Listening to Dr Michael Hammer, business guru, bluster and bellow about re-engineering on a stage in Orlando, Florida, Tuesday, one was struck by the quirkiness of it all. Here was a former professor of computer science at MIT who has founded a doctrine that preaches the pitiless mass sacking of thousands of middle managers, the tearing down of corporate structures, the demolition of what he calls ‘functional silos,’ in short nothing less than a total overhaul of the way capitalist enterprises have organized themselves since that cautious Scotsman Adam Smith told them to in The Wealth Of Nations (1776). In its place Hammer – who it must be remembered had never run a company before he became head of his own consulting firm – demands that the business process become pre-eminent. Business Process Re- engineering (BPR), as this Aztec blood sacrifice religion became known, duly consumed the careers of thousands of managers in Fortune 500 companies, especially in the US and UK, in the mid- 1990s, while kickstarting those of thousands more (who walked back into those decimated workplaces as immensely expensive day hires or consultants). Did we really let him get away with this? A question easier to ask now than it was five years ago. For BPR, if not exactly old-fashioned, is now hardly the business trend du jour.
By Gary Flood
But that is partly because its message has been absorbed so thoroughly by so many Fortune 500 corporations, who find themselves, like Shakespeare’s Macbeth, unable to turn back, for they too are in blood/ Stepp’d in so far that Returning were as tedious as go o’er. But what made BPR work, or at least get it started, was the very same software company whose annual user show Hammer was guest speaker at, SAP AG. As Hammer says, quoting one of his BPR clients: Implementing SAP equals forced re- engineering. In this perspective SAP’s R/3 client/server integrated business software suite is not just a package; it’s a philosophy, it is no less than BPR made real. This is key to understanding how important SAP has become, how powerless its ostensible rivals, like Oracle Corp, Baan Co NV, or Peoplesoft Inc truly are. For if R/3 were just a package the comments and critiques of those good companies might matter. Before R/3, indeed, one could legitimately speak of just packages. It’s a forgotten milestone now, but the first independent software company to pass the $100m annual sales mark was an accounting software package supplier, Atlanta, Georgia’s MSA, in 1983 (which in Internet Time was when dinosaurs ruled the Earth, of course). But to speak Hammer-style, such packages were quintessentially appropriate solely for Industrial Age enterprises. They offered cross-industry generic functions such as accounts payable or general ledger, and were bought by companies that, tsk, still believed it clever to have separate Finance or Sales or Accounts offices (and chieftains). And one thought nothing of the fact that the data in those packages sat there, and might have to be re-keyed, or clumsily imported, into other computers. But with R/3, as of course with its mainframe primordial ancestor R/2, one was always only ever looking at one aspect of the system as a whole, even if one did it in those Finance or Sales or Accounts offices.
Intimidating software system
SAP’s approach has always been integration, has always stressed the idea that data, as the hackers say, wants to be free, or in the SAP version, wants to flow around the various interconnected modules of the SAP universe. One can now see that the confluence of the urge to unite various hitherto artificially separated business units around a unified process could only ever have got off the ground with the help of a gigantic and stupefyingly intimidating software system like R/3. In this sense to buy R/3 was to commit to BPR, for what else could justify the pain of adapting to the Teutonic rigor of SAP software? What had up until then been a fairly seat of the pants way of organizing and disseminating business information in software terms in US businesses became something a lot more like rocket science (as in, expensive, time consuming, hungry of outside resource, requiring gigantic expenditure of dollars and effort, but maybe the only way to break the surly bonds of Earth). This explains why SAP is truly, to use our image of yesterday (CI No 3,232), Ozymandias, the King of Kings, of business software. For what SAP has achieved is the creation of an architecture, and architecture means dominance. After IBM created the S/390 architecture in the 1960s all other alternative mainframe technologies became irrelevant; Xerox’s Ethernet had a similar impact on local area networks; and one only has to look at today’s most successful example of such an over-arching architecture, the Wintel (Windows-Intel) desktop, to understand that with an architectural standard all the other guys either go with your way of doing things or go out of business. And SAP is only digging in further with all its recent moves, reinforced at this year’s Sapphire, to make itself more ‘open.’ With all its work on ‘components,’ of bite-sized chunks of SAP functionality, of Business APIs (150 in version 3.1 alone), of lowering the cost of implementation, SAP only makes bigger fools out of the analysts and press and customers who urged such moves upon it.
No-one will junk Sap
For now SAP can position itself legitimately as a platform upon which customers base their enterprise accounting (how quaint that terms seems now!) software, not a monolithic software Borg (though that may indeed be its true, secret face). A Peoplesoft or an Oracle may offer such and such a package, but in essence these can only ever be point solutions – no-one will junk SAP for any alternative approach at this stage of the game, and some, like Baan, even go so far as to position their offerings as a cheaper clone of the R/3 genotype. Yesterday we asked if SAP’s empire could ever crumble, as did that of Ozymandias. Well, in temporal terms, empires certainly crumble and fall (the Assyrians, the Nazi Germany of the Ancient Near East, are only one of dozens of power bases that in their day seemed indomitable, yet which aren’t on the State Department’s list of enemy nations today). But their cultural influence can last a lot longer. Shelley’s Ozymandias was from Ancient Egypt, whose shadow in many surprising ways we still live under (for example, some have controversially traced the Christian idea of the Trinity with the well-established Pharoanic idea of one God with many multiple, even contradictory, manifestations). In this sense SAP’s empire will last a good long time, and certainly it’s impossible to believe we could turn away from its data integration model for business software now. One day – maybe quite soon – we might wonder, as we do today with Microsoft and once did with IBM, whether it’s that good an idea to let one company accumulate so much power. How ironic, finally, that it should have been a German company that produced the goods that made BPR happen. For, much to Hammer’s chagrin doubtless, the Germans will have no truck whatsoever with this BPR schweinerei, much preferring their corporate hierarchies and established business practices. It was the unstoppable combination of American daring and German engineering that mad it all come about; on their own neither in and of itself would have been strong enough.
