For any new solution to be 2.0 it must recognize and leverage 1.0. In all the market chatter about E2.0 there is very little, if any, discussion about Enterprise 1.0. Until that fundamental issue is resolved E2.0 will continue to flounder.
There are two roots to business: transactions and change. Business runs on transactions. These transactions span the gamut of an entire company, their vendors and their customers. They include macro level transactions such as Procurement, Finance and Sales/Marketing as well as micro level transactions such as receive, make, store, sell, fulfill, ship, deliver, install and service. Of the latter there are up to 64 distinct transactions that are executed by Employees, Vendors and Customers.
Today, these transactions are held hostage in the E1.0 systems such as ERP, Best of Breed and Homegrown enterprise software. The architecture of these systems is entirely “inwardly” focused. They were built to consolidate the financial elements of a business and are good at Sarbanes-Oxley compliance reporting and HR. Beyond that they are ill-suited to address the second element of business: change.
Change is constant, pervasive and permanent. E1.0 wasn’t made to change and as such the average implementation is 11.5 years old (Constellation Research). Consequently the on-going pressure to meet the demands of regulations, competition, corporate strategies/initiatives, new markets, new products, improved efficiency, increased accuracy/quality and even the most basic elements of Collaboration go unresolved. This causes erosion in revenue, margin and long term viability of any company. Eventually, the pain becomes so great that a corporate wide replacement, modification or integration of E1.0 systems is undertaken. Beyond the cost, delays and diminished value – in the end, you just have a slightly newer version of an E1.0 system.
This brings us to the opportunity for E2.0. Social media has demonstrated the value of communication, collaboration and ‘pop-up’ IT. As consumers we have more computing power than our employee self does when we walk into the office doors. With very little if any effort we can join a social network of like-minded people and establish rich and meaningful conversations around a topic of mutual interest. There is no large scale IT project required…no endless requirements gathering and budget development or defending required. We just do it and our lives are better as a result. If the results are not worth the minimal effort – we quickly move on to other areas that do deliver value.
E2.0 needs to embrace all three aspects of value: communication, collaboration and pop-up IT. Coincidentally there are three elements of an E2.0 solution: E1.0 systems, Next Generation Enterprise Technology and Secure Collaboration platforms. These are the combined in three easy, rapid, innovative and agile steps that support business today and every day:
1) Freeze E1.0 System Investments – regardless of the age or sophistication of your ERP, Best of Breed or Homegrown systems do not touch them. Don’t modify them, replace them or integrate them. They are excellent at what they do but are not equipped to keep pace with the perpetual need to change that is business. They are like an offensive lineman – absolutely critical to the success of the team but not the fast, elusive, great-hands and peripheral vision that you find in the “skilled” positions. No disrespect to lineman or ERP’s. They just aren’t going to score as many touchdowns and business needs to stop running its playbook through them.
2) Enhance the Transactions – Employees, Vendors and Customers all have legacy applications. Each of those systems has a stranglehold on the data, process and technology that workers use to execute the ‘plays’. Asking these monolithic, rigid and complex applications to change has proven to be too risky, expensive and disruptive. Yet the transactions need to improve. More data is required to improve performance, retain compliance and meet opportunities. Revised processes offer improvements in efficiency and accuracy. Visibility to what is actually happening throughout the Supply Chain reduces the uncertainty of how the ‘team’ is operating. Next generation enterprise technology, from companies such as ours (http://babblewareinc.com) is legacy system agnostic. Without changing a line of code in your systems or those of your supply chain partners you can enhance the transactions so that they fit the needs and exploit the opportunity of business.
3) You are the Expert – For just as long as there have been consultants and software vendors they always come in and explain that their way of doing business is better. In reality, no one is more expert in your business than you and your employees. The amount of knowledge and innovation that is latent in your own company is seemingly limitless. Frustrated by legacy applications these people use work arounds. Their knowledge is tucked away in a spreadsheet or clipboard and the company cannot gain the full value. Having taken the first two steps, where technology gets out of their way, you can know leverage the knowledge of the entire Supply Chain. Secure, collaborative networks such as Chatter or Yammer can now be layered on top of the second step to be informed of targeted events. The participants in the collaborative network can not only monitor for certain events that impact performance of the Supply Chain but they can also collaborate on how the transactions can continue to improve to reduce the non-value add elements while creating greater value.