SAP Influencer Summit #3 - SAP missing the biggest opportunity ever?

I believe that SAP is missing an opportunity to more than double their market, in the same space with the same customers, still for business processes, in a new market segment that is amazingly virgin with virtually no competition, and where the customers are only waiting for the first products.

Why do I believe that? Well, allow me:

A Business Process is any process, sequential work or activity, that happens in an organisation. Some are repeatable and linear, others happens in unstructured ways and are hard to model.

Let me keep it simple and divide process types into two groups:

1. The Easily Repeatable Process (ERP for me)

Processes that handles resources, from human (hiring, firing, payroll and more) to parts and products through supply chains, distribution and production. The IT systems go under catchy names like ERP, SCM, PLM, SRM, CRM and the biggest players are as we know SAP and Oracle plus a long roster of smaller firms.

Known to be rigid, but handles events and transactions with precision and in volume. Systems delivers value through extensive reports and full control over resources.

Resource oriented, transactional, event driven systems. Delivered by system vendors with roots in accounting using up to 25 year old technological solutions.

A mature market segment where an upgrade from version 7.0 to 7.1 would not deliver much in productivity growth for the customer so much of the vendor growth stems from finding new customers for the same solutions.

2. The Barely Repeatable Process (BRP)

Typically exceptions to the ERPs, anything that involves people in non-rigid flows through education, health, support, government, consulting or the daily unplanned issues that happens in every organisation. The activities that employees spend most of their time on every day. Processes that often starts with an e-mail or a call. A process volume, measured by time and resource spent at organisations, probably larger than for the Easily Repeatable Processes. 

These are mostly handled and organised - frameworked - by systems like paper based rules and policies, e-mail, meetings, calls and now in more modern organisations by wikis and other collaboration systems and methods.

Known by extensive loss of information (e-mails residing on HDDs), little knowledge acquired and reused (typical research says 70% of problems solved before without being known) and most of all, untrustworthy processes (oops, forgot to send that mail). In other words not an iota (well almost) of business process thinking or methodology applied to this huge untapped area of business processes.

Requires a different conceptual representation of the processes and data than the transactional linear processes so this would require a technological shift from the current.

A truly virgin market segment where even installing a humble wiki would increase productivity measurably. And most important, a market where the customers are yearning for solutions.

The big question: Why does not SAP spend almost all of it's R&D funding in the BRP space? It would make utterly, completely, undisputed sense.

Now folks, this situation puzzles me so much that I need some help; is there a glitch in my logic? Good folks at SAP, prove me wrong or right!

[Sidenote: Obviously BRPs is what thingamy can handle nicely, but I'm not afraid of some competition at all so come on ye big enterprise software vendors, I'm waiting! ;)]

[Update: Should have been a question mark in the title really, as afterthought, added that]

Comments

[james governor]

how could you have been at the summit and not seen any of the stuff SAP is doing in exactly the spaces you're talking to? See my piece, which should drop later today. But is there some wilful blindness from some of thje EI crew? Beginning to wonder.

[Ric]

What axe do the EI's have to grind here? 'Willful blindness' is a big call, James, and I don't see it. (or maybe I share it?)

[sig]

James,

true that I knew what I was looking for when at the summit (should we not all be prepared for such shindigs?). One of which was "what are they doing with BRP". The closest I could get to there was the three-hour seminar on "connecting the knowledge worker".

The triangle of Productivity - collaboration - knowledge sharing makes a lot of sense and many of the pieces are ready and getting ready.

Duet (under productivity) is a fine product, but after all it's only an interface to the underlying systems (covering the usual ERPs), widgets ditto - but such did not deliver any process of the type I was looking for (BRP), except for some exposure of underlying processes (ERPs).
Social networks (Harmony say) and collaboration efforts are closer as they have a snippet of process in them, albeit not very structured nor comparably able to their current system in capturing data nor disseminate knowledge.
Search, portal and interactive forms I could not term as other than more pieces in the puzzle that in itself is well and good as a complete interaction with the underlying systems for the daily users. But as said, not much BRP structure to be seen, at best exposure of the ERP types in the main system.

Then of course if you're looking for new products that will give their process building more flexibility I would point to Galaxy, a very fine tool indeed, but after all a tool to build processes using their current technology and framework - which we know are quite transactional skewed.

All in all I saw much goodness, much innovation - as expressed earlier and repeatable I am much impressed - but I do not see any effort to transplant the process strength from the current Easily Repeatable to the Barely Repeatable Processes.

Where were they? Blind or not I did not sniff'em out.

[ewH]

Excellent breakdown, Sig. Before the big Enterprise software vendors can choose to address the BRP, they first have to admit that it exists and then they have to realize that it's very different from the easily repeatable.

Cheers,
ewH

[Balaji Sowmyanarayan]

What is the interplay of ERP, BRP and the worldview on Business Model?
As I understand it, ERP's Biz Model worldview = Biz Model static and frozen.

Whereas BRP takes a dynamic and emergent worldview of the underlying biz model.

ERP is subset of BRP is this posts theme.
And the peeve is current approach tries to bit bang BRP into the ERP framework or approach it ad hoc. Resulting in information seepage - causing lack of Intellectual Capital capture.

[sig]

Balaji, interesting take - and yes indeed, could see ERP as a subset as the more complex and flexible will always be able to accommodate the linear and repeatable, not so much vice versa.

In other words, new technology that is able to do BRP should also be able to do ERP while adding more flexibility for free :)

A very good analysis, as usual. Most organizations I am working presently with suffer the same issue. Only one *BIG* point: this is obviously a comment based on your participation to a SAP summit, but... are you aware of any comparable solution to this HUGE isse being developed by ANY other "ERP" software vendor? I am not.
Shall we all assume that improving business systems means improving SAP?
I know it's a provocative question, but competition si competition, and there is more than SAP out there... ;-)

[sig]

Thanks ... ;)

And absolutely agree, I cannot see any substantial signs that BRP focus happens anywhere at the big ERP oriented ones.

One way to look at it is that collaboration tools / wikis are increasingly used for the purpose of getting those iffy processes into some kind of system.
Not that bad in my mind but still sorely lacking the process part, so I cannot but see such as work-around solutions. I can hear some protest now, but process kills cracks and ties up loose ends, process adds knowledge, process makes it possible to better the processes. And everything are process as in sequence anyway so why not accept and model it right away.

And choosing work-around solutions might delay any real change, in fact I do see such solutions being added as a top user interface layer to the large ERP type systems.

[phil jones]

I'd say the reason you don't see it is that it's a hard sell.

Consider "Thingamy! Optimizes the process you don't know you have, can't predict you will have, and can't measure the ROI on."

[sig]

Phil,

a few years ago I never thought much of BRP - but then I heard nothing but, especially at larger enterprises.

Loose ends galore, problems that had been sorted out before but nobody remembered how to, little accountability, no growth in intellectual capital, rules & policies sheets taped to walls that nobody followed.... a big huge sucking sound!

Then I met mid level managers in really big organisations that counter to corporate policies had two guys doing nothing but small snippets of programs in Visual Basic in a corner just to survive and get some structure.

Even IT departments have it internally, heck that's where they start to tinker when we discuss thingamy; "blast the others we have tons of iffy processes here to fix first" :)

It's like a town without water - you do not have to sell at all, just bring the water... :)

[Account Deleted]

Sig,
hope this time the blog won't delete my name as in my previous comment ;-)
Years ago "paradigm shift" became yet another buzzphrase, but I cannot help but thinking this is the issue behind this discussion.
I guess we all know ERP history: not exactly hi-tech. It can be ERP 2.0, but it still basically is an integrated system sharing typical business data. Nothing fancy or innovative, really.
A barely repeatable process is by definition fairly complex: it will only be supported by extreme data flexibility and this DOES require innovation.
Maybe you can implement it as a layer on top of, but we'll end up learning that a car is not just a horse running faster.
A tough sell? Sure. As cars were, but nobody rides a horse to the office by now. Even in Texas ;-)

[sig]

Luca,

agree. The BRP can be handled "on top" of an ERP system - often it's not even about the same "objects":

ERP is resource oriented and transactional, BRP is more "virtual object" (issues and problems, medical conditions...) oriented and transformational as in how these objects changes when it passes through a flow.

At the end of the day a BRP enabled system should be able to also handle ERPs, while the inverse would not be possible.

[ArtiMind]

It looks like BRP is another side of Enterprise 2.0?

[sig]

Mikhail,

absolutely right! In fact Enterprise 2.0 has found the big gaping hole where no other enterprise systems have ventured.

An area frameworked today by culture (how we usually does it), organisational hierarchies (Monday morning meetings) and rules & policies (if A happens, then do B). Quite a virgin market for some system based frameworks one might add.

Still, I do not think Enterprise 2.0 (as it is today) will be the ultimate answer.

Mainly because they usually have little process built in which allows the cracks to remain (oops forgot to send mail) but also because they do not capture the process as it is and that is important for learning, getting better and real knowledge about objects.

Even more, a bit of that in next post, is that I think process innovation is what innovation in enterprises should be all about.

And as usual, they are still in the "application" mode as in separate and silo-like. In any business or organisation all processes are linked, I usually describe a business like a ball of yarn, one end is "customer with need", the other "happy customer".
And if you want to create that value in the most efficient way one must think holistic, I think. :)

The big question: Where will the real framework for BRP handling emerge from? Will it be the ERP systems that are solidly process oriented but are transactional and have little understanding for virtual objects like "issues" or "medical condition", or will it be from the budding Enterprise 2.0 side that have all the flexibility in the world but little understanding of process today?

I, as you would guess, thinks from neither, a rethink must take place... but that again depends on how to define Enterprise 2.0 ;)

[Jon Husband]

I agree with Mikhail's observation. And, having just finished a book on E 2.0 9actually, the early imopacts of W 2.0 on KM) I like very much this "Thingamy! Optimizes the process you don't know you have, can't predict you will have, and can't measure the ROI on." but will agree that it is a tough sell.

It takes (still) enlightened business people to acknowledge that less than they think or want of what we do "at work" is actually controllable / repeatable, and that it's actually the really valuable stuff, the new wealth generators, that comes from the jazz, the play, the loosely connected federations of skunkworks. I think it will take a minimum of another decade and probably two before businesses can grow up enough to treat their adult workers as seriously playful and responsible knowledge workers in conversation(s) about how best to play with and use information and knowledge.

But then, I'd argue that in 2007 we are still not fully out of the Industrial Age yet (Gary Hamel's new book The Future of Management say much the same thing).

[sig]

Hi Jon,

on the surface one might think it's a tough sell. But the funny thing is that when I started doing demos/quick pilots for potential customers they more or less immediately reacted with "hey, this stuff could create some order for our iffy and unstructured processes!".

Typical "issues" oriented stuff "structured" by a sheet of paper with rules & policies - then run using e-mail, calls, meetings - and for the more modern ones; a dash of wiki and some ad hoc collaboration software.
What's lacking for them using the current mish-mash of ways and systems is accountability and control so no cracks swallows the process (oops, forgot to answer that mail...).
As well as a lack of ready and easily reusable solutions for later use - an easily navigable repository of problems & solutions - automatic capture of process and data every time you solve any kind of issue. That's what could be called "increase in corporate intellectual capital"!

This trend has only been strengthened over time, for me it seems more like a big sucking black hole of need than a "sell" situation, certainly not a tough sell...

But I do agree that the long term gains from re-inventing the BRPs is a harder sell. But if the immediate need to get some order is enough, well then the LT gain would be a freebie :-)

[Jon Husband]

I guess you could call applying Thingamy capability to Barely Repeatable Process(es) a "just in time" or near-real-time mash-up ?

Mashups of course having become respectable and saleable .. just ask IBM ;-)

[sig]

Good try Jon ;-)

OK, in a sense you're right... but "mashup"? Hehe, thought you knew that I'm in the camp that thinks "mashup" is only another word for "messup"!

Yeah, yeah, it's currently popular as mot du jour, and as you mention IBM, that's what they live off - although it's mostly called middle-ware there.

Relieving the pain inflicted by bad architecture (applications as process snippet silos) and stupid data handling (data captured in manipulated form .doc .ppt US GAAP...) it does, but healing? Nope, not as much methinks.

Not crutches, real solution - what mot du jour would we have for that? Hmmm... :-D

[Mikhail Elashkin]

I can’t see any software to automate my daily activity. And now I think that this is probably because manager’s activities are much more social – I communicate and my work has sense only together with other people.
I agree that social communications or BRP or Enterprise 2.0 should be Next Big Thing. Well, at least I need it a lot! ))

[sig]

Mikhail,

interesting that you couple "automate" with software!

That is very much classic ERP - how it works and why it exists.

Beside a need to "automate" a few dumb tasks and the task distribution itself, BRP is not that much about automation.
It's about having a framework so nothing is forgotten, that captures what happened so you'll get accountability and reuse of solution (knowledge).

The efficiency gain is not from automation as it was for ERP, it would stem from tasks not forgotten, solutions reused and smooth distribution of tasks.

Quite an important trait of BRP in comparison of an ERP is the nature of the process: It is conditional, i.e. every task might lead to a change in the flow direction (now I have the X-ray, let's do a blood test) while ERP is basically linear with some limited conditional forks (order over 5 k then boss must sign).

This is the flexible, human nature of the BRP - allow most anything while still being a framework. A car is a rigid framework, still it let's you do whatever you want... :-)