Bimodal IT doesn’t mean complexity

bimodal_itFor over a year the Gartner analyst group has been talking about the need for ‘bimodal IT’. An article in InformationWeek described it as the need for an IT organization to

split its focus between the core services that make other things possible and the more exciting possibilities of digital innovation.

When I first heard of bimodal IT I was still working in the ERP software space. Coming from that traditional background I used to think that any bimodal IT effort had to be somewhat big and complex. But now I’m at a cloud software company I’m beginning to see things differently. Continue reading

What journalists don’t understand about M&A in tech

There is an article in BusinessWeek about SAP acquiring software companies.  As it’s a story on a business-oriented site, the emphasis on matters financial is accepted. However it did make me question whether (some) journalists understand the impact of M&A in software companies.

The article mentions firstly that SAP has struggled to catch up with Oracle and, but considering Larry Ellison discounted the cloud until fairly recently, and SAP is still the largest enterprise software vendor, I wonder what ‘catching up’ the writers are thinking about. From the way they write, it appears the writers think that the only real software business must be cloud based.

The emphasis of the article though is on the acquisitions SAP has been making. It find it interesting that, again, the writers compare SAP against Oracle, calling Oracle ‘a deal-making machine’; as though deal-making should be a major focus of a software company.

What I see in the article is an appreciation of M&A for investors; I don’t see an appreciation for what it means to customers, and the work that must be done internally by developers to meld the software together. Vinnie Mirchandani has made the point that:

… most CIOs are still ambivalent about technology M&A. As most will honestly say, we gave Oracle (or IBM or whoever) a chance to competitively win our business a few years ago and they did not. They are backing into our business with acquisitions.

Tom Peters has been vociferous about it:

 why do these ego-maniac CEOs keep merging…? Why do their boards sign off? Why does Wall Street go along?

I worked at a US software company some years ago that did a few acquisitions, and saw the problems that it creates.

Software from two different companies rarely has the same user interface and user experience, and the integration of the two systems is often complex. Despite the best efforts of developers to sort out the technical challenges, customers have to bear the brunt (ie, cost and trouble) of the early integration implementations.

So instead of focusing so much on the money side, why don’t journalists explore what the impact will be for existing customers – whose payment of annual maintenance revenues funds  the M&A activities.

What’s so special about integration to SAP?

I saw a short news article [link no longer exists] that Microsoft’s Dynamics AX (the old Axapta) could now provide integration of documents between AX and SAP (the Microsoft press release is here). My initial thought was “what’s so special about that”, until it dawned on me that some people think SAP integration requires something magical. Granted, SAP is not the easiest application to work with, but it does have integration hooks – Netweaver being one.

If you are not sure why SAP integration is needed, the reason is that many large national and mega international corporates run SAP at the head office or for large divisions, but they don’t necessarily run SAP everywhere. There are large multi-national companies which uses SAP in their main offices, but the dozens of smaller divisions don’t run SAP, they use SYSPRO. Why? Because SAP is so complex and expensive it makes no business sense for a smaller organisation to use it, but SYSPRO provides all the functionality they need (for distribution and manufacturing) at a much lower cost and far less complexity. Analyst R ‘Ray’ Wang has discussed in more the ERP needs of small and medium businesses (SMBs) and when companies should have a two-tier ERP strategy.

Microsoft will try to sell you their Biztalk product to help the process. However, Biztalk is costly and adds another layer of technological complexity to the integration issue. If you run SYSPRO you don’t need Biztalk for SAP integration.

SYSPRO solved the problem a long time ago when it introduced its integration software and a feature called Document Flow Manager (DFM). SYSPRO solutions (the proper name of the product) is a set of components that enables access to SYSPRO business logic and data without using the SYSPRO client interface; it was one of the first applications to take advantage of Microsoft .NET Framework for interoperability and application integration. The DFM module consists of a group of services that:

  • poll a data location (ie, folder) looking for files (documents), or for incoming email looking for particular attachments,
  • compare documents against specified ‘contracts’ for a match,
  • places the matched documents in a message queue,
  • processes the message queue and applies an appropriate SYSPRO business object to process the document and return a result

The contracts can be configured to specify file types that must be located and which SYSPRO business objects must operate on the files.

Incoming documents do not need to be in XML format. A contract can specify pre-processing using XSLT (Extensible Stylesheet Language Transformations), an XML-based language used for the transformation of documents into XML documents. The same process can be applied in reverse to ongoing documents.

You will need .Net Framework and a few other bits of Microsoft software (such as MS Message Queue), but they are essentially “free features” available in Windows.

While the skilled work is in setting up the XSLT transform and configuring the contracts, the important work is getting suppliers or customers to agree to using electronic document processing and a standard for the documents. Ten years ago, some vendors started talking about inter-company transaction processing using integration software. Now the reality is here and the functionality is available. Remember, SAP integration is not difficult if you have the right technology and, of course, the budget and commitment to do it.

Are you considering a more cost-effective ERP for parts of your organisation but worrying how to link to the head office SAP system? Have you been told you need Biztalk, or some other costly specialised software, to allow you to transact and operate electronically with partners or larger divisions? Have you looked at SYSPRO? I would be interested to hear your comments.