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Avoiding the Vortex: Successful Postmodern ERP & Information Management Strategies


Or in other words leveraging both:
Digital Innovation and greater Business Insights = i Squared

Blog by Tim Main – IBM Analytics – Information Management and ERP – Technical Director

24th January 2018

Executive Summary – The challenge facing CxO’s, CIO’s, CTO’s and Chief IT Architects

It is clear businesses across multiple industries are having to manage unprecedented rates of technology change, whilst concurrently having to Innovate to both manage and address new “Digital Platform” challengers and/or adjacent industry competitors.

Where prior physical asset centric “Leverage our global scale and reach” business models are being challenged by asset light digital partner eco systems.

Businesses need to effectively balance global scale and reach with local flexibility, agility whilst still being response to Insight driven innovation and adaptability, in the past this was described this as the “GLOCAL challenge”.

As both senior business leaders (CxO’s) and aligned senior IT Executives (CIO’s, CTO’s, CDO’s, Chief Architects, etc) have to both make and balance complex strategic Digital Innovation and IT Investment priorities, choices and trade off decisions.

Within this context it’s relatively easy to be drawn back towards what would have been considered to be prior safe “major ERP platform” eco system aligned solution investments, we are a SAP shop or an Oracle shop etc.

However, in the practical reality a postmodern ERP and Information enabled age, these prior safe choices can rapidly turn into a storm / sink hole “vortex of IT investment/s”.

Where unless carefully managed they then carry a significant risk diverting finite strategic IT investments away from front office Insight driven digital innovation.

Where these are firmly targeted at customer and channel enabled relationship and revenue growth opportunities that typically generate a faster real rates of return / ROI with a significantly lower “start small prove (or fail fast) and scale fast” risk profile.

If we accept the principle that “Factory IT and “Innovation IT” (Some call this Bimodal IT) naturally operate at very different rates of change, often with different, disparate supporting technology stacks  and architectural building blocks (ABB’s).

Then as a direct consequence Enterprise Clients need to develop both strong and viable Enterprise Application Integration (EAI), DevOps and Information Architecture and Information Management architectures (IA & IM) in parallel.

Let’s call this Dev/Ops plus the “other eAI” and IA + IM for a moment, or indeed the eAI and IA + IM “Twins”  plus the AI/ML Ladder as described below.

We then end up with a Business into IT Strategy construct that could be summarized as follows:

Screen Shot 2018-01-25 at 16.04.00
Figure 1 – Essential Capabilities in a Postmodern ERP environment.

Then within this context we have a framework to prioritize both capability development in critical Digital Innovation (or/or disruption) and information driven insight area’s to help respond challenging business into IT Innovation requirements and that operate at viable rates of change.

Some traditional or hybrid postmodern ERP vendors and their implementation partners (CSI’s) will typically strongly recommend that a re-implementation and simplification of typically deeply customized core ERP (transactional) application template and MRPII planning systems is a prerequisite for effective Digital Innovation in the front office, in addition to relatively tight coupling of “Edge ERP” / SaaS portfolios with the prior Core ERP / SAP NetWeaver functional portfolio’s.

Personally I do not subscribe to this point of view for the following reasons:

  • Whilst essential, typical ERP processes are no longer differentiating capabilities vs simply being “must have, must work, table stakes” whilst needing to be cost efficient and optimized where practical relative to the required effort and/or ROI, not re-engineering one set of ledger structures for AN other.

    A number of Clients I talk to are actually deciding to “Digitally Innovate” around the edge of prior Core ERP Investments in a hub and spoke or 2 tier ERP modelIndeed the DSAG Investment Survey from late 2016 into 2017 was a clear pointer in this respect plus the latest DSAG 2018 Survey that can be found here.

  • We have observed the strong emergence (& acquisition and/or integration) of SaaS based “Edge” complementary ERP providers leveraging SaaS / Cloud native delivery models, examples include:
    • Workday, (HR) NetSuite (ERP), Salesforce.com (CRM+), Anaplan all come to mind..
  • Even for the “Mega ERP” vendors like SAP and/or Oracle, have typically acquired “bolt on” complementary SaaS solutions (for example SuccessFactors, Concur, Fieldglass, Ariba) which are built out on disparate information management and platform architectures.Hence these also depend on effective API/Microservices integration and flexible Information Integration, Management and Governance processes and flows back to a given ERP core.
  • Additionally, when we then examine typical new Dev/Ops and/or Open Sourced enabled front office Digital Innovation and Insight driven workloads.These tend towards being clearly back office “ERP System & Ledger Neutral” and open standards enabled as the majority need to seamlessly integrate with extended eco systems of partners, channels, supply chains. In this case a homogenious ERP+ platform strategy actually then becomes a Digital Innovation inhibitor vs enabler.
    Where one thing is clear in ERP platform terms, these will simply not be uniform or indeed dominated by a single ERP provider; examples include IoT, Blockchain, Extended Collaborative Logistical and Manufacturing 4.0 Supply Chains, Big Data, API Enabled Weather Data etc
  • Typically implementing Modern, Consumable User Interfaces (UI’s) like SAP Fiori vs the prior very network efficient SAP GUI are and/or should not be dependent vs independent of application logic or data platform choices (a layered SAP NetWeaver and/or fundamental SOA design & separation of duties principle).

A number of these topics are discussed in a Gartner Paper (G00311163) “Schrodinger’s Cat: How ERP is both Dead and Alive” Published on the 28th of June 2016.

Which I would recommend as further reading material, also there are a number of papers from Forrester, SAP and other providers that describe 2 Tier ERP strategies and solutions that mostly all revolve around a hybrid strategy of complementary SaaS / ERP / Best of Breed capabilities around an existing deployed, customized and working ERP Core.

Now let’s move on to consider what are the essential strategies and capabilities a typical large Enterprise client needs to develop to be successful in a postmodern ERP environment and information age.

A number of these data management capabilities are described in a “Stretch the three C’s” Context – Culture, Competency and Capability” in a recent Forrester Paper by Brian Hopkins, published on January 10th 2018 – “Stretch Your Data Management Capabilities”

Also I’d recommend the following Blog, by the General Manager of IBM’s Analytics Business, Rob Thomas which uses a motor industry analogy to describe the logical steps and prerequisites that are required to successfully navigate the AI (Artificial Intelligence) and Machine Learning (ML) Ladder.

With a guiding principle being to gain increased business insight, value and/or process automation (or RBA) there is simply put no AI or ML without a clear Information Architecture (AI) and Information Management (IM) strategy, plus a step wise logical approach to developing capabilities and maturity working step wise up the AI/ML maturity ladder.

Hence in terms of a Line of Business and/or IT Executive recommended course of action in this context would or could then be an appropriate combination of:

  1. Avoid being drawn down the complex re-implementation of back office ERP function spiral or Vortex..

    Unless it is a natural time for a complete refresh of your ERP platform / application template and aligned back office business processes vs an “optimize of what you already have strategy”.

  2. Find way to increase the efficiency and optimization of your existing ERP, SAP Business Suite / NetWeaver platform investments to free up IT Investments for:
  3. Increased Front Office, System of Engagement, Insight and Digital Innovation investments.
  4. Enabling new value creating Cognitive solutions via IBM Watson API’s services integration.
  5. Build out a clear Information and Data Management Strategy as a foundation for:
    • Artificial Intelligence (AI) and Machine Learning (ML) enabled Business Insight & Value

      ..following a logical step wise AI / ML “Ladder Strategy” and capability development.

    • Also as a sound information foundation for continued Process Automation (and/or RPA)
    • Develop an effective Information Architecture (AI) and Information Management (IM) and Data Governance and Security (DG&S) strategy

      Understanding for example that Data Lakes projects, without a parallel and sound information management and governance strategy typically fail to deliver the expected ROI, unless this aspect is properly addressed upfront (in particular within regulated industries and/or for example where GDPR clearly applies).

    • Look closely at providers within your Information Management “Eco System” do they offer a combination of flexibly choice, scale with platform integration vs point solutions
    • Enable a clear, Open Source enabled and leveraged strategy to effectively combine both “Big and Little Data” sources (Data at Rest + Data in Motion, SQL Schema Before & After)
    • Employ tools and methods (like IBM’s Data First Method) to define existing Information management maturity and required target capabilities aligned to specific Line of Business (LoB) sponsored and value creating use cases.
    • Develop parallel Application API / Microservices and Information Integration and Management Strategies and architectures (the twins represented by the top and bottom half of figure 1)
    • Ensure that ERP vendor driven proposals that re-engineer often working ERP solutions have realistic and accurate ROI vs risk vs cost / investment profiles.Refer Note *

    • Look closely at solutions that balance a standardized Core ERP processes with locally optimized front office process automation as per the following diagram.(apologies for the old style SAP logo, but this is not a new strategy, also as per the prior Veissmann IBM SOA + SAP White Paper I previously referenced)

      Pendulum Screen Shot 2017-06-08 at 00.57.20 copy

      There is a good case study / example of striking this balance at Carlsberg

  6. Enable a clear, flexible Dev/Ops platform management strategy and API/Microservices integration capability (inner / outer ring ESB / API integration hubs)  Refer my prior Blog on this topic

Note * We have observed that significant ERP re-engineering projects can become all engulfing in focus and IT budget terms may take and cost x2-x3 times the initial budget & time estimates.

Sources of information researched for this Blog item include, but are not limited to:

  • The road to AI leads through information architecture – Rob Thomas IBM GM Analytics
  • Gartner Paper (G00311163) “Schrodinger’s Cat: How ERP is both Dead and Alive”Published on the 28th of June 2016.

    Authors: Denise Ganley, Coral Hardcastle plus various related Gartner ERP platform and market related papers.

  • SAP S/4 HANA as the Digital ERP Core for organisations on a Digital Reinvention journeyMark Dudgeon, IBM CTO SAP IBM Global Services – January 5th 2018

    IBM offers a S/4 HANA Impact Assessment Service as follows

  • Forrester – Stretch Your Data Management Capabilities by Brian Hopkins, Jan 10th 2018Continuous Improvement: The Data Management Playbook
  • IBM’s Institute for Business Value – The Software Edge to drive competitive advantage
  • SAP S/4 HANA: From 2 Tier ERP to the N Tier Enterprise – Fall 2016, Joshua Greenbaum
  • Forrester – It’s time to clarify your Global ERP Strategy. Dec 2010, George Lawrie

Also I would refer readers to an excellent IBM Institute of Business Value study that looks at Innovation in an API Economy which can be found here.

Open Source and Standards driven enabled and business process optimization

My prior Blogs, LinkedIn items on:

API / Microservices “Inner / Outer Ring” ESB / Messaging and Application Integration

Via IBM’s API Connect, Node RED, IBM Watson IoT Capabilities

Including the following related Dual Speed IT Summary approach

Dual Speed IT Strategy v1 170717

The opinions within this blog are the authors, they do not represent a formal IBM corporate point of view, copyrights are respected and/or sources acknowledged and referenced as and where applicable.



Developing flexible, business aligned IT innovation and capability delivery strategies

After my prior LinkedIn item on when does SAP S/4 HANA make sense for your business?

I received a question through a colleague in respect of a large European client who was effectively defining a Choice A over Choice B forward IT strategy.


This prompted me I to sit down and put some further thought into a IT Executive view of a business into IT strategy model and approach that could result after an Enterprise client makes Choice A.

A Business Domain / IT Transformation Viewpoint

Getting straight to the point, as a direct consequence, I then sketched out the following high level architectural thinking and strategic business into IT building block based approach (having further researched various recent IBM C Suite and IBM Institute of Business Value (IBV) studies) that places an effective API and Enterprise Service Bus “inner / outer ring” strategy as the key enabling capability.

An Open Business Domain : IT Transformation Viewpoint v2 180717
It was also interesting to read a recently (31/01/17) published summary of a study by the DSAG (German Speaking SAP User Group) which in addition to discussing various S/4 HANA adoption rates amongst the surveyed SAP DACH clients.

This study highlighted plans to significantly increase forward IT investments and focus in front office “digital transformation and business / IT enabled innovation projects” within the surveyed German and Swiss speaking / based companies (similar to Panalpina) leading in this area, with up to 60 and 70% respectively of funding being targeted at these critical area’s and “competitive advantage” or simple “stay in business” IT transformation and investment requirements vs disruptive adjacent industry or new physical “asset lite” digital disruptive competitors (Netflix vs Blockbuster retail outlets comes to mind) .

It is possible to say that a number of industries including global logistics companies naturally already have complex extended digital supply chains which are facilitated by standards based messaging, API’s, data exchange with supporting back office EAI (Enterprise Application Integration) platforms and web enabled consumer and partner .

After creating this high level model and approach I naturally started to think further the critical business into IT capabilities that are required to ensure success when implementing a business aligned IT innovation strategy of this type.

When I net these out, to me they seemed to distill into six or seven strategic IT capabilities and imperatives in combination with the profile of the individual business appetite from a forward risk / reward and rate of IT innovation and management / adoption of change point of view.

These included the business aligned development, governance and practical implementation of:

  1.  An effective API development, brand, portfolio management and delivery strategy
  2.  An effective data governance and management strategy to pool, integrate and actively manage data for trusted, timely and accurate business insight
  3. An existing, defined and working ESB (Enterprise Service Bus) application messaging platform or platform/s (I refer to this as an “inner ring / outer ring” ESB / EAI strategy)
  4. The appropriate and targeted selection of buy (& Integrate) vs build (Dev/Ops) and run application capabilities
  5. Aligned Business and IT Executive sponsorship, funding and organization / cultural factors
  6. Structured, thoughtful analyze to select the most appropriate IT capability building blocks
  7. A plan to explore, target and integrate cognitive computing, ML / AI capabilities

Crucial also is timing, as various new and emerging technologies typically traverse the Gartner “technology hype” curves (or Forrester Waves) at different speeds, with specific vendors, technologies and/or platform/s emerging to becoming a or the “de-facto” standard or dominant provider in a particular function or area.

Within this context it’s clear that some fundamental and basic “table stakes” still apply including:

  1. A real, demonstrable, sustained commitment to Open Source offerings and capabilities
  2. The selection and integration of at scale, viable “top right” quadrant platforms, products and/or technology partners
  3. Appropriate Business into IT funding to phase delivery – Start small, prove, then scale fast
  4. Understanding when to buy vs build – The Factory IT vs Competitive Advantage IT question
  5. Understanding that multi source, highly cost optimized, outsourced IT strategies are relatively unlikely to provide a firm foundation for the agile delivery of new business into IT capabilities – as Business into IT Driven “Digital Innovation Requirements” become ever more critical

Which in turn relates towards the phased evolution vs revolution question that is described and nicely summarized in a GA Moore technology model below.

Where often within individual global enterprises various Business into IT delivery programmes will sit in different segments under the “cross the chasm” curve.

In a prior Imperial College Business Innovation course it was clear that the most successful and effective business innovation strategies and platforms (including the Apple’s iPhone), were in the majority of successful cases, actually combining proven prior individual technology components and eco system building blocks in new innovative ways.

It was the innovative new combination of these proven capabilities and technology building blocks often within new value based networks that creates the greatest and/or most disruptive business value, often not brand new or immature technology.

It was also interesting to observe a recent joint Schaeffler Group / IBM Watson IoT / Manufacturing 4.0 partnership announcement and youtube video that is grounded on a number of these principles as described below:


In addition to a recent LinkedIn CIO / Data Management forum item that nicely described effective Data Management and IoT strategies as the “King and Queen” partners of aligned IT Innovation capabilities in the complex game of chess that is successfully implementing viable, long term IT strategies.

If these are the King and Queen I’d also then say that Hyperledger and blockchain represent the Castles in chess terms, enabling swift directed movement combined with protection and security.

Additionally in my view as described in a short you tube video about IBM’s Hyperledger blockchain pilot system within IBM Global Financing (IBM IGF process $44 Billion Dollars of transactions, within a network of 4,000 partners, suppliers, shippers, banks).

Where the implemented open source based IBM Hyperledger solution provides an “individual client ledger” neutral, secure, immutable, auditable digital asset / document and transaction supply chain without seeking to force change the participating partners back offices platforms which is costly, risky and typically has extended cycle / lead times vs speed to value.

Approximately 10 years ago a number my IBM colleagues in our Consulting, Hosting and Global Services teams invested significant time and effort in a structured review of large scale complex IBM / Client project deliveries both successful (and a few unsuccessful) to help better inform future joint projects and joint IBM / Client success.

The output of that study is as valid now, if not more so now than before (in our Hybrid Cloud, Cognitive world), in that it logically identified and confirmed what we all know to be true, but is unfortunately often ignored or lost in the heat of an early project life cycle.

In particular these structured approaches become even more important as many large, medium and small Enterprise clients seek to successfully deploy and manage relatively complex “Hybrid Cloud” scenario’s.


The success of any significant IT initiative crucially depends upon the initial business aligned requirements definition and closely managing and defining the interfaces and hand offs between the different partners and functions that are described in a 10 box IT operating and innovation model.

With the 1st and most crucial box being the initial terms of reference and requirements definition box prior to developing a 9 box “design, build and run” model in 3 layers:

  1. The business transformation requirements, value into the application delivery layer
  2. The business application, integration and data management layer
  3. The IT Infrastructure, platform and IT service delivery layer/s

The success of this model and approach is then defined by the success (or otherwise) of carefully defining and managing the interfaces between the 9 boxes in people, culture, technology, funding, capability teamwork and strategic terms as follows:


One of my Client IT Architect colleagues working in the Retail and Consumer products industry also recently highlighted that it’s never been more important to manage these interfaces effectively to avoid the unwelcome emergence of the “IT to IT Gaps” that will inhibit successful delivery, in combination with the critical success factor of selected and assembling proven building blocks in new innovative ways that is at the heart of the most successful Business into IT innovations:


Where the basis rule applies more often than not, assembling proven capabilities and building blocks (using a Lego like analogy) will typically yield more predictable and effective outcomes.


I hope this item is helpful, in highlighting the requirements and prerequisites for successful “Choice A vs Choice B” business into IT innovation delivery.

IBM provides a combination of proven scalable, virtualized building blocks for Enterprise scale SAP Hybrid or Private Cloud platform delivery including DB2 v11.1 LUW, IBM POWER8, AIX, PowerVM, Linux, IBM System z, DB2 and/or Linux One, System I with DB2.

Disclaimer: The views expressed by the author in this blog reflect 33 years of experience in Enterprise IT and ERP / Application platform delivery are my own and do not represent formal IBM views or strategies. Vendor trademarks are respected