August 6, 2024 Consolidating ERPs and DAPs – Top Considerations

Consolidation between ERPs and DAPs leave manufacturers with a lot to think about.

By Krishna Dunthoori, Founder and CEO, Apty

According to Gartner, by the year 2026, approximately 70 percent of organizations will incorporate digital adoption platforms (DAPs) into their technology stacks. DAPs serve as overlays residing on top of popular enterprise software (ERP, SCM, and more), providing in-app training and contextual guidance to application end users in order to help companies using DAPs increase proper use and enhance end-user adoption.

Think reminders, alerts, announcements, and information bubbles, delivered right when the end user encounters friction, within the app, and precisely at the point of need. DAPs ease the learning curve and overcome the shortcomings of more traditional, rote training sessions by making training seamless and available on-demand.

The harsh reality is that 78 percent of organizations fail in their digital transformation initiatives, largely due to poor user adoption. With companies increasingly turning to DAPs to lower this risk and maximize their enterprise software investments, DAPs are becoming a hot commodity and an M&A focus for the largest enterprise software players.

However, are marriages among leading DAPs and broad enterprise software players a good thing overall for the companies using DAPs? Specifically, for manufacturing companies relying on DAP solutions there’s a lot to consider, including:

Where is Your Data Going?

When a DAP is acquired, manufacturing companies that have this particular DAP integrated into their day-to-day business processes and workflows have a new thing to think about – the fact that their proprietary data is now being collected, analyzed and leveraged by a potentially much larger acquiring entity. For example, the most used features, the most unused features, areas of high friction within the app – all of this data that the DAP once collected will now be within the purview of a potentially much larger, more omnipotent player.

The question these manufacturing companies now need to ask themselves is, “Do I want this acquiring company to have access to all the data that my DAP partner had previously collected?” Data that could be leveraged and incorporated to improve the acquiring company’s own products – that my competitors may use? Maybe you believe that “a rising tide lifts all boats” and you have no problem with your proprietary data being used as a new profit center for the acquiring vendor. But maybe you do – especially if you don’t use the acquiring company’s products, and your competitors do.

Goodbye Innovation?

It’s not uncommon for two things to happen after an acquisition: the acquired business’ employees either check out or get pushed out, and/or its products are sunsetted. It’s also not uncommon for newly acquired products to be put on the backburner when it comes to future research and development priorities, or even relegated to “maintenance mode.” For this reason, it’s not totally unfounded to believe that an acquired DAP’s best days may very well be behind it.

DAPs’ increase in popularity has coincided with the wider software industry’s overall expansion into markets like AI and machine learning, and the DAP industry overall is on the cusp of major advances with generative AI, moving from reactive to proactive features.

For example, reactive DAP may offer static tooltips, out-of-the-box templates when users request them, and basic user analytics. Proactive DAPs, on the other hand, provide intelligent and contextual insights when they are needed, predict future issues, and eventually generate predictive algorithms from learned user behaviors that prevent mistakes and suggest solutions. Few DAP vendors are fully doing this to the full potential – yet. This is the future of the DAP industry and companies investing in DAPs will want to ensure they’re at the forefront of the most cutting-edge advances.

What Does This Mean for the Rest of Our Application Portfolio?

Let’s say a newly acquired DAP indicates they will continue to support applications that don’t belong to the acquiring company. One has to ask – assuming the acquiring company is going to emphasize research and development for the acquired DAP at all, where will they place the majority of their focus? Will they focus on enhancing their own enterprise software, or competitive software products? What does this mean for the other enterprise software that a manufacturing company may have in their application landscape?

Will Your Relationship with Your Chosen DAP Partner Change?

Furthermore, manufacturing companies using DAPs may be accustomed to a certain high level of service, from a formerly independent partner dedicated to helping them meet their digital adoption goals. If a manufacturing company’s DAP partner is acquired, how might this relationship change? Will the company suddenly become a small fish in a much bigger pond?

If recent headlines are a sign of things to come between leading ERPs and DAPs, companies relying on DAPs, particularly manufacturers, have a lot to think about. Whatever market dynamics come into play, you need to carefully consider your DAP relationships – specifically, how they treat your meticulously honed proprietary data; and their commitment to future innovations, cross-platform excellence and consistently exceptional customer support.

Krishna Dunthoori is Founder and CEO of Apty. After growing up in India, Krishna completed his undergraduate in computer applications, and finished his master’s in computer science in Germany. He then traveled to New York, Silicon Valley, and eventually Dallas, where he finally decided to build roots. Prior to founding Apty, Krishna worked as a principal architect and consulted for Fortune 500 companies implementing software tech stacks.

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