I have received a letter in the mail from Zurich Insurance that they noticed that a back-up storage tape with some of my personal data has been lost during a transfer.
The fact that the transfer happened last year but they only recently discovered the loss is a bit disconcerting. What’s also concerning is that I don’t recall ever having had any kind of policy or investment with Zurich.
It just goes to show how much of our personal data is held by organisations we have don’t deal with, even on an occasional basis.
It’s times like this that I appreciate why countries enact data privacy laws – South Africa doesn’t have any yet. Then maybe I would known that Zurich also kept personal information about me.
Use of an analogy is one way of trying to get people to understand your proposition. Joint President of Oracle, Safra Katz, is reported by Michael Krigsman - Oracle’s integration strategy: Customer trade-offs – to have used the analogy of buying a car vs buying technology to explain Oracle’s acquisition strategy.
… we would go online to buy thousands of disconnected parts from many vendors, which our children would assemble into a completed car because the parts would not come with instructions. Just as we finished assembling the car … a light would go on indicating that an upgrade or patch is required. Katz said, “We would then do it all again.”
Katz used this car assembly story as a metaphor for product complexity in the enterprise … Oracle reduces this complexity by bringing together under one roof infrastructure, hardware, and database products that are “engineered to work together.”
The problem is that analogy is false – its trying to make out that purchase decisions by consumers and businesses are the same. As a marketing colleague has pointed out about information, there a significant differences between the consumer and business market.
When you buy a car, you don’t have to consider whether the wrong car choice will change your personal or family life (unless you can’t pay or buy an old, unsafe car). Business decisions on enterprise software are far more complex and have a different set of considerations.
As Michael points out:
Even though integration can reduce implementation complexity on customer projects, large vendors may introduce another set of risks.
While a large end-to-end vendor can offer greater simplicity, the trade-off involves the customer transferring power to that vendor. In a single-vendor world, customers who invest in large systems can become beholden to the large vendor, which gains greater control over pricing, product features, maintenance costs, and future development.
Update: See Vinnie’s comment on SAP’s perspective of integration strategy
Brian Sommer suggests that technology marketers should adopt the practices of consumer marketing and use ‘experiential’ marketing techniques - Selling that Technology: Functions, Features & Fools.
I’m trying to imagine how an ERP vendor would approach this. What’s the experience of a sales order clerk capturing an order, or a production manager managing work-in-progress?
The issue is that they don’t make the buying decision. The only experience you would have to focus on it that of the CEO or CFO. And what would that be?
The bloggers I respect disclose their business-related interests. So I feel it appropriate that I disclose my new business role.
I am joining the ERP vendor SYSPRO. My position will be in Product and Industry Marketing and my responsibilities will include some standard duties like:
- product-based messaging and collateral,
- working with Product Managers to understand and articulate product value,
- assist and communicate with sales to position, articulate and sell product,
- working with Marketing to optimise marketing through all channels and drive demand generation and awareness programs,
- support the company’s analyst relations effort,
- work with User Groups around the world.
In addition I will be able to participate in social media and networking, so what used to be a hobby now is part of my job.
I will also be working with the team on the launch of a new release of SYSPRO in the coming months.
There are only two Tier 1 ERP vendors – Oracle and SAP – but there are several Tier 2 vendors (and Microsoft is a Tier 2 vendor in the ERP space, despite what some say). If your company is a large or international business, you don’t have much choice and the chances are high that you are a Tier 1 ERP customer. If, however, the business is a small- or medium-size organisation, or if you have de-centralised divisions, you have a much wider choice of ERP vendors.
In June 2009, the analyst group, Gartner, published its “Magic Quadrant for Midmarket and Tier 2-Oriented ERP for Product-Centric Companies”, which is their evaluation of some major Tier 2 ERP vendors based on two criteria – Ability to Execute, and Completeness of Vision. For some consulting research I was asked to do, I had the opportunity to review the Gartner report and some of the comments that were made about it:
Tough to retire in this economy
The One and Only Choice in SMB ERP: Microsoft Dynamics AX
Gartner Mid-Market ERP Magic Quadrant: Should Have Stayed in Retirement
Gartner’s conservative mid-tier ERP Magic Quadrant
Leaving aside the comments about “where are the SaaS vendors?”, it interested me how analysts, all based in northern hemisphere, 1st World countries, were surprised why some vendors were placed where they were. For example, Frank Scavo’s amazement that:
QAD and Syspro show a better "ability to execute" than any SAP or Oracle product
Epicor Vantage shows a better "completeness of vision" than any SAP or Oracle product
The point is that these vendors have dealt with mid-market customers since they started and understand how those organisations operate and think. As I have mentioned in a previous blog, the super-size IT vendors have such a bloat of bureaucracy that they discourage the smaller, more nimble companies. The only way the Tier 1 ERP vendors can approach small- and mid-size companies is via a reseller channel which can communicate with that market in the appropriate way.
Gartner’s report classed only one Tier 2 ERP product as a leader, Microsoft Dynamics AX (Axapta has it used to be called). This surprised a number of bloggers, including me. The problem is that AX does not have a large customer base, and is more complex to implement than some of the other Tier 2 products. There has been a spate of comments on the ITToolbox ERP selection site about AX, for example, here; finding good and experienced AX implementation partners and consultants is not that easy, compared to a number of the other Tier 2 vendors.
Some people think that, because Microsoft is the global leading brand when it comes to desktop and server software, its ERP software must have the same attributes. Except for the CRM product, its ERP products were acquired – GP (formerly Great Plains) because it was strong in the US and UK, and NAV (Navision) and AX because of their presence in Europe. But as Dennis Howlett noted:
The reality is that Microsoft’s acquired products … don’t travel well. When they do, they travel inconsistently.
Another problem with Microsoft’s Dynamics division is the inconsistency of regional management; to some extent Microsoft is still dominated by a desktop and server marketing and sales mentality.
The Tier 2 vendors to watch are the Challengers as they “have broad and mature ERP systems” – SYSPRO, QAD, Oracle’s JD Edwards Enterprise One (formerly JD Edwards OneWorld), and Infor Syteline. I remember being told some time ago that it was the Challengers that have the best chance of becoming leaders, rather than the Visionaries.
There seems to be a belief in some quarters that when it comes to IT companies, the larger the better; for example, Acquire Me! Oracle’s and SAP’s Next Likely Targets which quotes:
"A move by Big Blue, say on a midmarket ERP partner like Lawson or Infor, could presage further consolidation in that arena by Oracle and SAP." (The 451 Group report – Where Might Old Foes Oracle and SAP Each Look Next to Stave Off Apps Hunger Pangs?)
However, from a customer (and a partner) point-of-view, dealing with some larger ERP vendors means going through the bureaucracy to get even small things done. Also, large software vendors seem to go for a centralised control model. It might be old news, but at a conference in 2008, I was told by a senior local representative that Oracle’s process for confirming quotes for SA companies could only be done by Head Office in the US, this required a wait of several weeks before a quote could be approved.
Waiting that long for a quote might be OK in some countries, but South African business people are not typically enamoured by long decision cycles.