Re-envision ERP's with Industry 4.0 Solutions...by Greg L Towne
The Problem with current ERP approaches
Focus on Incremental Optimisation
Existing Enterprises and ERP (Enterprise Resource Planning) Vendors have focused on plugging new technology into old business models with the hope of enhancing those models (mostly just filling gaps) with smarter tools and more data, namely taking a perceived Optimisation approach to current models. Making old models work better becomes just a lock in to already sub-optimal outcomes; especially when new technologies are enabling all-new models that render the old ones obsolete. In fact, so obsolete that the new models become a complete paradigm shift with an Order-of-magnitude ROI (Return on Investment).
The evolution of outcomes from the ERP world has been extremely slow over the past two decades; in that
Outcomes tend to offer little ROI for the investment required
ERP Transformations can drag on for years with NO measurable impact or capability to make valid assessments of value
Industry and stakeholder expectations are dynamic and changing rapidly
Regulatory Compliance and Process Safety are adding to the complexity
There has been a lack of new innovative capability from ERP Vendors as they continue to build monolithic structures that are costly to maintain
There is acceptance that the ERP design focus is still on feature/function and activity/task, instead of business process outcomes
“Continuing to put lipstick on a pig will FAIL - This problem needs to be re-envisioned NOW before it becomes a Lock-in!”
The Impact of Complex Systems and Data
Industry 4.0 Solutions require robust data integrity e.g. the blending of diverse time and series data for more complete outcomes driven by prognostics rather than a single focus predictive analytic. Modern business problems and related assumptions underlie the complexity of systems and their data requirements; which if not provided for, shall result in mischaracterisation of the causes and consequences of large-scale or multi-scale analysis and behaviours that are part and parcel of a business framework in today’s business environment.
Old feature/function systems can no longer provide the capability, nor the science, nor the scale to resolve how internal and external business components now relate to each other. We also need to more accurately measure data quality in order to provide and protect data-driven decision making.
Hence, trade-offs in efficiency or adaptability or required data structures shall now be difficult to justify!
“It is sufficed to say, we need to walk straight by optimisation of existing models and build ‘extended’ capability in order to meet today’s business requirements.”
Environment Integration and Interoperability
There is no ideal scale at which a system should possess extended capability and complexity; rather, the most effective systems are those that, at each scale, match the capability and complexity required of their environments.
The Next Generation business systems need to encompass levels of connectivity never before experienced; in that large, complex integration efforts provided by current off-the-shelf ESB platforms need to also become process-interoperable in order to maximise the outcomes inherent with Industry 4.0 solutions.
The business integration and interoperability landscape will need to look outside existing processes/procedures/activities/work practices and be cognisant of
Understanding our Customer’s total business (Internal and external)
Staying abreast of industry and regulatory influences and impacts
Engaging and working with the Customer’s scarce resources and helping them on this new journey
Identifying where Quick Wins can be gained and how to Extend business utility in a manageable manner over time without impacting core business
Provide technology e.g. IoT and methods, to support Customer’s focus on the complexities of their core business
Diriger’s Approach to Industry 4.0
Following many years of developing, implementing and improving ERP environments across major asset intensive industries in various corners of the globe, we have been able to shape the next generation industry solutions via an extension of McKinsey’s Data Insights Value Chain concept. We have coupled this with our own Digital Intelligence Ecosystem and business to business integration platform.
About the Author...
Greg Towne is a Co-Founder of Diriger with 35+ years of experience implementing Enterprise Resource Planning solutions and Business Process Improvement Initiatives in Mining, Utilities, Energy and Defence industries. He is dedicated to working closely with our Customer’s in order to help them solve the BIG problems that have been in play for far too many years.