This is a cross-post from the SYSPRO SmarterERP blog
Whether you call them RFIs, RFPs, RFQs* or some other acronym, and whether you are a vendor or a customer, those three letters conjure up the same impression in many minds – pages and pages of detailed questions about a software product’s functionality, which takes weeks to create, days to respond, and weeks again to review.
Frankly, no one likes these documents, but businesses evaluating ERP software keep producing them, and vendors keep responding. Isn’t there a better, more efficient, ‘leaner’ way? According to one view:
Regardless of how many consultants a client uses to select software, many would have been far better selecting out of a hat.
The people who see value in ERP selection documents are the consultants whose job it is to create those documents. I know of cases where the client didn’t really understand the reason and the purpose of several questions. I have also been on a project where literally hundreds of selection questions were used, but once the implementation started those questions – and the answers – were effectively forgotten.
The now undeniable truth is that the selection of software plays little part in the final success or failure of an ERP project. What makes the difference during selection is addressing the real questions.
- Has the organization identified the major business challenges that they want the ERP system to address, as well as the key business drivers the ERP system must support?
- Are the business processes which operate in the business clearly understood and defined, and how should the ERP software assist or improve those processes?
- Have executives clearly communicated the reason for, and objectives of, the ERP project to the rest of the enterprise, and more importantly, have they taken the time to get buy-in from the staff?
If those questions can be answered, here is an alternative process for selecting an ERP system:
- Check with other organizations, or industry groups, what ERP software deployment they know of, and their experiences around it.
- Do some of your own research. These days a bit of time using a search engine, and looking for some relevant blogs can give you a reasonable idea of issues in the ERP world.
- How do the vendors you have now identified articulate the direction and focus of future functionality in their product roadmaps, and is that consistent with your organization’s goals and plans?
- How are the vendors represented in your area? Do they have a local presence for training and support? What is the quality and quantity of skilled resources the vendor or reseller have available in your area?
- From the list you have now created, invite the vendors or their resellers to present to you. Provide them with some key requirements you need in an ERP and ask them to do a live demonstration or proof of concept using their software. Do they show an understanding of your business and its key issues? Can they show proven functionality in areas that concern you specifically? Lastly, what will it all cost?
The result of this process will be a few vendors with proven understanding and experience, who can then be engaged in more detailed negotiations. You might also ask these vendors to summarize in writing how their proposals address your key requirements. The vendors who understand the business issues should not only do a good summary but may also give you additional ideas you hadn’t thought of.
The key point is – don’t sweat the small stuff; avoid getting into too much detail on small issues of functionality. Focus on the important issues of the business and how the ERP software will allow you to improve them. No ERP system will address every single requirement perfectly, so make sure the ‘must have’ requirements are met.
Let me know if you have other ideas for selecting an ERP solution.
* RF = Request For. I = Information. P = Proposal. Q = Quote
I started blogging on a South Africa site in 2005, but moved here to WordPress after about a year. That South African site is going to be terminated soon so I decided to copy over a number of my blogs to a page on this blog – see the Archive page.
It was interesting for me to see some of the observations I made back then – some of them were quite presceient, others actually came true or show things haven’t changed at all.
I was one of the many who was greatly impressed and influenced by Geoffrey Moore’s early books on the Technology Adoption Life Cycle and the High-tech Marketing Model – Crossing the Chasm and Inside the Tornado. These books deal with the issues of high-tech product development, marketing, sales and service; describing and analysing processes, positioning and practices of a product as it goes through its life cycle.
Not only did Moore discuss how a technology product should be packaged, delivered and adapted through the life cycle, but he also dealt with the changes in service and support that would be needed, depending on the stage of the life cycle.
For a long time after I read his books I assumed that it was written for the benefit of customers first, then the high-tech industry managers and other workers. However, after attending SYSPRO’s international executive conference, and hearing CEO and founder Phil Duff talking about how the company focuses on its customers, and how it has been, and will be, delivering products and services, did it strike me that Moore’s books are really aimed at one audience – not customers or vendor people, but technology industry investors.
This is another case of me taking a long time to ‘get it’!
Because SYSPRO is privately held, the focus has always primarily been the value of the product to customers, and the protection of a customer’s investment. When Phil Duff speaks about what SYSPRO will be providing in the future, he talks about things that make a difference to customers. At other established ERP companies, a major concern is on the value to shareholders and their returns (something I have personally seen).
When you look at Moore’s bio and credentials, as a venture capitalist, the purpose for writing the books should have been obvious. So in future, when I come across one of Moore’s other significant concepts – e.g., the whole product – I will remember that while this is for the customer, the ultimate reason for the concept is to deliver benefit to shareholders.
The question however seems to be whether these stats have taken into account all the enterprise apps that still use SOAP.
There is a good comparison of the two APIs here.
Does anyone remember previous discussions along the seem theme over the the years: is X dead, where X =
- … add more languages here
The saying “swings and roundabouts” is a British one that describes a situation where you can win and lose. I am using it here to point out that Microsoft’s combination of business divisions may be giving it advantages on both the traditional (Windows, server) as well as the Dynamics (ERP) sides.
What kicked off this train of thought was an article by Josh Greenbaum: The Realignment of the Enterprise Software Market: Oracle vs. Everyone, Microsoft in Ascendance, and Watch out for Infor. The article notes that Microsoft’s Dynamics division
… the former bastard stepchild of the Microsoft portfolio, is now becoming the poster child of innovation in Redmond. And Redmond is taking notice big time[.]
Dynamics is a great driver of product pull-through. Today, every dollar of Dynamics generates from $3 to $9 in additional software sales for Microsoft.
Note: the article mentions other points but my focus is the first one.
I know from a Microsoft partner perspective that product pull-through is one of those phrases that brings a sparkle to the eyes of Microsoft’s partner managers.
Does this mean that Microsoft is discovering the value of a wide eco-system? Greenbaum makes an interesting comment about Microsoft, in comparison to Oracle:
This places Microsoft front and center in a battlefield where it is deploying 21st century technology against an Oracle that fighting the battle as though this were still the 20th century.
Microsoft’s strategy seems to provide a whole range of “interchangeable, plug and play” components. In my opinion this is far better than the Oracle strategy which wants to control the full stack – from hardware, to database, application, and middleware.
I have thought for some time that the Oracle strategy of vertical integration is an anachronism since so many other industries have abandoned the practice. In effect, it is a throwback to a bygone era when IBM ruled the computer world in the 1970s.
I also wonder how customers would feel about putting all their computer ‘eggs’ in the Oracle ‘basket’? There is an advantage to having a single, strategic supplier, and a single ‘throat-to-choke’, but a small customer has very little bargaining power with such a large supplier.
I read with much interest Don Dodge’s predictions for 2010 and the new decade. I find predictions a bit of a waste of time – when you look are what people predicted for 2009, about half came true, which is what a random selection would give. However I was struck about the prediction on future computing and mobile computing.
“Your cell phone will become your primary computer, communicator, camera, and entertainment device, all in one … I think in the near future there will be docking stations everywhere with a screen and a keyboard. You simply pull out your phone, plug it into the docking station, and instantly all your applications and data are available to you … Your phone will have enough storage so you can decide which applications and data are stored on your phone, and which will be in the cloud.”
When I look at what I can already store on my cellphone, this prediction seems quite plausible. But if people store applications on their phone, which they will presumably choose themselves, and if they decide to use the cloud to select their preferred applications, how will this impact the role and responsibilities of the company IT function? Their role of deciding what applications are suitable for the organisation becomes irrelevant, but they still have to ensure application and data security and integrity.
”Mobile phones are clearly the next computing platform … Mary Meeker of Morgan Stanley says Mobile Internet usage is bigger than most people think, and it is exploding.”
Application developers will have to re-consider the presentation layer for a different user interface and experience, and will have to assume that the mobile interface will be the preferred or default one, rather than as a side issue.
Where I do have a problem is the predictions about cloud computing and mobile bandwidth:
The explosion of reliable broadband bandwidth, virtualization technology, cheap storage, memory, and servers, has made Cloud Computing the obvious choice for the next decade … Why buy servers, hire IT admin to manage them, buy operating system licenses, application licenses, pay 20% maintenance fees every year, worry about security updates/breaches, hassle with asset management, etc., when you can just “pay as you go” with cloud computing resources? …
The new 700Mhz wireless spectrum became available in 2009, and will be built out over the next decade … Cell phones will see the same explosion in bandwidth in the coming decade, which will enable new applications and uses.”
This is a simplified view of the world. Firstly, business applications for even small and medium businesses are getting more complex. I’m not talking about simple accounting or CRM solutions, but the complex applications to manage orders, receive and dispatch inventory, schedule and manage manufacturing operations. It isn’t as simple as paying and starting, as the “pay as you go” mantra likes to make out. It may well be that business hands over the management of the application infrastructure to a cloud provider, but every successful business has a particular way of working that is different to others, and that is unlikely to be assisted by a standard enterprise application.
Secondly, the comment about mobile bandwidth is US-centric. Developing countries like South Africa are constrained in all sorts of bandwidth (Internet, radio, cellphones) because they have been already allocated to developed countries years ago. That is not to say that cellphone bandwidith will not significantly increase. What Don fails to note is that the growth of the mobile Internet will probably come more from developing regions like Africa than the US, as reported by Opera and Google.
However you look at it, the next decade is probably going to redefine the way we use, consume and interact with computing resources.
I was helping an NGO as they did a food hand-out to hundreds of poor children in Alexandra, Johannesburg. As we were doing the hand-out, the original plan for the hand-out process had to be adjusted on-the-fly as we discovered there were problems with the process. We didn’t stop to review the process in detail, then present a proposal to change it. Someone had an idea how to re-organise some tasks, and we adjusted to it, and continued on.
That experience made me wonder if organisations could ever get to that stage of dynamic process management. In the past, processes had to be defined, documented and agreed, and neither the levels of technology nor communication enabled that to be done quickly in the first place, or when processes needed to change.
However, with the rise of social networking and collaboration in the organisation (the Enterprise 2.0 phenomenon), the speed and channels for communication have increased such that rapid communication across and between groups should not be so difficult. That means that if a problem is found in a process, there should be no reason why the situation cannot be immediately communicated to the people in the organisation who can review and change it.
On the technology side, process management software now allows organisations to graphically create and manipulate processes that will be performed. Software like SYSPRO Process Management connects directly to the enterprise software applications that the business runs, so that as a process is configured, the underlying ERP system is also configured. That means that if a process is found to be problematic, the process management software could be used to re-configure the process and the ERP system more quickly than has been possible before.
There are obviously other issues that need to be considered when changing processes, it’s obviously not as simple as I am describing; for example, there might be performance and testing considerations. But I am starting to wonder whether dynamic process management could become a reality in business, in other words almost real-time process management and change. Or is that just a dream?