One of the many problems associated with lockdown is managing the trade-offs between risk and reward. This got me thinking about the governance policies surrounding many of the ERP systems that provide the core business processes for many organizations. The processes for change are usually designed so that it is pretty hard to make change – the system is in “ERP Lockdown” – in this case, the lockdown is designed to prevent the spread of errors/issues that could interrupt business as usual processes. One of the downsides of this policy is that it can mean stifling innovation – once again it represents a trade-off between risk and reward.
Lock the ERP system down too much and you can’t drive maximum innovation value from your ERP investment. Lock it down too little and you end up with an unstable platform that doesn’t meet the required business service levels.
No CIO wants to be dragged in front of the CEO about the sales that have been lost, stock shortages from production line interruptions, or supply chain bottleneck caused by an unstable ERP system. What tends to happen is that each time a problem occurs, the governance processes get tighter and tighter.
Sometimes the lack of innovation can go unnoticed for months or years as it is difficult to miss something you never had or teams outside of the ERP bubble learn to work around the ERP Lockdown, often making the IT landscape more complex than it needs to be.
Things I have seen include:
New features not being activated
These features are paid for via your maintenance/subscription, so never using them means you don’t get full value from maintenance payments
Running processes in batch which could be real-time
Many systems were implemented when processing capability was much slower than today – so what could be run today in real-time that only runs once per day/month – could that help you serve your customers better or reduce costs?
Limiting real-time reporting / real-time APIs / reporting on out of data information
What could be reported in real-time now given increased processing power? Could data be provided to other systems/partners in real-time?
Replication/duplication of data across the organization
If in doubt – take a copy, an easy fix to isolate your needs, but one that creates masses of duplicated data that then needs to be kept in sync
All of the above limit the value that should be gained from the rich source of corporate data “Locked Down” in the ERP system.
In the same way that we will learn to live with COVID-19 by adjusting our day to day lives, I believe the same can be done with ERP systems to get the right balance between control and innovation.
There are six ways you can start to lift your ERP Lockdown.
Knowledge of ERP End to End Processes
Critical to opening the lockdown of any system is knowledge about how that system runs. Without this knowledge, it is impossible to understand the impacts of a change. In some organizations, this knowledge left a long time ago or is locked in the heads of the outsource provider. Organizations who want flexibility and innovation must reclaim this knowledge and manage it in house.
Flexible Run Contracts
Running ERP systems is a commodity task and one that is commonly outsourced. These outsourcing arrangements come with legal contracts that have definitions of the services to be provided. If these are defined in the wrong way it can encourage a “no change” mentality to ensure that Service Levels are maintained. In these cases, the ERP Lockdown now has a commercial basis which can be hard to work around. The best type of arrangement allows for a changing world and encourages a spirit of teamwork and collaboration.
Knowledge of New Capabilities
One of the interesting features of IT, in general is the continuous stream of new capabilities that evolve. Each one follows a hype curve and delivers different values to different industries. Having a team looking at these capabilities and the ones your ERP vendor is baking into your system is key to making sure you catch and exploit each of these waves.
The processing capacity of systems has increased many times over, but often ERP systems are locked into infrastructure that was sized and designed years ago. Understanding the modern capabilities to expand and reduce capacity is key to removing “performance” as a lockdown reason.
Tools that provide automation and managed access
Instead of keeping systems safe from overload by locking them down the most flexible ERP solutions now implement real-time monitoring and automation strategies that allow the software to flex capacity and throttle demand to agreed SLAs. These solutions mean that the system can be open and guarded at the same time.
Last, but not least, is moving to a DevOps approach where shorter innovation cycles are driven by “automation of everything”. The catch is that successful DevOps is built on top of the other 5 capabilities listed above as without them DevOps will not deliver its benefits.
Is your ERP in Lockdown? How much is that costing you in shadow IT and/or missed opportunity? How many of the 6 keys to successful unlocking do you have so you can avoid an Innovation Recession?