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ERP Transformation Can Be Risky; Yet Necessary



It was just before the dawn of the 21st century when I no longer could endure the priorities of our management. They did not understand that technology could go from great to poor. As head of development and experienced two previous transformation projects, I believe(d) a system should be fixed before becoming totally broken.

At the same time, companies were desperate to plow ahead with ERP projects because they wanted to be viewed as investment-worthy by stock markets and to avoid a nasty problem called Y2K.

The focus was on implementing ERP. If you were not doing it, you were behind the times. Managers believed they had found the holy grail. For ERP vendors and consultancies, it was a goldrush where they put their energy into implementation methods designed to create as many billable hours possible. Companies’ money was used on corrupt and lousy consultants.

For all high-minded talk about business process reengineering, the reality was depressing. Businesses often found themselves with significant delays and substantial cost overruns, usually resulting in big cuts in adoption programs and user training.

People had to figure out how to work with ERP. Using it required employees to conform to the way the system was designed. User interfaces reflected what was most straightforward from a technology perspective, not what best supported the work an employee or business unit was trying to do. The system ruled. If it did not work the way you wanted, users could post complaints to an ever-expanding list the IT office was working on, but they could rarely expect a valid response.

When we entered the 21st century, the bubble burst. My prior employer Intentia/Movex went insolvent, becoming Symphony, then Lawson and now Infor M3. In trying to prevent the collapse, I lost my job – but I have never regret standing-up for effective and usable software apps, as that is what companies and its employees need to survive and prosper.

ERP Is Changing Again

Few of today’s ERP systems are meeting the requirements of the next decade and forward. For the most part, enterprise apps still center on what the software does not what people in business are trying to achieve. There has though been some ERP modernization projects of ERP in recent times. Sadly, many of them follows a pattern of rushing into complexity toward outstripping the ability to cope with the aftermath.

The challenge of enterprise software lies not so much in sophistication of the user interface, nor the endless feature/function glut but to control change and manage ever more complex relationships. Enterprise apps simply needs a better architecture. Change of such magnitude can never be realized by applying a new layer of paint. Establishing an architecture aimed for the future requires starting all over.

To craft a proper architecture requires to understand the demarcation between complex, simplistic, and simple. A complex system is inadequate to support business as it does not handle nuances of operations. Simplistic is insufficient. Only a simple system considers all issues of an agile enterprise and is transparent to the people using the system. People are not intimidated by a simple system; they regard it as a useful tool; yes, even a friend.

ERP Is Becoming Enterprise Business Capabilities

The new software architecture – powered with a responsive UI – provides unprecedented opportunities for improvements in efficiency, user satisfaction, and customer delight. Old school monoliths are dead. The new architecture mirrors how the Internet operates. Gartner and other pundits refer to this new era of ERP as Enterprise Business Capabilities (EBC):

  • It delivers a more dynamic infrastructure where the apps are open to a landscape with a variety of devices, services, and data sources.
  • It is no longer a priority to have only one system for the entire operations. Instead, companies choose SaaS applications where it matters most for the business.
  • Almost everything will run in safe cloud environments. Cloud apps offer much faster innovation adoption, which enables the delivery of higher business value faster.
  • Fragmentation is an enemy. To avoid it, chose a viable cloud platform and ensure that all new apps are specifically made for this environment.

To realize the EBC benefits, Gartner advice:

  • Companies should shift how they think about ERP “to include the fourth era of ERP – EBC. Prepare for EBC by embracing new technologies, but don’t ignore existing apps that still play a vital role as providers of core data and functions.”
  • Be aware, companies failing to properly adopt EBC with its more agile technology and implementation approach are at risk failing to realize the potential benefits.

ERP transformation can be a risky business. There is however one thing more dangerous: doing nothing! If Intentia’s management had realized their technology position, they could have avoid losing a market value of 1 billion Euros and becoming insolvent.

Software is still eating the world. Most companies have a software app debt of such extent it must be reduced. The importance of allying with the right software cannot be exaggerated. Simplified digital strategies and software can create competitive advantages for companies’ futures, shielding them from potential threats.

Author: PeterBj

Proud to be enough experienced to understand that there is more to learn

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