How Accurate was Forbes on Systems of Record vs Systems of Engagement?

Executive Summary

  • What is a System of Record?
  • What is a System of Engagement?
  • The Ripe and Common Misuse of the Term System of Record
  • Historical Systems of Record

Introduction

Previously we explained how the term system of record is a buzzword or term of propaganda that was promoted chiefly by ERP vendors to help sell ERP systems, and to invest more in ERP systems once purchased. We covered this topic in the article Misuse of the Term System of Record.

What we noticed when looking up the system of record topic is the presentation of a different idea which uses the term system of record as a counterpoint. The concept presented is that why ERP systems are the system of record, what is required is a system of engagement.

In this article, we will analyze this concept as explained in an article from Forbes.

What is a System of Engagement?

Probably the best way to explain what a system of engagement is, and how it is presented is to provide a quote.

“There’s an ongoing discussion in the enterprise software world about “systems of record” vs. “systems of engagement.” Which do you have?

“Systems of Record” are the ERP-type systems we rely on to run our business (financials, manufacturing, CRM, HR). They have to be “correct” and “integrated” so all data is consistent. And they were traditionally designed for people who have no choice but to use them.

“Systems of Engagement” are systems which are used directly by employees for “sticky uses” – like email, collaboration systems, and new social networking and learning systems. They “engage” employees.” – Forbes

Here the system of record is presented not only as the ERP system (which is a deliberate inaccuracy presented by ERP vendors), but as other systems as well. It is strange to read a CRM system being an “ERP type system,” and it would be more accurate to use a different term, but what the author is driving to seems logical.

“Today we are in the middle of a transition away from “systems of record” toward “systems of engagement.” If you look at SAP’s new Employee Central or Oracle’s Fusion and compare it to older SAP and Oracle applications, it’s like night and day. And these systems, which have come a long way, still have not caught systems like Silkroad and Workday.” – Forbes

This is where the concept runs into problems. This is because both the older systems and the newer systems are “systems of record.” It just so happens that the newer systems are easier to use. This problem illustrates why the term system of record should not be used to describe older systems as it almost serves as a proxy for the term “legacy.”

The Ripe and Common Misuse of the Term System of Record

This example aligns with our earlier observations regarding the term that the vast majority of people that use the term system of record don’t understand computer systems very well. It is a prestige term which is grabbed quickly, without understanding its meaning.

“Take a look how HR systems have evolved over the years. The first, labeled “Green Screen,” is an old-fashioned 1980s style mainframe HR system (I grew up on these). IBM dictated what they looked like, believe it or not. This is a “system of record.”” – Forbes

Now, this is just becoming humorous. The author seems to think that “how easy a system is to use” determines if it is a system of record. That is not the definition of a system of record.

Systems of record have been around for quite some time. 

Historical System of Records

If one has a stone tablet that is used as a reference and has all the calculations used to engineer a pyramid, and excerpts of the tablet are kept on papyrus for pyramid foreman to refer to while at the construction site, then the stone table is the system of record. The term system of record has nothing to do with either how modern the data storage is, or how easy it is to use.

In the Christian religion, each denomination goes through a process where they accept some books as their “system of record” and reject others. This becomes the cannon of that denomination. In religions, quite a lot of people have ended up on the wrong side of a sword or pike for not agreeing with others as to what is the system of record.

One of the best movies that illustrate religious disagreements is the movie Elizabeth. Throughout the movie, various people demand that others submit to “the one true faith.” Sound familiar. Perhaps you have heard the term “one source of truth” while sitting in an IT meeting?

Therefore, it shortsighted to only consider the term system of record, considering the concept has been with human societies as far back as the written language has existed.

Conclusion

Using the term system of record in the way used in this Forbes article is unnecessary, and it is not used correctly. This is because it is being used, as the term mostly is, by a person with only a fleeting grasp of how computers work. It is perfectly fine to say that systems should become easier to use…everyone agrees they should be. But there is no need to invoke the term system of record to make this case. A system of record relates to the origin and authoritative reference point of a system as it relates to data. It can’t be converted to mean older systems.

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References

The Real Story on ERP

ERPThe Real Story Behind ERP: Separating Fiction From Reality

How This Book is Structured

This book combines a meta-analysis of all of the academic research on the benefits of ERP, coupled with on project experience.

ERP has had a remarkable impact on most companies that implemented it. Unplanned expenses for customization, failed implementations, integration, and applications to meet the business requirements that ERP could not–have added up to a higher Total Cost of Ownership for ERP were all unexpected, and account control, on the part of ERP vendors — is now a significant issue affecting IT performance.

Break the Bank for ERP?

Many companies that have broken the bank to implement ERP projects have seen their KPIs go down— but the question is why this is the case. Major consulting companies are some of the largest promoters of ERP systems, but given the massive profits they make on ERP implementations — can they be trusted to provide the real story on ERP? Probably not, however, written by the Managing Editor of SCM Focus, Shaun Snapp — an author with many years of experience with ERP system. A supply chain software expert and well known for providing authentic information on the topics he covers, you can trust this book to provide all the detail that no consulting firm will.

By reading this book you will:

  • Examine the high failure rates of ERP implementations.
  • Demystify the convincing arguments ERP vendors use to sell ERP.
  • See how ERP vendors take control of client accounts with ERP.
  • Understand why single-instance ERP is not typically feasible.
  • Calculate the total cost of ownership and return on investment for your ERP implementation.
  • Understand the alternatives to ERP.

Chapters

  • Chapter 1: Introduction to ERP Software
  • Chapter 2: The History of ERP
  • Chapter 3: Logical Fallacies and the Logics Used to Sell ERP
  • Chapter 4: The Best Practice Logic for ERP
  • Chapter 5: The Integration Benefits Logic for ERP
  • Chapter 6: Analyzing The Logic Used to Sell ERP
  • Chapter 7: The High TCO and Low ROI of ERP
  • Chapter 8: ERP and the Problem with Institutional Decision Making
  • Chapter 9: How ERP Creates Redundant Systems
  • Chapter 10: How ERP Distracts Companies from Implementing Better Functionality
  • Chapter 11: Alternatives to ERP or Adjusting the Current ERP System
  • Chapter 12: Conclusion

https://www.forbes.com/sites/joshbersin/2012/08/16/the-move-from-systems-of-record-to-systems-of-engagement/3/#71d1b7e86227

https://en.wikipedia.org/wiki/Biblical_canon