Over the past 15 years, business transformation has grown to mean only one thing: the replacement of people with automated processes to reduce costs or create new business models. With the expected introduction of a whole range of new automation technologies, it shows little sign of slowing down. Indeed, a new wave of automation is on the way.
But its nature looks like it will be completely different from the old.
Traditional ERP systems take too long to produce a return, are too inflexible when created and cost far too much to implement. Lidl’s 500m Euro write off of its SAP HANA project this month, is a good example. Lidl cancels €500m SAP HANA project After a 7 -year failed implementation project, it looks like it could be a turning point for the industry. Sense may have finally prevailed.
Business leaders are not only fed up with the huge implementation costs and the dubious returns of major ERP projects, but they are increasingly concerned about their lasting negative effect on company performance. ERP fails because people hate having such major change imposed on them. One day staff are happily working to a set of processes that are visible and familiar; the next they have to adapt to a brand-new system built on a set of invisible processes they don’t recognise.
Businesses are nothing more than a collection of people. If they don’t exist, as a result of automation replacing their jobs, or if, as a result of the imposed automation they are so disengaged from the project as to be ineffective or disenchanted, they will walk.
In every business, this has created tension. IT departments and their consultants love the project work that these huge ERP implementations have generated. But every CEO, HR department and line manager dreads the impact they have on morale, motivation, innovation and staff retention. With the announcement of the Lidl write off, maybe this is about to change.
Over the past few years, ERP vendors have been creating a new, lighter, quicker format for creating automated applications. Called DXDP/LCP, it enables companies to pre-code apps themselves: particularly positioning the market to deal with the new wave of automation generated by AI, IoT and blockchain.
The impact of this could be quite profound. Instead of requiring every company to build a monolithic ERP system which takes over the business, companies will instead be able to engage their staff in designing and writing piecemeal apps themselves. All they will need is a set of visible processes written in a language that everyone can understand, which are shared and improved by the workforce. In other words, a single point of operational focus for the entire organisation which not only acts as the sole version of the truth for operations but also engages staff in continuous process improvement. This is much simpler, much quicker and much less risky than monolithic ERP.