March 21, 2016Doug Hadden
Technology analysts, the Gartner Group, made quite the splash back in late 2013 by characterizing Tier 1 and Tier 2 ERP software as “legacy”. The premise of the argument was traditional enterprise resource planning (ERP) systems require too much customization making it difficult for organizations to adapt to change. In addition, cloud enterprise software is more configurable. Gartner also predicted the increase in “loosely coupled” integration among public cloud and on-premises software.
I suspect this came as a bit of shock to many of the large enterprise software vendors. It shouldn’t have because there has been a good 20+ years of ERP replacing the previous generations of enterprise software. Congratulations ERP, you’ve grown up. You’ve come of age – more specifically, you’re middle-age legacy. High customization, low configuration. Tightly coupled integration.
More on Post-Modern
Post-modern means many things depending on the discipline. I’d like to explore a few relevant patterns:
- Pace of Change: Post-modern can mean that the pace of change is so rapid it’s impossible to distinguish what is more modern. This means enterprise software designed in the old paradigm, the ’90s, was not designed for rapid changes, adaptation or agility. Gartner is quite right to make the distinction.
- Meta-Narratives: The modern era was characterized by broadly accepted meta-narratives. Post-modern brings many of these narratives to question. We’ve become skeptics when we analyze the new wealth of information relative to these meta-narratives. The ERP meta-narrative is that it is possible to support almost the broadest enterprise needs with a single suite of integrated software that will have the lowest Total Cost of Ownership (TCO). The high technical debt of implementing and maintaining ERP bloatware and the difficulties of intra-suite integration have caused great skepticism about vendor propaganda. (Of course, leading vendors have jumped on the “post-modern” bandwagon by claiming compliance with the concept.) “Best practices” is the other major tired enterprise software meta-narrative.
- Analog to Digital Thinking: Computerization has been characterized by improving analog concepts. Accounting, word processing, spreadsheets, video on demand etc. Marshall McLuhan pointed out, any new medium takes the previous media as content. At some point, the “medium becomes the message.” That happens when the impact of the medium exceeds any message, and when the medium takes on the true characteristics of the medium. We’re seeing this through the combination of social, mobile, and big data for new business models and the shift of power from institutions to communities. In other words, so many of the leading enterprise software companies are stuck in the analog way of thinking. Where “economies of scale” are enabled through proprietary technology in the analog world while open technologies drive economies in the digital world.
The ‘Run Simple’ Myth
One of the Tier 1 ERP vendors has been touting “run simple.” This is an odd positioning for a company that has been selling complex for so long. The problem facing legacy vendors is to reduce the burden of customization – not by providing improved configurability – by convincing customers to use non-differentiated vanilla features. Or, in the government context, change Public Financial Management (PFM) laws to meet what’s in the software. (Of course, one of the reasons for this “run simple” approach is that the latest generation of software isn’t yet mature.)
Some don’t believe that a mostly configuration approach is possible in enterprise software. They have a point. Every enterprise software domain introduces complexity in configuration. It really isn’t possible for configuration to provide deep adaptability for a product suite that covers public and private sectors and horizontal domains like ERP, SCM, CRM and PPM together. That’s why I’ve had people laugh at me when describing the configurability of the FreeBalance Accountability Suite.
Cloud providers have shown how configuration for horizontal domains for many organizations can be supported. FreeBalance is showing how massive configuration is realistic within a single vertical market – government.