Moreover, the big transaction systems like ERP, CRM and supply chain have a set of business rules, e.g. the general ledger structure, hard-wired within them. Changing the structure of something like the general ledger is a major undertaking, and yet what happens if you acquire another company? Their general ledger is certainly not the same as yours, and one of them will need to be changed if you are to achieve the elusive goal of standardization. How long will this take? Three months? Six months? Longer? Then if you buy another company a month later, the problem multiplies.

You also have to wonder how much sense there is in actually trying to standardize too heavily from central office. There are, after all, big differences between local markets, e.g. the Vauxhall Nova means “no go” in Spanish, and there are countless other examples that show that trying to decide all aspects of marketing from a central head office is, at best, fraught with potential issues.

What is required is not yet more centralization initiatives that are essentially doomed to failure. Instead what is needed is an acceptance that there will always be some diversity in business definitions and approaches in organization, processes and software that acknowledges this reality rather than trying to pretend it is some sort of “legacy” accident that can be stamped out if only you can hire the right management consultants.

Software is emerging that can start to deal with this level of complexity and can also deal with business change, and best practice in process is starting to appear in leading organizations like Unilever and BP. The software is given a number of names, but the overall issue is generally referred to as master, reference or meta data management: expect to hear a lot more about master data management over the next few months.

However, too many companies are still taking an ostrich-like approach to the issue, and are pretending that the next corporate standardization initiative will somehow solve the problem, even though the last five did not. The next initiative won’t succeed either because it cannot. Get used to a diverse, fast-changing business environment and start to consider what approaches can be taken to dealing with business diversity and change rather than hoping they will go away.

About the Author

Prior to leading Kalido's spin off from Shell in June 2003, Andy was CEO of Kalido Ltd in January 2001. In previous roles at Shell, Andy led a 290-person global consultancy practice of Shell Services International, and was Technology Planning Manager of Shell UK Oil. Prior to Shell, Andy worked in a number of senior technology positions within Exxon.

A 20-year veteran of data warehousing and integration projects, Andy is a regular speaker at international conferences such as ETRE, Tornado Insider, Red Herring, Gartner and Enterprise Outlook. See his award winning blog www.andyonenterprisesoftware.com for his insights on the industry.

Andy has a BSc (Hons) Mathematics degree from Nottingham University.