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Editor's Note: Rick Davidson is the Conference Chair for the 2012 Fusion CEO-CIO Symposium on March 7-8, 2012. Brent Leland is on the advisory board.
Don't look for a lot of exciting presentations on ERP systems at Fusion 2012 CEO-CIO Symposium
sponsored by WTN Media. ERP's time came, and passed, perhaps a decade ago.
Bruce Richardson, senior vice president and chief enterprise strategist at Salesforce.com
, noted in a blog post that it's been 10 years since the big ERP (enterprise resource planning) vendors started talking about composite apps to overcome the limitations and inflexibility of their software.
As envisioned, composites were going to paint the white spaces left uncovered by their transaction systems. Never happened. Sure, there were some point solutions, but most of these planned apps ended up with an X through them.
Yet, the idea had merit. There will always be a large market for role- and team-based software that can cut across arbitrary application borders, integrate with analytics, and support structured and unstructured content.
Unfortunately, it's too late for composites as we knew them. What we need instead are social apps that map to how our business processes actually work. For most of what we do each day, we need to collaborate with others. That's not how ERP or most enterprise apps works.
In fact, one could make the case that many ERP systems were designed to be anti-social. They embrace process automation, not human interaction.
But that's a little like blaming a horse for not being a cow and providing milk, to use a Wisconsin metaphor.ERP Systems were designed for internal efficiency
ERP are transactional systems based on a model operating within the four walls of the organization, said Rick Davidson, president and CEO of Cimphoni and a co-chair of Fusion 2012. ERP systems have brought significant transactional efficiency across the enterprise with their fully integrated set of processes.
Now though, added Davidson, the emergence of social media has changed the elements of competition from competing around transactional efficiency to awareness of what is happening outside the four walls and understanding how people who buy your products and services feel about your service and engage with you.
Companies are just starting to figure that out now and the ERP vendors aren't playing in that space. Those huge monolithic systems that had their purpose, but once everyone had them then efficiency isn't a competitive advantage any more. Now the challenge is to create an organization that is responsive to the marketplace using tools like Hadoop that can see how customers really feel about product and service offerings.
ERP vendors need to reinvent themselves, but he doesn't see any sign that is happening. Instead, companies and other vendors will have to provide a layer of social media information to interact with the ERP systems.
But why would anyone expect them to reinvent themselves?
Brent Leland, CIO at Trek Bicycle Corp
., thinks the problem with ERP is over-promising by vendors and unrealistic expectations from users.
People drank the Kool-Aid, said Leland, whose company bought JD Edwards, since acquired by Oracle.
We are your solution for everything, align everything on these strategic business processes. But that never lived up to its expectations. It is very rigid and you end up in situations where it is expensive to upgrade and it doesn't move fast enough.
He expects to maintain the JD Edwards system as a transactions ERP engine, because there is no good alternative for general ledger and shipment functionality.
That's the core and there are a lot of complexities in there. But he expects other functions will move to new technology or the cloud. Trek uses the online version of Microsoft Dynamics CRM
and Microsoft's business intelligence solution. Other companies are moving additional functions, such as human resources to cloud solutions such as Workday
, founded by PeopleSoft veterans Dave Duffield and Aneel Bhusri.