How The Past Is Coming Back To Haunt Your Digital Transformation Initiative
Digital Transformation – The past coming back to haunt us is a common theme in literature. Tales of fiction can explain a fundamental truth about business technology: What we did in the past has the power to determine our present and future. As is the case in gothic tales like Edgar Allan Poe’s “The Tell-Tale Heart,” when we try to bury the past instead of going back to make it right, it resurfaces when it is least convenient.
As businesses around the globe seek to transform and embrace disruptive technologies, including artificial intelligence (AI), the internet of things (IoT) and augmented/virtual reality (AR/VR), the past shortcuts and half measures of the business technology industry will reveal themselves. It is time for the software industry to make these things right and clear the path for their customers’ digital business transformation.
The ERP Graveyard
In business software and technology, the past 20 years have been characterized by extensive merger and acquisition activity. Industry insider Ned Lily even kept an ERP Graveyard scorecard to track who had acquired various enterprise resource planning (ERP) companies.
Over many of those years, I was with Microsoft, having come to the company through their acquisition of Navision in 2002. At Microsoft, I was intimately involved in rationalizing software acquisitions, including Solomon, Damgaard/Axapta, Great Plains and various customer relationship management (CRM) products.
But the same thing has been happening at other enterprise software vendors, including Oracle, with their acquisition of PeopleSoft and J.D. Edwards and, more recently, NetSuite, Taleo and Hyperion. Even SAP has collected its share of acquired products, including SuccessFactors for human capital management (HCM), Hybris for web channel experience, Ariba for procurement, Concur for expense management and TopManage, which would later become SAP Business One.
My company, IFS, has also been acquiring other software companies. Our recent acquisitions include field service management vendor Astea, aviation maintenance company Mxi, field service management provider Metrix, and AI customer experience vendor MPL Systems. Additionally, software-as-a-service (SaaS) ERP vendor Acumatica has become IFS’s sister company under our parent, EQT’s, banner.
You can argue that one software company’s acquisitions are better rationalized or more strategic than another’s. But if our industry wants to facilitate customers’ digital transformation journey, it must make the investments necessary to make it right — and provide a pure-play, consistent architecture despite past acquisitions.
The Past Is Not Forgotten
While these acquisitions fade into distant memories, the software products that came in the acquisitions refuse to be forgotten so easily. Companies intent on digital transformation will find that their software is like Frankenstein’s monster: A sum of cobbled-together spare parts that will be unearthed as they try to evolve their organizations toward digital transformation.
Why is this so problematic? While technologies like AI, IoT and AR/VR are currently featured in certain parts of software suites, true disruption will require that they permeate the enterprise. In the current paradigm, this would need to cut across several different product architectures and data structures. Software providers would have to make significant investments in not one, but many technology stacks and functional sets or risk orphaning these products and the customers running them.
Companies that thought they had a unified application suite will find they are, in fact, running multiple software products behind a common interface — an unpleasant surprise for the technologists charged with achieving their company’s digital transformation goals.
Making It Right
Some software companies have made attempts to unify their various products with mixed results. Most notably, in 2005, Oracle announced its planned 2007 launch of Fusion, a unified product suite that would combine its acquired ERP products on a single platform. What they eventually developed was a middleware offering and some net-new applications, which should indicate exactly how hard a task the enterprise software industry has before them.
Other software companies, including SAP and Infor Global Solutions, have obscured their fragmented product portfolio behind a single interface. But the underlying technology and data structures are all different, which again will come back to haunt companies that rely on these products as they try to significantly evolve their business.
I am convinced that in 2020 and beyond, companies will look increasingly to their software providers to truly give them that consistent technology environment and eliminate the deadwood of years of acquisitions. Not only can this improve the user experience, but also it can deliver the structural predictability bots, AI cognitive services and the other automation technologies needed to evolve the business on a foundational level.
Companies intent on digital transformation will either receive the support they need from their software partner or will find themselves following their software vendors into the ERP graveyard.
This article originally appeared on forbes.com To read the full article and see the images, click here.
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