ERP: Outside In

So this is how it starts. Here you have a guy with absolutely no ERP or application experience, co-writing a blog about ERP applications. It′s great!

First off, let me introduce the blog—welcome to A², the Workday blog co-written by Aneel Bhusri (who does know a thing or two about the applications world) and myself, Annrai O′Toole. I have spent the last 20 years of my professional career exclusively involved in middleware and distributed computing. We′re hoping to use this blog to share a few thoughts (and maybe provoke a few) on the state of the applications industry. We hope these are entertaining and useful. So without further ado, let′s dig in …

This quote from Albert Einstein seems an appropriate phrase to get going on. Here at Workday, we are undertaking the substantial task of remaking the ERP world. This may sound audacious, but it seems a fair reflection of what′s going inside the company. Clearly, we are providing an On-Demand solution, which has the large and obvious benefit that our customers don′t have to install our software on their premises. However, if all we end up doing is re-inventing the same old ERP applications with the same old relational database architecture then we′re not really addressing the problem. We don′t simply want to “multi-tenant” an old ERP application. Just doing that we′d just be using old thinking to solve new problems.

So, what are some of these new problems?

1. No application is an island: The last wave of ERP has proven that. There is just no way any single company can provide all the application functionality you want in one package — no matter how many companies they acquire.
2. Change is constant: ERP applications need to be better able to respond to that change. Ask any customer of a traditional ERP application and they will attest to the fact that changing them is damn hard. Too damn hard.

For the purpose of this article, I′m just going to take on issue number 1.

Here at Workday we are putting integration technologies in the heart of our application. Want to know exactly what we mean by that? We′ll let′s look at a recent announcement from a brand new customer, Flextronics. There are many reasons why Flextronics chose Workday, probably top of them is that they believed that a partnership with with us would not only be good business but a lot of fun too. However, in the 3rd paragraph of the above article David Smoley talks about one of specific reasons they chose Workday: he tells us it was because of “Integrations”. One of the things that we build with our Integrations is a “Network” of connections to third party applications. In this specific case, it is a set of integrations that we built (and maintain) to healthcare benefit providers like United Healthcare.

But step back a second and think about what is going on here. One of the key features for Flextronics is not a feature that we built ourselves—it′s a feature we integrate with. But the great thing from the customer point of view is that they can′t tell the difference. A feature is a feature, whether it exists in “our Cloud” or in someone else′s “Cloud”. When we first joined Workday from Cape Clear, the vision was to blur the line between what′s an “Integration” and what′s an “Application”. This quote from a great customer is testament to how successful we′ve been in making that a reality.

But we′ve only started. One of the profound things that happens when you put integration into the heart of the application architecture is that you start to see things from a very “outside-in” perspective. The traditional ERP worldview is that everything is siloed. HR apps live in one silo, financial apps live in other silo and the integrations are in yet another silo. At Workday, we see all these things as part of a cohesive whole: applications and integrations share the same world; they are the yin and yang of a new application architecture. David Smoley′s remark above tells me that what customers want is not an application island, rather they want an application network. We are now at the point where the underlying technology in Web Services has matured enough where this is a reality. Today in Workday we are delivering over 20 pre-built integrations to 3rd parties in our application network. We believe that this will be closer to 100 within 12 months.

Another key feature we want to offer our customers is a whole new way of integrating between their existing on-premise applications and all the information that lives in the application network. By solving this problem in a new way we can make a massive contribution towards solving the second of the big problems we list above: how to enable constant change, even change on-demand!

However, for that piece of wisdom from the non-ERP guy, you′re going to have to wait for the next installment. Hopefully, this piece was useful and gets you thinking that there is more to On Demand ERP than simply being “multi-tenanted”. To really change ERP, we need to think in a very different way. If you have comments on this, then please join the conversation.

This post was updated February 20, 2018.