Workday: End of ERP or Just Well-Timed Hype?

Ann All

Just about every major software application suffers from a period of widespread user dissatisfaction. Heck, the phenomenon is so common that Gartner even has a name for it: the trough of disillusionment (one of five stages in its "hype cycle").


In theory, the two stages following the trough of disillusionment are the slope of enlightenment and plateau of productivity. But do all apps advance to these stages, or do some remain mired in the trough?


While lots of companies use ERP, plenty of them struggle with its cost and complexity, notes ZDNet blogger Dennis Howlett. ERP took a hard hit recently, in an MIT Sloan Management Review article cited by Howlett.


The article's author, Cynthia Rettig, describes "massive programs, with millions of lines of code, thousands of installation options and countless interrelated pieces." These systems "introduced new levels of complexity, often without eliminating the older systems (known as 'legacy' systems) they were designed to replace."


In fact, we blogged recently about a guy who suggested that a whiteboard, markers, eraser, Webcam and copy of Quickbooks make a perfectly acceptable substitute for an ERP system for SMBs -- and some larger businesses, as well.


ERP implementations are so complicated and expensive, Rettig points out, that simply completing one is seen as a success without any corroborating productivity gains. She writes:

It seems that ERPs, which had looked like the true path to revolutionary business process reengineering, introduced so many complex, difficult technical and business issues that just making it to the finish line with one's shirt on was considered a win.

In the midst of all of this disillusionment comes software that some folks are touting as "the end of ERP." Though Nick Carr qualifies that statement with a question mark, he does position the forthcoming product introduction as "the Shootout at Enterprise Gulch."


Its creator is Dave Duffield, who as the founder of PeopleSoft was one of the original architects of ERP. Duffield's new company, Workday, is introducing a lineup of software-as-a-software applications that it believes can unseat ERP -- if not in companies already using ERP, in those about to adopt it for the first time.


Workday's target market, reports Computerworld, is midmarket companies with 1,000 to 5,000 employees and revenues of $200 million to $1 billion. Some 25 percent of such companies are looking to implement ERP in the next year, says AMI-Partners.


Workday customers already using the human resources software the company introduced last year include SaaS darlings Salesforce.com and RightNow Technologies. Earlier this week, Workday rolled out beta versions of the financial and supply chain apps that, in theory, could replace ERP.


Somewhat radically, Workday abandons the traditional relational database management model for an object management system. It utilizes the Web 2.0 concept of tagging to help users search for and link their ERP data, Computerworld adds.


At least one developer, blogging in Knowledge Forward, likes the object-oriented approach. Building on some of the points made by Rettig in her MIT Sloan Management Review article, he notes that "it is difficult for designers working with a RDBMS-enabled system to think of new ways to synthesize and connect data that are not supported in their RDBMS model."


Even if Workday isn't a success, blogs Carr, it at least shows "the outlines of the post-ERP era of enterprise computing." Carr notes that ERP heavy SAP is reportedly adopting a Web-based approach similar to Workday in a revamp of its software.


Throwing a little cold water on this idea in the Manticore blog, a South African blogger says that unlike developers, CFOs and other executives aren't going to be impressed by this "ain't it cool" technology. And Duffield's marquee name alone won't be enough to ensure Workday is a success, he says, noting that a number of high-tech hotshots have failed to repeat their original successes.

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Add Comment      Leave a comment on this blog post
Aug 29, 2007 8:42 AM James Noblitt James Noblitt  says:
ERP (Enterprise Resource Planning) is an integrated set of enterprise-wide business processes enabled by applications software. Just because the software technology and architecture changes, it's still just ERP; that is, an enterprise-wide system. Workday may very well work better, work faster, be built around newer and better processes, and do more; it is still just ERP. Therefore, Workday will not replace ERP; it will just replace current ERP technology. It won't necessarily be any easier to implement either, especially in an organization with poor processes. That is unless Workday is going to create a new ERP that supports poor, un-integrated, and illogical business processes. Many companies fail in their ERP efforts simply because their operations and processes are a shambles and they are unwilling to change them. Hence, no ERP, even Workday, will be able to benefit such an organization.Rumors of ERPs death seem to be exaggerated. ERP may be about to enter a new generation, maybe even an improved generation but it is still just ERP. Reply
Aug 29, 2007 9:02 AM Sean Culey Sean Culey  says:
I must agree with James' comments - Workday is simply another tool - and there are enough tools in the marketplace today. The problem stems when businesses see a tool as being a panacea or silver bullet for all their ills - a situation that is not helped by the multitude of consultancies that make their money implementing ERP solutions and being paid on the basis of whether it went live or not, and not whether it delivered the benefits the original business case promised.At the end of the day ERP customers reach the "trough of disillusionment" because they haven't addressed the underlying business issues at the root of the problem; poor and illogical processes, untrained or ineffective people, the wrong measures and metrics and more often a complete lack of understanding of the integrated nature of the solution and the required process and data conformance required to deliver quality information into the hands of the decision makers. An ERP implementation, be it SAP or Workday, that simply replaces a legacy system and doesn't involve a change of processes or behaviours will always get the same, disappointing results.Articles like this actually do not help the situation because they support an ideology that the problem is not the processes, strategy, people or quality of the data - it's the fact that the business has the wrong tool. And replacing a tool is always easier than changing minds and behaviours, and thus the business is willing to accept this as the answer, only to be disappointed once again. Reply
Aug 29, 2007 9:06 AM Patrick Patrick  says:
The idea of object oriented, on-demand software as a replacement for the current crop of ERP software is not new. My company, Plexus Systems (www.plex.com), has been offering it to manufacturers since 2001, and we've posted phenomenal growth during this time - and we didn't even have sales and marketing departments until recently! We combine an agile development methodology (RAD) with the SaaS model, and it's an amazing difference - companies deploying in a few weeks or a few months, rather than a few years, and they're running their entire business on the system, shop floor to top floor. Reply
Aug 29, 2007 9:19 AM Raghu Kowshik Raghu Kowshik  says:
IT was touted as the enabler of Business Process Reengineering (BPR). BPR got a bad wrap because it "delivered" work-force-reduction more than anything for whetever reason. At some point ERP was seen as a facilitator of BPR. When BPR got a bat wrap ERP distanced itself from the other TLA (three letter acronym). ERP has so far managed to stay in organizations.Outsourcing has also been seen as another dimension to BPR. Outsourcing is seen as an enabler of BPR in many instances.How will "Workday" and Outsourcing affect global organizations? This will be an interesting development.Today manufacturing outsourcing has become OEM's competitive strategy. The EMS (Electronics Manufacturing Service Provider) companies are playing a big part in this strategy. The EMS companies are focusing on speed and flexibility (along with low cost manufacturing) as their competitive strength. Instead of implementing one ERP system globally, the "Workday" technology offers them the ability to build solutions quickly to meet the custoer specific needs. In other words, "Workday" helps the EMS companies offer the speed and flexibility of a small company whiule at the same time offering the economies of scale of a large global company. Reply
Aug 29, 2007 9:44 AM Steven Steven  says:
Please another article by those who have no real problem or business solution experience. I can certainly speak to the formal knowledge cycles we have gone through over the last thirty years and the technology that has followed slighly behind. Each one an opportunity for a CIO or CFO to slightly grasp the edges of a new concept taught currently (BSC) in management schools or Technology seminars and to think that this will become their legacy and the perfect competitive advantage, all of it to be found in a box or in today newold idea - strategic outsourcing of non-core competancies. As others have already suggested whether the CRM world, DAM world, or ERP world, or the SOX world it is important to understand what your corecritical processes are and establish a Business Architecture that can be passed on and aTechnical Architecture that supports the business objective (If even your strategic business units have on). What ever the solution establish who you are and why you are doing it, kiss it with monitoring and actionable controls truly understand what a cost benefit is because undertaking any foolish trend in business is going to distract you from what you think your solving, performing your core competancy! Reply
Aug 29, 2007 12:47 PM Rich Rich  says:
I have to say, the responses to your article serve to underscore the essential problem....unnecessary complexity. For example, appears one respondent was on an ERP project team that got more than a bit frustrated with quite a few things, to include: "...poor and illogical processes, untrained or ineffective people, wrong measures and metrics ... complete lack of understanding of the integrated nature of the solution .... required process ... data conformance required to deliver quality information into the hands of the decision makers. "I believe what everyone yearns for (and profits from) is a chance to get back to the basics.....NOT more technology, more reengineering, more data, more integration, more controls, more metrics, more acronyms, more tools, more emails, more meetings. As hard as eveyone has tried, more complexity just does not work, and truth be known it is not necessary. "Simplicity is the essence of sophistication." If tools like WorkDay give us a chance to simplify, I'm all for it! Reply
Aug 29, 2007 1:30 PM Dennis Howlett Dennis Howlett  says:
I must say I find the majority of these arguments tired and uninspiring. Have any of the naysayers actually called up Workday to find out what they're about? Have they looked at the solution? Have they seen any of the videos the company has prepared or attended any of the seminars where Workday executives have spoken? Reply
Aug 30, 2007 9:16 AM vallabh vallabh  says:
It is probably incorrect to say that ERP has failed to deliver. Over a period of time, far too many players came on the scene and the customer is spoilt for choice. There is a mind-blowing choice, be it in terms of one's budgets, product features or technology. So, its hardly surprising that a new buyer is left befuddled- it is really tough to decide. So, they go for beauty parades. But, at the end of the day, a customer makes up his mind, in most cases, only after he gets absolute certainty that the product supports his current or planned business processes. The real chasm appears during implementation, where the average customer's inability to aprreciate the need to allow sufficient time for the consultants to understand their processes well, build good prototypes and also be able to nominate clear-headed staff from their side to help with the implementation. And in most cases, it is a case of 'bad implementations' getting projected as' bad products'. The business processes, if documented correctly, can get complex even in small businesses. It is only natural that your ERP implementation gets complex. The mistake of over-customisation also makes the implementations difficult to complete and maintain. Upgrades will be much easier and smoother if your ERP has fewer customisation. The bottomline is: ERP is a business necessity and should be considered during the early stages of starting a new business, so the system grows in sync with the processes. The real fruits of implementing an ERP would be realised only when the next logical step of data warehousing/BI is taken, which helps the business to be understood from several perspectives ('dimensions'). Most ERP customers do not go thus far and then pine that ERP didn't deliver.Staff reduction or even significant cost reduction, is not a promise of ERP - but, efficiency is; productivity is;better-informed management decisions are. You would certainly need good folks to make sure that the critical backbone of business is in fine shape. Reply
Aug 30, 2007 11:56 AM Sanya O. Dehinde Sanya O. Dehinde  says:
I am currently researching quantifiable "ERP- gains in the private sector (if any) and how best to extrapolate this to the public sector. One of the factors that certainly spurred ERP growth was the fact that it takes care of basic integration. Simple daily exercises now taken for granted in every day business life like single (rather than duplicated) data entry were first systematically addressed by ERP systems . Many firms taking on ERP systems started off at this point and new most new entrants will also be in the same position. Beyond basic integration however, the options have always varied for organizations. There will be no "ultimate" ERP systems or any "over hyped" replacement. The mantra as repeated in other comments is process, process and process. Whatever technology will enable businesses to align their strategy, goals and business processes better will always win out in the end. Reply
Aug 30, 2007 2:54 PM The Livebase project The Livebase project  says:
Re-discovering the value of data over processes Our vision, from the small-business perspective, is that it's important to re-discover the importance of data. Processes change, business functions change, workflows change, organization breakdown structures change: if you try to heavily automate thes... Reply
Aug 30, 2007 4:02 PM saya saya  says:
ERP yang mana nih? Tolok ukurnya apa? Tidak jelas nih pembahasannya Reply
Aug 30, 2007 5:58 PM Shadrack Mwaniki Shadrack Mwaniki  says:
Many ERP systems are great and have the potential to offer good returns for money.However, the major challege with ERP systems has been poor, hasty, unfocussed and forced implementations.Majority of the ERP systems implementors lack the Technical, projcet and Business skills required to carry out an ERP implementationAny organisation hoping to implement an ERP system must first undertake a BPR (Business Process Re-engineering)The above two issues have led to ERP implementations that are tailored to fit into rendundant, wasteful, ineffective, desdaint and inefficient business processes further aggravating user frustrations.We amy replace ERP systems with any other systems; but as long as the skills and BPR are not addressed, user frastrations will persist! Reply
Aug 30, 2007 7:16 PM Masood Badri Masood Badri  says:
We are a government organization. We just started implementing ERP. After reading this article, now I could say that I am getting more confused by the day whether we have chosen the right product! Reply
Aug 30, 2007 7:20 PM Fran�ois Camus Fran�ois Camus  says:
I strongly agree with the first comments made by James and Patrick. They are reflecting the hard learned lessons of every electronic information system implementation since the beginning of electronic information technology. I would had the importance of proper project scoping and project management.The insistence on understanding, clarifying and reengineering processes, and the insistence on clean & useful data reminds me of a user's definition of LAN and WAN technologies: Largely Automate Nonsense and Widely Automated Nonsense, which is what you get when you don't do things properly.Common trends of all new technologies in the history of information technology are the hype generated by technology inventors and early adopters, the promises of ease of implementation, the promises of great payoffs, the proclamations that the old technology is dead, and people believing the hype and promises.Here are a few examples. The creators of the first vacuum tube mainframes thought that only four super computers (the ones that used vacuum tubes) would be enough to manage all of Americas accounting. Bill Gates thought that home users would never need more than 1MB of RAM and 10MB hard drives. there were also the promises of structured programming, 4GL langages, object oriented programming, integrated accounting packages, MRP, ERP, GUI's and Windows, etc. All had their promises. They all brought significant improvements, usually more slowly than proclaimed, none of them delivered all their promises and none of them was as easy and cheap to implement.People just like to believe in quick, easy and cheap fixes and miracles. There is just a refusal to recognize that the world is complex, that humans have limitations in understanding that complexity, and that large scale change is never easy. Easier maybe, but never truly easy. Reply
Aug 30, 2007 7:47 PM VIG Menon VIG Menon  says:
It was the time when ERP first landed in India about ten years ago, I wanted to play a role in in it.There was SAP first, soon there was a plethora of local options.As a consultant ,my job was to evaluate and recommend a good ERP to my clients and to my dismay I found very few that would really solve the Clients businesss problems.And it did not take me too long to realise the problems ahead.Mainly I found where a Customer needed a "flower" you have to buy ,not the entire tree, nay, not alone THE WHOLE JUNGLE,you had to buy the JUNGLE KEEPERS too in the form of trainers !!.This hiked up the cost of operations ,implementation ,migration and maintenance and so on DEFEATING THE ORIGINAL PURPOSE OF COST REDUCTION.And to add to my disillusionment in some sectors,eg Educational Institutions, the solutions a vailable mencingly look like a "CANCER",growing at the cost of the host!!.Perhaps Enterprise Resource Planning Softwares need a better strategy and customer focus."Slimmer,Faster and Smarter " may help. Reply
Sep 2, 2007 2:59 PM Sean Culey Sean Culey  says:
There is enough technology ERP in its fullest scope contains more functionality than the average organisation can handle in the next ten years if it poured all of its available manpower into it.And most of it, if done properly, will bring enormous business benefit and increased value.I feel qualified enough to state this having worked over the last 15 years on four different continents on 13 different full-lifecycle ERP implementations, and through my current company am helping many more achieve true value from their existing ERP and people investments.I also very much look forward in the future to helping companys that are at the trough of disillusionment over their Workday implementation as well, when they realise that all of the promises that Workday offered did not materialise just by buying the software and implementing it.Regardless of the where it puts the accounting functionality. Reply

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