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Regardless of the services your company is offering, advancements in ERP have created opportunities for service firms to reach new heights in 2024. Artificial Intelligence (AI) has dominated the conversation but will this net users with actual benefits or will it continue to be “hype” in the new year? What are the greatest takeaways from ERP in the service industry in 2023, and how can your business capitalize on these lessons and innovations? In this special mini-series, Shawn Windle analyzes the services industry and its greatest opportunities to foster growth and success in 2024.
ERP Trends for Service Companies
Introduction
With the world rapidly changing, ERP vendors are expanding their available specialized solutions for companies in the services industry. This is a relief to growing services firms dealing with common industry pain points who need better technology to serve their clients. But what trends impacted the services industry the most in 2023? And how will they benefit from ERP in 2024? ERP Advisors Group answers these questions and more in this special industry review.
pain points pressuring service companies
The greatest pain point for service companies is a lack of a “one-size-fits-all” application. Unlike other industries, services firms do not have a central hub where they can manage and execute their daily tasks. These companies often rely on a tight cluster of software applications that help run the business, making developing the right technology stack even more difficult. This family of five to six applications keeps the business running but also means larger teams and greater payroll expenses to keep up with the demand. Above all, the services industry relies on accessibility, making technology that can improve the requirement a priority for firms in 2024 and beyond.
the greatest challenge to overcome
Despite this being a nationwide concern, the services industry is struggling to identify and hire talent. With a significant percentage of professionals pursuing other career paths, available talent is becoming scarce, forcing service companies to look for solutions to fill the gaps. Recently, service firms have looked to utilize the latest technology available in the ERP and software markets to attract and retain talent. This has sparked a need for ERP upgrades and major software selection efforts to identify their real pain points.
Reshaping the business’ attractiveness is what will make all the difference for these firms in the coming years. The right software provides greater value for both the employee and the company, gives the team an upper hand over their competitors, and ultimately helps the talent feel empowered in their work. Talent also gravitates toward companies that enrich their staff with more value-added work, instead of the mundane. This is where technology can make the biggest difference.
exciting tools on the horizon
Two tools were the focus of ERP vendors in 2023 and will continue into 2024. Field Service Management (FSM) tools were acquired across the market and developed internally by vendors to run on their platform and fit seamlessly within their preexisting technology stacks. In 2024, service companies will be able to fully leverage these tools to automate and accelerate their processes to better serve their teams and end-users because of these platform enhancements. The more accessible and efficient service companies are, the stronger and more financially successful they will become. The second tool is an “all-in-one” app. Services desperately need an “all-in-one” solution and as vendors adjust their strategies to meet the needs of micro-vertical markets, they will begin to dive deeper into the needs of services companies. While we are still waiting for that breakthrough, we expect vendors to begin looking at those types of investments.
consolidation brings better solutions
Services firms have greater opportunities with AI because the industry tends to be much more likely to adopt new technologies. In addition, services solution providers will experience many acquisitions as the market consolidates significantly over the next five to ten years. Eliminating the smaller competitors simplifies the environment to empower customers with fewer, more powerful solutions wrapped into a single platform. Essentially, the number of unique tools will not decrease, but the number of providers will.
greatest reminder heading into 2024
The most important reminder is to discern whether an ERP upgrade is truly necessary. Businesses should thoroughly investigate the company's needs before making any upgrade decisions, and if your current ERP is meeting your needs, do not invest in a new solution. ERP upgrades are a significant investment and require a lot from your budget and your team. If it is unnecessary, DON’T DO IT and save your company the pain.
conclusion
The services industry has great opportunities to leverage emerging technology in 2024 and will benefit significantly from the advancements that took place in 2023. As the market continues to evolve, businesses that adapt their ERP strategies will become more efficient and attractive as new talent enters the market. We are optimistic about the ERP market for services companies in 2024 and beyond if businesses carefully evaluate their requirements and are open to new opportunities in the ERP space.
