Dynamic process management – dream or reality?

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?

A sign that social business is growing up

Michael Fauscette made some wise comments about a new company, Pragmatic Enterprise 2.0, that announced itself recently:

without a methodology, a risk mitigation approach, the correct skills and change management a project is doomed. Businesses need enterprise class, scaleable social tools, social processes and knowledgeable assistance to pull off this level of business transformation.

Earlier this week some colleagues announced a partnership that is both good news for businesses that want to do social transformation projects but also an indication that social business is growing up.

I think Michael is right.

I also had a discussion with one of the founders, Michael Krigsman, on Twitter that their product diagram looked like it was designed by a committee and was difficult to understand. I am looking forward to how things develop on that front.

Safra Katz’s false analogy

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.

Experiential marketing for enterprise software

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?

Customers at the whim of public software company

Thomas Wailgum, writing about Oracle’s 2009 1st quarter results, makes some telling comments.

it becomes clear that Oracle is trapped in the age of foolishness and epoch belief that shareholders are more important than customers, while those customers are in the worst of times and full of incredulity.

Oracle’s profits rose by 4 percent year-over-year to $1.12 billion, but revenue fell by 5 percent to $5.1 billion … New software license sales fell 17 percent … A neat trick, did Oracle pull: Increasing year-over-year profits while revenues fell … Oracle’s enterprise software maintenance- and support-related revenues grew 11 percent to $3.1

In effect, Oracle is telling its customers that they, the source of the company’s revenue, are not as important as the shareholders. The way Oracle has increase revenue is by increasing software maintenance that its customers pay.

The question those customers should be asking is “what value are they getting from increased maintenance.” In other markets, a supplier would lose customers if it treated them in the same way.

Of course, there are alternatives. Privately-held software companies are not accountable to external shareholders and have a long-term perspective, rather than the short-term one that drives public companies who rely on stock markets for approval.

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.

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!

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.

Organisations need to be project-prepared before they adopt PPM technology

Brian Sommer commented on reports that organisations should really start looking at project portfolio management (PPM) – PPM & IT Management – is now finally the time?

Many organisations have some rudimentary project management capability – such as an enterprise licence for Microsoft Project – but have no idea how to really benefit from a project-oriented to their business.

The work that I have been doing at my company in the last 2 years has shown me that simply implementing a technology solution is most unlikely to make an organisation project-prepared. The problem is that the project software vendors like to promote their software as the first step. Working with consultants like the X-Pert Group have shown me that to become project-oriented, an organisation has to go through a cultural change, starting at the executive level, and has to be prepared for a long learning curve and a number of struggles on the way.

So while I would love more people to come to us for project technology, I would recommend that they put their houses in order first.

Rise of EPM applications

Thanks to Twitter, I have started to follow the blog by Forrester Research’s Ray Wang. He seems to have coined a term project-based solutions (which we might start to use to segment our software), and tracks software companies in that segment.

So I am surprised, and pleased, to see a number of start-ups in the project space. They seem to be more in the IT and workforce project management space – eProject (now Daptiv), Tenrox, Augeo, QuickArrow, and OpenAir (NetSuite); interestingly, SaaS offerings are quite common.

Until now, EPM (enterprise project management) has been almost an underground software offering. Noise about it started with the acquisition of Primavera by Oracle earlier this year. But the other major vendors that I am aware of – Microsoft’s Project and Portfolio Servers, CA’s Clarity – seem to follow a ’stealth marketing’ approach to their products.

With the rise of the project start-ups, I wonder if the majors are going to sit up and take more notice of this segment of the software market? As we start to expand our opportunities in the project ERP space, I hope that the attention and focus around EPM grows.