The cloud movement has challenged how businesses operate on nearly every level. From finance to marketing, customer relationships and data management, cloud-based services are making the need to invest in costly on-premise infrastructure almost irrelevant. The humble old ERP, while late to the party, is seeing the same shift as other business tools have. Many companies are finding the need to constantly update and maintain a gargantuan piece of software too tedious, investment-heavy and, in the face of cheaper alternatives, unnecessary.
Postmodern ERP helps businesses avoid the recurring issues of maintaining costly legacy ERPs by creating a unique ecosystem which leverages both on-premise and cloud based systems. Unlike monolithic ERP systems, applications in postmodern ERP are integrated on demand. So, if a company finds that their marketing staff produces their best results with Basecamp and Hubspot, then both can be added into their postmodern framework. This means the company no longer has to try and find a way to make a monolithic ERP’s bundled guru work and can use whatever works for them.
Implementing a postmodern strategy, however, is easier said than done. Getting all the different applications to seamlessly communicate with each other is a daunting task, albeit one a postmodern ERP strategy will take into account. Gartner defined a three-layer approach to implementing postmodern ERP utilizing systems of record, systems of differentiation and systems of innovation. The Pace Layered Approach, as it’s known, breaks down applications based on their life cycles.
Creating an Agile System of Records
Every ERP implementation is built on a System of Records (SoR) which serves as the source of all data for it. In organizations with complex information management systems, having a homogenous SoR becomes essential as different systems might disagree with one another on the same information. This disagreement can stem from using different sources, semantic differences, timing of extracting data, transform and load of information and different opinions.
While monolithic ERP systems come with a basic SoR to ensure all modules are on the same page, a postmodern ERP strategy requires the SoR to adapt to changing requirements. In standard data management, IT teams focused on creating the most updated organization-wide record. Since this a lofty goal requires significant input in time, the output often arrives too late to be of any business value.
Agile MDM attempts to make quick wins rather than one large sweeping move that may touch IT aspects that may not be relevant at the time. The strategy can help companies transition to a postmodern way of life. In Agile MDM, IT teams will focus on the most currently relevant business problem first. So, if the company is undergoing a logistical overhaul, then logistics data can be given priority over other sets. Likewise, if a massive marketing campaign is underway, then customer data takes precedence. This helps the organization create a “golden record” which combines meaningful, current data from multiple sources into one accurate picture.
Getting a Systems of Differentiation in Place
A System of Differentiation (SoD) consists of applications that enable industry specific capabilities. These are suites that give your company it’s unique selling point. For instance, for a logistics company, its primary differentiator can be its powerful Transportation Management System (TMS) that allows it to plan routes with great efficiency. For an HR firm, it can be the ability to identify and recruit high level talent and provide intuitive, self-service tools. SoDs require involvement of a company’s IT and business departments since they are responsible for its competitive advantage.
The SoD layer is where a postmodern architecture begins to show its advantages. A company’s unique methods require unique applications with features that can enable best practices efficiently. A monolithic ERP, while well integrated, will also come with modules that may or may not suffice.
Set a System of Innovation on Top
The topmost layer of enterprise IT consists of applications with a fairly short lifecycle and address new business requirements as they emerge. New ideas and technologies are rapidly tested via SoRs. This layer uses applications to facilitate experimentation and benefits from an agile work culture. The cloud has already proven to enable innovation for companies in all growth cycles and is an ideal place to host systems of innovation.
Migrating from Monolithic to Postmodern
As each of these layers will have their own culture, skills and governance and data models, making them work together, will become a challenge. CIOs need to enable robust control measures in each of the different layers while giving enough freedom to SoD and SoI, so they may work optimally.
The key to going postmodern successfully lies in understanding that the migration process needs to be slow and gradual. Part of the focus should be on ensuring as little downtime as possible. The first step will be to get a system of record in place. If you are running an ERP system, then you already have a SoR. You may consider, however, moving your SoR to the cloud for greater agility.
Start by making a copy of all your existing data in a cloud data warehouse along with its schema. As cloud warehouses support different schemas, you can take the opportunity to shift to a new one if your business direction so requires.
Next, you will need to decide whether you want to work with a single cloud or go with a multi-cloud approach. While single cloud will allow for easier integration as your IT team will only need to use one kind of API, it also means all your IT eggs will be in one basket. Alternatively, going multi-cloud will allow you to integrate a wide variety of applications, but integration becomes trickier. A plethora of integration tools and techniques exist that can help you overcome many of the challenges.
There is obviously much more to migrating to a postmodern system. While the technical aspects are certainly complex, going postmodern also requires cultural and organizational shifts. Having the right tools in place will make the move more seamless, but a qualified integration partner familiar with the postmodern ways can take the hassle out altogether. Interested in learning more? Feel free to leave a comment below or let’s have a call to discuss how we can help you deliver better output while enhancing organization-wide security.