Enterprise 2.0: it's not about people it's about process. Part 1

Enterprise 2.0: it's not about people it's about process. Part 1

Summary: The conventional Enterprise 2.0 wisdom is that people matter over process.

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The conventional Enterprise 2.0 wisdom is that people matter over process. It is about value coming from the social relationships between people that govern our approach to applications going into the next decade as a way of delivering the next wave of value to the business. While the amplified concepts surrounding E2.0 emphasize unstructured data, emergent behaviors, crowdsourcing and information discovery, they say nothing about how all of this 'stuff' is supposed to fit into the existing IT landscape. It appears as an afterthought. It's a dangerous way to think.

From 30,000 feet we have two basic flavors of E2.0: that which faces outwards as an adjunct to existing sales and marketing activities. Today we see that morphing into the idea of Social CRM. The second can broadly be corralled into the general idea of business collaboration. At that same 30,000 feet, both have merit as standalone concepts. Both can deliver at least some value. However they quickly break down once we start to examine them in the context of the existing applications landscape and the business hierarchies that are both supporting and supportive of what we call enterprise IT.

The other day I pointed to the classic problem of turf wars and process gaps which are a common feature in the conduct of business and which serve to cut across processes involving people. They cannot be ignored because they always impact the business, often with enormous consequences as evidenced in the Nigerian Pants Bomber story.

E2.0 mavens have tried to side step this problem broadly arguing either that hierarchies will disintegrate from the bottom up or that business requires a fundamental redesign around the social. That can be true in knowledge based businesses but I'd be hard pressed to see those ideas taking root in large scale manufacturing or process industries. Both notions ignore the problem of managing process which is where all the business action takes place and from which monetary value flows via the transactions those processes generate. Think about it. Does the fact I Tweeted something or that I annotated a wiki post deemed as valuable create monetary value on the balance sheet? Of course not. It's what happens when that non-monetary value is converted to real money that it becomes recognizable as having business value. And for that we need processes.

In what we might call the 'old world,' automating processes allows us to become more efficient or, with a bit more automation and tweaking, more effective. Whether that's been achieved is not wholly relevant to this discussion even though it is frequently debated. Whether we can function without IT is an altogether different story and that means at least a partial acceptance of what we have. It's either that or blow up the whole SAP/Oracle/IBM etc edifice. That alternative is what seems to be in the minds of at least some E2.0 mavens although I can find no support for that position from business.

Brian Sommer has argued that the current crop of established applications are largely ill suited to the fast paced world in which we live. He correctly points out the technical limitations of much enterprise software. Key to his argument is that at least some software companies have figured a way around the problem. In other words it may not be necessary to throw out the concepts of ERP etc but supplant them with other ways to crack the process change nut.

In the alternative, Phil Wainewright argues something quite different:

I believe we’re at a breakthrough point precisely because technology has matured to the point that it’s flexible enough to be adapted to what the people who use it are trying to achieve — to empower them to refine the automation and processes that help them fulfil their roles as effectively as possible. We no longer have to ask people to change their processes to fit in with the demands of punch card runs or application stovepipes or implementation and upgrade cycles. We now have information technology that’s sophisticated enough to fit in with how human beings work and behave, and that’s why people-centric IT is a defining theme for the new decade, requiring information technologists to develop new skills and ways of working that deliver results the people demand.

Despite Phil's lacking of concrete proofs, it's an extremely seductive argument until, once again, you realize that Phil is sidestepping the process problem in the context of what we have at our disposal. Sure, we desperately need better UX, certainly the consumer world has much to teach but in isolation they cannot achieve much that you would recognize as business value. Even with the most sophisticated SOA deployments, you still have the problem of working within often rigid process environments. What to do?

If we step back a moment and look at the problems E2.0 is seeking to solve you can argue (at least from the collaboration perspective and possibly the outward facing sales/marketing angle) that they are trying to meaningfully surface information that adds value somewhere in the process chain and which ultimately can be turned into money. Right now that broadly doesn't happen except through manual application and even then in a chaotic way. Somewhat self defeating. That neatly brings me to an email SAP's Michael Bechauf penned to the ESME Apache incubator group. The essence of what he is asking is as follows:

What can micro-blogging utilities like ESME really do to make ERP systems "better" ? For me, this was not a technical integration question, but rather a fundamental question...

The way I look at ERP systems is that a business process is broken up into multiple steps that can each be executed with a specific transaction. Most of these transactions can also be executed through some remote invocation interface (WS*, RFC or whatever) which would apparently be used by ESME. People with specific roles using the ERP system would enter those transactions, either triggered by an outside event (Goods Receipt, Create Sales Order, Shipment) or prompted through some workflow in the system. In a way, the system is designed and implemented so that it's clear when who has to do what. The level of success of an ERP implementation depends on the degree of automation that can be accomplished.

Typically, ERP systems work best with what Sig lovingly calls "Easily Repeatable Processes". An event happens, an appropriate transaction is executed, the ERP systems determines specific follow-up action that either need to be executed manually by a person or a follow-up business process is triggered automatically. Even in the case of customer support, where Twitter is said to have some enterprise-level success, the CRM system will make sure that a customer support specialist will give a customer a callback, and if that hasn't happened within a certain time period, a different customer service agent would be found. Essentially, it is all about predictability.

Obviously, predictability only works as long as the real world works in synchronisity with the inner workings of the ERP system. In many cases it is not; that's when people pick up phones or maybe use some internal micro-blogging utility. Somebody will say, "Hey, I've got this customer who presents me with this issue, anybody out there who can help ?".

However, what kind of "integration" is required to make this happen ? The demos that were shown at Demo Jam essentially published an event with a text on ESME, but isn't that in reality just somebody typing in a question ? Would ESME really trigger a business process through some remote invocation interface, like creating a PO, or would the ESME user, once a question was satisfactorily answered by their network, rather turn to their ERP screen and enter whatever they have learned ?

So, essentially what I'm saying is that I don't think an ESME integration with ERP will be of significant value. ESME as a standalone tool may very well be, but then what is its sweet spot compared to Twitter or compared to commercial tools for enterprise-level deployment that are already on the market ?

Let's break this down as in many ways it goes to the heart of the issues surrounding E2.0 as applied to the existing IT landscape. I should at this point say that Michael's question is one I've seen asked in similar fashion by representatives of other large ERP players so let's not assume for one minute that what I'm referencing represents the ramblings of one individual. This is a big issue.

In the ideal IT ERP landscape automated processes deliver the optimal result. In the real world that's rarely the case. Or rather it is rarely so in specific application areas. If you think about it what's to go wrong with financials? Not much. HR admin? Not so much. CRM? Yep - all sorts of things. SCM? Plenty. Parse that to say industry specific order to cash processes (as an example) and there are potentially multiple points of failure, even though the aggregated process steps should deliver more value than trying to traverse many applications.

The ESME DemoJam use case was meant to describe a relatively simple scenario where a person was operating a process that broke down. In the demonstrated use case it works as a people based discovery mechanism for problem resolution that would otherwise get shoveled into an email trail. I'd therefore argue that in time saved, ESME demonstrated value which could be costed back to the process issue. I'd also add that because ESME was integrated to what was a NetWeaver process, the savings were greater than going out to a non-integrated service. Taking an integrated process view, microblogging tools can deliver value. Expand that to blogs/wikis and you can make a reasonable case for E2.0 technologies helping in the case of broken processes which are readily fixed. Yes it has a social component but that is not the main point. It's about the ability to leverage the network while in process.

So - given we have ERP which may be capable of varying levels of automation but which is often inflexible and/or liable to breakdown then what are we to do? How can we optimize processes, continue to reap benefit from ERP and yet manage improvement in a fast track process world while at the same time leveraging E2.0 data? That's the subject of the next post.

Topics: Enterprise Software, Software

Dennis Howlett

About Dennis Howlett

Dennis Howlett is a 40 year veteran in enterprise IT, working with companies large and small across many industries. He endeavors to inform buyers in a no-nonsense manner and spares no vendor that comes under his microscope.

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14 comments
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  • Phew!

    Sorry, but I finally have to say something about your writing. Your message, as usual, has be obfuscated by your prose. While you have thoughtful ideas, trudging through your sentence structures are arduous, at best.

    Please keep ever-handy a copy of Strunk's & White's <i>The Elements of Style</i>. If it becomes your constant companion, I dare say more people would actually read what you write.
    Lucky2BHere
    • Sorry about that

      It's a big topic and yes this is densely packed.
      dahowlett
  • RE: Enterprise 2.0: it's not about people it's about process. Part 1

    I agree, inprove writing prose will help. Then again I am not very good either so I understand.

    Great info in the article thou, people forget Software is supposed to help you doing processes cheaper, or give you better information so you can make decisions that make more money or save cost. If they do neither of these things then software is just a waste of money. The new E 2.0 can help in specific areas, I would say business management admin/communication areas are the big area. These are in many cases process that are so complex creating a standard is extremely difficult because mapping the processes them out almost becomes a waste of time due to the need for major variations in the processes.
    bcclendinen
    • Yes...

      ...this is apoint I come to in my next post
      dahowlett
  • RE: Enterprise 2.0: it's not about people it's about process. Part 1

    Very nice read. You have explained the survival tip for E2.0

    E2.0 as described above, needs to be enhancing business processes, making them easier, removing failure points , bottlenecks etc. via social intelligence. Usecases which are driven from problems faced by enterpise with ERP will teach us how social intelligence can help and there are a plenty.
    Asif_Khan
  • RE: Enterprise 2.0: it's not about people it's about process. Part 1

    I don't accept the premise that "conventional E2.0 wisdom holds people over process". Where do you find these statements?

    That said, another thought provoking article Dennis.

    ERP and E2.0 are both enterprise level software, but E2.0 is about filling in the ERP gaps. Democratizing the enterprise so that more ERP info is shared and not silo'd.

    E2.0 does make ERP better because (in theory) the right people get access to the right information at the right time. Moreover, E2.0 allows communities around ERP data that can discuss go-forward business strategy.

    We're still early, and we have a long way to go, but real business cases are being made every day.
    fidelman
    • The people thing...

      As a social scientist by education my background is in the study of people, what makes them tick and how they relate in society. Much of what I've seen and read about social software tips a nod (although I'd also argue it is often without much intellectual rigor) in that direction with much emphasis on the 'people' component.

      I agree that more recent thinking talks about 'the network' but that's still located in a discussion around people as the defining element.
      dahowlett
  • RE: Enterprise 2.0: it's not about people it's about process. Part 1

    Very much appreciated the focus of the article!

    I also disagree with the sentiment that the Enterprise 2.0 movement values people/process over the technological dimension.

    The tools are continually being stressed, not how to use change management principles to actually change organizational structures to be more 2.0!

    If the org is not 2.0, then the tools will have little impact. Performance reviews have to be based on 2.0 adoption/use/engagement/innovation, hiring/firing decisions need 2.0 input as well. Do employees get to rate each other? Or is the business purely top-down?

    We do not see much being written on these basic management concepts.

    Looking forward to part 2.
    jwilfong
    • Really?

      Blame the customer because they don't run their business according to some ill defined 2.0 way? Really?

      If they'd just reward people for adopting 2.0 approaches then 2.0 will succeed? Really?

      What is this, 1998/9 and the .com revolution all over again?

      Business has been around way too long and fully understands what it takes to run a business. Your statements are echoing across the internet as one E2.0 advocate after another criticizes the very market they hope to capture. Dumb stupid business doesn't understand what it takes to survive and grow until 2.0 came along? Unbelievable.

      Good luck with that approach.
      BabblewareInc
      • What is your advice for the complexity?

        With all the failures of strategy in relation to the financial crash, do you
        not think that strategies will have to change? I could easily name dozens
        if not hundreds of companies that failed in their strategies. I am not
        blaming them or their traditional business models. Obviously, business
        acumen is strong in these companies from a relative standpoint.
        However, if we limit ourselves to discuss only what is "acceptable" to the
        business clique, then will we not repeat them same disasters over again?
        After all, the world is increasingly becoming complex and connected?
        Nowhere in your post do you seem to allude to what is smart business.
        Sure, survival and growth is important, but I am not sure what you are
        getting at.
        jwilfong
  • RE: Enterprise 2.0: it's not about people it's about process. Part 1

    Dennis,

    Amen.

    Enterprise 2.0 needs to build upon Enterprise 1.0. Enterprise 1.0 was built upon the Enterprise. All facts that the current E2.0 crowd ignores.

    Business is about processes: making them faster (productivity), better (accuracy) and scalable (visibility). That is what makes business, business.

    Some of the advocates of E2.0 are old enough to know better while others apparently lack sufficient experience. This may be the same crowd that welcomed this century with business models that eschewed profit and lead to the .com bubble.

    True Enterprise 2.0 systems build upon E1.0 by creating the continuous improvement/process change environment business desperately needs. They directly address productivity, accuracy and visibility without causing any change to the E1.0 systems.

    A true E2.0 solution was implemented at the world's largest automotive manufacturer, requiring zero change to the existing E1.0 solution, delivering a 292% increase in productivity for the distribution labor resources, a reduction in labeling costs by 91% and inventory accuracy went from 99.6% to 99.9996%. All accomplished in less than one month. We will document the case study upon customer approval. In the mean time, the http://tinyurl.com/EvolutionBegins.

    The reason the E2.0 crowd is struggling to gain traction with the people/companies that will actually pay for the next best thing is because their next best thing ignores the fundamental realities of business. But the current conversation is exactly as you've stated, despite the opposition reported here, "conventional E2.0 wisdom holds people over process".

    It isn't enough to facilitate a conversation with the customers or even amongst employees to distill some previously unknown product/service/solution. Those capabilities already exist as people have been able to speak and listen since the dawn of civilization.

    Long live process. Build those well and you can run a company where good people will want to work as success, including profit, create an environment everyone finds enjoyable. Have poorly developed or broken processes and the discontent that foments will destroy the company and the good people will leave in droves.

    I look forward to Part 2.
    BabblewareInc
  • RE: Enterprise 2.0: it's not about people it's about process. Part 1

    One of the other challenges of "E2.0" is that assumption that the social web model can be copied behind the firewall as is. But the scale isn't there. Most people do not want or have no interest to contribute to the conversation. It's that famous 1% or less that do. Now 2 Billion internet users are enough to create Twitter. But what about a company with 2K employees? It's challenging to create a critical mass that would start the usage snowball. So apps such as "knowledge sharing" "collaborative problem solving" may not be the best. In that context, I think Michael is asking good questions, even though I disagree with his conclusion.
    amit_bendov
  • RE: Enterprise 2.0: it's not about people it's about process. Part 1

    What are processes supposed to be implemented for? Automating chains of tasks to increase efficiency and avoid spending time (and resources) taking decisions where the best one is already supposeed to have been taken.
    If that had proved to be so determinant in companies wealth, entire sections of our Western economies wouldn't have been delocalized to other countries.
    Beside innovation and other R&D stuff, one of the main competitive advantages of organizations is the way they take decisions. Business is all about decision making, even if that boils down to design better processes. And as a process, decision taking is clearly one of the messiest. Not to say that Enterprise 2.0 tools are optimally designed to straighten this, we still miss a lot of conceptual design, but their implementation allows for a better grasp of the core mechanisms of business. Enterprise 2.0 isn't about process, it is about where process falls short.
    tdebaillon
    • Hold it

      ...fair points but I'd suggest you wait to see today's missive where I specifically address that in some detail.
      dahowlett