Point Counter Point: Forget About Technology: ERP Systems are All About Business.

As an avid reader of Panorama Consulting's 360° ERP News and Information, I was immediately drawn to the March 16th article, Forget About Technology: ERP Systems are All About Business. I figured this was just another one of their great hooks only to read on and find out that they were serious. With all due respect, the statement that "Technology doesn't matter," is not as much anathema as it is absurd.

Imagine a thorough definition of ERP without using the word technology or at least qualifying with technology industry terms like software or database. The fact is that in the genesis and evolution of ERP, business goals and technology are inextricably linked. Without technology and technological advance, there would be no meaningful ERP. Still the 360° article seems to imply that ERP is more a product of Peter Drucker than the Gartner Group.

Take two identical, competing $200M manufacturing companies and give one (a) paper, pencil and an abacus and the other (b) a modern ERP system. Which one runs the greater likelihood of controlling purchasing and inventory levels, shipping on time, closing its books faster? Is this a silly rhetorical exercise or fatalistic scenario for company (a)?

So why react this way? Well besides the point that I currently run the Oracle JD Edwards development organization (full disclosure), I have been intrigued lately by this sort of unbalanced argument in the ERP community that seeks to create a type of divisive techno-phobia. This fear of technology's influence on ERP runs counter to the role that technology plays in our day to day lives and the true three legged stool spirit of ERP (Systems, People & Process). 

It is exactly statements like "Technology doesn't matter," that relegates IT to a, "not of the business, but only in support of" status. In my experience in talking to hundreds of customers, this often leads to technically ill-informed point decision making where business purchasers are susceptible to Sea- Monkey sales and marketing tactics. Ultimately such a road is paved with non-rationalized and sub-optimal systems that act as friction on the business. In the last organization chart I looked at IT was part of the business. 

I am not saying that technology should be the only consideration or that IT has the only say. However, in today's market the business must embrace IT and technical expertise in a true dialog so that together we can create sustainable business growth and innovation. 

The 360° article also featured a few "fun facts" gleaned, I imagine, from what in the past has been very thought provoking research. In summary, the idea was that vendors and products don't really matter. Any ERP system will do, just pull a name from a hat. In my mind these "facts" deserve more analysis. Still, I feel safe in saying that this is at least a trivialization of the exercise of software selection and implementation. More aggressively it is a complete denial of the lack of universal standards when it comes to definitions for company, success, time required and deployment budget. One system does not fit all in ERP. While there are some similarities in the business level functions across software packages there are also big differences. At the end of the day, company size, industry, growth targets, skills - business and technical, supply chain sophistication, process maturity and yes technical maturity (see the works of Geoffrey Moore) - all matter. 

To say you can pull any software solution out of a hat and run the same chance of success in a given ERP deployment is like saying it doesn't matter what car you should buy. Take a 1978 Ford Pinto, 1998 Hyundai Elantra, 2011 BMW 5 Series, a Chevy Volt and a S10 pick up and put them all in a hat? Blind draw, why not?  They all help you get from point A to B.

One can highlight business importance and key drivers in ERP deployment without denigrating technology or putting IT in a second order. This is not a zero sum system. In today's market, CFO's and CIO's, together you either grow or fail. And depending on your journey, make sure you pick the right car.

Lyle Ekdahl
Group Vice President and General Manager Oracle JD Edwards

I believe you have observed some very interesting details , thankyou for the post.

Posted by Matthew C. Kriner on April 21, 2011 at 04:53 PM MDT #

Both you and Eric raise good points from opposing ends of the spectrum. It's been fun reading the point/counterpoint.

Posted by datango AG on May 25, 2011 at 01:01 AM MDT #

Yes, technology matters, but not as much as people and process. In your $200 million company example, I doubt that it matters as much if the company runs JD Edwards versus Oracle EBS as it does matter how much care has been taken in establishing good fundamental business processes and cultivating better user adoption. As a CIO, I coach my team to spend 60% of their effort on people issues, 30% on process issues and only 10% on "pure technology". We consistently find that if the people and process issues are in alignment, then the technology issues are comparatively easy to resolve. That may not have been the case 10+ years ago, but it appears to be so now.

Posted by guest on May 25, 2011 at 01:02 AM MDT #

Well....as long as the driver does not have clear directions and a good highway it does not matter if they have a 1978 Ford Pinto, 1998 Hyundai Elantra, 2011 BMW 5 Series, a Chevy Volt or a S10 pick up. I believe that this is the point. Continuing with the analogy, a BMW 5 Series driver with concise directions and a clear expressway observing a 55 mile per hour speed limit will not arrive to their destination much earlier than someone with a Pinto. The problem is that clear directions (business rules and discipline) cannot be purchased from a software vendor.

Posted by guest on May 25, 2011 at 02:24 AM MDT #

The difference in ERP is not the 1978 Pinto and the 2011 BMW. It's between a 2011 BMW and a 1978 Caterpillar Tractor. It depends on the job that you want it to do. If I need to plow a field, I'll take the tractor.

Posted by guest on June 08, 2011 at 04:53 AM MDT #

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