R.I.P. E.R.P.

The “Bitcoined” Enterprise

Digital Transformation will kill ERP. It is a strong statement but at this time nothing is more certain than change. When giant corporations are created from a basement in San Francisco or a student hall at Harvard, it is not hard to question the future of an application. If Digital Transformation can “disintegrate” enterprises why could not destroy a concept?

Industrial Age x Digital Age

In his excellent text “Old ERP is way past its “Best When Used By” date”, Brian Sommer provokes: “like Monty Python’s Norwegian Blue Parrot, no amount of talking or nailing the poor thing to its perch is going to make it come back to life. Call the funeral home and write the obituary.” In a second text he details his thoughts hitting the heart of ERP structure. Cost Accounting belongs, in his opinion, to the Industrial Era and it teaches people how to determine if any production, cost, scrap or other variances were incurred in the production of an item but this is not relevant if your product is data and “the digital age urgently needs a new cost accounting model.”

“It’s time to put the old ERP solutions out to pasture. It doesn’t many millions or billions your firm spent implementing its ERP system(s), they’re just not relevant anymore”

Brian Sommer

Corroborating with this requiem Gartner says that “the concept of a single ERP suite that meets all of an enterprise’s needs is dead, and has been replaced by a hybrid ERP approach that combines cloud point solutions with a smaller “core” of on-premises ERP function, such as financials and manufacturings. For them “as alternatives to monolithic, on-premises ERP and enterprise applications continue to mature, CIOs and application leaders must take action to address the fast-approaching reality of “legacy ERP”.

Digital Transformation

Enterprise Resource Planning through the ages

Blockchain: The Day After

Forget about ERP and the way we run enterprises for years. Despite technological changes, everything is kept in a book. The book of transactions called general ledger. Payable, receivables, cash flow, fixed assets and purchasing. Why? In a simple sentence? Because we need to know if we can take money home! And does not matter if is a small-one-owner or a large shared public company. It is the same. But if there is not a centralised book? We need to know if we can take the money home still. But if there is no money?

Napsterisation of Everything!

It was 1999 when I heard this for the first time. Dr. Richard Barbrook, my master thesis advisor and cyber-anarchist, was spreading the news: Internet, as was invented by the US military (ARPANET), was the greatest irony of the Cold War. At the height of the struggle against Stalinist communism, it unwittingly bankrolled the creation of cyber-communism. Dr. Barbrook, funnily portrayed here by The Sun and the man behind Jeremy Corbyn’s Digital Democracy Manifesto, assumed that “intellectual property was technically and socially obsolete in The High-Tech Gift Economy”.

The case for (re)decentralising the Internet

“But whose Internet? The ultimate decentralised network has progressively devolved into an array of gargantuan-sized stacks, where the utilities of our 21st century (communication, reputation, payment processing) are run by monolithic companies…”. “The 1990’s virtual frontier heralding a new era of self governance, is not moribund: it’s dead.”

Stephan Tual, founder of the world’s first blockchain consultancy, asked the above question but did not let us behind. In his text he is talking about “Economy of Things”, IBM, where is possible to extract value from the Internet of Things with direct communication between devices without a central database. It has a huge disruptive potential and he calls for a (re)decentralisation via blockchain. In other text he talks about “The End of Big Data” (!) where instead of sending data back to the centralised mothership for processing and targeting, information would be kept where it belongs: within itself, in your home, encrypted, accessible to no one but its owner.

Blockchaining the world

Could we decentralise, finally, the book of transactions creating a “napsterised” general ledger? Is it possible via Blockchain? First, lets see what is blockchain and IBM has a good way to explain it:

“It is a technology for a new generation of transactional applications that establishes trust, accountability and transparency while streamlining business processes. It is a design pattern made famous by bitcoin — the reason I used in this text — but its application go far beyond. With it, we can re-imagine the world’s most fundamental business interactions and open the door to invent new styles of digital interactions. It has the potential to vastly reduce the cost and complexity of cross-enterprise business processes. The distributed ledger makes it easier to create cost-efficient business networks where virtually anything of value can be tracked and traded — without requiring a central point of control.”

Developing Applications

Applications can be developed using blockchain technology as Ethereum, a decentralized platform where applications run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.

To be continued…

Next: How would be an enterprise application? How is possible an enterprise without money? What would be the social impacts of a world without money?