Why ERP is (potentially) really dumb

There that’s done it πŸ˜‰

Here’s part of a discussion underway at http://bit.ly/h6dMr and I will start my ‘call to arms’ with a quote from Stephane Haelterman, SAP BPM & SAP Business Workflow consulting:

“Looking to ERP πŸ˜‰
Most of complexity is often resulting from poor understanding of the system capabilities, poor integration and poor consulting. An ERP is a ‘standard’ system. You can really leverage the power of it if correctly implemented following industry best practices and a good dose of pragmatism and creativity.To my experience, a total outside-in approach will make such a system fail by creating a monster (i.e. AS-IS becoming TO-BE at the implementation).
In case of ERP systems, you should align the outside-in thinking with the inside-out features by composing new processes and applications consuming services from different systems. And there comes BPM to leverage your investment.”

This comment highlights one of the potental challenges we face as we move forward with BPM. So here’s my response:

Stephane – complexity is a ball and chain of existing businesses created by a multitude of things but primarily driven by the change in ‘the customer’.

Lack of understanding of why a business exists (it is the customer stupid) and what processes should be doing (delivering products or services to the customer) causes all that internal specialism and fractionalisation. We have inherited models from the 20th century (and before) which can not and do not cope with the ‘new customer’ who is choosey, fickle and demands excellent service every time.

I am afraid businesses (especially in the service arena) who standardise around ERP are removing their own capacity to differentiate. If everything is the same how can they be different? Of course SAP and ORACLE et al will differ in that view as they are selling products that deliver ‘best practice’ – how can everyone be ‘best practice’? – and those businesses who are truly succeeding do not tell us it is because of their ERP systmes.

In fact the opposite is true. They tell us it is their focus on truly understanding the NEEDS of the customer and aligning everything they do (which doesn’t always require technology) to those needs. That requires ingenuity, simplification and dedication in developing business processes that do not have the burden of the past (take a deep breath) – checkers checking checkers, SLA’s, functional specialists, top-down inside-out hierachy’s, remuneration systems based on ladders, pyramidal thinking with customers ‘at the bottom’ in the ‘front line’ (why the trenches analogy?), top down, left to right process mapping – why is that? measurement systems counting activities, project management approaches that deliver ‘on time to budget’ but miss the point of delivering results… the list goes on and features strongly in the BP Group Process Audit approach (free for those who are interested).

By the way AS-IS and TO-BE is more of that inside-out baggage also!

Mature process organisations (4th wave BPM) are progressively removing all this ‘legacy’ and the really good news is that we have passed the tipping point and ‘outside-in’ thinking and practice is a shining light of success in the middle of the current global recession.

I work with more than a dozen companies who continue to generate profits and are managing customer expectations in new innovative ways without the need for all that old dross. (They are featured in the new upcoming book by the way).

Of course there must be some companies simultaneously reducing costs, improving revenues, enhancing service and exceeding at compliance who are being driven by SAP? Let’s feature them in this discussion and we can compare notes about what drives their success. Or even Oracle for that matter. Come on guys step up to the plate!

You can see the latest on this: http://bit.ly/h6dMr

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