Stifling corporates

A few weeks ago, the managing director and I had a meeting with the South African innovation manager of a major international food manufacturer based in north America.

My managing director has a gift of being able to identify quickly the essential issues that a prospective customer has, and this often enables us to have meaningful conversations early on in a discussion. In this instance we were getting along very well and discussing some really interesting challenges and possible solutions, when the IT manager was invited into the meeting. Within minutes his attitude towards any kind of solution killed the atmosphere.

He pointed out how every subsidiary had to comply with the rules laid down for IT projects by head office. Listening to the bureaucratic process that they had to follow, I was struck by how a good intention - preventing project and software proliferation – had served to obstruct a manager from making his department more productive, and effectively stifled any type of creativity or process innovation.

It also made me appreciate how fortunate we are as a company to deal with owner/manager companies in the medium-size business market. We had meetings this week with MDs and FDs (managing and financial directors) of building and construction organisations. In the space of a single meeting with some of them, we went from an initial discovery session to the directors making decisions about preliminary work we could deliver. They were able to identify the problems, debate and evaluate options, and decide on a course of action to introduce new or improved processes without having to go through a laborious approval process.

Vinnie has coined the term “business process angioplasty”, which is his way of showing how processes should be improved. The food company needs to do some business process angioplasty on its IT adoption process.

Innovation from Africa

This is something I hope Vinnie will put on this New Florence Innovation blog – essentially, an electronic bulletin board that operates without cables or custom software.

Here is where to read more about the Big Board project at the University of Cape Town.

Workday like TOC

Here is an announcement about the new ERP from Workday - Workday’s ERP-Like Software Gains Financials Beta . This is Dave Duffield’s new venture and some of the press are giving it a good pitch as a kind of “new ERP for the 21st century.”

Josh Greenbaum raises the relevant issue that “Workday is pitching potentially revolutionary ideas to a fairly conservative bunch. At the end of the day, particularly when it comes to CFOs and controllers, cool technology—even as significant as model-driven [technology]—isn’t what’s going to sell.” His comment reminded of the Theory of Constraints (TOC) approach to business, which sounds very plausible and sensible, but which hasn’t taken off in any big way in business.

Workday is also getting attention purely because Dave Duffield started Peoplesoft (now part of Oracle) in the 1990s. But there were a number of hi-tech founders of the 1990s who made a name starting one company then tried to repeat it elsewhere without the same result. Monte Zweben who founded Red Pepper Software comes to mind; after Peoplesoft acquired the company Zweben went on to start Blue Martini but that company never achieve significant profitability and was eventually taken over by a private equity company.

Sources of innovation #1

The CIO Weblog summarises a McKinsey report on the software industry that says, among other things, that customers expect software innovation is more likely to come from smaller vendors. That’s encouraging for our company with the software development plans we have.

The company I work for has many ERP manufacturing clients, and a number of them deal with long term projects. While the term ‘engineer-to-order’ could describe their busic business process, it doesn’t indicate the long-term nature and issues around their business. We use the term ‘project manufacturing’ because each engineering order is unique and must be managed as a different project. Each project can extend over several years.

When your business is making something that takes several years, a number of the traditional management and financial practices have to be adapted. Revenue doesn’t necessarily come in every month, but is related to a delivery milestone. Inputs to the manufacturing process may be ordered up front but only delivered a year or more later, which means escalation costs have to be planned for. Because the work takes so long, you need a means to measure progress so that you know that you are on track all the time.

Our application has been developed with a customer to address those and many other issues. From a technical perspective, we have built the software to be as independent of the back-end financial system as possible; the aim being to slot in with any ERP application. Using Microsoft’s .Net Framework, we are able to do that as many ERP applications are .Net compliant.

I wanted to write this blog to substantiate that innovative software could come from smaller companies. It’s thanks to technical and architectural developments in recent years that companies like ours can now do those things. I will go into more detail about our product in another blog.