Information Technology

The Trouble With Enterprise Software

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Part of the SloanSelect "What Is To Become of IT?" collection.

Drawing upon a wealth of data, informed experience and expert opinion — from Thomas Friedman to Bjarne Stroustrup, from David Gelernter to Nicholas Carr — the author builds a case that enterprise software in large organizations has not delivered on its promise to fully integrate and intelligently control complex business processes while remaining flexible enough to adapt to changing business needs.

Instead, ERP systems — including both software applications and the data they process — are variegated patchworks, containing 50 or more databases and hundreds of separate software programs installed over decades and interconnected by idiosyncratic, Byzantine and poorly documented customized processes. To manage this growing complexity, IT departments have grown substantially: Today’s IT departments spend 70% to 80% of their budgets just trying to keep existing systems running. The research shows, says the author, that the typical IT structure is so dense and extensive that it’s often a miracle that it works at all.

Enterprise systems that were supposed to streamline and simplify business processes instead have brought high risks, uncertainty and a deeply worrying level of complexity. Rather than agility, they have produced rigidity and unexpected barriers to change, a veritable glut of information containing myriad hidden errors and a cloud of questions regarding their overall benefits.

How did this happen? Rettig points to the inherent limitations in the nature of software, the costs of implementation and the vagaries of data. Indeed, she offers, enterprise software may be just too complex to deliver on its promises. She also suggests that the next new thing — service-oriented architecture (SOA) — is not likely to fare much better, for many of the same reasons. There are no easy fixes, cautions Rettig, save a large dose of sobriety, clear-eyed analysis and emphasis on simplicity and efficiency.

Note that this article was originally published on the MIT Sloan Management Review Web site and stirred up a good deal of discussion in the blogosphere. A sampling of that wide-ranging discussion is included in the article available here.

Cynthia Rettig was director of knowledge management for B2B consulting company Canopy International of Newton, Massachusetts. She has consulted to software companies for over 20 years. She can be reached at smrfeedback@mit.edu.

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