There was a time growing up, where I was more comfortable in a group, no matter if it was a troop, a band, a sports team or even a crowd. There was a sense of belonging, of having something in common with everyone else. This was especially true in school sports where I witnessed that having an alignment with the players on the team usually translates to better confidence and a higher level of results.
In the world of business, I have found many similarities with high-performance teams. They share a common purpose, common beliefs, and mutual commitments. However, these characteristics are completely at odds with a corporate perspective where most companies seek to be identified as being better by being different either with their products/services or with respect to their business processes.
Indeed, without differentiation, a company can struggle with explaining the distinction between themselves and their competitors and the unique value that they bring to the market. What is certain, is that in an increasingly saturated marketplace, businesses that fail to separate themselves or to uniquely define themselves are destined to get lost in the shuffle.
Has a company ever really made a difference being like everyone else?
In the same industry, in the same country, serving the same markets, I see companies separate themselves from the competition by operating a different business model. It drives differentiation – doing something in some way that delivers more value to their customers, that makes them clearly better than their competition.
However, differentiation via a unique business process can be hard to maintain over a sustained period. The challenge is that competitors recognize the advantages of the business process and can be quick to follow. To maintain differentiation, the highest performing companies recognize their unique business process differentiation as temporary and aggressively continue to evolve, to change, to increase the value they deliver.
For example, the core strategy of online retailers is built around differentiation. These retailers use technology to differentiate their business model by serving customers almost exclusively via their website. The business processes of their online model bypass the use of physical retail space to largely sell the same products.
In this COVID-era, physical retailers turned their stores into virtual warehouses so that orders from customers in lock-down were picked, packed, and shipped from the retail stores that were close to their homes resulting in shorter shipping times. In addition, the new pick and pack process at the store is the basis for the ‘curbside pickup’ that has emerged at all of the big box stores. These new business processes are an example of why an ERP solution has to be continually changed to deliver more value.
Enterprise Resource Planning (ERP) solutions over the last four decades execute the most critical and most complex business processes in a company – financials, sales, manufacturing, inventory, projects, supply chain, customer, and supplier management. ERP solutions have undeniably and successfully delivered on the promise of comprehensive business process enablement, but the price is a clear lack of flexibility. ERP has never been described as a system of agility, rather it is a mission-critical system of record.
Why is it so hard to modify an ERP solution?
This is the paradox of ERP. These systems deliver highly efficient business processes, but they are also extremely rigid. It is expensive, time-consuming, and sometimes risky to customize an ERP solution to support a new business process. While ERP customizations can deliver unique differentiation to a business and make the business more competitive, those same customizations come at an enormous expense.
The development of ERP solutions began over 50 years ago with the primary design objective to deliver a mission-critical system for general accounting. Any failure of the ERP solution could result in a serious impact on the business. Hence, the foundational design characteristic of classical ERP has always been high availability, not agility. ERP solutions are not intrinsically designed to have their business processes modified or customized.
At the same time, even the science of software development has not been able to address the paradox of delivering mission-critical systems that also deliver easily customizable business processes. That is, until recently, as the paradigm of software development has shifted from straight-on application development to building a computing platform.
What is a computing platform?
A computing platform is a digital environment in which a software application is executed. More importantly, computing platforms are engineered specifically to be mission-critical and to provide for rapid software development. So, the key to solving the ERP paradox is not to rewrite the application but instead to build a platform and then build the ERP functionality like general accounting, manufacturing, or supply chain on the platform. I call this the “platform-first approach”.
The platform delivers enterprise-class functionality, which demands high performance, scalability, disaster recovery, resource management and tracking, and high availability as well as a ‘no-code’ software development environment for building ERP or any other application.
ERP solutions have become enormously complex as they encompass virtually every aspect of running a business including financials, distribution, supply chain, manufacturing, sales, and much, much more. It is not practical for businesses to build such a complex system on a generic computing platform. Instead, a completely new generation of cloud-native ERP solutions is being built on platforms that deliver enterprise-class reliability and performance.
These ERP-specific computing platforms provide the mission-critical ERP business process functionality while at the same time inherently providing rapid software customization. Unlike classical ERP development models, the ERP solution provider and their end customers use the same software development tools on the platform. With a combined platform and ERP applications built on the platform, the customer has complete control over their ERP functionality in an engineering model that is mission-critical, safe, reliable, and efficient.
“89% of executives believe that their organization's ability to generate value will increasingly be based on the limitations and opportunities of our technology architecture.”
Accenture Technology Vision 2021
In 2021 --it’s time to be different. It’s time to increase innovation, agility, and ultimately revenue, while reducing the complexity and high IT costs of maintaining legacy ERP systems. Are you ready?
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Head of Application Product Management