From twitter I got an update from sig tipping about his new blog post on how SAP is missing its biggest opportunity. Reading and commenting on it I was not able to resist. But sadly, the typepad did not publish my comment the first time and couple of other attempts. So here is the full post for the context.
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.
How’s that possible? 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! ;)]
Here is the comment that needs to go with the post:
Is not the big ERP vendors the wrong tree to bark? At least when the market is virgin as you say. Each of the BRP will get addressed by a niche vendor perhaps in SaaS model. For instance, to organize an event( say an unconference) there are several options right from a wiki to some really cool services that handle the messy payments refunds, tour booking along with the event etc.
In time these vendors will offer the bridge to import/export information from/to these niche solutions.
When these services become one too many and fragmented, big vendors will integrate them in their good old ERP and everyone is happy.
The course you are suggesting will commodify ERP more rapidly. Which might shrink growth and profits.
An Aside,when Chris Gay of Milemeter asked about helping develop an accounting package for auto insurance by the mile, I was wondering if thingamy is the way to go. I got muddled while at it. Not able to go beyond the high level match of thingamy and milemeter. Any clues pointers out of the muddle welcome.