be overlooked. In my findings, I have identified three technologies that are overrated and the three technologies that are underrated when going through a transformation strategy.

Overrated: Cloud & SaaS

 The first and most controversial overrated technology is cloud and SaaS. The reason for this pick is that those vendors are moving toward SaaS and cloud solutions, but the problem is two things.

First, SaaS and cloud technologies are better for vendors than for customers in most cases, at least in terms of today. Costs are escalating and hidden fees lurk in the background of sneaky contracts.

Also, the cloud and SaaS solutions in the marketplace, especially when looking at enterprise technologies like ERP systems or broad, comprehensive technologies, are half-baked. The overall design is mostly the same as their on-premises counterparts, which had 30+ years of on-premises R&D dollars to develop that functionality. Current cloud and SaaS solutions have only been around for three or five years and the core functionality is not there yet. In the end, more money is paid for less business value which makes cloud and SaaS solutions frequently overrated.

When looking at CRM systems, human capital management for HR, supply chain management, or even warehouse management, particular technologies are meant to solve specific problems. Those are less likely to be overrated and a problem. SaaS and cloud solutions get into trouble when they are trying to be everything to everyone and providing these big, expensive solutions with high ongoing annual costs that do not deliver the expected ROI.

Overrated: AI & Machine Learning

 The next set of technologies on the overrated list is artificial intelligence and machine learning. First, let me say these are fantastic technologies. There is a massive future in AI and machine learning and potential benefits are limitless. The hype around AI and machine learning are created by the biggest industry analysts and vendors. It is high-end technology, but it is on the bleeding edge for most organizations.

Most companies are not ready to adapt or do not have the use cases for AI and machine learning solutions. To add one more caveat to this, the fact that this technology is overrated has less to do with the technology itself and more to do with the fact that organizations often do not have an effective data strategy.

The volumes of data required to make machine learning and artificial intelligence of value are not there or optimized. It is key to consider how-to leverage artificial intelligence and machine learning in the future. Organizations need to take a data-centric approach to prepare for potential emerging technologies in order to have any success.

Overrated: Single ERP Systems

 The last technology on the overrated list is the extensive single enterprise resource planning systems that try to be everything to every organization. Hear me when I say, no one ERP system can achieve all objectives of one business, let alone other companies within the industry. There is just no way that a single ERP system will be able to solve all the business needs and problems.

Also, so many solutions are open source today. The flexibility provides a nimble approach. Massive, monolithic ERP systems are anything but agile and malleable. Being a mature organization trying to drive efficiencies and standardization within the organization are requirements for larger, single ERP solutions.

Underrated: Predictive Analytics

 Shifting gears, let us look at technologies that are underrated. These technologies are overlooked by the team within an organization. The first one is predictive analytics. These toolsets are baked into solutions like ERP systems, HCM, CRM systems, and other enterprise technologies.

What predictive analytics does is help see trends in the future. These technologies assist in analyzing historical data, third-party and macro trends to predict what might happen. This is related to customer demand, financial forecasting, and workforce planning. There are different use cases and ways that predictive analytics can be leveraged within an organization.

There are examples of how predictive analytics can help organizations even today. It is not a pipe dream or a futuristic technology, five or ten years down the road. Instead, these are tools, functionalities, and capabilities weaved into the existing technologies. Predictive analytics can be a game-changing technology within a digital transformation.

 Underrated: Best-of-Breed / Composable

 Earlier, I alluded to this next underrated technology. Best-of-breed point solutions are multiple systems that handle specific needs within the organization. Instead of having one big single ERP or enterprise comprehensive technology, there are numerous systems that tie together those distinct parts of the organization. Industry analysts often refer to this as composable ERP. In other words, it is something that can be broken up into tiny pieces, and the separate technology vendors that are tied together are created as an enterprise-wide solution.

This best-of-breed and composable approach to ERP is becoming common and more feasible for a couple of reasons.

  1. ERP systems cannot be everything to everyone. Composable ERP systems are ways to find the best solutions for various parts of the organization.
  2. Best-of-breed and composable ERP are more feasible now than it was 20 years ago. There are more open architecture and integration tools meant to tie together solutions. Bringing together data sets from different solutions is less of a big deal than it was 10-20 years ago.
  3. There are many startups and modern technologies emerging every day. Diversity in vendors and solutions is higher today than ever before.

All those reasons prove that composable, best-of-breed solutions should be considered for all organizations.

Underrated: Diversification

 The third and final underrated technology is the bucket category of available technologies. In years past, technologies were often proprietary and a unique language was required to be successful. Particular toolsets meant only to integrate vendor-specific solutions were the norm.

Today, there are more open architectures. These solutions are intended to tie into others and bring together multiple systems. Much like the best-of-breed and composable ERP technology, this focuses more on the unique business needs and across enterprise integration.

It is not just open architectures that can integrate well with other systems. Open-source software is one category that includes software vendors like Odoo and ERP Next that provide lower-cost technologies that are customized to the organization.

 Resources

These are just a couple of available technologies to consider as part of the digital transformation voyage.

  I hope this has helped put things into perspective when it comes to overrated and underrated digital transformations. As more trends begin to come up, I encourage you to look into downloading our 2021 Annual Digital Transformation Report which provides best practices for how to deploy technology and also a more extensive list of ERP, CRM, and HCM systems.

If you have any questions regarding why I chose this overrated vs. underrated list or if you have additions/feedback, please don’t hesitate to reach out to me directly. I am happy to be an informal sounding board as you move through your digital transformation journey.

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Author:
Eric Kimberling
Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.
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