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Articles by James A Robertson and Associates

SNw 033 The coming demise of ERP in business
Created by James on 6/12/2013 2:26:41 PM


It is clear that the demise of Enterprise Resource Planning (ERP), in the way we traditionally understand it, IS a real possibility.  

The ERP industry stands at a watershed and is in the process of being redefined.

This discussion focuses on some of the key factors that are pointing in this direction:

Tech-savvy executives

We are rapidly seeing the advent of a new generation of tech-savvy executives.  They are executives who have been around computers all of their lives.  They do not necessarily know how to use them to best effect, but they are not scared of the technology and are quite willing to get hands-on.

Market saturation

Big brand ERP is rapidly reaching market saturation.  Most corporations have a big brand ERP, some are on their second or third product.  Many have been using those brand name products for a considerable period of time.  Realization is building that it is not the brand or the tool but what is DONE with the brand or the tool that is the issue.  Consequently, the prospects for new sales of brand name ERPs are diminishing rapidly.

Executive frustration with ERP

High levels of frustration with ERP remain. Fact is that at an operational level there is a reasonably high level of satisfaction in many organizations but at an executive level, most executives complain. The complaints include not being able get answers to their questions when they need them, that the quality of reports is dubious and that the cost of maintaining reports is excessive, etc.  

Most business intelligence investments have also failed to deliver on expected returns. 

Increasingly this is leading to a cynical view of ERP and reluctance to incur significant costs.  This also points to a relatively bleak future for ERP vendors and implementers who do not adjust to the new reality.

Emphasis moves to IBIS – MAKE IT WORK

Increasingly there is a move towards what I call "IBIS" or ‘Integrated Business Information Systems’ – the mishmash of technology that represents the real world for most enterprises.  

IBIS frequently, but not always, comprises a brandname ERP surrounded with a great diversity of third party specialist software, custom developed utilities and sometimes whole modules of custom development together with the ubiquitous Excel spreadsheets - all of which constitute a unique solution for the enterprise.

By now most have realized that this mishmash will always exist, whether it operates surreptitiously under the cloak of FRED (the name of your big brand ERP) or whether there is a realisation that FRED is NOT the total solution.  There simply is NO silver bullet and if you replace FRED you are still left with all the surrounding stuff and frequently with the recreation of the surrounding stuff to fit the new FRED.

Precision taxonomies dominate

In recent years it has become increasingly apparent to me that the next BIG frontier in the ERP or IBIS space is the huge morass of badly configured systems out there.  

Business has made huge investments in precision software only to have it populated with sloppily defined content.  Whether the Chart of Accounts, the Material Master, the Product Class, the Customer Type or whatever the validation list is it frequently has little or no logic, highly variable granularity, duplication, etc.

The net effect is that precision ERP software operates at a fraction of its true potential.  Processing that should take place within the ERP takes place in add-on's and Excel, even simple reports are difficult and time consuming to develop and maintain and management struggle to get the answers to simple questions.  Complex models and analysis are frequently beyond the bounds of possibility.

The answer to this is NOT to replace the software, it is to reconfigure the existing software with precision taxonomies leading to precision configuration.

Decision support is paramount

Many years ago, long before ERP was coined as a term, we used to refer to MIS "Management Information Systems" and then EIS "Executive Information Systems".
When the MIS and EIS failed to deliver the MI or EI, the industry re-branded the technology as ERP "Enterprise Resource Planning", thereby adopting a label that was frequently inappropriate because it is a reality that few organizations actually DO RP in their ERP – most industries require specialist packages to RP their businesses.

In truth MIS and EIS WERE appropriate labels, the problem was that, because of the sloppiness referred to above, those systems could not deliver management or executive information.

Today the industry is coming full circle – executives and managers STILL want information on which to base decisions and, as much as the re-branding created a smoke screen for many years, the smoke is now clearing and tech savvy executives are demanding the information they need in order to support improved decision making.

Precision taxonomies and precision configuration is the only way to meet this need and this has nothing to do with which product is used.

Precision data warehouse data

Increasingly it is becoming apparent that the real opportunity for precision configuration lies with the data warehouse on top of the ERP.  Because the ERP is working operationally, the cost of re-implementing it is beyond the realms of what is practical for most enterprises.  Investment in excellent precision first principle taxonomies, what I call "Strategic Engineered Precision Taxonomies" or "SEPT" for short, in the data warehouse with remapping of the operational data is where the REAL opportunity lies for business information systems today.  

Incremental beneficiation becomes the norm

The realization that re-implementation of an ERP is frequently too costly brings with it the realization that incremental beneficiation of operational data in the ERP underpinning the precision data in the data warehouse is an attractive option for many enterprises.  This is likely to become the norm for most existing installations going forward.

Software company influence diminishes and implementers become re-furbishers.

As a consequence of these developments it is likely that the influence of large ERP companies will diminish, further take-overs are possible and shake outs and down-sizing are distinct possibilities.

The number of ERP implementations will reduce drastically and those implementers who survive will increasingly focus on developing high value taxonomies with associated data warehouse and business intelligence installations focusing increasingly on high value business information solutions.  

In the ERP space it can be expected that implementers will increasingly become re-furbishers – fixing up sloppy configurations in a controlled manner over periods of years.  It is likely that many implementers will fail to make the transition so a major shakeout in this area is to be expected. .

It is debatable whether the term ERP will be in the forefront of business-speak in twenty years' time and it is likely that the ERP industry will be radically re-defined in the next couple of decades.

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Dr James A Robertson PrEng The ERP Doctor

Business Systems NOT delivering?

Call the Business Systems Specialist

Dr. James Robinson

Dr James A Robertson -- has been involved in the effective application of Business Information Systems, including but NOT limited to ERP, since 1987 and in the profitable and effective use of computers in Business since 1981.

Drawing on a diversity of experience, including formal military training in Quick Attack techniques at the Regimental Commander level, Dr Robertson has developed highly effective methods of investigating any sub-optimal Business Information Systems situation -- be it an established system or a stalled project or any other source of Executive frustration -- quickly and concisely diagnosing the root cause of the problem and prescribing concise practical actions that Business Executives can effectively act on see the Pulse Measurement page and also the Sample Reports page for redacted real reports.

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Table of Contents

Home

About Dr James A Robertson PrEng -- The Business Systems Doctor -- and Other Topics

Catalogue of Major Business Information System Failures

About the Engineering Approach

James Robertson's Value Add

Attributes of a HIGH VALUE solution

Recognizing Business System Failure

The Critical Human Foundation

Old Software IS Viable

From South Africa

Competencies of Dr James A Robertson PrEng

About Professor Malcolm McDonald

Table of Contents

About my relationship with the Almighty Creator, Yah the Eternally Self-Existing

Comments relating to the Business Systems Industry and other topics

Testimonials and other positive material regarding James Robertson

Reference Articles

List of Articles

Article Catalogue

Achieving High Value Business Information System outcomes

Executive Custody -- What is it and HOW do you get it?

The REAL Issues in Integrated Business Information System Success

Part 1: Introduction

Part 2 -- Mythology and Lack of Executive Custody

Part 3 – Strategic Alignment and Precision Configuration

Why your ERP is NOT delivering and HOW to FIX it

IT Project Management

Pulse Measurement

CEO Anthony Lee Comments on his experience of the Pulse Measurement

No Charge Guarantee on the Pulse Measurement Service

Examples of Pulse Measurement Outcomes

Critical questions regarding the Pulse Measurement™

The Pulse Measurement Workflow

The Critical Factors for Business System (ERP+) Investment Success in the Pulse Measurement

Indicative Pulse Measurement Durations

What is a JAR&A Pulse Measurement?

Survival of the fittest – why it makes sense to measure the pulse of your business

Examples of Pulse Measurement Outcomes over 24 years

Sample Pulse Measurement Reports

Strategy

Strategic Essence: The Missing Link in Business Information Systems

Strategic Essence: Overview

Strategic Essence: Part 1 -- Strategy Defined

Strategic Essence: Part 2 -- Differentiation

Strategic Essence: Part 3 -- The Essence IS Different

Strategic Essence: Part 4 -- The Essence should be the Point of Departure

Strategic Essence: Part 5 -- Discovering Strategic Essence

Strategy -- the Essence of the Business: What is it and how do you develop actionable strategic plans?

Simple Steps to Increase the Strategic Value of your ERP Investment

Free Strategic Snapshot Toolset and Manual

A strategy focused planning system beyond traditional budgeting

Tough IT and ERP Procurement and Contracting that Works

Robust Business Systems Procurement

Part 1 -- Introduction

Part 2 -- Bill of Services, Laboratory, Go-live Certificate, etc

Part 3 -- Executive Engagement, Bid Compliance, Adjudication and other matters

Procurement Documents

Guidance and Advisory Services

The Art of Project Leadership

Why Regular Communication with the CEO is Vital

The Business Simulation Laboratory

Precision Configuration and Strategic Business Information Architecture

Precision Configuration based on Strategic Engineered Precision Taxonomies

The JAR&A Cubic Business Model

Highly Structured Strategic Chart of Accounts -- a Vital Element of your Corporate Information Arsenal

The Product Catalogue -- an Essential Element of any Precision Configuration

Attributes -- answers to the questions you have NOT yet thought to ask

Case Studies of Notably Successful Projects with high value Precision Configuration

092 Doing things differently and better -- ASCO Case Study 2-- BPM Summit 2013

088 Strategic ERP Invesment -- ASCO Case Study -- Service Management Conference and Exhibition Africa

026 Information Architecture and Design of FIS for Rennies Group -- Financial Information Systems Conf

018 CRM Risk Control: Designing and Implementing an Integrated Risk Mgmt Sys -- Integrated Risk Mgmt Conf

011 V3 Consulting Eng: Benefits of MIS to Professional Practice -- SAICE 15th Ann Conf on Computers in Civil Eng

Strategically Enriching your Business Information Systems

Part 1 -- Introduction

Part 2 -- Principles of Data Engineering

Part 3 -- Steps in applying these recommendations

Simple Steps to increase the strategic information value yield from your Business Systems Investment

The Full JAR&A Taxonomy Manual

Part 1: Introduction, Problem Statement, Definitions and Examples

Part 2: Why Use JAR&A, Required Knowledge and Experience, Cubic Business Model and Chart of Accounts and Taxonomy Software

Part 3: How to do it, Case Studies and White Papers and other References

Example General Ledger Manual

Business Process -- Irrelevant, Distracting and Dangerous

The RIGHT Approach

Custom Strategic Software Design and Oversight of Construction

Standards for Custom Software Specification

What IS Software?

IT Effectiveness

Organizing Outlook

Critical Factors for I.T. Success

A Moral and Ethical Dilemma -- Systems that Fail

Case Studies examining Business Information System failures

The BBC Digital Media Initiative Debacle

The Bridgestone -- IBM Conflict

Speaking and Training

Showcase of Conference Presentations

Most Viewed Presentations

Briefings and Seminars

Why your ERP/BIS is NOT delivering and HOW to FIX it

ERP and IT Procurement that Delivers Results

The Critical Factors for IT and ERP Investment Success

Other Seminars

Conferences and Public Presentations

Conferences 80 to 99 -- 2009 to Present

Conferences 60 to 79 -- 2005 to 2009

Conferences 40 to 59 -- 1996 to 2005

Conferences 20 to 39 -- 1994 to 1996

Conferences 01 to 19 -- 1989 to 1994

On-Line Seminars (Webinars)

Webinar on Preparing and Presenting Webinars

Contacting James A Robertson and Associates Limited