Thursday, November 19, 2009

Killer combination: open source ERP and cloud computing

I honestly can't understand why this has not gotten more attention. Opentaps, an open source ERP project, is now available on Amazon's Elastic Compute (EC2) cloud. Si Chen, of Open Source Strategies, has put up a Youtube video that shows how anyone can go to Amazon and install a working instance of opentaps in less than 10 minutes.

Although Si plays it straight, if you have any experience at all with ERP, the video is a laugh-out-loud experience. In less than 10 minutes, it's possible to do what would normally take weeks of time and thousands of dollars with traditional on-premise ERP.

Not only so, but it's also faster and cheaper than deploying any of the SaaS enterprise solutions, such as or NetSuite.

Granted, open source ERP isn't for anyone, but you have to admit--this has major potential for disruption.

Watch the video here (hint--expand to full screen for better viewing):

Update, Nov. 20. I see I have some catching up to do. Another open source ERP project, Compiere, also has a deployment option on Amazon's EC2. There is a basic description of Compiere on EC2 on Compiere's website.

Related posts
Open source ERP and CRM carry strong ROI
Court ruling strengthens legal basis for open source
xTuple: a hybrid open-source ERP development model
The disruptive power of open source
Total cost study for an open source ERP project
Compiere's open source ERP business model and growth plans
Open source ERP gaining adherents
Key advantage of open source is NOT cost savings
Open source: turning software sales and marketing upside down

Friday, November 13, 2009

Oracle layoffs, November 2009

A reader emailed me today indicating he had received word from a friend, who works for Oracle, that Oracle Consulting had a sizable layoff today. He mentioned a specific percentage that I won't repeat here, without some confirmation.

A quick check of my webstats shows a pickup in web referrals today searching under the key words "Oracle layoffs," "Oracle Consulting layoff," and "Oracle layoffs, Nov 2009." (see image on right).

In the past, this type of activity has been a reliable indicator of Oracle's workforce reduction actions.

A check of the layoff blog also shows a few comments today from Oracle consultants who have been terminated--not as many as I would have expected, however.

If anyone has more details, feel free to email me, or leave a comment on this post.

Update, Nov. 14: Several readers have left comments on this post, or previous posts, basically, confirming that yesterday, Friday the 13th, was a real nightmare for many Oracle consultants. There are many more comments now on the layoff blog as well. Read comments below.

Update, Nov. 16: Dennis Howlett picks up on this post and provides further analysis of the layoffs. And, Oracle officially has no comment on the layoff.

Update, Nov. 17: A reader, who works for Oracle Consulting, reports that just prior to the recent layoffs there was a reorganization of the North American consulting unit. This individual, who had been in a management position, has now been put back into a billable role, with a target utilization.

Monday, November 09, 2009

Epicor's Shared Benefits program: watch for unintended consequences

Epicor is holding its Perspectives user conference this week in Las Vegas, and one big announcement this morning was concerning Epicor's new Shared Benefits Program. According to the press release, the program is "aimed at helping companies eliminate risk and avoid excessive cost overruns that can plague conventional enterprise resource planning (ERP) system deployments."

The press release goes on to talk about return on investment, joint responsibility, visibility, and accountability. But when it comes to metrics, the incentives only seem to address the cost side of the equation:
Upon project completion, if the project is under budget, the savings are shared 50/50. Conversely, if the project runs over budget, the customer is billed 50% of the contracted professional services hourly rates for all over-budget costs.
My take
First, Epicor should be commended for addressing this issue. Implementation cost is a big concern for companies of all sizes, but especially among the midmarket firms that Epicor targets, and especially under current economic conditions. I like that Epicor is facing this problem head on with its Shared Benefits program.

However, as with any incentive program, there can be unintended consequences.
  • First, if Epicor receives half of the savings for bringing the project in under budget, might that not motivate the project manager to expend as few professional services dollars as possible during the implementation?
  • Second, if Epicor has to cut professional services rates by 50% after exceeding the budget, how will that affect the choice of which consultants to assign to the project? Might that not motivate the project manager to utilize someone other than the best consultants? I suspect that, with the rollout of Epicor 9, Epicor's best consultants might be very heavily utilized right now, so you have to question anything that might encourage engagement managers to skimp on services hours.
  • Another issue, as I mentioned, is the exclusive focus on costs. On the one hand, this is understandable: benefits from enterprise systems are often difficult to measure, while the costs are clearly recognizable. On the other hand, this could motivate the service provider to focus more on getting the system installed and getting the professional services team out the door, rather than ensuring that the customer achieves real benefits.
To be fair, I don't believe that Epicor wants any of these consequences--that's why they're called "unintended." But it's important for customers to recognize and be aware of how it's possible for such a program to have perverse results.

Again, credit goes to Epicor for trying to put some teeth in its implementation commitments. It will be interesting to see in a year or so what the real results of this program are.

Update, Nov. 11: Dennis Howlett attended the conference and had a chance to ask Craig Stephens, Epicor's VP of Consulting Services, specifically about my concerns expressed in this post. Read Dennis's write up. Stephens is right that my concerns would apply even more to a fixed-price contract, which, of course, have been quite common in ERP implementation deals for ages. Ultimately, it's all about the professionalism and qualifications of the vendor's implementation team, as well as the willingness of the client to bear its part of the responsibility for success.