Nice blog. I don’t know how much of the ERP markets decline/stagnation is due to customers not living up to their end of the bargain (i.e. growth). Instead, you identified the only reason I can see: “The newer software does not offer enough value to pay for the investment and trouble to change..”

The new software may provide value, and even a substantial amount, but not enough to incur the cost and the risk of change. ERP, regardless of delivery method, is a very complex set of functionality. Their architecture of centralized command and control is there achilles heel. Once a company has a solid, consolidated view of their business in financial terms the value of the rest of the ERP that feeds that view becomes a liability. The process rigidity and finite data structures prohibit change. Any business experiences change on a daily basis. It is the inabiltiy to adapt to that change that negatively impacts a companies ability to survive.

I wouldn’t throw the ERP out with the bath water, though. They serve(d) their purpose but their complexity, architecture and rigidity have reduced their role from driving force to a utility that should be maintained (for less than the maintenance costs). By diverting maintenance fees and on-going support and development expenditures a company can invigorate their company with the next generation of Enterprise systems and be budget neutral or even reduce the outlay. The next generation of Enterprise systems are built to leverage the existing business systems (be they Off-The-Shelf of Homegrown) and allow companies to finally establish their competitive advantage based upon their unique opportunities. No more one size fits all – mass customization is finally here.