The 21st century ERP

by Dennis Howlett on October 19, 2009

This is a marker in the sand. Feel free to debate.

Last week I attended Softworld in London. This is the annual accounting and HR show for the UK providers. Everyone from SAP to the smallest provider shows up. This year I was expecting a freshness given the UK has latched onto the saas/on-demand/cloud (SOC) trend. A handful of the SOC’cers had stands and were doing a brisk trade. For me the high point of the show should have been the cloud computing debate. The show organizers had lined up FinancialForce.com, Mamut, NetSuite and Salesforce.com. A good mix of SOC and software + services vendors that should have led to a lively debate. Sadly, it was deeply disappointing. As Richard Messik, one of the very early SOC advocates said:

The subject was simple enough – what are the business benefits of Cloud Computing. However, left to the main vendors that were speaking, the subject could just as easily been “Quantum physics for beginners”. There were so many acronyms and jargon speak used that to the uninitiated the topic was the most complicated issue.

And this, surely, is the point. Cloud Computing is on the cusp of something major, I am sure, and in a few years time most of us will probably be amazed that we ever used anything else. But the majority of potential users are not technically minded and are not really that interested in what is under the bonnet. They want to get in the car and drive knowing that it is going to get them from A to B safely.

Remember Richard is a SOC advocate. Now think forward a little to Oracle Open World. The reports coming out of the analyst and commenter communities were mostly about bits and bytes or go to market. As tech types, we’re all prone to falling into that trap. Where was the voice of the customer? We have seen the preponderance of outward facing hand waving in the direction of marketing and sales efforts via social networks on all things Web 2.0 the last couple of years being folded into Oracle offerings. That is a fraction of the story. We hear about SocialCRM but some of us wonder where the breakthrough deliverables truly lay.

As a segway, Brian Sommer made a loaded observation when discussing Vishal Sikka, CTO SAP’s presentation to invited bloggers at SAP TechEd:

ERP vendors could create better, more relevant solutions now if they’d just envision a technology world without constraints. When you create systems assuming you have unlimited storage, terabytes of in-core memory, etc., you realize that business information doesn’t have to be internally generated data only. You realize that work is not just comprised of internal work processes (just watch how a sourcing professional does their job – they spend much of their time checking prices of suppliers, analyzing the financial statements of suppliers, etc. – they spend just minutes a week actually keying in a purchase order) but a mix of internal and externally facing tasks. When you realize that the old systems’ views of processes were artificially constrained and limited to an internal view of the world, then you understand that the old data model for ERP is just obsolete, irrelevant and desperately in need of a new perspective…

…We need visionary ERP vendors who will take the fresh piece of paper and envision what a new generation of software product should look like. The technology maturity curve for ERP solutions has run its course. The S-curve has hit its apex and has flattened. It’s time for a new kind of product. It’s time for some real innovation and not more of this innovation at the margins.

Brian’s words are built on many years’ experience as a senior person within Accenture. As Brian correctly observes, ERP has been predicated on the notion of the transaction recorded as an accounting entry. Yet we seem to be living in a world where unstructured data is way more important because it contains the kernels of value that drive business. That makes intuitive and factual sense yet it is far from baked into what is being delivered today. Brian believes SAP is thinking deeply about this and on what I know, that sounds about right. But when you are stuck with 35 years of code that have served both you and your customers well then how do you move the developer compass to embrace these fast track, new ideas? Are the SOC players any better? On Softworld’s evidence you’d have to argue ‘no.’

In past conversations, Vinnie has opined that we have yet to see the emergence of a new class of player that can deliver what the enterprise needs in the 21st century. Brian appears to be saying the same thing. I think both have missed a wee trick. Perhaps a glimpse comes from our mutual friend Sigurd Rinde. The last couple of years Sig has been quietly talking about Barely Repeatable Processes. These occur when issues arise yet need some sort of automated and recordable set of events and processes from which people might learn and rapidly adapt systems and where the transaction element is the result of all that is important rather than central to the process. Brain’s procurement examplle gives a taste of what that might mean. Check out what Sig is saying and see if it makes sense.

Perhaps another way to consider the customer side is to think about what TIBCO has been doing the last five or so years. TIBCO may be ‘last man standing’ in the middleware stakes but it doesn’t prevent them from pushing the business event boundaries. TIBCO has been talking real time and business event processing for the last 10 years. In the last five years it has developed solutions based on the notion of complex event processing. It’s a technical nightmare and even more difficult to parse into business language. It’s another case of tech getting in the way of offering business something which it can grasp. At the extreme edges it is an idea born out of the need to respond to sometimes random events that have far reaching consequences. The things that make the difference between profit and loss. An example is the need to respond to an incoming hurricane through the effective (not efficient) redeployment of food resources and all the logistics processes that go with that scenario.

Brian missed it as an alternative argument to his central thrust. But then I am not surprised. Tech companies are brilliant at solving some of the most difficult problems on the planet. Yet much of the time they are woefully inept at putting those solutions in terms the business person can understand. Is it any wonder then that CIOs struggle to help the business or get attention at the board level when the very people that could help them do not articulate a readily understood business case?

At the SMB end, Softworld players muffed it. At the top end enterprise vendors do the same thing. Fact is solutions exist to many of today’s and tomorrow’s issues. Based on my experience, the engineers will ‘get it’ and develop what’s truly needed in tomorrow’s ERP and in ways that customers can consume. I’m sure Oliver Marks, with his focus on collaboration has more to say about this. The tech IS important but it doesn’t need to be a front and center religious argument as so often happens.

But what do you think? Have we yet to see something new emerge or have we yet to make best use of what we already have available?

(Disclosure: TIBCO has been a past client)

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  • Arina Ardashiyan

    Great article. I guess, several points will never be out of date. You could create a list of SaaS ERP vendors. Then you can offer it to wiki. Your article is a nice start for it. I can offer one point for your future list *growing red* - the solution, our leader uses every day called workforcetrack. vendor's name is the same.

  • timtribe

    Excellent article Dennis, you have pulled together some very cogent arguments. We do need a new ERP - have needed one for a while I think. I wonder if the only way that this can start is to have some univerally agreed transaction standards? There are many compelling reasons for this - not the least to allow inter-operability between applications and to reduce the cost of entry for startup ERP vendors. A role for an honest broker do you think?

  • @tim - elsewhere I have argued that ICAEW might fulfill those role in the UK. BASDA previously established machine to machine transaction standards. I'm told they are in growing use which is good news but as you can properly gather, the initiatives are disconnected.

  • timtribe

    But doesn't it have to be global? And doesn't it need the buy-in of SAP, Oracle etc?

  • That's an interesting idea and I would say a tentative 'yes.' But this is always a global v local issue. Might be worth checking out EuroCloud. Of course 'we' need the vendors. That's one reason why I like the idea of 'honest brokers' and participation by strong and knowledgable buy side participants.

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