Bringing ERP into the 21st century – the 20th century would be an improvement

Bringing ERP into the 21st century – the 20th century would be an improvement

Posted by Ian Burdon in e-Procurement 19 Jun 2012

Today, we’re delighted to welcome a post from Ian Burdon, Director of Strategic Business Development, Elcom International, Inc.

It’s 2012. We’ve mapped the human genome – been to the moon and back and lost interest in it – and discovered graphene, a fourth carbon allotrope that will transform engineering. Yet when it comes to business processes and conventions, it’s hard to distinguish what we do today from the practices in renaissance Italy.

Pete’s post of 14 June “World Class or Half Assed” struck several chords for me but, for now, I’d like to consider only one of them. Particularly resonant was the idea of e-procurement software being designed for the professionals in the system rather than end-users.

This is not a new phenomenon and it is not confined to e-procurement.  I remember with residual embarrassment back in 1987 or so, when I worked in the Courts, that we had a grand idea to move away from typing up decisions on typewriters and adopt the new-fangled notion of word processing. This would let us type and print decisions and also archive them for retrieval on screen.  The project went ahead with the backing of the Judges and everyone was happy except the one group of people we somehow forgot to consult – the typists. They were very happy with their Olivettis and not at all pleased about losing them. Lesson learned. Forcibly.

The problem of the design of e-procurement systems is one I have observed in ERP systems. Pete is correct to say that these systems have traditionally been designed on the assumption that purchasing is a finance function when, of course, it is a quite separate activity with financial consequences.  I think the problem is bigger than Pete suggests, though, because of the assumptions that are made about process which are then hard coded into the systems.

ERP systems embody standard accounting practices which would be recognisable to the Medici Bank in 15th century Florence with some minor allowances made for the 19th century invention of Telegraphy.  Crucially, these administrative practices are built on Paper as the dominant technology.  Purchasing and accounting practice grew up around the use of formalised documents which provide the evidential trail.  Even though the mantra in IT, for as long as I can remember, is that one shouldn’t just transfer an existing process onto the screen, in fact that is precisely what finance (and e-procurement) systems have done and in the process have also imported the assumptions of the old technology into the new.

This doesn’t simply pull against the trend of our consumer experience of purchasing it also means that we do not, in that sense, do “e” procurement. This is notably so where the primary system is an ERP which has hard coded into it both accounting practices rooted in paper and purchasing processes built on paper too.

We should be able to do better than this by now.

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