The Growing Circle of Cloud ERP

Traditional providers of ERP systems typically sought to expand their functional footprint to include complementary applications outside of core ERP. Now cloud ERP vendors are adopting a similar strategy, bringing significant benefits to buyers.

For most companies, an ERP system is generally at the center of the business systems strategy. But a comprehensive applications portfolio includes much more than ERP. Most companies, even small and midsize businesses, have a surprising number of important systems outside of ERP.

By way of example, Figure 1 shows our proposed future applications landscape for a current client of my consulting firm, Strativa. (Company-specific references are removed). Although just a midsize company, it has plants and distribution centers around the world. As a result, the future applications portfolio will be quite extensive. At the core, within the red circle are the core ERP functions. Outside the circle are other enterprise system
s that must interact with the core ERP system. Nearly all of these systems will be new, or replacements of current systems.

Read the rest of this post on the Strativa blog: The Growing Circle of Cloud ERP

Oracle Acquisition of NetSuite Is a Mixed Bag

Oracle took another step in its strategy of growth by acquisition by announcing a bid for NetSuite, the leading player in the cloud ERP marketplace in terms of number of customers. At $9.3 billion, the deal is the second biggest in Oracle’s history, after PeopleSoft in 2005 for $10.3 billion.

The deal was long expected, for several reasons. Oracle Chairman Larry Ellison was NetSuite’s original investor, and Evan Goldberg, NetSuite’s founder came out of Oracle. CEO Zach Nelson was an Oracle marketing executive. Oracle’s database is an integral part of NetSuite’s infrastructure.

But apart from helping Oracle in its race with Salesforce.com to get to $10 billion in cloud revenues, what are the benefits of the deal to Oracle? How does it help NetSuite, and what does it mean to the broader marketplace? Looking at the big picture, there are certainly benefits, but there are also several concerns.

Read the rest of this post on the Strativa blog: Oracle Acquisition of NetSuite Is a Mixed Bag

Announcing the Salesforce.com Superlative Index

We often hear that Salesforce.com is an amazing company. But how amazing is it? The Enterprise System Spectator is proud to announce today a new metric that will be incredibly important for investors, customers, and fans of Salesforce.com everywhere: the SFDC Superlative Index™.

Through the SFDC Superlative Index, we can now quantify the awesomeness of SFDC. We do this by counting the number of superlatives used by SFDC executives in their quarterly earnings calls and analyzing the changes in the use of these superlatives over time.

Our proprietary list of superlatives currently includes the following: exciting, incredible, huge, amazing, outstanding, terrific, awesome, phenomenal, fantastic, tremendous, extraordinary, and spectacular. 

Superlatives per Quarter Reaches High Water Mark

These are fantastic days for SFDC, terrific days indeed. As shown in Figure 1, SFDC executives used tracked-superlatives 97 times in the firm's most recent quarter, the greatest number in the past five quarters.

Analyzing superlatives that make up the SFDC Superlative Index provides deeper insights.

Excitement is Rising

SFDC executives are truly excited about the most recent quarter. As shown in Figure 2, we find that "excited/exciting" has now returned as the top superlative in the first quarter, after a sharp decline in the fourth quarter of FY 2016. 

CEO Marc Benioff reported that he as "really excited to be here, really excited for the first quarter" and he was "really excited" about raising the company's full year revenue guidance. "This kind of accelerated revenue growth [is] something that we’re very, very excited about," he later added.

Benioff's excitement also extended to up-coming events, such as World Tour New York, which he said is already sold out. "So we’ll be excited to see you there," he added. He also said that he was "really excited to visit with all the Salesforce customers and developers who are coming Trailhead DX."

But Benioff saved his greatest excitement for the upcoming Dreamforce conference in October.

"I know the bands that are playing. I know what’s going on and I’m [not] going to give you too much of that yet," he said. "I can just tell you it’s going to be the biggest and most exciting Dreamforce ever."

COO, Keith Block, also shared Benioff's enthusiasm, especially about the firm's moves in Europe. "Obviously we’ve made investments with data centers in Europe which we’re very, very excited about, our customers are obviously excited about that," he said. 

Business is Beyond Exciting

As shown in Figure 2, SFDC executives went even further in describing developments during the quarter, using words such as incredible (23 times), huge (16), amazing (8), and outstanding (5) to round out the top five superlatives.

Early in the call, Benioff described the first quarter as the best that the firm has ever seen, "There is [sic] some incredible numbers you’re going to see including the cash flow number," he said. "We’re well positioned for another great year. This is amazing."

Block confirmed Benioff's enthusiasm. "I mean, this is an incredible company with incredible people and an incredible set of products and customers," he said. 

Not only is SFDC incredible, SFDC customers are also incredible. For example, Benioff said, "Uber, one of the world’s great innovative companies, another expansion in the quarter, they’re an incredible innovator with off-the-chart growth." Regarding a new deal with Amazon in the quarter, Block said, "We love Amazon, we’ve got a great relationship with Amazon, they are a huge user of Salesforce and that certainly has been a huge part [of] this quarter as well."

In describing the firm's Sales Cloud, Benioff let loose with a string of incredibles:

"I mean we know that there is not just a cloud, there is not just a incredible cloud vision for Sales Cloud, not just incredible, social vision. You all know it has been built on this incredible engagement platform built on our Chatter core and then extended into Salesforce1. Of course it has incredible mobility, the best of any enterprise application in the world with more mobile users gone up than any other application that I’m aware of."

We can only scratch the surface in this short post. For a complete transcript of SFDC's amazing, incredible, outstanding quarter, check out the full transcript on Seeking Alpha.

Plex Developing a Taste for Food & Beverage

Plex Systems, a long time cloud ERP provider, primarily to automotive and industrial suppliers, has recently been expanding its focus to the food and beverage sector. T

To see Plex now actively pursuing opportunities in food and beverage indicates that Plex is serious about this market. Nevertheless, even within this sector, Plex is selective in its focus.

This post outlines the capabilities of Plex for food and beverage manufacturers along with steps that it is taking to better serve this industry.

Read the whole post on the Strativa blog:  Plex Developing a Taste for Food & Beverage

The Role of Fear in ERP Implementation

Photo Credit

One of Deming’s 14 points for management was, “Drive out fear, so that everyone may work effectively for the company.” By this he meant that employees should not be afraid to point out problems, provide feedback, or make mistakes in an effort to improve. Business leaders should engage employees positively in continuous improvement.

But when it comes to business leaders themselves, fear can be a powerful motivator. And, nowhere is a healthy fear more needed than in ERP implementation.

It is difficult to think of a major project that is riskier for an organization than an ERP implementation. It ranks right up there with a major strategic merger or acquisition in terms of potential to disrupt the business. This is because an ERP implementation touches nearly every function of the business, nearly every business process, and nearly every employee. Although ERP systems involve computers, they are not IT projects: they are business change initiatives. Do it wrong, and you may find yourself as a case study on the front page of the Wall Street Journal.

Hopes and Fears

I recently co-led a half-day workshop for a large client in the manufacturing industry that is about to embark on a wholesale replacement of their aging ERP system. The participants were 18 of the firm’s business leaders. We covered the history and role of ERP, reasons for failure, lessons learned from successful implementations, typical processes most in need of improvement, and the roles and responsibilities of business users in the implementation.

At the end of the workshop, we conducted a short exercise that I call, “Hopes and Fears.” We invited the participants to list the things that they hoped would result from the implementation. They responded with a variety of benefits, such as improved efficiency, lower inventory, better planning, and a more modern user experience.

We then asked them to list the one thing they were most worried about, the thing they most feared as they looked forward to the implementation. Here the mood turned more serious as they expressed their fears, such as that they might not get enough training, that inventory might actually increase during the transition, that employees might not speak up when things weren’t going well, and that customer delivery schedules might be disrupted.

But the one thing that worried this group the most was that they wouldn’t have the resources to get the implementation finished while still taking care of their regular duties. Would they have the bandwidth? We had told them that they had to put their best people on this project, but could they afford to do that? Where would they get additional personnel? The top executive in the room spoke up and assured the group that the company was ready to spend the money to make those resources available.

At this point, I told them that I had accomplished my unspoken objective. My goal in conducting this workshop was to put some fear into them, as business leaders. Nothing concerns me more than when I see a company begin an ERP implementation thinking that it is no big deal, that they can delegate the project to the IT department, or to the system integrator. Or, thinking that they can treat an ERP implementation as just another project, like installing a new production line, or implementing a new safety program.

Address Fears in Contingency Planning

Healthy fear can be a strong motivator in ERP implementation. At the same time, fear should not lead to paralysis, leading an organization to not move forward with new systems.The right response is to address each of those fears in the project plan, in the form of contingency planning.

• Are you afraid you won’t have sufficient resources? Allocate budget to hire additional resources to back-fill the regular responsibilities of project team members. 
• Are you concerned that business users won’t adopt the new system? Develop and implement a change management plan as part of the implementation. 
• Are you worried that customer delivery might be disrupted? Allocate extra time in the acceptance testing phase to ensure that doesn’t happen. 

You can never completely eliminate risk in an ERP implementation. But with careful planning, allocation of resources, and management commitment you can greatly mitigate those risks.

Which Comes First, New Systems or New Processes?

Everyone agrees that business process improvement is a key success factor in enterprise system implementation. But, which comes first? Should organizations redesign their business processes before selecting and implementing new systems? Or should they first select a new software vendor and then redesign their processes to match how the new system does things?

This question comes up repeatedly in our vendor evaluation and software selection consulting services. Clients read about failed ERP or CRM projects, for example. They hear the warnings of executives from such companies, telling them to spend more time up front understanding their business processes. They hear about companies that go live but don’t achieve the desired benefits. They vow to do better. They don’t just want to implement a new system. They want to implement best business practices.

These are good reactions. When it comes to enterprise systems, anything that heightens the fear of failure is a good thing. The more business leaders are focused on business processes, the better.

But, how should business leaders deal with their business processes when implementing a new system?

• Should they improve their processes before implementing the new system, so that the new system is not automating broken processes?
• Or, should they choose the new system first, so that they can redesign their business processes using the best business practices that are embodied in the new system?

The answer is a little bit of both: the two should be done in parallel. In fact, doing all of one before the other—whether process first, or system first—will result in failure.

Read the full post on the Strativa website:
Which Comes First, New Business Processes and New Systems?

Oracle v. Rimini Street Lawsuit Verdict: Good for Third-Party Maintenance

Earlier this month, the jury in Las Vegas reached its verdict in the Oracle v. Rimini Street lawsuit, a closely-watched case involving third-party maintenance (3PM) in the enterprise software industry.

Although the jury awarded Oracle approximately $50 million in damages, the amount was far below what Oracle expected. Moreover, the jury found that Rimini Street’s copyright infringement was “innocent,” not “willful,” that Oracle suffered no lost profits as a result, and that neither Rimini Street nor its CEO, Seth Ravin, engaged in any tortious business conduct.

Assuming the jury’s verdict stands up against potential appeals, the case sets an important precedent for how 3PM providers should operate to ensure they are not violating the intellectual property rights of software owners. We expect customer use of third-party maintenance will increase as a result of this verdict.

Read this entire post on the Strativa blog: Oracle v. Rimini Street Verdict Clarifies Ground Rules for Third-Party Maintenance

Sage Puts Stake in the Cloud with Sage Live

Sage is one of the world’s largest providers of business applications for small and midsize organizations. Now in the cloud it has taken a big step forward, launching Sage Live, a built-from-scratch accounting system on the Salesforce.com platform.

This post outlines key features of Sage Live, the challenges it will face, and recommendations for potential buyers.

Read this post on the Strativa blog:  Sage Puts Stake in the Cloud with Sage Live

AscentERP Rises in the Cloud ERP Market

AscentERP is a cloud ERP provider building on the Salesforce platform, with a focus on manufacturing and wholesale distribution companies. Though not as well-known as other ERP providers on the platform, the company is doing some interesting work within its industry focus.

This post provides an update to our previous coverage of AscentERP.

Read this post on the Strativa blog:  AscentERP Rises in the Cloud ERP Market

FinancialForce Expands Its Footprint in Cloud ERP

FinancialForce continues to show strong momentum in the cloud ERP market, and it is building out its product capabilities in interesting ways.

In this post, we provide an update on FinancialForce, based on interviews we conducted with its executives at Dreamforce, the annual conference for users of Salesforce.com. We also provide recommendations for buyers considering FinancialForce.

Read this post on the Strativa blog: FinancialForce Expands Its Footprint in Cloud ERP