I will be speaking at Sapience2009 (Cambridge, MA, December 8th and 9th). It’s a conference about how to get the most value from an SAP solution, which is often not to use another SAP solution. Our own example is a cloud-based helpdesk that avoids the need for help from SAP itself. The cloud alternative costs less and offers access to world-class talent that might otherwise be out of reach of the average SAP user.
The conference opens with a panel on a very intriguing topic: “How Sweet is the Future for Suites?” It’s an excellent setup because it goes to the heart of SAP’s value proposition. That’s the idea that a collection of resources is better served as a package than for the user to assemble resources independently. Before ERP there were silos and without ERP there would still be silos -- and resources would still be trapped inside.
So now the cloud vendors (like us) are saying that it is the ERP suite that is the silo. Knowledge and functionality trapped within an ERP solution are still trapped.
That doesn’t mean, however, that the cloud is the new suite. The idea of pre-wired collections of applications that speak the same language and represent one version of the truth is still very compelling. There is also a generation (or two) of IT professionals whose careers are tightly linked to the ERP suite. None of that is going away anytime soon, if ever.
What will happen is that ERP will be less a silo and more of a cell (the living kind, not the jail kind) whose wall is permeable. And just as with the living kind, the future is decided by evolutionary comparative advantage.
Where it makes sense to have things tightly connected, they’ll be tightly connected. But evolutionary comparative advantage will go to those ERP suites that thrive within more complex organisms. Comparative advantage will also go to those user organizations that move beyond one-size-fits-all ERP. And comparative advantage will also go to those alternative providers (like the ones speaking at Sapience2009) who seek to evolve ERP rather than replace it.