ERP, what’s next?

I recently found a really provocative and interesting article about the current status and trends for ERP software applications.

Without any doubt, many customers of the “Big ERP” vendors, feel the weight of complex, monolithic systems that have piled – over the years – an impressive amount of investments. Despite this situation, I believe that there are now some factors that will, soon or later, spark a completely new generation of solutions for middle, big, end very big business.

If I look at my professional history, maybe the initial growth of the main ERP solutions (SAP, JD Edwards, PeopleSoft, Oracle, etc.) was based on two, technological, disruptive factors:

– relational databases,

– availability of long-range data connections

The first one allowed to build scalable applications, able to process quickly vast amounts of data (“vast” in the scale of ’70 ’80 of the previous century).

The second one allowed Companies to dismiss the multitude of “local”, strongly customized, applications, and concentrate to a single, standard, application platform accessed remotely from all the plants, sales, offices, local branches, etc.

Today, we have, at hand, some new technologies – first of all unstructured databases (NoSQL) and strong transactional databases (Blockchain), plus cloud, service orientation, Big Data, and all the commercial hype that vendors are eager to promote.

The big – and emerging – ERP producers are reacting adding new, and fancier, user intefaces, additional modules, but, in my opinion, are failing on some key points. They are adding stuff on top of existing applications, leaving the underlying architecture untouched. 

Furthermore, they failed to recognise the growing importance of the “personal information” aspect of document processing.  This lead to attention on the “presentation” features of user intefaces, rather than on the “content” of the interface. there are still strong barriers dividing the enterprise side of the information from the personal side. This require,  to the user,  frequent context switches. 

So I tried to imagine some features for a “New ERP” software architecture.

  1. Each transaction should have an url

If you are reading my post, you can easily share it with someone else, simply passing him the link to the browser page (or using the “share” button embedded in all the mobile apps). Your friend will receive your share via mail, or some other sort of generalized messaging or notification system.

If you are watching at an invoice on your ERP system, you cannot do this. Maybe you can, if your colleague operates on the same software and he is logged on same server.

In my dream ERP, every customer order, GL posting, article master data, purchasing request should be available as a single page (web or mobile doesn’t matter) with a simple link (obviously requesting all the authentication and permission checking stuff).

  1. Single repository

All the documents (EDI, pdf, etc.), mails, chats, comments, records should be available in the same “space”.

They may be physically dispersed in several locations or cloud systems, but their index should be unique, exactly as the index of a search engine is unique, even if indexes millions of different servers.

Please,  note that,  for me,  email should be a totally integrated feature.  This mean that the mail server should be a module of the system,  and should be able to tag each incoming mail with the relevant references,  analyzing the semantic meaning of the message body and attachments.

Microsoft, for example, is pushing and claiming it’s messaging app Outlook integration with it’s NAV ERP solution.

  1. Search

The fastest way to find something should be the search box.

You type “Invoice june 2016 ACME”, and you get the list of all the invoices issued in the month of june to/from ACME. But ALSO the mail that you have exchanged with the salse rep about this invoice, maybe a report where this invoice is listed.

You will be able to browse and refine your search.

The key point is that ANYTHING should be indexed, not only the “keys” recorded on transactions. If there is a customer order with a description containing “provided by ACME Corp.”, it should be in the result list, even if the customer/supplier is not ACME.

Search should go beyond content searching; I think that also menu items, user guides, how-tos, should be searchable in the same way. So, if you have to post a new lease-out contract, simply type “new lease-out contract”: the result list will show you the link to the active page where you can post the contract, as well as a link to the guide, maybe also an alert, telling you that – from the first of july – “lease-out contracts should be posted under a new category”, or something else.

You will be able to save anything in your favourites, be it a document,  a menu item, a mail.

  1. Social

Social ERP doesn’t mean a bad Facebook clone with a different name and your Company directory preloaded.

It means that all the documents/records that you process, your comments on them, your approvals or rejections, will be part of a content stream, categorized under many keys (“Project X”, “Lead Y”, “incoming invoices”, “maintenance requests”) cleverly assigned to each item.

So, if you have a purchasing request that is approved by your boss, you will read this event in your main stream. But if your boss has some issue on it, he will simply annotate the request, you will receive this notification, and will be able to see it in the context of the request, not as a separate mail.

And a mail, coming from a vendor, will become a document, within the stream related to your purchase requisition. Your collegues will be able to comment it, and, if properly configured, each comment will become a response mail to the original author.

5. Workflow and capabilities

Workflow automation is a great tool,  when you follow a course about process modelling,  or you watch at a demo.  Why business executives dislike process models? Because they are a mess. And they are a mess not because your organisation is poorly designed,  or is overwhelmengly complex, but because reality is flexible,  fuzzy, and it has to be so.

A modern ERP should incorporate Workflow management,  but only as a “main” process path,  keeping track of milestone approvals,  allowing a flexible “I will take charge of this” pattern. The system should provide you with a clear view of the process pipeline,  highlight exceptions,  and allow a flexible collaboration on each item.

6. Related content

It means that you should be able to find,  and link,  anything that you find that is related to the content that you are viewing.

People working on items,  tend to manage them mainly as a chronological sequence,  all the other forms of archiving are useful,  but not “natural”. Then,  when they read an item,  the association mental mechanism happens,  and their memory suggest the existence of related content.  This should be naturally implemented in the system,  thus simply enhancing the natural power of the user’s mind. 

Related contents may include documents that have a functional relationship (an order with a goods receipt,  a VAT posting with an invoice) that will be managed by the system, as well as mail, memos, spreadsheets,  drawings,  that can be useful for evaluation, knowledge sharing,  and the else.

  1. Really modular applications

Localization is always an issue. ERP vendors are requested to maintain some functions (eg. VAT, Withholding tax,  property tax), or to develop some functions only for one country. This has a cost, a huge cost, and customers pay this cost, in term of maintenance fees. I live in Italy, where the regulator is often tricky, and new requirements, fiscal reports, blossom every year, and ERP vendors often don’t provide a timely, simple, and fully effective solution. Maybe, the fact that the local functions are developed offshore, by people who haven’t ever a “field” experience of our normative reality, is a factor influencing the final quality.

In my vision, a localized application for VAT will be developed only for Italy (or India, Argentina, USA…) by a local software developer, with strong ties and knowledge of the evolving regulatory landscape. When you post an invoice, you will generate several, related (see point 6), different documents:

– the invoice itself, with metadata describing only the essential information (date, number, vendor, total amount, customer);

– the general ledger document, with only account codes and amounts;

– the VAT document;

– the Withholding tax document, if required;

– the financial (account payable cash flow) document;

– the good-receipt clearing document.

This means that:

– the application footprint is small;

– user interfaces require a careful design (but this is already true for the legacy, monolithic, applications);

– different document are linked only by a “structured” link, made by the document url, and few integrity constraints based on document values

I listed only few elements that I believe will characterize the future generation of ERP systems, and are made possible by the technologies that emerged in the past years. I am convinced that a new software development approach, conceiving the application as something mixed or meshed with common use tools, like mail, document systems, social networks, will provide agility, ease of management, and – at the end – an impact on the bottom line of P&L!

Some of my thoughts are shared by key players in the ERP software industry (look,  for example, this interview with the SAP Fiori guru). But I haven’t seen yet a full conceptual design for a “New ERP”.

Additive creativity: Maker Faire Rome 2014

Postdigital Node

The Innovation Week Rome ended with the Maker Faire European Edition, a huge event where makers from all around the world met to showcase and share their innovative ideas and inventions with more than 90,000 people from all ages.

Showcases, exhibitions, workshops and talks in the field of robotics, 3D printing, drones, sensors, and many more, took place during 4 days at Rome’s Auditorium Parco della Musica.

Maker Faire Rome was promoted by Camera di Commercio di Roma and curated by Massimo Banzi and Riccardo Luna.

On this post we will focus on the Opening Conference that gathered an array of noted international speakers to talk about the future of the Third Industrial Revolution and Maker Movement.

IMG_20141003_125328 Young makers at work

I can’t let you do that, Dave

Science Fiction author and technology activist Cory Doctorow made one of the boldest speeches of the meeting.  Doing a strong call to make an active defense…

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The aged concept of aged workers

When a Company hires retired, aged, workers, the news spread across business and popular information channels.

Why?
Because HR departments, Board members, recruiters, commonly believe that a younger workers offers more “opportunities” for the Company.
This is based on a common perception of the shape that the age/opportunity curve has:

image

After the peak, reached between 30 and 40 years, the opportunity offered by a worker decreases (and its cost increases). So, the marginal utility of hiring such worker decreases.

This approach doesn’t take into account the shift introduced by the evolution of the wealth/social landscape occurred in the last years. Why business and recruiters are missing this point? Mainly because they have been trained by aged teachers, or by teachers replicating concepts and behaviors that are linked to a previous situation.

It’s known that social systems have the tendency to maintain their established order,  and this is valid also for the ecosystem of labour market.
I believe that the real opportunity curve is different:

image

The green curve shows a flattened tendency over the years.  This means:

A) younger workers offer an higher opportunity value, earlier,
B) older workers retain their opportunity value for a longer period, and the slope of the decline is less.

Remember that I am talking about “hiring opportunity”, not about “retaining opportunity”.

Conflicts value destruction

When a Company is relying too much on direct, vertical interaction, among functions or divisions, and the Head, conflicts multiplies.

image

Vertical interaction, according to Ackoff and Gharajedaghi, is typical of an uni-minded organization, where peripheral, or vertical, units, are supposed to execute the directions from the Head, with a limited amount of “local” flexibility.
In the real world, this often means that the Head loses touch with the reality of the field, as each vertical unit repprts a filtered view of the business status.
Furthermore,  competionion develops among internal lines, diverting the energy devoted to competing in the market, towards internal struggles.

In the traditional management wisdom, this is often positive, as increases strength of each vertical unit, creates a self-controlling mechanism, and promotes natural selection: weaks are eliminated.

In the wide and wild market of the globalized world this is no more true.

Internal competition destroys value, through two mechanisms:
– limited deployment of competency,
– entropy.
Internal competitors seeks the goal of damaging other internal competitors, creating the conditions that make their competitors’ performance worse.

A good top management should be aware of the increasing level of internal competition,  putting in place mechanisms that turns this energy in value for the Company.

The easiest way is to give rewards to “promoted results”: if your competitor/collegue reaches a result thanks to your support, you receive a bonus, and his bonus will be higher if he acknoweldge this.
Such an approach puahes teamworking, and lowers the collaboration barriers across certical organizational structures.

The result is an increase in competitive strength,  for the Company, in the marketplace.

Cloud based collaboration and office suites

Image The traditional landscape for Office Automation application has changed significantly.

The disruptive new entry was Google. During time, the Mountain View Company has built its online offering over four main pillars:

  • Drive,  this is both a generic cloud storage, but at the same time offers a suite of Office applications (Documents, Spreadsheets, Presentations, Drawing);
  • Gmail, just for mail processing;
  • Hangouts for text, audio, video, chatting;
  • G+, adding a Social platform to the suite.
Microsoft, durign the last years, but mainly during the last months, have followed, with an offering that is similar, by some points of view, but different in non trivial details.
  • Outllok.com offers the mail functionality, integrated with text chat (the old Messenger);
  • One Drive offers the cloud storage functionality, integrated with Office apps, with a subset of the traditional PC based Office suite.
  • Yammer: is the Social component, but in an “Enterprise” flavour. Yammer is the result of an acquisition, and is still under “integration” with the other products.
  • Share Point, in the cloud version, is a derivation of the mature on premise product, with a simpler deployment curve. This product offers an unique, structured, platform for file archiving, that doesn’t compete with Drive, or other similar products, like Dropbox or Box, but rather with platforms like Alfresco.
  • Lync, for internet based video/audio communicaton.
  • One Note, is a mature note taking product, that wasn’t able to gain user traction, leaving space for other competitors like Evernote.
Now, the two competitors are pushing their marketing efforts toward the rich Business market, and this is the big shift that I have introduced at the beginning, and that each CIO should consider carefully.

 

Significantly,  both platforms don’t put a big emphasis on the “mail” component, and both struggle to obtain a good acceptance for their Social apps.
The two things are linked, in my opinion: why any Social app require so a big effort, in a business environment, to conquer the user attention and involvement? 
The answer, I believe, rests in the lack of integration with the mail component. The great part of our daily interaction, at work, comes from mail messages. Managing messages, organizing them, forwarding and processing them, absrorbs the biggest part of the time  that we commit to interaction. This is why few minutes are left for engagement in other collaborative platforms, and we are, somehow, scared of being further involved in other things.

 

The solution would be quite simple: integrate mail in the “stream” of posts that populate our social dashboard. This could work well if we are able to organize mail, posts, documents around the big “themes” that we deal with, projects, prospects, processes.
This require two things:

  1. An intelligent classification system that is able to spot the right hashtag that is to be applied to each message/post;
  2. An intelligent search mechanism, capable of finding related posts/messages/documents, beside the “natural” linking mechanism provided by hashtags.
Another point: the majority of the cloud apps users consider them only as a practical online replacement for the traditional PC versions, enjoying the availability on fixed and mobile platforms. The real time collaboration features are often overlooked. But the ability to work, in real time, by multiple users, on the same spreadsheet or document, while chatting, introduced a new paradigm for collaborative work, that has still a long way to go.

Modeling and System Management

Modeling standards can be a great resource for System Management. Field Engineers often are more oriented towards “practical” tecniques, underweighting the help that a good model can contribute to a successful management practice.

While I was managing Information System, I have worked with the Tivoli suite – from IBM – and developed some modeling tecniques to represent system events and to analyse the requirements for monitorning consoles. There is a paper, describing this, not updated, but perhaps interesting. I published it online after receiving a lot of requests from the Tivoli mailing list.

Another approach is described in my recent KISS project – described in another post – where I tried to build a knowledge model of the Information System and the related security and compliance issues.