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  • Writer's pictureLiviu Cotora

ERP is just a component in the extended Enterprise Business Management System

A component just like one of the many other processors in a computer and certainly not the operating system neither the different others databases and applications responding to the business specific requirements.

Why the so strategic Enterprise Resource Planning is in the actual stage just a component, a processor for the Enterprise Value Creation activity?

Because it was designed to integrate the financial-accounting flow and the logistic booking flow plus the invoicing and delivery registrations and the payroll and jobs administration so generally to keep the books in a centralised real-time accurate mode, and there was the strategic goal to be able to plan the money and logistic flow with the time per activity and workforce cost.

Premium you get thousands of nice static models how to integrate and not forget each information regarding the customers, suppliers, logistic down to each vehicle and each spare part with his entire technical manual cabled in the system.

The '80s and '90s and 2010th, the problems concern the thousands of humans typing billions of documents, so optimisations regarding documents complete processing was a sensitive cost element together with the accuracy of the processing information's.

Now the technology solved the problem, big company's automated 95% of the data entry regarding the orders, invoices, deliveries, packaging, transportation, accounting, reports, payroll.

The planned manufacturing is mostly very flexible because markets, customers, completion and demand is very variable and prediction is much complex and packaged with many intangible assets and events so certainly not adapted to the half-century business models.

The Enterprise resources are much more than the cash-in -account, machines,


Intangible assets and different values are for far more important to the Enterprise business value creation dynamics.

The Morale Revolt in Silicon Valley (Michael Short/Bloomberg) where Tech Workers Coalition (TWC) put in strike 485 000 employees in 2018 from Google, Microsoft, Amazon,...because the ethical AI and Face recognition problems and other concerns, can't be treated by the old-fashion schemes where the intellectual worker counts for an intellectual capital like other assets and his efficiency is just a payroll matter.

Knowledge, human learning, competency production context, human to the machine transfer process, all of that are objects of a new economy where resources are also others value flows and the today ERP is not managing these resources, which are critical for the Enterprise value creation process.

ERP is just managing the tangible part of the partnership agreement with the customers, supplier's business associations, is not able to manage the complementary, the competitive advantages, to identify the different value flows passing between the partners like the knowledge, competency, common values, and the different assets build in the partnership.

Even for the Cash-flow the ERP is much behind the real market performance CFO avoid the implementations long expensive complex , inefficient, not adapted to the global market challenges like the risk management and exchange risk linked to the planet real time and real life , fraud detection , cash protection , see the Kyriba software growth, a champion in treasury management software better than an ERP.

So why should you carry out an old library of cash-flow models inefficient and pay millions to copy these libraries that probably you care for 10% of it, from one platform to another?

Is not a competitive advantage for you in a financial cash-flow model sold to many thousands of companies in so many different domains and risk context.

ERP is a component because if the data entry is automatic the basic accounting and logistic rules are cabled in the software the human is less present in these kinds of activity, the machine learning can help to assure a high degree of automatic processing.

The goal of these data processing will be to assure the right numbers for the financial reports and a lot of different legal reports and the tangible numbers, the basis for the more sophisticated software specific for building the right context to catch customers or be on the market trend.

Managing innovation in each company corner involve the need to change each day without extraordinary cost your working environment not waiting 5 years for that. Innovative communities need innovative specific software easy to adapt, only in this way you can build a differentiating point in your domain.

When you deal with thousands of questions and fill plenty of check boxes integrated with a huge business process adapted to the '80s technology,

no attraction, no creation, no enthusiasm.

The creativity playground in sales is certainly not the static Sales Process Model is more the Lightning, SalesForce platform where you can create your interfaces and flexible component why not with JavaScript or HTML5.

All the Enterprise activities will also be extensively automated by Robotic Process Automation platforms like Automation Anywhere is simple and YOU can design the process not to implement a  relic of the past that you try to adapt it to your vision.

Distributed Ledger will be a much better choice than the central ERP repository where Security is weak, vulnerable to the cyber attacks.

Distributed Ledger is much protected because they are multiple shared copies of the same database so a cyber attack has to simultaneously be successful on all the copies if you add the method by which information is secured and updated mean the participants are sure the copies match at one time each other.

The Private sector started to recognize that this centralized model is poor potential to deliver customer good service is expensive and fails to exploit the full benefits of the e-commerce and digital capability.

According to the recent report from the IBM Institute for Business Value:

"In our vision of a decentralized IoT, the blockchain is the framework facilitating transaction processing and coordination among interacting devices. Each manager its own role and behavior resulting in an "internet of Decentralized Autonomous Things"."

ERP can't change completely the software architecture because this will be like a completely another product, today ERP player even if they buy IoT companies they will squeeze the code lines against the same old fashion Business Process Models, so no innovative logistic process and no disruptive Business Model with the ERP.

Logistics, Sales, Partnerships need "Smart Contract" on top of the Distributed Ledger and Blockchain technology.

Smart contracts are contracting whose terms are recorded in a computer language instead of legal language. Smart contracts can be automatically executed by a computing system, such as a suitable distributed ledger system.

In summary, a smart contract is useful when machines, companies or people want to create a digital agreement with cryptographic certainty that the agreement has been honored in the Ledger, databases or accounts of all the parties to the agreement.

If two users sign a smart contract, it will then contain logic that operates on the data in all parts of the shared ledger. This could facilitate the automation or removal of manual process and drive efficiencies in productivity.

Concerning Distributed Ledger there is an extraordinary array of opportunities to develop algorithms that will add sophistication to ledgers and built in all security disruptive applications to create the competitive advantage and not use the same business model like in the old volume economy leave these to the robots.

"More than 400 million lines of code were developed in the ECC SAP Suite, but just today S/4HANA is offering just a couple of functionalities of Business Suite "

said Pat Phelan Gartner former analyst and vice-president Market Research of Rimini Street.

So how Agile will be the ERP ECC Suite and how many consulting days will be spending on a S/4HANA migration?

Based on a nine-month S/4 HANA migration, the researchers estimated that if every organization migrating to S/4 HANA hired an average of 15 SAP consultants per project globally, 108 million days of consulting effort would be needed to complete the migration of the 42 000 SAP customers still on ECC... At a rate of £925 per day, that equates to £ 100 bn of consultancy cost in addition to the software licenses (the Resulting IT report, co-author DEREK PRIOR former Gardner analyst).

"A study has warned that many organisations are failing to put together a compelling business case to upgrade their SAP systems" because is not Business Value, Innovation is not responding to the modern economy challenges.

It was the top to integrate the accounting with logistic, now is top the Distributed Ledger, block chain and the Cryptocurrencies, like Goldman Sachs and Facebook and more and more others are using technology to build disruptive solutions in the global and fast moving economy the years-long implementations are over, the data are strategic Enterprise assets can't be taxed the data move is creating value so free move and speed to all the data combinations.

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