IT versus Accountants

Which is more valuable, and easier to manage – IT or accountants? According to a post by Dennis, it seems that IT wins on both counts – in the UK at least.

Amazingly, businesses report that they are more likely to be within budget on IT investments than on accounting ones. Also, the accountants see less value in IT than business (their clients) do.

So much for the big consultants understanding IT.

Software packages and car models

A recent blog by Dennis Howlett on ZDnet mentions that Microsoft is adding a small user finance/ERP package, Dynamics Entrepreneur Edition. This package was one of the apps that were acquired when Navision Damgaard was bought; it is not a new app but never got exposure outside of some northern European countries.

This new licence is described as allowing “the opportunity to trade up customers as they grow because a switch to the full blown product will likely involve little more than a flip on the registration key switch.” My question about this approach is - since people who buy entry-level models of cars (eg, Toyota Tazz) do not necessarily upgrade with the same company (eg, to a Corolla), why should we expect companies to do the same with their ERP software?

When people upgrade their car there are other requirements and attitudes beyond the fact they might get a good deal from their current vehicle supplier. For example, a Toyota Tazz owner who wins the Lotto would be more likely to buy a BMW or Mercedes than a Lexus because their are other issues involved.

When companies come to upgrade their ERP, they look at other things than just the licence cost, which anyone who sells and implements ERP can attest. We have opportunities involving companies using entry-level products who are not considering upgrading from, say, Pastel to AccPac or Sage, which are like different car models from the same company.

The software licence price really isn’t an issue, because: 

1. a competing vendor can and will adjust their licence pricing to be competitive with an incumbent, if the deal warrants it;
2. the implementation costs can far exceed the licensing costs, even if its upgrading to a different package in the same line; 
3. each package has its own way of dealing with functionality, so project activities like requirements analysis or training have to done as if this is a brand new implementation;
4. an incumbent must treat it as a standard sales process because all the normal sales issues have to be addressed, even though its an existing customer;
5. quite often companies feel their incumbent ERP has let them down are are looking for something that will work better for them.

Until a customer can upgrade from a lower-level ERP product to a higher-level one in the same way people can upgrade from Windows XP to Vista, having different levels of ERP packages will not be a safe guarantee that customers will stay with the same vendor as their ERP needs grow.

Happy birthday Madiba

South Africa’s first democratically-elected president and one of the top statesmen of the 20th century, Nelson Mandela, celebrates his 89th birthday today. He is affectionately known as Madiba.

One of his activities today is to launch a new initiative to promote dialogue. His partners in it are - ex-archibishop Desmond Tutu, ex-US presidents Bill Clinton and Jimmy Carter, ex-UN head Kofi Annan, ex-Irish PM Mary Robinson.

Oracle blogs need to be human

I was checking out the some of the Oracle blogs on their corporate blog site, but I have to say they are all technical, don’t appeal to me as a non-Oracle person, and don’t have anything that reflects what might be called ‘a human face at Oracle’. (But then again, is Larry Ellison human?)

Oracle PR – check out Thomas Otter’s site as an example of an SAP blogger whose contents are interesting and understandable to non-SAP people.

Zim – tsunami, meltdown

These are the words being used to describe the situation in Zimbabwe – a tsunami of illegal immigrants (Saturday Star), inside the meltdown (Sunday Independent).

It seems that the province most affected is Limpopo, the most northern one and bordering with Zimbabwe. According to reports, it is estimated that between 3000 and 4000 people a day are crossing over the border illegally - or 100,000 a month. That must be having a significant impact on the local economy, and causing a lot of work for social services, police and immigration.

Back in the late 1980s and early 1990s the government of this country ignored the threat of HIV/AIDS, and as a result SA now has one of the highest AIDS infection levels in the world. It concerns me that the government today is ignoring the Zim situation, and we may only know the price of that in a few years time.

The terrible thing about the current Zim situation is the helplessness that people here are feeling. Individuals feel powerless to do anything when Bob Mugabe is so obviously a complete megalomaniac, and Thabo Mbeki doesn’t seem to be doing anything to change or help things.

In our churches, the best thing we can do is pray.

IT marketing changes

An interesting item in a MarketingSherpa report on B2B (business to business) marketing is that companies consider that they find the vendors, not the vendors find them. The authors comment that for marketing this means changes.

“Instead of doing one big campaign of the year, I would break that budget up into 12 months and do a systemic, cross-media, low-volume campaign that goes on all year; a year-long presence in every possible media that those prospects are looking for you in”

The vast majority of companies start looking via a search on Google, which means that search engine marketing and optimisation should be a priority – “if you’re just depending on someone in the Web department who thought he’d do it on the side as a favor to the marketing department, you’re not spending enough.”

There’s also an interesting finding about how web site layouts should be done as people “find it easier to find what they were looking for when it was fewer columns and there were navigational items well above the fold and their view wasn’t blocked with this big ad in the middle.”

Mobile apps adoption

Adopting some of the new social network apps – Twitter, Facebook, Google Reader – has exposed me to the mobile solutions that those apps provide (for use on my cell phone). I am now quite used to spending some time viewing my RSS feeds on Google Reader mobile, updating Twitter on Twitter mobile, and checking things out on Facebook mobile - while I am waiting, usually in the car for a family member.

The way these mobile versions have been skillfully adapted, made user-friendly, and provide information in a concise manner, makes me wonder whether the next wave of ERP apps should focus rather on mobile solutions rather than Software as a Service (SaaS). The young generation, like my kids, are very familiar with using a cellphone as an Internet platform and for social networking (in SA they use Mxit), and it is getting common to see business people checking emails on their phones.

SaaS and Web 2.0 may be a sexy new wave for the IT people in the developed countries, but in developing countries the lack of good telcoms infrastructure makes it a luxury. However, many developing countries have good mobile communications, so applications that could be used on a cell phone might have a lot more traction.

So why have ERP vendors not started adapting their user interfaces for mobile use? There are obviously some ERP functions for which a small screen on a phone won’t work, but activities like approving a purchase order or leave/vacation application, or completing a timesheet, could be provided as a mobile application, and I am sure there are many others.

The technology is obviously available, as my mobile usage can attest, but it is the foresight, and creative insight and ability to re-design information layouts on a cellphone screen that seem to be lacking at the moment in enterprise vendors. An example of this creativity is the Opera Mini browser on my phone which allows me to view normal websites (I see they are adding more functionality as well).

Managing – learning from kids

Sig has some interesting comments to make about managing and leading that you can only learn from kids and teenagers.

On-premise vs SaaS

A comment recently by Vinnie that Oracle is ‘going retro’ with its plethora of ‘on-premise’ apps, as opposed to SaaS (Software as a Service) apps, makes me wonder about the on-premise vs. Software as a Service (SaaS) debate as applied to enterprise software.

I can see why an app like FreeAgentCentral can be effective as a service, but how could that be applied for big apps that need significant customisation? In the space that my company operates – complex manufacturing and project ERP – many installations have unique customisations and need guarantee of high availability, neither of which I can see SaaS offering. But there is a bunch of commentators - Phil Wainwright, Nick Carr et al – who seem to think that SaaS is the way to go. One analyst group is also putting SaaS as the next wave of adoption for enterprise software. 

In the on-premise vs. SaaS argument, Dennis made the point that this is ‘not an either or world’. Add to that coverage by Thomas of Hasso Plattner’s comments on the Lego analogy . Although this refers to the argument by the Software As Services (SOA) proponents that ”the ‘enterprise’ is a series of interconnected businesses that can be snapped together on demand”, it seems to me to be something that the SaaS followers also use. As a key founder of SAP, Plattner knows how enterprises work and has said that Lego is “not the model for corporate or enterprise software. Lego bricks are not the model for architectural models. No architect in the world uses Lego for models, and they are a few magnitudes simpler than enterprise software.”

SaaS apps for business tend to be focusing on specific requirements within certain functions. That is creating the old problem of ‘silos of information’ within those companies that have adopted SaaS. One reason why companies in the 1990s adopted ERP was to get away from those silos to a system that promised an integrated view of the organisation.

Since Gartner’s prediction in 2001/2 of the rise of ERP 2 (ERP between enterprises – ERP 1 was within enterprises), which still hasn’t happened, I am sceptical of analysts like the one on the Sandhills blog who forecasts mainstream adoption of SaaS in the next few years.

The key point to my mind is the magnitude of complexity of enterprise systems. So what do you do to handle complexity, you abstract it to smaller blocks or layers that can be more easily managed. What then would be the layers for an enterprise SaaS? Could they be technical (as in database, application, rules, presentation) or functional (payments, receipts, order management, inventory control, etc)?

When it comes to customisation, how would a vendor provide a highly configurable, multi-tenanted system where an implementer could also provide add-on applications for unique requirements? There are probably some very bright people who know this answer, but I haven’t heard from them.

I am not discounting that SaaS will have an impact on us enterprise software geeks. The guys at Microsoft are getting into SaaS for enterprise apps , and Thomas regularly comments about SAP’s excursions into SaaS. But I doubt that, outside the US and a few other places, we will see companies changing their on-premise apps for SaaS ones in the next few years. New enterprise systems require not only extensive technical work but also extensive change management, and organisations have been through a lot of that with traditional ERP in the recent times to want to go through it again soon.

State of the nation

There has been a lot of press coverage about the latest crime figures released, and whether they are terrible or just bad. But my attitude is to look at the state of the nation as a whole.

According to the government-published development indicators, there is good and disappointing news. For example:

• good – GDP indicators, capital investment, budget deficit, government debt, interest rates, inflation, exports, R&D spend, employment, per capita income, housing, potable water, land restitution and redistribution, immunisation, matriculation and graduation results, confidence and pride, tourism, tax revenue.
• bad – foreign direct investment, unemployment, inequality and poverty, life expectancy, maternal deaths, HIV and TB prevalence, Transparency International ranking.

You could argue that this indicates things are getting better, but probably too gradually and not in all the right areas.

The latest crime stats are available at:
 http://www.saps.gov.za/statistics/reports/crimestats/2007/crime_stats.htm 

The big story is that while crimes like common assault and robbery are down, aggravated robbery, robbery at home, car hijacking and murder are up.

The crime information is available by station, and for our station – Linden in Johannesburg – I see the stats are fairly stable or decreasing, but robbery has increased.