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Saturday, September 19, 2009

Enterprise Modernization – The Modern Corporate System

What a mouthful of words.  Perhaps the biggest buzzword (or phrase) in the market today is “Enterprise Modernization”. 

Many vendors are selling you software to convert existing systems written in old “legacy” languages like COBOL or RPG (on the iSeries) to a “modern” platform neutral language. 

You are being told you need to adopt Web 2.0 and SOA (Service Oriented Architecture).  Get rid of those 3270 and 5250 screens and replace them with modern web based UI’s. You need this product or that product, and you most certainly need an army of consultants to help you get there (do they actually tell you where there is?). 

Throw some new buzzwords into the mix like Cloud Computing or SaaS (Software as a Service) and it becomes even more challenging to digest.

This blog is about corporate enterprise level systems.  I may establish myself as a dinosaur and the last of a breed of folks who had the audacity to believe that we could (and did) create integrated enterprise systems (now called ERP by certain vendors).  Today you and your C-Level executives are being told that your IT organization cannot build large scale ERP systems or that it is a redundant and unnecessary activity and you should just buy one.

In this blog over the coming days and weeks, I want to examine the current state of modern business computing and try and separate hype and reality. I also want to focus on key development initiatives including building a solid “business infrastructure” that can help guide any modern business (large or small) through the future of constantly changing computer technology.

The Software Industry Today

There are two fundamental directions being taken by major software companies today. 
  • Some like IBM, Sun, HP, and others have made a deliberate decision to stay out of the business of application systems and leave business systems to their partners.  These companies focus on tools and middleware that they hope other business partners and customers will use in the development of their business systems.

  • The ERP vendors who have now been dominating the market place with their end-to-end turn key systems for many years try and keep corporations captive within their systems maintaining extremely large annual maintenance or subscription revenue streams.  They want you to stay within the confines of the system they provide.  If ever there was a need for modernization it is with most of the software sold by these vendors.  Today many major ERP systems are over 20 years old, often without rewrites to stay current with modern technology. 

Many software vendors today will tell C-Level management at your company that internal IT is no longer capable of addressing the needs of the modern corporation or responding in a timely manner with high quality business systems.

The Reality of Corporate Systems Today

The reality of today’s systems depends a great deal on where your corporation is headquartered.  Europeans and South Americans tend to focus on the needs of the corporation or business as an entity.  U.S. based companies tend to delegate computer systems to their business units and treat computer systems as a tool for a business unit executive to use and control.  In Europe and South America, executives remain in place for long periods of time.  In the U.S. people are very mobile and change jobs frequently often creating a lack of continuity in corporate leadership.

In the typical large U.S. Corporation you have mix of virtually every hardware platform known to man and software from many vendors.  Frequently there is no such thing as “enterprise systems” and the corporate accounting office demanding input from local systems to build a corporate ledger provides their only corporate level integration.

A few years ago IBM gave away an employee directory product for use on its web servers that was based on its internal “Blue Pages” software.  You could search for and look up any employee in your enterprise.  You could see an organization chart showing whom that person reported to and see the chain of command from the person all the way up to the president of the company.  You could also see whom a manager managed.  It was a great tool as far as it went. 

The limitation was that tools designers decided that the legal boundaries of a country should be reflected within the system.  You could see whom a person worked for within their country. Unfortunately, this was often not the true organization structure of the enterprise.  While a person had a physical reporting relationship to a manager in their country, they might take operational direction from a manager in another country. The reality was that the true organization spanned countries but the system did not. The bottom line is a great idea for a software product failed to deliver what was really needed.

This point illustrates that there are many views of a company’s organization that are valid and necessary.  All too frequently technologists do not see or address these views.

Build versus Buy

At one time I would have vehemently argued in favor of in-house development in order to provide your company with the best possible systems giving your company a competitive advantage over others.  Today I see a combination of build and buy as the best solution.

Today I would advocate buy, build, and integrate. 

In subsequent postings, I will explore how you can manage buying best of breed 3rd party software from multiple vendors, building internal applications, and integrating systems across diverse hardware platforms into a corporate system that meets the needs of your business. 

In the early days of modern computing, many small entrepreneurs with expertise in a certain area of business would create a software application and sell it.  Today it is virtually impossible for this type of person to participate in the modern corporate world of software with its legal issues and cost of bringing products to market.  We need to bring back channels for wonderfully brilliant people with specific skills and knowledge in a specific area to collaborate with technical people and bring their ideas to the market place in a manner that makes it viable for larger enterprise to adopt their software and integrate it into their systems.

Studying the Modern Enterprise

After leaving the corporate world and working for IBM where I got to see many other companies, I found that over the years while building large scale fully integrated corporate systems that I had become a student of modern corporations.  In this blog I will share what I have learned about enterprises large and small and what needs to be done to address provide a path to the future.  I think you will find my approach different and hopefully refreshing.

There are commonalities in business enterprises that can be represented in computer systems that allow computer systems developers to build very specialized components to handle specific business problems and still integrate into the whole of the modern enterprise. 

To achieve what I am going to talk about requires that a corporation be willing to address its systems from a corporate perspective and allow management of systems from a corporate viewpoint.

If you are looking for detail technical discussions, this is probably not the place.  I will not be able to avoid some technical issues, but the focus is on what to build and how to represent a business enterprise and not how to build it.

The Future

IMHO the future is dependent upon a corporate systems infrastructure that allows vendors to write to standards that allow them plug their systems into a customers system and allow the customer virtually instantaneous advantage of their new system functionality. 

Interestingly enough, I see that we may need organizations similar to the open source organizations to make the vision that I see materialize.  There are major challenges in what I am going to discuss and present along with the development of software vendors willing to create applications that conform to the architecture that I will describe.  The concepts I describe are diametrically opposed to the business objectives of some major ERP vendors.  I do think it is time for a change.

Stay tuned for the building blocks of the future…

Bob Cancilla, Principal
RJ Cancilla & Associates
Office:     916-226-4951
Mobil:    562-290-2849
Skype:    bob_cancilla

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