Tag Archives: business transformation
ERP systems were a true competitive advantage 20+ years ago, but not so today. ERP systems are a tool that gave people the best view into their business, but that is when there really were only ERP systems and Databases, but today that critical data resides in so many other areas. There are several reasons why ERP systems act as a data trap: technical factors, out of date management theory, and big data trends. First, let’s talk about management theory.
There are two fundamental concepts that have been driving much of the strategic planning in modern organizations in recent decades. The idea of economies of scale is deeply embedded in our thinking. The concept was first introduced by Adam Smith in the 18th century and reinforced throughout the 20th century by contemporaries such as Bruce Henderson. In 1968 Henderson wrote “”Costs characteristically decline by 20-30% in real terms each time accumulated experience doubles.“ The basic idea is that bigger is better. (more…)
Collaborative learning is essential for transforming work activities that involve a high degree of uncertainty and creativity into a lean value stream. These characteristics are common in enterprise integration initiatives due to unclear and inconsistent data definitions across multiple silos, rapidly changing requirements and lack of perfect knowledge around end-to-end processes. Traditional approaches generally end up propagating the integration hairball which is inefficient and wasteful – and certainly not Lean. You could say that these value streams are simply immature processes that lack standards and metrics, which is true, but the practitioners that are involved in the process don’t see it that way. They see themselves as highly skilled professionals solving complex unique problems and delivering customized solutions that fit like a glove. But yet, the outside observer who looks at the end-to-end process at the macro level sees patterns that are repeated over and over again and what appears to be a great deal of “reinventing the wheel.” (more…)