The hollowing out of ERP
- business rules/workflow
- master data store
- transaction data store
- transaction processing
- user interface
- (and perhaps some business content e.g. pre-built reports)
If, and it is a big if, SOA architecture takes off, then you will also be able to plug in your favorite cost allocation module (say) from a best of breed vendor, rather than relying on the probably mediocre one of your ERP supplier. Combine this with the emergence of "on demand" hosted ERP services from emerging companies like Ataio and Intacct as alternatives, and the vast ERP behemoth looks a lot less secure up close than it may do from a distance. If the master data hubs and business workflow engines continue to grow in acceptance and chip away further at key control points of ERP vendors, then at some point might it be reasonable to ask: exactly what is it that I am paying all those dollars to ERP vendors for?
This line of reasoning, even if it is very early days, explains why SAP and Oracle have been so anxious to extend their product offerings into the middleware space, with Netweaver and Fusion respectively. This is also what SAP has been trying to falteringly launch an MDM application (the rumor is that after the botched initial SAP MDM, the buy-in of A2i isn't going that well either; maybe a third attempt is in the works?) and Oracle has been keen to promote its customer hub.
Of course it is too soon to be writing the obituaries of ERP yet, but a combination of evolving technologies is starting to illuminate a path for how you would eventually migrate away from dependence on the giant ERP vendors, rather than endlessly trying to consolidate on fewer vendors, and fewer instances of each. Now that would be radical thinking.