Future ERP

Brian Sommer's provocative post that juxtaposes SAP's technology thinking around the 'old' and 'new' worlds provides insights into something SAP was talking about last year - the two speed world of ERP. At the back end there is still plenty to do, hardening applications, winkling out recurring bugs and fine tuning.
Written by Dennis Howlett, Contributor

Brian Sommer's provocative post that juxtaposes SAP's technology thinking around the 'old' and 'new' worlds provides insights into something SAP was talking about last year - the two speed world of ERP. At the back end there is still plenty to do, hardening applications, winkling out recurring bugs and fine tuning. At the edges we see an explosion of business generated data that somehow needs drawing into the ERP orbit. Brian concludes that:

We need visionary ERP vendors who will take the fresh piece of paper and envision what a new generation of software product should look like. The technology maturity curve for ERP solutions has run its course. The S-curve has hit its apex and has flattened. It’s time for a new kind of product. It’s time for some real innovation and not more of this innovation at the margins.

It's a point well made when you contrast that to Paul Greenberg's head scratching around FinancialForce.com:

I’m not clear on what market they are going after yet.  If its the same market as  NetSuite goes after - the midmarket to upper midmarket, with some bleeding into the larger enterprises, that means that Financialforce is going to put itself squarely in the wheelhouse of SAP also - and Oracle for that matter though SAP probably has more to worry about. But it doesn’t stop there.  On the lower end, Financialforce might be competing with financial software juggernaut Sage - which as you may know is much larger in the backend systems market then they are in CRM - not that they’re slouches in CRM either. But the bulk of their nearly 6 million customers is ACT! and their varying financial packages.  Plus we got Intuit in the mix here too - who are arguably the small business leader - period. Then there’s Microsoft…. In other words, this is not going to be easy for this new venture

A more traditionalist view you could not wish to see reinforced to some extent by Dave Turner of FinancialForce.com in his remarks about visibility and market awareness. (see video above) One view of Paul's assessment is that it reflects the relative immaturity of enterprise class cloud offerings and their need to play functional catch up before the cloud infrastructure can be used to bring the kinds of innovation of which Brian speaks. Assuming that is where the innovations will occur.

Over at Enterprise Advocates, I argue that the cloud computing debate I witnessed in London suggests that we're far from the starting line of Brian's nascent vision. In that article, I quote colleague Richard Messik who said:

The subject was simple enough – what are the business benefits of Cloud Computing. However, left to the main vendors that were speaking, the subject could just as easily been “Quantum physics for beginners”. There were so many acronyms and jargon speak used that to the uninitiated the topic was the most complicated issue.

And this, surely, is the point. Cloud Computing is on the cusp of something major, I am sure, and in a few years time most of us will probably be amazed that we ever used anything else. But the majority of potential users are not technically minded and are not really that interested in what is under the bonnet [hood]. They want to get in the car and drive knowing that it is going to get them from A to B safely.

In other words, if cloud computing is to deliver then business needs to know in simple terms that baseline functionality and benefits are in place. We already know the cloud computing economic argument is largely settled. In talking to Dave Turner, he said that speed to functionality is driving significant interest in large enterprises looking for rapid deployment and that the bare subscription price of cloud computing applications as a comparison to on-premise is no longer a significant discussion topic. But again, that only gets you to the starting point.

Earlier in the year when Vinnie Mirchandani, Oliver Marks, Jeff Nolan and I met with Parker Harris, co-founder and CTO at Salesforce.com, there was talk about architectural changes to the service that might see replacement of the Oracle database with an in-memory database. That should be no surprise given that Salesforce.com is 10+ years' old and that the world has changed significantly in that time.

That one action alone would set the stage for Brian's world of innovation. It would for instance allow Salesforce.com to escape the performance and cost limitations of SQL calls and triggers. If they're able to successfully navigate such a fundamental change then the door is open to absorbing the masses of unstructured data that is informing the more social CRM world that Paul sees as emerging. Again though that's a starting point. Albeit an important technical hurdle.

In my Enterprise Advocates piece I suggest that we should be thinking about real-time events and what complex event processing delivers. In mentioning TIBCO, I note that:

Tech companies are brilliant at solving some of the most difficult problems on the planet. Yet much of the time they are woefully inept at putting those solutions in terms the business person can understand. Is it any wonder then that CIOs struggle to help the business or get attention at the board level when the very people that could help them do not articulate a readily understood business case?

I also talk about Barely Repeatable Processes and technology that can be far more agile at solving problems than the transaction based systems that already exist. BRP marries Brian's event driven real-time issue to more traditional processes in a readily consumed way. In the meantime the SAP's, Oracle's and dare I say it Salesforce.com's of this world still have to work out how they respond to this world without destroying that which already exists. How do you instantiate the changes needed so that friction between the two speed worlds doesn't lead to meltdown?

Groups like Dachis believe you need to put social business design at the center of strategy, articulated through services like Confluence and ThoughtFarmer. It's a big idea but not something I see as taking hold any time soon. It's central thesis seems rooted in the intranet world. That's something I can see driving enormous internal business value but it isn't expansive enough to include partner collaboration in the overall business value chain. In large enterprise there are more prosaic problems to solve. To quote Sigurd Rinde, a proponent of BRP:

...taking a cue from real life practices, like hospital emergency receptions, we built a proper flow from report to solution using a system of appropriate triages - allowing for any kind of problem from "oops forgot to plug it in" to good ideas for changes to business processes to be appropriately addressed by the right person at the right time.

And we will still need to tie solutions back to transactions. After 600 years of general accounting, they're not going away unless the SEC provides us with a radical new handbook against which to assess business performance. Anyone who believes that can have dinner on me. On the other hand, I can see investor analysts demanding a different set of metrics with which to assess business effectiveness and value than those which exist today.

The cloud infrastructure is a given. I see almost nothing new coming out of the on-premise world. So perhaps the fundamental question comes down to this: do the technologies that already exist - CEP, BRP - provide enough with which to envision a radically more effective enterprise? Or do we need something truly groundbreaking coming out of the tech world?

Your POV?

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