It all started quite innocuously for me about 21 years ago. I was a management trainee at Siemens. Siemens in preparation to tackle the Y2K (remember this?) had decided to implement a state of the art application globally, it was an obscure system called SAP R/3 (they had just migrated to a new platform from their mainframe based R/2 system) and they were touting that they were the only true ERP application (again a new term) !! This was no small feat for Siemens considering that they were in more countries than even the United Nations! That would be over 150+ countries. I was picked as an implementation team member for an odd business division in a corner of the 150+ spread- this was for Switchgears manufactured in India.
As with most early days ERP implementations- it was an unmitigated disaster! But in those times it was still considered successful because we limped over the finish line in 19-22 months and triumphantly used the application or parts of it. We blamed the bad experience on the fact that we attempted a difficult maneuver (a double back somersault of sorts) doing a, again a new concept, business process reengineering (BPR) along with the SAP implementation. Some background- Michael Hammer had just written a best-selling book on BPR and all of a sudden almost all CEO’s around the world fell in love with it (disaster for us minions). For a young man that I was it was all in good jest and I loved watching all the older folk around me squirm and curse the company’s vision.
Although when I first looked at a SAP R/2 screen, I was largely unimpressed- but then I had one of those moments you attribute in your life where you without much initiation or warning you suddenly see where the future is heading and don’t really have a vocabulary to describe it at that moment- this was when I saw the SAP R3 version 2.0 on a Microsoft 486 machine with its color monitor (MS had just come out with this, and it was the first color screen for me).
R3 or in general ERP apps (there were 3 major ones at that time – SAP, PeopleSoft and BAAN) in the early 90’s had a number of challenges for customers/users – starting from figuring out the 3 tier architecture, understanding integration aspects, the spread of the modules etc. and one of the most significant one was the fact that there was no prescribed methodology. So it was every man for himself and you had to figure out a way to get this beast implemented across all business divisions in the shortest time possible because SAP consultants even then cost a bomb. Finally SAP and so did the rest came out with their own prescribed methods and it did bring down the failure rates considerably.
ROAD LESS TRAVELLED
I had by this time moved to the States (banking on the demand for SAP consultants especially with finance and accounting background!). I did multiple ERP implementations across the States and for a small town boy who always dreamt of flying in an airplane this was a dream come true until I started cursing how hard life was on the road- I still do!
Anyways – times had changed, SAP had made the long march to R3 4.6 (literally step by step- from 1.0A to 1.0X and then to 2.0 A and so on and so forth- a super irritating release strategy, they have fixed this now). 4.6C had a completely a new Vista- it had a very modern GUI interface and I once again had a vision of where the future was going!! These were the golden days of ERP- everyone and their brother wanted an ERP application even though Y2K was behind us but there was no real answer in the market for ERP.
By this time I had moved into full time program management and was managing 3 ERP teams (PeopleSoft, BAAN and SAP) – one thing I noticed that all ERP’s were marching towards a sort of a common theme and there was very little to distinguish between them in terms of features- but the difference really was in who was able to maximize their investment in their own product development because clearly technology in terms of bandwidth and processor speeds etc. were lapping the commercial applications – and apps were constantly catching up with what the networks and hardware were capable of doing (sadly this is still the case). In the end SAP and Oracle clearly emerged as the Coke and Pepsi of the ERP sector and outlasted all the rivals – SAP with their unique go to market using Tier 1 accounting firms and Oracle using the reach of their top selling Database to finally make it big.
IN THE COURSE OF TIME, THINGS GET WELL!
I had now moved into management and was actively selling ERP. Some of the big points we used to sell ERP apps (still do)- It freed you “the business user” from the IT departments and coders as mostly everything including configuring the product was entirely GUI based unless you decided to move away from the standards (which you always did and so ended up being one of those lies you hear in Sales pitches all the time), the system was truly integrated so anything you changed in one place also reflected equally in all places- so if you added a customer to book an order- the customer was available automatically in Finance for AR; Accounting was integral part and anything to do with money automatically hit your books so in other words you could pull out a trial balance at any point of time in the month- a dream for the leaders of the company (not that most would knew what to do with it- this is where BI systems came in but that is for a later blog post!!), Speed, ease of use and of course security of data and the most important of all the fact that it was an all in one application from one vendor- this last point was significant- when I was a CIO for a German Automotive company (I had moved to Europe by this time)- we achieved a “double back somersault of sorts” implemented SAP in 9 months and replaced 85 applications in one fell swoop….
SAP marched on- now on Ver 6.0 and it was hard for me to the keep up with the name and version changes. I had now become the Managing Director of an automotive plant in Sao Paulo and I decided to become a turncoat and implemented MFG Pro for the plant (hol one before you shoot me- it was still an ERP and was a lot cheaper!!). By this time I knew exactly what to expect and got the most out of this implementation and was gradually becoming a Data Hawk and wanted more and more out of the IT systems and truly appreciated the value of Business process integration with IT Applications- the meshing of Machines and Humans for the betterment of the organization….
SAP has now come out with yet another version S4 HANA (they claim that this is it for major upgrades – that’s what we thought about Star Wars)– again a true torch bearer for what the future will hold for ERP applications. The In App memory concept and the fact that it can all move to the cloud (Where SAP is clearly way way behind its rivals and is already paying a significant price for this lapse)
CHANGE IS NECESSITY
I am now the CEO of an IT Solutions provider (tvsnext.io) and we are agnostic as to the platform or technology but do run SAP implementations all the time. The most recent one had all the bells and whistles- A SAP HANA global implementation, Success Factors and CRM on the cloud, Fiori to enhance user experience etc.
It has been 21 years now but the general theme of why a company would move to an ERP has still not changed. With the new times and the golden period of ERP firmly behind – the overarching principle of an integrated and single vendor system that ERP’s boasted all these years has come to finally become the biggest liability. Best of breed is firmly in vogue and as Gen X CIO’s take over the reins they are lot more comfortable with open source and cloud platforms, they dislike the predatory license practices of SAP and Oracle (this has become extremely obnoxious in recent times!!). With Enterprise Service Bus, cloud, mobile, IoT and BI technologies becoming exceedingly potent not to mention the meshing of Social media with all that – the appeal to bringing different applications with different strengths (like the Avengers) together using a BUS to bind them is very strong. SAP HANA and Oracle cloud platforms are a strong attempt at fighting that trend but only time will tell.
In my new avatar now at TVSi (tvsnext.io) we enjoy bringing together a bevy of super hero apps built on .Net or Open source Java platforms for our customers and creating a sort of ERP but more potent or take an existing ERP application such as SAP and marry it with Mobile, BI, IoT and Social apps to make it more relevant to the times without spending a ton of money!!
Companies since the 90’s have invested billions in IT and to a large extent that investment has had relatively poor returns – that is changing now- I am glad I am once again at a point where I can see that the future is going to be radically different, another turn in the road- where small but powerful and relevant (domain specific) applications will rule the landscape and truly companies will run using IT applications and not use them as an afterthought.
It has been a fun ride with ERP and I truly wonder where the market will be in 5, 10 15 years!!!