Google Wave

I am really intrigued by the announcement of a new product from Google – Wave (http://wave.google.com). A review in TechCrunch commented that it is “one of those products that you have to see in action to understand.” Reading the article proved the statement – I only vaguely understand what it is planned to do. Google describes it as “a new model for communication and collaboration on the web.”

The Office gets into ERP

If you enjoyed The Office TV series (the UK version, and even the US one), our SYSPRO colleagues in the UK have created a series of humourous videos about ERP in manufacturing - The quest for the perfect ERP solution.

Project Server 2010 defines its market segment

One of the Microsoft bloggers has provided the software requirements to run the forthcoming version of Microsoft Project Server 2010, which is:

Project Server 2010 will be 64-bit only
Project Server 2010 will require 64-bit Windows Server 2008 or 64-bit Windows Server 2008 R2
Project Server 2010 will require 64-bit SQL 2005 or 2008
Project Server 2010 will only support Internet Explorer 7 or 8 (IE 6 will not be supported nor other browsers)

What this effectively announces is that Project Server is aimed at the large enterprise organisation (over 1000 users), and that Microsoft will not be continuing with an enterprise project management (EPM) solution for the mid-market. I would see that as an indication that Microsoft believes it should be competing with Oracle’s recently acquired Primavera product, rather than with products like Sciforma’s PSNext.

Does SaaS ERP exist?

There is currently a debate on the ITToolbox site about whether ‘proper’ ERP is available as a Software-as-a-Service (SaaS) offering – Does SaaS ERP really exist?

I don’t believe the debate has been resolved either way, but I found some comments interesting:

“Perhaps there are some ERP vendors that have made the leap to true SaaS, but, keep in mind, in the long run, you will pay more money for a SaaS model. Typical payback times are between 2-2.5 years to where it becomes more expensive to operate with the monthly fees (you never “own” the license), vs. paying up front for a perpetual license. Due to the strategic nature of an ERP investment that may not be changed out for 10+ years, the SaaS model typically does not make much financial sense.”

“One major TCO benefit surfaced right to the top in favor of SaaS. We call it the “Six Year Pinch”. We all agree that the payback for on-premise is within the five year time frame; however, growing enterprises require upgrades to the on-premise applications, infrastructure, and personnel (new hires and training). When you factor these costs into the TCO model, the on-premise ERP became 3x more expensive than the SaaS ERP since the investment for SaaS remained linear whereas the on-premise had a investment requirement every 5 to 6 years. True SaaS ERP vendors have one code base (i.e you are always on the latest and greatest version of software). The SaaS vendor manages the deployments behind the scenes and the customer is responsible for enabling new functionality through switches as necessary. On another note, the companies we interviewed who are using SaaS ERP chose the solution not because it is a SaaS solution, but chose it because the functionality met their requirements – the most important decision in any business system selection. The SaaS model was a secondary benefit.”

How the software world has changed

Care of @CurtMonash on Twitter, a photo of the Top Software Vendors in 1989. How the world has changed!

The 10,000 hour rule

Time has an article on Malcolm Gladwell’s Outliers book. One of the significant points in his book is the 10,000-Hour Rule. According to TIME, there is a reason for this rule.

Studies suggest that the key to success in any field has nothing to do with talent. It’s simply practice, 10,000 hours of it — 20 hours a week for 10 years.

If that’s correct, I’m probably at or close to my 10,000 hours in ERP. I started working for an ERP company, JD Edwards, at the end of 1998. Apart from a break of seven months during 2003, but I have worked with JD Edwards, Microsoft Dynamics NAV and SYSPRO ERP for just over ten years – in project management, sales and marketing.

I just wonder how soon after the 10,000 hours does success begin

old DEC, new Oracle

The news that Oracle is to acquire Sun Microsystems sent my mind back over 10 years to a company I used to work for that had many of the attributes that the new Oracle/Sun business will have.

I am referring to DEC, aka Digital Equipment Corp, aka Digital. Look at what Digital had and what Oracle will now have:

Technology	DEC	Oracle
Relational database	Rdb	Oracle
Operating system	VMS	Solaris
Middleware	MessageQ	BEA
Hardware	VAX	Sun

There was a belief about Digital that it became too difficult to manage so many different technologies, and that contributed to the company’s demise. So I can’t help wondering how Oracle will manage.

The difference between the two is that Digital developed its products through innovation, Oracle has been getting them by acquisition.

Unproductive April 2009

April 2009 was definitely the month in which South Africans did not get much work done. In every week this month there has been a public holiday – all but one planned well in advance; the unplanned holiday was the election day on 22nd. That means we have not had a 5-day working week for 4 weeks. The last week is the shortest, with only 3 working days.

Truths About IT Costs

A Harvard Business Review article The Truths About IT Costs lists seven ‘truths’ about IT costs. These are:

1. Enhancements often don’t deliver results commensurate with their costs.
2. Projects are often too big and take too long, partly because unnecessary functionality is built into applications.
3. Previously purchased applications and infrastructure technology are often underutilized.
4. Project failure rates are too high.
5. Tech teams do not have sufficient incentive to achieve high quality, and quality is often not measured.
6. Managers don’t know enough about the systems that support their areas.
7. IT is too risk averse: “No one ever got fired for buying IBM or Microsoft.”

The article reads like some consultants’ reports – addressing problems at a high-level, with a few key recommendations; but when you think about it for a while you wonder how to practically implement the recommendations.

Update: see also Michael Krigsman’s critical blog

Mid-market ERP is regional

Reading bloggers and analysts reviews on ERP solutions sometimes makes me cringe. Often, these writers are US-based, and they seem to think that their experiences in the ERP industry, especially in the mid-market, can be extrapolated elsewhere in the world. I beg to differ.

An example of regional differences comes from a report by the Panorama Consulting Group, which shows that US and European mid-market companies are comfortable with an implementation period for, and an investment on an ERP system which, from this South African’s view, is extravagant.

One of the reasons that mid-market ERP vendors are regionally strong is because, for the mid-market, relevant customer references and industry knowledge in their specific area is important. A recent set of articles about Mistakes Sales People Make points out that creating credibility and lowering the customer’s view of your riskiness is a critical issue.

Another reason why I believe the ERP mid-market is regionalised is because of the markets and the requirements are different. It’s no point a big US software maker talking about their US or European sites to a South African or Indian business, because the worlds and the cultures are so different. This is where I think the ERP vendors should be taking lessons from the consumer packaged goods (CPG) companies.

The CPG companies often have the same product sold in different countries, but the branding, packaging and marketing is specific for those countries. A CPG company in a region will have its own marketing program – from research through to campaign – which could be quite different to the same company in another region. I have not seen that approach adopted yet by any ERP company – where the marketing plan and decision-making is centralised in one developed country.

In my un-researched opinion, based on personal information, these might be some major regional ERP dominances:

UK -  Dynamics GP, Sage
Northern and Eastern Europe – Dynamics NAV
Sub-Saharan Africa – SYSPRO, Sage
Middle East – Oracle

I am not familiar with India, Asia or Australia, but would be interested to hear what others think are the situations for those regions.

So, my recommendation to:

• the northern analyst organisations – by all means keep up what you are doing but be more explicit about regional differences,
• the major ERP vendors – break out of your centralised marketing mentality and create teams in separate countries/regions who are allowed their own discretion on what to market, how to package (modularise) it, and how to sell and price it.