Rutger Heijmerikx

Simple: Commodity is not evil!

These days we have to handle a big daily lump of ‘buzzwords’: In Memory Computing, Everything Cloud and Internet of Things just to name a few. A lot of organizations are wondering how they ever going to live up to the expectations of their customers, partners and other important stakeholders. Their landscapes aren’t ready, their budgets aren’t sufficient and the skillsets of people are lacking the right components.

First things first: where to start? McCoy’s Road to Simplicity is the guide for a lot of companies to become ready and we’ll discuss one of the steps in that roadmap in this blog.

To be ready for the future, we have to make sure that the core is stable and forms a true foundation for innovation. That doesn’t mean we have to actually innovate within the core. Au contraire: it might be a good idea to reduce the core to a set of standard and stable building blocks and processes!

How to get there? The Pace Layered Architecture framework might be helpful. In recent conversations with a global manufacturing company we talked about how the framework helped them to decide which systems, processes and organizational units had to be placed in a certain context or ‘layer’. 

Several applications residing in SAP systems were placed in the so called ‘System of Record’ layer. In this layer the focus is on highly standardized best practice processes, implemented in a standard system. The business should be able to run efficiently, with as little disruptions as possible. The systems provide the base for implementing core processes like finance and supply chain. Preferably these processes are highly commoditized with as little exceptions on best practices as possible. It should just work! Simple.

Specific special company specific processes, services and capabilities are plotted into the layer ‘Systems of Differentiation’, while true innovation and possibilities to distinguish yourself to stand out compared to competitors, peer groups and markets are usually very high paced projects and could be done in the layer ‘Systems of Innovation’. Here you might want to touch some of the earlier mentioned ‘buzzwords’ in the first few lines of this blog.

At the company mentioned earlier they have defined a very clear starting point and a realistic project plan. They started at the core of the company: mapping the business strategy and organizational model, defining the target operating model and determining the SAP ERP and market best practices to be implemented. They have designed their own Road to Simplicity, so to say.

The first step is done fast, but also well thought out by getting help from our experienced team that can advise on these best practices in global manufacturing companies. Advising on Enterprise Structure, determining the principles for Best in Finance within the company and defining a future SAP Solution Roadmap are some of the helpful insights provided. When this first step is finished, a verified template will be available and the next step will be designing and implementing the set of standardized processes into the system.

Best of all: this will all be done in their existing SAP-system, so this is a true example of a Simplification track with the preferred brownfield approach. Back to standards and if possible a return to commoditized processes will help them innovate at the front of their customer facing business units. Simplify to be ready for the future, as the future is very close.