Juho-PekkaPöyry
Enterprise Systems and User Friendly Screens
From time to time, I’ve been involved in conversations about the benefits of enterprise systems such as ERP. Many times, it has seemed as though the people writing software, other than those in large scale enterprise systems, see the (almost) sole benefit as automating tasks and helping single users to be more efficient. With some subsets of software, this is, indeed, the case. However, when dealing with enterprise-wide systems such as ERP, this is half-truth, at best, and downright wrong, at worst.
A couple of examples will illustrate this.
Consider ERP: The bottom line promise of an ERP system is that it will manage all the business information of an enterprise. When this is done, the silo effect (at least with regard to data) is done away with and single functions and units need no longer be islands of information. Decisions can be made, not just based on local information of functions or units, because data for the whole enterprise is available for every unit. Local optimization is no longer necessary. For example, marketing can coordinate pricing campaigns based partly on current inventories in the supply chain and manufacturing resources that are currently lying idle. Centralized data also provides a top-down view of the enterprise. The flipside of this scenario is that local optimization needs to actually stop in order to realize the full benefits of an ERP. If decisions are made based on the old rules, gains will be significantly diminished.
In a wider enterprise system context, the right kind of IT architecture will enable the propagation of best practices and process improvements much more quickly than “traditional” means would permit. Business processes can be analyzed, improved, brought under statistical control, and, finally, replicated and propagated inside the enterprise. For example, a forecasting model, bundled with a forecasting process can be built in one unit or geography, tweaked to high performance, and then copied to other units in the same company. This kind of ability is also a major argument for uniform architecture across the whole enterprise. The magnitude of potential benefits was elaborated, for example, by McAfee and Brynjolfsson in their 2008 Harvard Business Review article Investing in the IT That Makes a Competitive Difference. They show that the ability to manipulate and propagate business processes with IT systems has a strong link to overall competitiveness.
In both examples, the user friendliness of the home screen in any given software application is not pivotal. And, in both examples, the real heavy duty gains to be had from an enterprise system lie first and foremost in the enterprise, not in the system. The ability of systems to change the way real world processes function is often at the essence.
Further material:
McAfee and Brynjolfsson, Harvard Business Review 2008: Investing in the IT That Makes a Competitive Difference
Eliyahu Goldratt 2005: Beyond the Goal: Eliyahu Goldratt Speaks on the Theory of Constraints
