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Preview: The Enterprise System Spectator

The Enterprise System Spectator



Independent analysis of issues and trends in enterprise applications software and the strengths, weaknesses, advantages, and disadvantages of the vendors that provide them.



Updated: 2017-07-25T22:11:01.779-07:00

 



Strategies for Dealing with Legacy Systems

2017-06-22T10:14:24.817-07:00

Developing an IT strategy for some organizations can be difficult because of the presence of a legacy system. Legacy systems that are old, out-of-date, and difficult to maintain are a huge obstacle to innovation. As a result, business leaders become increasingly frustrated by their inability to roll out new mobile apps, connect with customers, analyze business performance, or become a digital business.In recent years, it has become popular to describe organizations with an out-of-date legacy system as being in “technical debt.” I would take this a step further. If an organization ignores the need to update the system for too long, it can lead to what I refer to as “technical bankruptcy.”We can define technical bankruptcy as a situation where the organization cannot, or finds it exceedingly difficult to, pay off the technical debt. It does not mean that the organization is in financial bankruptcy but rather that its systems are broken or held together in a way that makes them extremely difficult to upgrade. Significant Percentage of Organizations Are at Risk of Technical BankruptcyIn work with our clients at Strativa over the past several years, we have gained new insights into challenges facing organizations that have out-of-date legacy systems. We recently took the opportunity to combine those insights with survey data from our sister IT research firm, Computer Economics, to produce a new report, Avoiding Technical Bankruptcy in Legacy Systems. (Click the link to download the report free from the Strativa website.) Figure 3 from the full report shows the magnitude of the problem as it applies to ERP systems. A small but significant percentage (7%) of organization have not upgraded their ERP systems for 10 or more years. These are likely to already be in technical bankruptcy. But the 13% of organizations that have not upgraded their systems in the five-to-nine-year time frame are in the danger zone: Technical debt is building, and if the organization does not undertake a major upgrade, it risks falling into technical bankruptcy.Signs of Technical BankruptcyWhat are typical signs that a legacy system has reached the stage of technical bankruptcy? We found five characteristics: Extensive modifications, extensions, and interfaces.Poor understanding of the system by users and IT alikeDirect involvement of IT personnel in business processes.Legacy system atrophy as shadow IT emerges.Upgrade or replacement hard to justify.In the full report, we explore the symptoms of technical bankruptcy and the devastating effects that it has on the organization. We continue by quantifying the scope of the problem specifically for ERP systems, using our research on the typical age, frequency of upgrades, and extent of modification of these systems.Most importantly, we conclude with recommendations on how to avoid technical bankruptcy and, for organizations that have reached this stage, strategies for getting out and staying out of technical bankruptcy going forward.  Download the full report, free from the Strativa website: IT Strategies for Legacy Systems: Avoiding Technical Bankruptcy.  Bonus: Watch a Datamation's James McGuire in a video interview with me about the report.  allowfullscreen="allowfullscreen" frameborder="0" height="315" src="https://www.youtube.com/embed/j-IttroDhDc" width="560">[...]



Manufacturing Is a Huge Opportunity for Cloud ERP

2017-06-08T08:56:42.337-07:00

In many markets for enterprise software, the battle between cloud and on-premises (or hosted) systems is over. Salesforce, the market leader in CRM, will soon pass the $10 billion mark in annual revenue. Workday, with its cloud HCM offering and growing financial management applications, expects to hit the $2 billion mark in 2018. Traditional Tier I providers, SAP and Oracle, are certainly not out of the race. But the only way they have been able to compete is by building, or buying, their own cloud services for CRM and HCM. Cloud has won.

Why Is Manufacturing Cloud ERP Lagging Behind?

Nevertheless, there is no cloud ERP provider the size of Salesforce or Workday, and there is certainly no cloud ERP provider for the manufacturing industry with that scale. NetSuite was founded in 1998, around the same time as Salesforce. But it only reached the $741 million revenue mark in 2015, before being acquired by Oracle. Claiming more than 30,000 companies, organizations, and subsidiaries in more than 100 countries as customers, it is by far the largest cloud ERP provider. Although it has done very well with professional services firms, software companies, and other services-related businesses, manufacturing companies form only a small part of that number. Plex Systems has a pure cloud ERP system for manufacturers dating from 2000 and has been rapidly growing over the past four or five years. But its customer count is under 600. After NetSuite and Plex, the number falls significantly: Cloud-only systems such as SAP’s Business ByDesign, Rootstock, and Kenandy,  each have even fewer manufacturing customers.

To understand how great the market opportunity is for cloud ERP in manufacturing, consider that, according to the U.S. Census, there were about 63,000 manufacturing firms in the United States in 2014 with 20 or more employees, as shown in Figure 1. Considering that the estimated customer counts by vendor in the preceding paragraph include customers outside of the U.S.,  it is safe to say that manufacturing cloud ERP probably has less than 2% market share in the U.S. The market opportunity going forward, therefore, is enormous.

Read the rest of this post on the Strativa blog: Manufacturing Is a Huge Opportunity for Cloud ERP



Software Vendor Implementation Services Not Always Best Choice

2017-05-04T07:51:23.649-07:00

In our software selection consulting, clients often seek our advice on implementation partners. In fact, our experience over several decades tells us that the choice of an implementation team is as important, sometimes more important, than the choice of a new system.

In choosing an implementation consulting group, clients often start out thinking that it’s best to choose the vendor’s own professional services group. They think that no one can know the software as well as the vendor’s own personnel. They think that when problems arise, the vendor’s consultants will be in a better position to deal with the software vendor. They also think that there will be less finger-pointing: the consultants blaming the vendor, or the vendor blaming the consultants.

These considerations have merit. But there are other factors to consider, factors that may make an implementation partner, or even an independent consulting firm, a better choice.

Read the rest of this post on the Strativa blog:
Software Vendor Implementation Services Not Always Best Choice.



Three Things to Like about Acumatica

2017-02-09T13:30:48.450-08:00

Since the turn of the century, there has been an ongoing ERP consolidation trend, with Oracle, Infor, Epicor, and others buying up smaller ERP providers. During this same period, newer ERP vendors have risen up to challenge the incumbents. Nearly all of the new entrants are cloud ERP systems.

One of the most interesting of these is Seattle-area-based Acumatica, founded in 2008—just yesterday in “ERP years.” Like many other ERP startups, it initially focused on services businesses but soon added distribution and CRM functionality to its horizontal capabilities. Its go-to-market strategy is 100% through value-added resellers (VARs), who can add their own industry-specific software on top of Acumatica. Its VAR strategy, in this respect, is similar to that of Microsoft Dynamics and Sage. In fact, many of the new VARs in Acumatica’s channel program have come from the Microsoft and Sage ecosystems.

Acumatica’s partner and customer conference in January gave us an opportunity to update our view of this emerging cloud ERP provider. We find that Acumatica is interesting because of three characteristics that are somewhat novel in the ERP world.

Continue reading on the Strativa blog: Three Things to Like about Acumatica



New Customer-Facing Systems Extend the Reach of Small, Midsize Businesses

2017-01-23T18:48:06.301-08:00

Small businesses play a vital role in the economy and are often the leading innovators in new products and services. According to the U.S. Census Bureau, organizations with fewer than 500 workers account for over 99% of businesses, and companies with fewer than 20 workers make up nearly 90%.

But small business doesn’t always mean simple business. Like larger companies, small and midsize businesses (SMBs) need to reach new markets, develop new products, satisfy customers, and control costs. The main difference is that SMBs need to do these things with fewer resources.

In recent years, however, software vendors have announced new products to address the challenges facing small businesses. This post outlines two of them.

Read the rest of this post by Strativa consultant Dee Long: New Customer-Facing Systems Extend the Reach of Small, Midsize Businesses



HCM Fertile Ground for Data Science

2016-10-18T16:16:09.451-07:00

Whether known as big data, data analytics, data mining, machine learning, cognitive computing, or artificial intelligence (AI), data science is a hot topic.

Human Capital Management (HCM) is turning out to be fertile ground for providers to develop use cases for data science. The recent HR Technology Conference in Chicago provided an excellent opportunity for us to learn about the offerings of six such providers.

At the same time, there are other interesting problems for data science to solve in HCM beyond the initial use cases.

Read the rest of this post on the Strativa blog:  HCM Fertile Ground for Data Science.



Big Data Analytics Not Just for the Big Guys

2016-10-02T06:50:11.308-07:00

Big data analytics can be a highly technical subject, but as consumers we come face to face with it every day. 

The personalized coupons we receive at checkout are generated by the grocer’s analysis of our purchase history. Likewise, the targeted ads we see on the web are based on ad brokers’ use of big data generated by our browsing history. Large health insurers use big data to target us with advice on managing our health and lowering costs of medication. And major political campaigns are getting good at using big data to target us based on our demographics.

Based on our experience as consumers, it is evident that the “big guys” know how to use big data. But what about small to midsize companies?

The good news is that business analytics and even big data are becoming more readily available to smaller businesses. This is the result of three big enablers.

Read the rest of this post by Strativa consultant Dee Long, on the Strativa blog. 



Salesforce.com Less Exciting, More Incredible, Amazing

2016-09-02T10:57:02.693-07:00

Salesforce.com released its second quarter earnings this week, followed by its quarterly earnings call. To provide a deeper analysis of the state of Salesforce.com’s business, we are pleased to release our SFDC Superlative Index™ for the latest quarter. Developed by the Enterprise System Spectator, the SFDC Superlative Index is a proprietary metric that quantifies the enthusiasm of Salesforce.com’s executives, by counting the number of superlatives used in their quarterly earnings calls and analyzing the changes in their use of these superlatives over time. Our proprietary list of 12 superlatives currently includes: exciting, incredible, huge, amazing, outstanding, terrific, awesome, phenomenal, fantastic, tremendous, extraordinary, and spectacular. Dramatic Decline in SuperlativesSalesforce executives used tracked superlatives only 71 times in their conference call this quarter. This is a significant drop from the 97 tracked superlatives used in the previous quarter, which was the highest number over the prior five quarters.After the call, Salesforce.com’s share price fell sharply in trading overnight and the next day. Many analysts attributed the decline in the share price to the firm’s revised forward guidance and the level of new bookings. But we attribute it mostly to Salesforce executives' declining enthusiasm, as shown in Figure 1. Analyzing the individual superlatives that make up the Index provides deeper insights.Excitement Takes a HitSFDC executives appear to be losing excitement, using the word "excited/exciting" only 14 times in the most recent earnings call, less than half the number of times used in the previous quarter, as shown in Figure 2. Nevertheless, CEO Marc Benioff reported that he was “so excited and …  everyone in Salesforce is so excited” about the firm’s new artificial intelligence platform, Einstein.” He was also enthusiastic about the firm’s recent acquisitions of Demandware and Quip. “But it's been an incredible time for us to acquire some phenomenal assets and I have never been more excited about Salesforce and our product line and coming into Dreamforce, like I said is, just awesome.”Yet, new deals failing to close before the end of the quarter seemed to take a little off the edge of Benioff’s excitement. “So there [are] a lot of exciting things coming for Dreamforce, and nobody likes to see softness in any particular region…. Like I said, we really saw some great growth and deal flow in the United States, but we did get a bit of softness at the very end of the quarter,” he said. For his part, any softness at the end of the quarter didn’t seem to dampen the enthusiasm of COO Keith Block, who was still excited to be part of Salesforce.com. “As you know over three years ago Marc and I had many many conversations about coming onto Salesforce which I was super excited about and I continue to be super excited about being here.”Nevertheless, Business Is Increasingly Incredible and AmazingThe decline in excitement, however, was partially offset by an increase in the use of the superlatives “incredible” and “amazing.” In fact, “incredible” took the top spot from “exciting” this quarter, with “amazing” jumping into the number two spot, as shown in Figure 2. These two superlatives were especially pronounced in Benioff’s comments about recent acquisitions. “And as you know, over the last few years we have acquired a number of AI companies. Incredible companies like RelateIQ, MetaMind, Implisit, PredictionIO, Tempo AI and more with amazing, amazing people and technology. We have been able to stitch all this together into this incredible AI platform and this focus on AI and on the critical aspects of AI as the next wave of our industry has resulted in a machine learning team of more than 175 data scientists who have built this [...]



The Growing Circle of Cloud ERP

2016-08-10T16:59:07.214-07:00

(image) Traditional providers of ERP systems typically sought to expand their functional footprint to include complementary applications outside of core ERP. Now cloud ERP vendors are adopting a similar strategy, bringing significant benefits to buyers.

For most companies, an ERP system is generally at the center of the business systems strategy. But a comprehensive applications portfolio includes much more than ERP. Most companies, even small and midsize businesses, have a surprising number of important systems outside of ERP.

By way of example, Figure 1 shows our proposed future applications landscape for a current client of my consulting firm, Strativa. (Company-specific references are removed). Although just a midsize company, it has plants and distribution centers around the world. As a result, the future applications portfolio will be quite extensive. At the core, within the red circle are the core ERP functions. Outside the circle are other enterprise system
s that must interact with the core ERP system. Nearly all of these systems will be new, or replacements of current systems.

Read the rest of this post on the Strativa blog: The Growing Circle of Cloud ERP



Oracle Acquisition of NetSuite Is a Mixed Bag

2016-07-31T12:45:31.676-07:00

Oracle took another step in its strategy of growth by acquisition by announcing a bid for NetSuite, the leading player in the cloud ERP marketplace in terms of number of customers. At $9.3 billion, the deal is the second biggest in Oracle’s history, after PeopleSoft in 2005 for $10.3 billion.

The deal was long expected, for several reasons. Oracle Chairman Larry Ellison was NetSuite’s original investor, and Evan Goldberg, NetSuite’s founder came out of Oracle. CEO Zach Nelson was an Oracle marketing executive. Oracle’s database is an integral part of NetSuite’s infrastructure.

But apart from helping Oracle in its race with Salesforce.com to get to $10 billion in cloud revenues, what are the benefits of the deal to Oracle? How does it help NetSuite, and what does it mean to the broader marketplace? Looking at the big picture, there are certainly benefits, but there are also several concerns.

Read the rest of this post on the Strativa blog: Oracle Acquisition of NetSuite Is a Mixed Bag



Announcing the Salesforce.com Superlative Index

2016-06-03T10:27:50.508-07:00

We often hear that Salesforce.com is an amazing company. But how amazing is it? The Enterprise System Spectator is proud to announce today a new metric that will be incredibly important for investors, customers, and fans of Salesforce.com everywhere: the SFDC Superlative Index™.Through the SFDC Superlative Index, we can now quantify the awesomeness of SFDC. We do this by counting the number of superlatives used by SFDC executives in their quarterly earnings calls and analyzing the changes in the use of these superlatives over time.Our proprietary list of superlatives currently includes the following: exciting, incredible, huge, amazing, outstanding, terrific, awesome, phenomenal, fantastic, tremendous, extraordinary, and spectacular. Superlatives per Quarter Reaches High Water MarkThese are fantastic days for SFDC, terrific days indeed. As shown in Figure 1, SFDC executives used tracked-superlatives 97 times in the firm's most recent quarter, the greatest number in the past five quarters.Analyzing superlatives that make up the SFDC Superlative Index provides deeper insights.Excitement is RisingSFDC executives are truly excited about the most recent quarter. As shown in Figure 2, we find that "excited/exciting" has now returned as the top superlative in the first quarter, after a sharp decline in the fourth quarter of FY 2016.  CEO Marc Benioff reported that he as "really excited to be here, really excited for the first quarter" and he was "really excited" about raising the company's full year revenue guidance. "This kind of accelerated revenue growth [is] something that we’re very, very excited about," he later added. Benioff's excitement also extended to up-coming events, such as World Tour New York, which he said is already sold out. "So we’ll be excited to see you there," he added. He also said that he was "really excited to visit with all the Salesforce customers and developers who are coming Trailhead DX."But Benioff saved his greatest excitement for the upcoming Dreamforce conference in October."I know the bands that are playing. I know what’s going on and I’m [not] going to give you too much of that yet," he said. "I can just tell you it’s going to be the biggest and most exciting Dreamforce ever."COO, Keith Block, also shared Benioff's enthusiasm, especially about the firm's moves in Europe. "Obviously we’ve made investments with data centers in Europe which we’re very, very excited about, our customers are obviously excited about that," he said.  Business is Beyond ExcitingAs shown in Figure 2, SFDC executives went even further in describing developments during the quarter, using words such as incredible (23 times), huge (16), amazing (8), and outstanding (5) to round out the top five superlatives.Early in the call, Benioff described the first quarter as the best that the firm has ever seen, "There is [sic] some incredible numbers you’re going to see including the cash flow number," he said. "We’re well positioned for another great year. This is amazing." Block confirmed Benioff's enthusiasm. "I mean, this is an incredible company with incredible people and an incredible set of products and customers," he said.  Not only is SFDC incredible, SFDC customers are also incredible. For example, Benioff said, "Uber, one of the world’s great innovative companies, another expansion in the quarter, they’re an incredible innovator with off-the-chart growth." Regarding a new deal with Amazon in the quarter, Block said, "We love Amazon, we’ve got a great relationship with Amazon, they are a huge user of Salesforce and that certainly has been a huge part [of] this quarter as well."In describing the firm's Sales Cloud, Benioff let loose with a string of incredibles:"I mean we know that there is not just a [...]



Plex Developing a Taste for Food & Beverage

2016-05-06T16:23:43.723-07:00

Plex Systems, a long time cloud ERP provider, primarily to automotive and industrial suppliers, has recently been expanding its focus to the food and beverage sector. T

To see Plex now actively pursuing opportunities in food and beverage indicates that Plex is serious about this market. Nevertheless, even within this sector, Plex is selective in its focus.

This post outlines the capabilities of Plex for food and beverage manufacturers along with steps that it is taking to better serve this industry.

Read the whole post on the Strativa blog:  Plex Developing a Taste for Food & Beverage



The Role of Fear in ERP Implementation

2016-02-27T12:26:11.677-08:00

Photo CreditOne of Deming’s 14 points for management was, “Drive out fear, so that everyone may work effectively for the company.” By this he meant that employees should not be afraid to point out problems, provide feedback, or make mistakes in an effort to improve. Business leaders should engage employees positively in continuous improvement.But when it comes to business leaders themselves, fear can be a powerful motivator. And, nowhere is a healthy fear more needed than in ERP implementation.It is difficult to think of a major project that is riskier for an organization than an ERP implementation. It ranks right up there with a major strategic merger or acquisition in terms of potential to disrupt the business. This is because an ERP implementation touches nearly every function of the business, nearly every business process, and nearly every employee. Although ERP systems involve computers, they are not IT projects: they are business change initiatives. Do it wrong, and you may find yourself as a case study on the front page of the Wall Street Journal. Hopes and FearsI recently co-led a half-day workshop for a large client in the manufacturing industry that is about to embark on a wholesale replacement of their aging ERP system. The participants were 18 of the firm’s business leaders. We covered the history and role of ERP, reasons for failure, lessons learned from successful implementations, typical processes most in need of improvement, and the roles and responsibilities of business users in the implementation.At the end of the workshop, we conducted a short exercise that I call, “Hopes and Fears.” We invited the participants to list the things that they hoped would result from the implementation. They responded with a variety of benefits, such as improved efficiency, lower inventory, better planning, and a more modern user experience.We then asked them to list the one thing they were most worried about, the thing they most feared as they looked forward to the implementation. Here the mood turned more serious as they expressed their fears, such as that they might not get enough training, that inventory might actually increase during the transition, that employees might not speak up when things weren’t going well, and that customer delivery schedules might be disrupted.But the one thing that worried this group the most was that they wouldn’t have the resources to get the implementation finished while still taking care of their regular duties. Would they have the bandwidth? We had told them that they had to put their best people on this project, but could they afford to do that? Where would they get additional personnel? The top executive in the room spoke up and assured the group that the company was ready to spend the money to make those resources available.At this point, I told them that I had accomplished my unspoken objective. My goal in conducting this workshop was to put some fear into them, as business leaders. Nothing concerns me more than when I see a company begin an ERP implementation thinking that it is no big deal, that they can delegate the project to the IT department, or to the system integrator. Or, thinking that they can treat an ERP implementation as just another project, like installing a new production line, or implementing a new safety program.Address Fears in Contingency PlanningHealthy fear can be a strong motivator in ERP implementation. At the same time, fear should not lead to paralysis, leading an organization to not move forward with new systems.The right response is to address each of those fears in the project plan, in the form of contingency planning.Are you afraid you won’t have sufficient resources? Allocate budget to hire additional resources t[...]



Which Comes First, New Systems or New Processes?

2015-11-18T06:16:43.737-08:00

Everyone agrees that business process improvement is a key success factor in enterprise system implementation. But, which comes first? Should organizations redesign their business processes before selecting and implementing new systems? Or should they first select a new software vendor and then redesign their processes to match how the new system does things?

This question comes up repeatedly in our vendor evaluation and software selection consulting services. Clients read about failed ERP or CRM projects, for example. They hear the warnings of executives from such companies, telling them to spend more time up front understanding their business processes. They hear about companies that go live but don’t achieve the desired benefits. They vow to do better. They don’t just want to implement a new system. They want to implement best business practices.

These are good reactions. When it comes to enterprise systems, anything that heightens the fear of failure is a good thing. The more business leaders are focused on business processes, the better.

But, how should business leaders deal with their business processes when implementing a new system?
  • Should they improve their processes before implementing the new system, so that the new system is not automating broken processes?
  • Or, should they choose the new system first, so that they can redesign their business processes using the best business practices that are embodied in the new system?

The answer is a little bit of both: the two should be done in parallel. In fact, doing all of one before the other—whether process first, or system first—will result in failure.

Read the full post on the Strativa website:
Which Comes First, New Business Processes and New Systems?



Oracle v. Rimini Street Lawsuit Verdict: Good for Third-Party Maintenance

2015-10-28T15:00:07.122-07:00

Earlier this month, the jury in Las Vegas reached its verdict in the Oracle v. Rimini Street lawsuit, a closely-watched case involving third-party maintenance (3PM) in the enterprise software industry.

Although the jury awarded Oracle approximately $50 million in damages, the amount was far below what Oracle expected. Moreover, the jury found that Rimini Street’s copyright infringement was “innocent,” not “willful,” that Oracle suffered no lost profits as a result, and that neither Rimini Street nor its CEO, Seth Ravin, engaged in any tortious business conduct.

Assuming the jury’s verdict stands up against potential appeals, the case sets an important precedent for how 3PM providers should operate to ensure they are not violating the intellectual property rights of software owners. We expect customer use of third-party maintenance will increase as a result of this verdict.

Read this entire post on the Strativa blog: Oracle v. Rimini Street Verdict Clarifies Ground Rules for Third-Party Maintenance



Sage Puts Stake in the Cloud with Sage Live

2015-10-21T12:41:07.082-07:00

Sage is one of the world’s largest providers of business applications for small and midsize organizations. Now in the cloud it has taken a big step forward, launching Sage Live, a built-from-scratch accounting system on the Salesforce.com platform.

This post outlines key features of Sage Live, the challenges it will face, and recommendations for potential buyers.

Read this post on the Strativa blog:  Sage Puts Stake in the Cloud with Sage Live



AscentERP Rises in the Cloud ERP Market

2015-10-21T12:37:57.088-07:00

AscentERP is a cloud ERP provider building on the Salesforce platform, with a focus on manufacturing and wholesale distribution companies. Though not as well-known as other ERP providers on the platform, the company is doing some interesting work within its industry focus.

This post provides an update to our previous coverage of AscentERP.

Read this post on the Strativa blog:  AscentERP Rises in the Cloud ERP Market



FinancialForce Expands Its Footprint in Cloud ERP

2015-10-21T12:33:45.163-07:00

FinancialForce continues to show strong momentum in the cloud ERP market, and it is building out its product capabilities in interesting ways.

In this post, we provide an update on FinancialForce, based on interviews we conducted with its executives at Dreamforce, the annual conference for users of Salesforce.com. We also provide recommendations for buyers considering FinancialForce.

Read this post on the Strativa blog: FinancialForce Expands Its Footprint in Cloud ERP



Rootstock's Momentum in Cloud ERP

2015-10-03T08:19:53.410-07:00

Rootstock Software is an up-and-coming cloud manufacturing ERP provider, built on the Salesforce.com platform. Last year, I covered Rootstock in a post about four ERP systems in the Salesforce ecosystem. This year, the annual Dreamforce conference gave me the opportunity to interview Rootstock executives and customers about the progress the firm has made over the past year.

In short, Rootstock is showing good momentum, nearly doubling its publicly announced customer count over the past 18 months. It is also building out its product offerings by developing its own native accounting applications and extending its business intelligence capabilities utilizing Salesforce Wave Analytics.

Read the full post on the Strativa website: Rootstock Rounding Out Its Cloud ERP Offerings.



Kenandy Has a Contrarian View Toward Two-Tier ERP

2015-10-21T13:20:22.694-07:00

Salesforce.com is proving to be a popular platform for developing ERP systems, and its annual user conference, Dreamforce, has been a great way to catch up with all of them in one place.

Last year, I provided an update on the four ERP providers building on the Salesforce platform in a single post. This year, I want to provide an update on these, starting with Kenandy.

Unlike cloud-only ERP providers such as NetSuite and Plex, Kenandy is not interested in a "two-tier ERP strategy." The strategy of "two-tier" refers to the targeting of small divisions or operating units of larger companies that are running Tier 1 solutions, typically SAP or Oracle, at headquarters and in larger divisions. The cloud provider then targets its ERP solution for smaller divisions of the company with integrated to the corporate system, usually for shared services such as financials, central order processing, or cross-company supply chain management. NetSuite points to customers such as Jollibee Foods and NBTY (China) Trading Company as multinational companies implementing NetSuite in a two-tier strategy. Similarly, Plex boasts of Caterpillar and Inteva Products as success stories in two-tier ERP.  

Going against this trend, Kenandy executives say that, although they will not turn away two-tier opportunities, they would rather work in what they consider a more strategic role with customers. This means targeting (1) large enterprises for a complete ERP solution, or (2) serving as a more agile "orchestration" solution for new lines of business within large enterprises.

Read the full post on the Strativa website: Kenandy: Against the Tide of Two-Tier ERP



More Than a Deployment Option: SaaS Is a Business Model

2015-07-06T07:12:54.694-07:00

With the increasingly popularity of software as a service (SaaS), enterprise software vendors today cannot afford to be without a cloud strategy. As a result, traditional vendors have introduced various forms of hosted, hybrid, and SaaS deployment options. These co-exist alongside the vendor’s traditional on-premises license model.

But software as a service is more than just another deployment option, another way to consume software. SaaS is a business model. SaaS not only affects the product: it should drive the nature of how the provider does business, from how the product is developed and maintained to how it is sold, implemented, and supported. It should permeate the very culture of the provider’s organization.
How should the business model of a SaaS provider be different from that of a traditional software vendor? There are at least six aspects.

Read the rest of this post on the Strativa blog: Beyond Deployment Options: SaaS as a Business Model.



Big Changes at Microsoft Dynamics

2015-06-17T13:13:16.689-07:00

In a letter to Microsoft employees today, CEO Satya Nadella announced a major restructuring of its business, including what is essentially a disbanding of Microsoft Business Solutions (MBS), the group responsible for Microsoft Dynamics.
  • Dynamics product development teams will now report up into the new Cloud and Enterprise unit (see above)
  • Dynamics sales and partner relationship organizations will now report to Kevin Turner, Microsoft’s Chief Operating Officer
  • Dynamics marketing functions will now be handled directly by Microsoft’s CMO, Chris Capossela, and his team.

Now, some observers and some competitors will be tempted to say that Microsoft is abandoning its Dynamics products. But, in our view, it would be more accurate to say that the Dynamics products are becoming a more integral part of Microsoft’s overall portfolio. There are three arguments in favor of this positive view of Dynamics.

Read the full post on the Strativa blog:  Microsoft Unbundles Its Dynamics Business Unit



The Problem with ERP Requirements Templates

2015-06-09T06:55:12.504-07:00

Companies undertaking a new ERP vendor selection often begin the effort by using a standard template of ERP system requirements. Though requirements checklists may appear to be a time-saving way to get to a requirements specification, this approach can actually make the project longer and cost more than it should. Moreover, use of requirements templates can actually lead to the wrong ERP system being selected.

In this post, we identify the problems with the use of ERP requirements templates and outline a better way for specifying requirements for new ERP systems.

Read the rest of this post on the Strativa blog: The Problem with ERP Requirements Templates.



Oracle Sued by Customer over Source Code Access

2015-05-30T16:42:11.996-07:00

(image) Oracle was hit by a customer lawsuit earlier this month in conjunction with its MICROS Systems business, which Oracle acquired in 2014.

The dispute involves access to the source code for the MICROS Open Commerce Platform.  Aero maintains that when it licensed OCP, MICROS (not yet acquired by Oracle) knew that Aero intended to build customizations and new features to integrate with OCP.

Aero alleges that MICROS personnel represented that Aero would have ongoing access to OCP source code in order to build its customizations and maintain them going forward.

Although we do not yet know all of the facts, there is a lesson in this case for companies seeking to become digital businesses.

Read the rest of this post on the Strativa blog:
Oracle Sued by Customer over Access to MICROS Source Code



Web Commerce: The Great Equalizer

2015-05-19T14:05:45.083-07:00

Since the mid-1990s, it’s been easy to see how web commerce has disrupted many traditional business models. Early on, Amazon disrupted traditional bookstores, and Netflix disrupted video stores. More recently, Uber is disrupting the taxi industry, and AirBnB is threatening the traditional hospitality industry. But what’s not so apparent is how web commerce has become the great equalizer for small businesses. This is true in at least three ways. Market presence. Traditional marketing channels, such as broadcast media, print advertising, and direct mail, required substantial budgets. Today, a small supplier with a well-designed and well-functioning e-commerce website and good natural search results can rank right up there with major brands.  Global reach. Prior to the commercialization of the Internet, it took substantial investment for a supplier to grow its business internationally. But today, even the smallest manufacturer can be found by prospects in overseas markets. Using international distributors and third-party logistics, small suppliers today can more easily serve buyers around the globe. Cost efficiency. Economies of scale still count in making and distributing physical products. But a well-functioning e-commerce site that is integrated with back-end systems, such as ERP, can cut costs for small suppliers. Combined with cloud systems on the back-end, small businesses can enjoy productivity gains from information systems without having to support a large IT staff. In other words, an entrepreneur with a business concept or a fresh product design can start a business and scale it in a way that was not easily done twenty years ago. Small Companies Acting Bigger In NetSuite's most recent user conference, CEO Zach Nelson touched briefly on this point. He said something to the effect that, with its integrated ERP and e-commerce capabilities, NetSuite was helping small companies act bigger. (He also said that it was equally important to help large companies act smaller, but that’s a thought for another post). I made a note of Nelson’s remarks, and didn’t think much about them until I attended a reception for press and industry analysts later that evening. There, I found myself chatting with John Baker (CEO) and Alan Blackford (COO) of Thos. Baker, a supplier of outdoor furniture. They told me that NetSuite was working on a video about their business. After the reception, Baker sent me the pre-publication video link and I found it an inspiring story. In the video, Baker tells how he had been commuting to his tech industry job in Seattle for many years, but he aspired to do something interesting that would allow him to work close to his family on Bainbridge Island. So, he started his outdoor furniture business to combine his interest in technology with his interest in design.Baker points out that setting up web commerce for this sort of business is quite complex. His operational strategy makes extensive use of outsourced manufacturing, with furniture frames stocked in the warehouse on Bainbridge Island, the cushions from a supplier in Alabama, the umbrellas from California, the fire pits from Tennessee. Though the supply chain is complex, but the integrated system allows the firm to appear to its customers as if it were a much large company. When we are talking to our customers, they are comparing us to companies that are somewhere between 40 to 400 times our size[...]