Why ERP is (potentially) really dumb

There that’s done it 😉

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 😉
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

FREE SCO Toolkit

The BPGroup (established in 1992) is a not for profit business club representing a community of more than 30,000 individuals sharing information in business process management.

This week we passed 1600 LinkedIn members. In just 6 months membership has blossomed to include the widest possible range of interests and people. With over 200 discrete discussions the conversations are vibrant and frequently contentious. The most visited discussion “What do you think BPM is” started just two weeks ago, and across the community now has over 300 contributions.

To share our success members of the BP Group can download the Successful Customer Outcomes toolkit (for one month only). This toolkit helps in identifying exactly why a process exists and provides a framework to uncover how to align an organisation for achieving success – without exception.

The SCO toolkit is one of six toolkits that can be reviewed at http://www.bpgroup.org/Toolkits.html

To download the kit visit the BPGroup article and click the link http://bit.ly/16Djao – if you are not yet a member you will be invited to join, and as always with the BPGroup – it s free. You will receive he toolkit as a PDF complete with templates, pointers to other resources, and the means to implement your own Successful Customer Outcome.

Is BPM doomed like its predecessor BPR?

Once again BPM is coming under fire as inter factional fighting threatens to destroy what Research and Markets describes as a $32 bn industry by 2012. This time it is the proliferation of the initiatives purporting to be the real BPM leaving the corporate decision makes confused and dismayed.

BPM continues to decline as a search reference with the latest findings suggesting a decrease to less than 40% of the interest from the same quarter five years ago however IT vendors marketing campaigns reflect more spend, up 200% on the same period.

The ABPMP (Association of Business Process Management Professionals) has taken its time in establishing its presence and despite the many competing educational offerings is yet still to launch its BPM certification program. The original intention expressed in 2005 is still to appear while at the same time commercial offerings are fulfilling the needs of corporates in providing methods and approaches to make process management a key discipline. Recently technical training has emerged with organisations like the OMG (Object Management Group) providing training in process modelling semantics.

BP Group researches suggests three versions of the truth are obvious in the market place, each attempting to satisfy the needs of corporate and individuals in understanding and deploying BPM. The initial 2009 study of more than 120 European and North American senior executive decision makers reports 37 per cent of companies already use BPM ‘inside-out’[i], 27 per cent view BPM as a technology and another 36 per cent prefer BPM ‘outside-in’[ii].

The situation is similar to the demise of BPR a decade ago when ultimately the lack of delivery, hyped promises from IT vendors and then corporate disenchantment scuppered what had promised to be a transformational change in business thinking and practice. Will BPM go the same way?

The signs are ominous. The Linkedin community now boasts more than 15 communities covering the themes of business process management. Some groups, led by technology vendors, claim independence from any one product and yet push their own BPMS (BPM Solution) leading to many to see the sham of those communities as thinly disguised marketing machines. Who can the senior executives trust to provide impartial and objective advice?

Recently there have been developments amongst some of those disillusioned to form new entities. One such project from Theo Priestley, sometimes also known as Process Maverick, is creating some interest. Following a poll amongst BP Group members asking the question of whether a BPM Manifesto is required Priestley formed BPM Nexus, hosted on the Ning community platform. Will this initiative be any more successful? Time will tell.

In undertaking the BP Group’s 17th annual research programme we are seeking answers to all these questions. You can join this research and input your two cents worth. The findings will be fully published at the 5th annual BPE conference in London during September 2009.

[i] ‘Inside-Out’ reflects the way organisations are implementing BPM when they view processes as beginning when they cross the organisation threshold and end when they leave the door. A classic depiction would be in the airline business where some carriers treat ‘booking to carousel’ as the process. Typical ‘inside-out’ approaches include six sigma, lean and TQM.

[ii] ‘Outside-In’ sees processes as the customer experience. The starting point begins with customer desire, and ends only when the customer says it does. The ‘outside-in’ view is commercially more attractive as the organisation then influences and obtains revenue at each stage of the customer experience. Organisations such as Southwest airlines, Apple and Best Buy represent mature approaches to BPM adopting outside-in viewpoints.

BPM Webinar Invite, New record for Discussions, New downloads

Kick start the BPM week

Upcoming Webinar – BPM and Operational Intelligence

Project Management Certificates compared
http://bit.ly/3OecHt (66 views this week)

Top Discussion (this week) – Process Savings Potential

Latest Article – Gartner says 20% Y1 is doable (shock)

Next CPP Program – Next Week – Sydney

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This Week, Webinar, Perth, Australia – next, Sydney ( http://alturl.com/ggk ) soon * Dubai * Hungary * London * Denver *

Hopefully see you at Tuesdays Webinar

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All the Best for a great weekend


Chair – BP Group

Just a quickie (and one off) to let you know of a permanent change to my previous email address. The new one is steve.towers@bpgroup.org and it’s effective immediately!

We’ll have a BP Group newsletter featuring the 2008 Annual Survey, conference reviews and presentations, whitepaper (Accelerated Cost Reduction) and several offers THIS WEEK.

Also I would suggest a visit to the new BP Group site – the Open training programme for the next six months is taking shape there 😉