The New ERP will be CEO

Profile picture for user gonzodaddy By Den Howlett October 5, 2015
Summary:
A response to Brian Sommer's polemic about the future of ERP. It could work...

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Brian Sommer's polemic that starts with portending the death of ERP got the predictable Bronx Cheer from some of my favorite people. It's understandable.

Some of us have been living in the old, dull world of ERP way longer than is probably good for us. Many of us are tired of hearing about 'the death of ERP' only to see [name your favorite vendor here] continue to crank out sales figures that appear to defy gravity.

Even Sommer's 'ray of hope' doesn't really cut it. To that extent Sommer's missives are incomplete and our friends can, maybe, sit back and relax for a few more years. I'm not buying that but then I'm not necessarily buying the 'old' as equivalent to the 'old ERP' either. Here's how I see the problem and what I think needs to happen.

ERP in the 90s and 2000's has been dominated by two topics above all: accounting and HR. Both of those functions are administrative and add not a single penny to profit or cash flow. Both are subject to intense levels of regulation across multiple geographies, state and national boundaries. In short --- they're complicated. But as Sommer acknowledges, they have brought with them a degree of automation and efficiency that is only possible by applying technology.

That. Work. Is. Done. Any company that believes it needs much more than regulatory compliance updates and bug fixes is, quite frankly, firmly in the laggards corner. Those companies will likely perish in years to come. Any refresh should be about optimizing those processes, and considering more cost effective methods of execution. Using modern software, that might well get you a bonus in improved agility.

Instead, I see the ERP tomorrow as being CEO --- Customer Experience Optimization. In fact I already see it. The Infosys story that talks about IT and LoB operational alignment is a case in point that reflects the 'new and renew' strategies the company has developed in the last year. It isn't perfect and it isn't yet optimized. But notice the key difference in approach:

...we started from the end user's point of view, working with them to understand what they needed and then working needs back into the new solution.

It is this 'starting from the end user's point of view' that provides the key to getting CEO right. Think for one moment about how ERP evolved. At the beginning, it was all about getting the transaction into a system. It was never about getting anything out the other side.

The net result? We have two major technology blocks to manage: ERP AND reporting, which in turn morphed into business intelligence and which today is being swamped by so-called 'Big Data' while at the same time we see EPM (Enterprise Performance Management) aka budgeting, planning and forecasting coming back into fashion as vendors find new ways to make the old stuff work better.

Regardless of any excitement that Sommer may have about 'Big Data,' and advances we have already noted in going from POC to in production Hadoop systems, I am depressed. Why? Because however useful it might be and whatever problems it may help solve, the kinds of thing we do see sit in the middle or at the side of where we really need to be.

Instead of solving for an outcome while efficiently managing processes that, themselves, will likely need to change, we have a spaghetti monster of half baked solutions coming down the pipe.

There is an alternative. In principle, I am much more hopeful about SAP's CEC than anything else I've seen come out of SAP in a long time. Or out of anywhere else for that matter. But that's just the front end of what has to be an end to end process. SAP intuitively understands this but is it capable of delivering? Right now the answer is no. But from what I have seen and what I presume, they can get most of the moving parts assembled in an attractive fashion.

The back end supply chain element has largely been ignored --- a piece that Sommer conveniently forgets while proselytizing the "as a Service" economy.

Nice try mate but regardless of the digital economy bullshit, almost everyone I know needs clothes on their back, food and other essentials that are physical in nature. Where does the 'getting shit done' element that fit in? No vendor has adequately resolved those problems.

SAP ought to be in the best place to get that done, but I have yet to see signs of life that convince me that is a central part of their equation. But then no other vendor is talking similar 'stuff.' So maybe we move along in a sea of PR bullshit around 'Big Data' 'Internet of things' 'Bullshit 4.0' or what not until the point where CXO's say - 'Oy - give us answers.'

My take. He who solves the back AND front end issues will surely be the preferred supplier du jour. Who's up for that? Who is going to do that in a sensible manner? It should be SAP --- and I say that without preference or the fact they are a long term premier sponsor but based upon the gobs of the technology they have to hand that others don't and which they have failed to exercise as obvious connection points.

The monumental question must be: Can SAP persuade its whole customer groups to trust it to take it down the path that ensures transformation to a digital business before the likes of Accenture and IBM show a more alluring future?

More to Sommer's point - is there anyone else out there that has the capabilty to assemble a cogent and believable story? Oracle will try at the upcoming Open World but even given its advances, it will take some persuading - except of course, those idiots who think that Oracle DB is the center of the 21st century universe. Which it isn't.

Disclosure: SAP and Oracle are premier partners at time of writing. SAP pays most of the author's costs of attending SAP events. Oracle does similar regarding Open World.

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