VANTAGE POINT: Newsflash: The Center of the Universe is shifting!
By: Bernard Goor, Sr Director, Global Lead Consumer Goods Industry Business Unit, Oracle
Nicolaus Copernicus (1473-1543) was the first astronomer to formulate a scientifically-based heliocentric cosmology that displaced the earth from the center of the universe. His work is often regarded as the starting point of modern astronomy and the defining epiphany that began the Scientific Revolution.
What does that have to do with the technology landscape deployed by Consumer Goods companies? Everything. For the last 15 years, the common view was that ERP was the center of the universe, with all processes revolving around it. That was an inside-out view of the world, with the general ledger creating the force of gravity.
Let's take a look at what happened to the enterprise IT landscape in that period of time, across people, process and data. First of all, employees typically have a poor user experience, fueled by the need to use multiple user interfaces to do their job. Processes are disconnected across disparate systems, and only provide a backward-looking view of past events. Finally, data is stored in multiple disconnected sources, creating barriers to converting data into information. Does that sound familiar?
Back to Copernicus and heliocentrism for a second. To anyone who stands and looks at the sky, it seems clear that the earth stays in one place while everything in the sky rises and sets or goes around once every day. Observing over a longer time, one sees more complicated movements. As these motions became better understood, they required more and more elaborate descriptions by the scholars defending geocentrism -- none however that could explain the planet movements. In short, geocentrism simply did not work to explain how the universe functioned.
The same phenomenon is happening when putting ERP at the center of the universe. It just does not allow us to explain how your company processes need to function. The key question is: How does your company make money? By bringing innovative new products to market, focusing on your consumers, improving your relationship with your trading partners, implementing an agile supply chain that enables you to efficiently respond to demand, and servicing your customers and consumers. Innovation, sales and marketing, supply chain and service processes are at the core of your success. And at the center of it all is the consumer. This is an outside-in view of the world with the consumer, not the general ledger, being the force of gravity of your business.
So, what is the equivalent of the theory of heliocentrism for information technology? The center of your technology universe needs to be your Enterprise Backbone -- the architecture around which all your core processes revolve, the same way that all the planets revolve around the sun. Looking at your money-making core processes from that position, it all starts making sense, the same way that all the planet movements started making sense when you put the sun -- not the earth -- at the center of the universe. Your Enterprise Backbone, not ERP, needs to become the center of the universe. ERP is only one of the planets, one of the systems used as a component into your core enterprise processes.
Now let's paint a picture of the positive impact this view will have on your enterprise. All employees will be able to do their job using role-based cockpits, which will contain all the information they need to continuously improve the performance of the processes they are involved in. Their cockpits will give them access to role-based performance indicators, which they will be able to drill into in order to find root causes of performance deviations. They will then be able to analyze potential scenarios using predictive technology to come up with the best corrective actions. They will be able to measure the impact of executing these corrective actions in real time, and monitor their performance improvements. They will be able to collaborate on an as-needed basis, using Web 2.0 technologies to gain access to and leverage the required expertise -- inside and outside the enterprise. This will be supported by integrated and adaptive business processes, which will imbed "lean" principles. Finally, the backbone will be built on a foundation of harmonized data which will enable an integrated data environment, from operations to insights.
In order to enable this vision, your Enterprise Backbone needs to include (1) role-based cockpits, (2) business intelligence, (3) business process management and (4) master data management. It also needs to be standards-based in order to enable the construction of integrated business processes using standards-based web services across multiple applications.
What is the other key benefit of putting your Enterprise Backbone as the center of the universe? Today, 80 percent of the IT budget is typically consumed by keeping the lights on, due to fact that you need to maintain a rigid, complex and expensive set of applications. By making your Enterprise Backbone the center of your universe, you can deploy tailored, flexible and extensible business processes that will drive your money-making enterprise processes. It will also help you reduce your IT costs, thereby making more funding available to implement solutions that will fuel your growth.
Moving from geocentrism and heliocentrism was the defining epiphany that began the Scientific Revolution. Are you ready for the Business Revolution epiphany? Are you ready to change your view of the world and put your Enterprise Backbone at the center of the universe? If you are, the sun will shine on your enterprise for a long time, and the sooner you get started, the brighter it will shine.
I wish you all bright and sunny days ahead!
Bernard Goor is the global lead for the Consumer Goods Industry Business Unit at Oracle Corporation. Prior to joining Oracle, Bernard was vice president Business Development for Consumer Goods at Agile, vice president Client Services at Prodika and vice president, Retail and Consumer Goods at i2 Technologies. Before joining the technology industry, Bernard also served as senior vice president of International Operations for Nine West Group (now a division of Jones Apparel Group), and vice president of Global Sourcing/Global Quality at PepsiCo Restaurants (now Yum Brands). For more information, contact email@example.com.