Why monolithic systems of record will disappear

cloud-computingI thought that having left the ERP industry I would not have any reason or inspiration to write about it, but I was wrong. My experiences since I started working in the cloud application market have led me to believe that the era of the monolithic systems of record, as typified by ERP, might be coming to an end. Continue reading

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Device death and human-centred technology

DevicesWhy do we sometimes occasionally see articles on “the death of”, referring to tablets or PCs? If you look at the data from the KPCB Internet Trends slides about sales of devices, sales of laptops and PCs aren’t doing well, and tablet ownership is still low compared to smartphones. But why do some people think such articles should be written?

A story in TechCentral about PCs noted that modern users:

switch seamlessly between work mode on a laptop, to social mode on a smartphone, without ever slowing to adapt to a different device or operating system between tasks.
Life has more than one mode and technology should, too.

What we are now starting to do is use different devices for different purposes and in different contexts. That is what the “death of” writers seem to miss; just because a device isn’t growing significantly does not mean it is dying.

Unless all you do is read documents, no one would suggest it is easier to write and edit a document, or code a program, on a tablet compared to a PC. PCs are just better suited to some activities, especially for work.

It seems we are in a period of changing form factors and usage models. No one wants an old-fashioned PC in their home, or think that it should control and monitor their home. But people are quite prepared to have a specialized device to do that – as long as it’s connected to their smartphone, of course.

In 1999 a book forecasted that computers would move from being technology-centred to human-centred. One reason that tablets and smartphones have become popular is that they are usable by the average person – you are not expected to be tech savvy to use them. In the old PC days, it was a sign of proficiency that you could use a PC.

The book points out that tech companies tried to make the PC generic, and thus it became not specific for anything. When Microsoft wanted to to turn the PC into the home entertainment controller, the Windows Media Centre, it failed because it was trying to make the ‘reluctant masses’ adopt the attitudes of engineers and early adopters.

What Steve Jobs realized, and the engineering brains at Microsoft didn’t, was that for a technology device to be adopted by the majority of society, you have to understand two things, as a review of the book discusses:

  1. The user needs to educate or inform the design process from the beginning.
  2. The designers must ensure that the technology is not part of the difficulty.

Essentially, a technology device needs to become an appliance before general society will use it. That means the task, and learning to use it, have to be the same. As an appliance is designed for one thing, expect to see more devices as specialization increases.

Currently, Google, and recently Microsoft, are investing in different technologies for different applications, not trying to shoehorn one technology into a variety of roles.

I wonder what next device will have it’s death written about?

Why the US is different to other countries

I have just spent 10 days in the USA, split between a week just south of Los Angeles in Costa Mesa, and several days in Lawrence, Kansas. Although I have been to the US several times before, this time it was different, for reasons I explain below. But also because I may have figured out the essence of what makes the US different to other countries when it comes to business and technology.

My previous visits were either as a pure tourist, or as an overseas employee of a US company coming to get an update on future plans and directions. For those work-related visits, I was a passive recipient. This time it was different. I went to the US to attend a sales conference organized by my employer in South Africa. This time I was one of the people helping to set future plans and directions. This time I had to actively engage – mainly, though not exclusively, with people who work in our North American offices about their concerns and issues.

One of the ongoing issues is that we, i.e. South Africans, don’t understand the US. In the past, I have always supported the view that while the US may start earlier with certain things, there’s not that much difference when it comes to business. But at the end of the sales conference, I had a strong feeling that things were much more different than I had been able to understand.

On my previous working visits, I received direction from US head office people, and used to consider them rather ignorant of the world outside the USA. Now the roles were somewhat reversed: I was the head office person, and they were saying people like me were ignorant of their world.

It took a few days after the intensity of the sales conference, staying with family in Lawrence, and talkininside Dillonsg with my South African brother-in-law who works at the University of Kansas, to distill what I think is the essence of the difference. It was after a visit to a local supermarket, Dillons, that it occurred to me.

It’s what is considered basic.

For each product category, e.g. bread, the range at Dillons was two or three times more than I have seen in South African, or UK, supermarkets. Moreover, the products in Dillons exploited every single consumer niche you could imagine, no matter how specialized the niche. In others words, the choice and competition was greater than I had experienced. I surmise that this makes US consumers more demanding than consumers elsewhere, and makes what they would consider basic different.

When hearing the North American sales people talk about their market and competition, the same kind of impression arose:
product category range + exploitation of niches = high degree of expectation from business

Perhaps it’s because the US economy is so highly competitive that the basics are different – in supermarkets, in business, in IT (and if you watch any reality TV, in relationships).basic differences

It’s something for both sides to consider. If you enter the US market to do business, be aware of how the needs and requirements will differ and be at a higher level. On the other hand, for US companies operating internationally, don’t expect the same issues to be of concern, and don’t assume US concepts are universal.

When it comes to business software, the requirements of a US business are likely to be greater or more detailed than business in other countries because what is considered basic fo US business is different. The same duopoly then applies – overseas software companies must get really immersed in the US to learn what is needed, US software companies may not find the same functional requirements from businesses in other countries.

Change, technology adoption, and resistance

technology-adoptionWe are all aware that new technology often meets with resistance, the most recent and well-publicised case is that of the tax app Uber. The problem is some people seem to think that resisting change is unnatural. It isn’t.

As I’ve got older I realise that you get into patterns in life, and it can be hard to break those patterns. You also develop skills and technological changes may affect those skills. Consequently, the more you do something, and so the older you get, you harder it is to change.

A recent article on Kevin Benedict’s blog reckons resisting technology is like resisting aging. If like me you are over 40 (well over), that may sound a little crazy. But if also like me you have children, you know that you have to change your attitudes about many things as your children grow up.

One of the current themes on technology is how it may reduce the rate of job increase – or put another way, how technology reduces jobs. For example, this is a main concern of Andrew McAfee and Erik Brynjolfsson. But as the Benedict blog post points out, there can be other more positive aspects. The introduction of photography had a devastating effect on artists in the portraiture industry, making many jobless. However, this led to the development of the Impressionist movement.

An industry that has been affected by technology is the printed newspaper. It is well-known that print media has been in decline as the Internet has grown. There is an interesting story in LinkedIn of how two different media companies reacted to technology changes. The New York Times and South African media group Naspers both faced the same issues around the beginning of the 21st century. The difference is that

The management of Naspers decided to ride, rather than fight, the technology tide while the management of the New York Times chose otherwise.

The result is that the New York Times’ revenue and profits in 2013 were less than 50 percent of what they were in 2000, whereas Naspers is now the largest Internet company outside the US and China.

Going back to the Uber case, an issue that frustrates me is how (mainly) US pundits seems to believe that their attitudes and approaches apply to other countries. Why are these pundits surprised about Uber being banned in Germany? It’s because technology adoption is spikey, not flat – being significantly affected by geography and national culture.

The ‘flat world’ view was most famously stated in Thomas Friedman’s book which stated that globalisation is effectively complete. Others however contest this view, and bring convincing data to show that the world is only 10 to 25 percent globalised.

In some ordinary activities, differences in the way urban areas have developed make shopping very different in the UK as opposed to the US.

Even when it comes to mobile technology, adoption is different. The USA is far more of an ‘Apple’ culture than the rest of the world, where Android has taken over.

We need to be mindful therefore about how technology impacts people. New technologies like the steam engine, photography, the motor car, and electricity did just take over from older technology, but mainly it was not a sudden change and societies had time (several years) to adapt. Companies like Uber need to remember that technology change and culture change often have to go hand-in-hand, and changing culture takes some time.

The response to SAP’s Business ByDesign decision

softwareThe recent report that SAP was cutting back on development of Business By Design was widely reported. Here are some comments about it.

ZDNet

ByDesign is intended to serve “mid-market” companies …At launch, executives projected that the $4 billion software suite would generate $1 billion in annual revenue. Yet it is expected to generate no more than $35 million this year… Only a small team in India will take care of the maintenance of the software 

Forbes

SAP has been guilty of trying to own the entire ERP market by itself, rather than building a broad ecosystem which they are a part of – mid sized customers weren’t keen to be customers of SAP and by failing to embrace a more vibrant industry where small organizations could use third party products but would have a logical migration path as they grew or were acquired, SAP has done both its own business, and the market as a whole, a disservice.

PCWorld

Developed at reportedly great expense, the product was initially expected to have 10,000 customers by 2010 and be generating €1 billion (US$1.4 billion) in revenue for SAP. Instead, ByDesign has about 1,100 customers today

And from a SAP partner trying to do some repair work

SAP Business ByDesign, and its users, will in fact benefit from this leading technology [SAP HANA]… especially as SAP refactors parts of the SAP Business ByDesign platorm, so to take maximum advantage of SAP’s HANA breakthrough capabilities as well as dramatically improve speed and usability. As part of this, all of the know-how of SAP Business ByDesign is being preserved, and likewise is brought forward to benefit your business.

Of course, a cloud ERP vendor had to put the knife in. 

There was a major brouhaha when word leaked out that SAP was finally burying its ill-fated cloud-based ERP system, Business ByDesign. I assume it must have been a slow news week because no one could really have been surprised.

In my opinion, it is a sign of something happening in the cloud ERP space – maybe that the demand isn’t as great as the big vendors originally anticipated. Or it’s another failed attempt by SAP to penetrate the mid-market. What’s your view?

Social enterprise adoption – update

As an update to my previous post on social enterprise adoption, some research I saw by the Aberdeen analyst group on The Collaborators’ Advantage, has some interesting information.

Three-hundred and one of them were active users of collaboration; we then split those users into two groups: those whose organization had an official ESC (Enterprise Social Collaboration) initiative, typically with Senior Executive support (the “ESC Users”) and those for whom there was no official program, and for whom their use of ESC was primarily self-provisioned and ad hoc (the “Ad Hoc Users”).

Business performance and enterprise social collaboration

click to enlarge

So if having a social enterprise program supported by senior executives made a difference in performance, I wonder how organizations that didn’t even have any program would have performed. Anyone think they would have done better?

Social enterprise adoption: can business break away from Taylor?

The views of Frederick Taylor on scientific management have defined the way organisations have operated for over 100 years. The view that to improve efficiency and profits you need to focus on processes, has dominated the culture of business, and has led to the emergence of a market for various solutions to cater for this view – the ERP software industry is one.

A new approach is starting to emerge now, one that I think challenges the Taylorist view. This new approach is more a product of, and holds value for, the way business will work in the 21st century. The new approach is referred to as the social enterprise. Another term for it, enterprise 2.0, is described by its author, Prof. Andrew McAfee of MIT, as:

the use of emergent social software platforms within companies, or between companies and their partners or customers.
Social software enables people to rendezvous, connect or collaborate through computer-mediated communication and to form online communities.

Social enterprise puts the emphasis on people, not processes.

In his book, People Buy You, Jeb Blount points out that a major problem for business is that the balance of forces has swung far towards the side of technology, process and systems as the way to improve business, and far away from interpersonal skills. We have wrung so much efficiency out of process management that it is becoming an increasingly marginal return to find greater efficiencies. Human interaction and interpersonal skills are going to be the new competitive edge for business.

Geoffrey Moore, author of classic technology marketing books Crossing the Chasm, and Inside the Tornado, has been pointed out that business has spent the last few decades on improving their Systems of Record – the systems that handle business transactions like sales and purchase orders, inventory and supply chain management, production planning, customer relationship management, and others. He now believes those systems are no longer a source of competitive advantage. Moore argues that business needs to transform, to empower its employees by providing better communication and collaboration mechanisms, both inside the business and between businesses. What will enable this transformation is a new set of Systems of Engagement, which focus on communication and promote collaboration.

Doesn’t that sound like an emphasis on interaction and people, rather than process?

The problem at the moment is that businesses are run by people who have grown up with the Taylor view of the world. When it comes to enterprise strategy, that “social” really doesn’t count for much when it comes to enterprise strategy, according to a study by KPMG.

importance of social enterprise

What is the state of social enterprise adoption? An Altimeter report mentioned:

social media is extending deeper into organizations and, at the same time, strategies are maturing

A Deloitte survey showed that many C-level executives are starting to recognize the importance of social enterprise.

I have to admit, however, that I am not yet convinced that reports like these paint the true picture.

Why should sceptical, Taylor-oriented executives consider Moore’s systems of engagement? The answer is because the business world has changed, we are now in an era where agility and adaptability is required, not rigid command-and-control structures; where mobility and cloud computing are the key technologies, not mainframes or client-server. According to Moore, the questions that need then to be asked are:

Systems of engagement do not make competence cultures more competent. They make collaboration cultures more collaborative. The key questions are: 1) Is that a good thing in your industry today? and 2) Are the people in your enterprise—specifically your CEO and your CXO peers—really up for this?

The second question is important because it requires the equivalent of making a square peg fit into a round hole.

If the artistic argument appeals to you, I liked this interpretation by Hugh MacLeod:

New hierarchy

What do you think about social enterprise? Is it a fad, or a new way to which businesses will have to adapt?

Update

A blog has appeared on Brian Solis’ site – Social Business is Dead! Long Live What’s Next!  We may have to come up with some other responses to the Taylorists