ERP: automating processes | Enterprise 2.0: enabling knowledge work

There has been some very interesting discussion over the last week about enterprise software, which began with the question of whether it is sexy or not. It has since covered a wide range of related topics, including the usability of enterprise software, industry structure, how it is bought, its role in attracting talented staff, and whether it can get people laid. (Selected references at the bottom of the post.)

In all of this, there was a gem that I think is well worth exploring. In the context of market opportunities for the biggest enterprise software firm of them all, SAP, Sigurd Rinde wrote (in part):

A Business Process is any process, sequential work or activity, that happens in an organisation. Some are repeatable and linear, others happens in unstructured ways and are hard to model.

Let me keep it simple and divide process types into two groups:

1. The Easily Repeatable Process (ERP for me)

Processes that handles resources, from human (hiring, firing, payroll and more) to parts and products through supply chains, distribution and production. The IT systems go under catchy names like ERP, SCM, PLM, SRM, CRM and the biggest players are as we know SAP and Oracle plus a long roster of smaller firms.

Known to be rigid, but handles events and transactions with precision and in volume. Systems delivers value through extensive reports and full control over resources.

Resource oriented, transactional, event driven systems. Delivered by system vendors with roots in accounting using up to 25 year old technological solutions.

2. The Barely Repeatable Process (BRP)

Typically exceptions to the ERPs, anything that involves people in non-rigid flows through education, health, support, government, consulting or the daily unplanned issues that happens in every organisation. The activities that employees spend most of their time on every day.

Processes that often starts with an e-mail or a call. A process volume, measured by time and resource spent at organisations, probably larger than for the Easily Repeatable Processes.

These are mostly handled and organised – frameworked – by systems like paper based rules and policies, e-mail, meetings, calls and now in more modern organisations by wikis and other collaboration systems and methods.

Known by extensive loss of information (e-mails residing on HDDs), little knowledge acquired and reused (typical research says 70% of problems solved before without being known) and most of all, untrustworthy processes (oops, forgot to send that mail). In other words not an iota (well almost) of business process thinking or methodology applied to this huge untapped area of business processes.

In many ways, this gets down to the nub of the issues at stake. Enterprise software of almost every ilk is designed to automate business processes and the activities that surround them. A laudable task, and one that is at the core of most organizations today.

Yet here’s where Nicholas Carr’s “IT doesn’t matter” argument comes in. Doing Enterprise Resource Planning and other business process automation is a commodity, doesn’t differentiate organizations, and should cost less than it does.

However organizations do more than that. Where value is created today is in bringing together knowledge and expertise within and beyond the enterprise, resulting in product innovation, strategy innovation, and service excellence that differentiates. This is not something that is facilitated by traditional enterprise software, not by a long shot.

Enter Enterprise 2.0, which has been framed as applying Web 2.0 tools inside the enterprise. That’s not the best way of thinking about it, which immediately starts people thinking about blogs, wikis, tagging, and mash-ups – which are all wonderful things, but brings down discussion around three levels below where it should be.

Enterprise 2.0 should be about enabling innovative knowledge work, intersecting expertise in unexpected ways, creating new insights – in a word the “barely repeatable process” that Sigurd refers to. I’ve said for many years now that “flexible, collaborative workflow” is what enterprise software should be aspiring to offer users. The reality is that the monolithic enterprise software of today will never do that well (or at least not for the next 5-7 years). Yet we have now alternative ways to implement that knowledge-based workflow, collaboration, and value creation, that complement the necessary foundational ERP-style software.

So, to come back to the genesis of this discussion, much enterprise software is indeed not sexy, and probably shouldn’t be (except to have be more user-friendly than it usually is today). However there is a entire world of enterprise software that is definitely sexy, because it connects people, it frees thinking, and it allows unpredictable, barely repeatable things to happen. That is exciting.

A key question remains. Sigurd proposed this sector as a massive opportunity for SAP. Will they and their enterprise software peers take it? Or will this new world of Enterprise 2.0 be enabled by the new generation of software born out of consumer applications?

Selected references:

Robert Scoble: Why enterprise software isn’t sexy

Michael Krisgman: Scoble doesn’t understand enterprise software.

Ross Mayfield: Enterprise Social Software doesn’t get you laid, it gets you promoted

Nicholas Carr: Enterprise software can be stable yet sexy (see also the first comment on this post)