Posted by: A.R. Cherian | February 11, 2010

The Trouble with Enterprise Software

The title of this post comes directly from an article written by Cynthia Rettig in the MIT Sloan Management Review (Fall 2007, Vol. 29 No. 1). PDF copy here.

She argues that enterprise software has become too complex. The hope that it would solve a lot of the complexity and remove a lot of the legacy systems operating in companies today has not played out well. In fact, corporations are running intensely complicated enterprise software nowadays often patched with legacy systems. She quotes studies that show 70% – 80% of IT budgets are spent just trying to keep existing systems running. Management became used to the idea that buying more and more hardware and software would help them cut costs and improve operations. That is also the tag-line sold by a lot of systems vendors.

She also disparages ERP systems for their complexity and cookie-cutter processes and writes that the infatuation with SOA as a cure-all is also misplaced. I agree that the concept of SOA (sold as “lego-blocks” of interchangeable code) is very enticing. Why reinvent the wheel every time your company needs software for a specific process that has been addressed somewhere else? However, as she points out software is nothing like lego blocks. The inherent complexity and functionality required of software does not make for clean interfaces with many of the systems in most companies.

What is her solution? Nothing very detailed or concrete but she says that executives need to understand IT issues. They should be willing to hear the downsides of technology instead of buying into the hype sold by vendors. She also recommends business schools to create courses designed to show the interdependence of IT and business functions.

I like the article in that it offers a differing viewpoint on enterprise software. So often I read articles in trade journals or business journals that claim that ERP or SOA or any other host of acronymns will be a cure-all for companies. You hardly read about the potential downfalls. I also like the fact that the Sloan Review included other authors and experts who wrote responses to Ms. Rettig’s article. I don’t know if Sloan does it for all their articles, but it was refreshing to hear what others thought about it (including Nick Carr, author of “IT doesn’t matter”).

Good article. Read it if you have the time. Don’t believe all the hype. Investigate claims and do lots of research before investing heavily in enterprise software solutions.

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