The IT of the past

October 14th, 2006 Robert Bosman

If you do what you always did,
you will get what you always got.

In theory ‘Enterprise Resource Planning systems (ERPs) integrate (or attempt to integrate) all data and processes of an organization into a single unified system’ (source Wikipedia). The proverb ‘attempt to’ is a good indication of the problems of the ERP applications of our time, like SAP’s, Oracle’s and Micorsoft’s Dynamics.

‘Traditional ERP applications are so complex and so hard to manipulate, particularly at the user end, that they often have locked companies into processes. Although they make those processes more efficient, they also make it harder to react in many cases to changes in the environment, changes in competition, and changes in markets. Those traditional enterprise applications are still a little bit the IT of the past.’ These are the words of Nicholas Carr, author of Harvard Business Review article IT Doesn’t Matter and the 2004 book Does IT Matter? in a recent article in Business Week.

The IT of the past… Those words are essential in understanding the essence of the problem. Of course ERP software is a tremendously important asset in a lot of todays businesses. But the underlying architecture of all ERP software is that of the past century, the age of very limited (and expensive) disk storage capacity, processor speed and line speed. That limitation was the main reason behind the ‘island automation appraoch’ that was used by every software developper: create separate solutions for each process and whenever possible make integrators to bridge most of the information islands. In organisations HRM software, CRM systems, Accounting software etc were almost separate kingdoms and that is even the case today in millions of companies, institutions and governments. Moreover, each organization is an island for any other organization; and only a very, very small percentages of all information that could be shared easily with todays technology, is actually shared automaticcaly. A new global product, the new iPod for example, will be typed into thousands, no millions of backoffice systems manually; are we really in the 21st century?

In 2006 one can buy about 7.500 times as much disk storage and about 60 times as much processor speed for the same money as 15 years ago. And the speed of ‘backbone traffic’, the speed at the very heart of the internet, is about 20.000 time as fast as only 10 years ago. (see the recent article ‘The Information Factories’ by George Glider).

Such tremendous increases in technical performance offer the opportunity to create a whole new way of organizing. A way where shared information will replace the island approach and co-creation will shake up the traditional labour division and change The Future of Work (see also Prof. Thomas Malones book with that title). Upto now Web 2.0 is most about social networks for people. But the new web will also revolutionize the way all companies, institutions and governments will be organized; on the go thousends of nowadays unthinkable new webservices will arise. The big IT companies have the advantage of money, talent and customers; but they also have the burden of a hugh installed base, that decreases the speed of innovation.

So, the IT of the past is loosing it’s power. New IT, web IT, is on the rise. Anyone who thinks the new IT is just the old one in an different disguise, will loose the game, sooner or later. The most essential difference will be the new Service Oriented Architecture of Participation (SOA-P), that is not yet finished but is the main subject of innovation. It’s certain that human, corporate and governmental relations are at the core of SOA-P, so Universal Relation Management will become more important by the day.

Technorati Tags: web 2.0, URM, CRM, HRM, ERP, architecture of participation, SOA, SOA-P, co-creation, society, practosophy

Entry Filed under: Internet 4.0, Society 4.0