Simple ERP?

If ERP was simple, anyone could do it. It’s not, and few do it well.

Business is not simple, and many try and fail.  Managing people, managing processes, managing inventory, managing finances: it’s all complicated.  Even the best managers lack some of the skills essential to run an effective business, so they partner with people who have the strengths they lack. They form a team, and team members watch each other’s back.

Your ERP system should have your back.  Call me an idealist, but I think software should help.  Too many systems simply get in the way, preventing creative solutions, discouraging innovative approaches, punishing problem solvers, and paving unintended paths of least resistance.  Complex ERP systems seem often to be used primarily as weapons for enforced compliance, and end up in an essentially adversarial role with the very people they were designed to help.  This needs to stop.  ERP needs to return to its roots, to the simple fundamentals of helping planners plan and helping managers manage.

The principles truly are simple.  You have a number of demands (your requirements), you have a number of assets (your resources), and you have a never-quite-that-simple set of priorities for matching those assets to those demands. And there’s the rub.  The priorities are never simple.

FIFO sounds fair: first in, first out — matching the first available asset to the first available need. But not all demands are created equal, and not all assets are reasonably interchangeable. Project boundaries protect the cost and schedule of the best laid plans of project managers, but sometimes to the detriment of the company as a whole. The fine art of matching resources with requirements is the heart and soul of a well run enterprise. Collaboration, cooperation, and creativity make it work, when it works well.

The principles behind the principles are also quite simple.  Honesty, clarity, trust — concepts learned in early childhood. One would think modern software would cutivate and reward such virtues. Sadly, it rarely does.

Collaboration is not possible when the various parties have different versions of the truth. Inconsistencies in data, fragmented reporting, ambiguous definitions, and overlapping categories all contribute to a sense that team members don’t share the same playbook, or worse – that they are simply deceiving each other.

Cooperation requires communication and transparency. It boggles the mind how much information is dumped into a typical ERP system; even more baffling is how difficult it is to get that information back out in any comprehensible form.  Too often the question “where did this data come from?” is essentially unanswerable, and the credibility of the whole system erodes.

Creativity flourishes in safe, secure environments. When information is not trusted, creativity suffers, and ridiculous amounts of corporate energy gets invested in assigning blame, exercising the futility of finding roots of misinformation. People grow defensive, territorial, and risk-averse. Doing nothing new or unexpected becomes preferable to innovation, and unproductive behaviors become deeply entrenched.

Honesty, clarity, trust.  These are simple human terms, and they should not be foreign to software designers. Software should encourage users to share what they know — in the simple most straight forward way possible — and not require them to fabricate answers to things they do not know. Reviews and approvals should be constructive, not punitive.  People at every level should have opportunity to add value to information, and not simply the power to reject it.  Performance indicators should recognize and affirm the behaviors and collaborative results that help the company succeed, and not focus obsessively on assigning blame for all problems and fluctuations.

Software is a part of our culture, woven into the fabric of how we live our lives.  Your ERP system is a reflection of your corporate character, for better or worse.  Yours should bring out the best in your people, helping them perform at their best, highlighting all that is good about their work, and about the goods and services they produce.  If it doesn’t do that, it may be time to change systems.

It really is that simple.

Primary Thoughts

Value.  Worth.  Importance. Significance.  These concepts and desires live very near the heart of what inspires and motivates each of us to work, to strive, to grow, and to excel.  As individuals and as organizations, we engage obsessively in the effort to succeed and to quantify our success, to advance and to measure our progress. The swaggering conqueror and worried survivor are alike in their persistent need to know how they are doing, whether that news be favorable or not.

The idea that value might be earned — ought to be, must be earned — is evident in the most ancient stories of mankind.  The very notion that life itself may or may not be fair and just hinges in many ways on the question of whether worthy actions are followed by favorable results, and ignoble deeds met by pain and loss.  We universally want our efforts to be rewarded with everything we deserve… except of course for when we don’t.

I have spent the bulk of my career — as a mathematician, a computer programmer, a systems analyst, a business owner, and yes, even a small town preacher (that’s a story for another day) — intently engaged in helping organizations evaluate their performance, gauge the progress, and forecast their profitability  (financially or otherwise).  I am, without a doubt, a huge fan of performance measurement, and a firm believer in systematic, fact-based assessments of what is — or is not — being accomplished.  My favorite childhood memories involve canoeing with my father and older brother, and I learned early the difficulty of padding upstream, as well as the deep frustration of padding in circles, when we weren’t working and communicating well with each other.

My hope for you and your business, team, or organization is that all of your efforts are productive, that all your investments bring healthy returns, and that the things which you value most come to you, in accordance with all that you have sacrificed to gain them.

My selfish hope — for me and the small band of warriors assembled with me — is that we may be helpful in clarifying your efforts, that our experience and insight would add to your understanding, and that our tools would enhance your efficiency and productivity, as you pursue your most treasured dreams.

I look forward to sharing with you a few things I have learned along the trail, things that helped me, as well as things that have gotten in the way. Please feel free to share your stories as well, or ask questions, or challenge my conclusions. We all learn and grow from the exchange.

May all that you do bring lasting value to you and to those you care for.

Sincerely and respectfully,

Tom
ERP Contrarian