Why Mobility in ERP Matters to Small and Midsized Businesses

Small and midsized businesses (SMBs) that are looking to update from Quickbooks to an ERP systems – take note. Mobility-enabled ERP should be at the top of your requirements list. Sounds too newfangled? You’re just looking to move to a full-fledged ERP system but not looking for all the bells and whistles? That’s the wrong way to look at it.  As a SMB company, your chief concern is driving growth – expanding your business, scaling to new locations, and adding new divisions.  Well, that is the reason to evaluate an ERP system that has the ability to support growth. While first and foremost, you should look for a complete, pre-integrated solution that offers coverage of all of your key business processes so you can run your business, why should a “complete” solution not also include mobile enablement?  We order take-out on our iPhones, we rate our favorite restaurants, and play games all day. We essentially interact on our phones the majority of our non-working and working day. SMB execs are even more likely tied to their phones – getting business done on the fly. Why should they not be able to approve important sales orders, track freight shipments, approve time-sensitive and operational-critical access requests, all on their iPad or Blackberry? There is absolutely no reason why ERP mobility enablement is not at the top of your list.

A recent study completed by Aberdeen Group, “Mobility in ERP 2011” shows that “best-in-class” companies shared several common characteristics, including:

·         More than three times as likely as all others to make mobility strategy an inherent part of their ERP implementation

·         68% more likely than all others to notify decision makers immediately if exceptions in business processes occur, regardless of time or location

·         Twice as likely to be using mobile devices to automatically collect data for ERP data entry

These “best-in-class” companies have the following performance advantages over laggard companies:

·         90% less time spent looking for information

·         7x faster time to decision

·         19% better inventory accuracy

So SMBs – take a page from the big guys. Become “best-in-class” to enable your growth while managing operational costs.  More and more companies are looking for mobility to support the way they do business. In fact, the top driver for investing in mobility is cost reduction.  Out of 99 manufacturing companies surveyed in Aberdeen’s study, “ERP in Manufacturing: Measuring Business Benefit and Time to Value,” 44% note that ERP is a key component in reducing cost of operations. Access to ERP for mobile workers is second to reducing costs, at 39% of respondents.

Let’s take the example of ERP payment approvals. As a cash manager or financial executive, your priority is to ensure the liquidity of your company at any time. In this context, you have to check certain outgoing payments before the corresponding payment media are created and sent to the bank.  If your ERP financials were accessible on your mobile device, you could get notified of payments that need to be approved or rejected and address them at any time on-the-go instead of waiting to get back to the office to do it. SAP will be delivering an iPhone app like this in September for SAP ERP 6.0, amongst other apps like ERP Order Status for sales reps to check orders and an ERP Customer Financial Fact Sheet app for sales reps to check the financial situation of customers.  (See screenshot below).

Clearly, mobility will be used mostly by mobile workers, such as sales reps, field service, and warehouse employees. But mobility to support non-mobile workers that make time-sensitive decisions based on ERP data is just as important. Visibility and quick access to information leveraging mobile devices means folks are spending less time chasing down information in reports and ERP systems at their desks. ERP mobility can be part of a larger strategy to get information to the right people at the right time so you can power your employees to act.  

SMBs that need to empower every employee to be productive and efficient while managing growth at the same time can’t afford to let mobility in ERP be an afterthought. Set priorities on what roles and functions get mobile access to ERP and ensure that mobility in ERP is part of your larger strategy as you being to standardize your systems. According to Aberdeen, only about half of management and sales are using their mobile devices to access ERP data − that’s just abysmal. Learn from the big companies --- identifying the right device, for the right role, with the right level of ERP access will lead to improvements beyond your typical ERP implementation. But that requires context and strategy setting. Be clear on your goals and make mobility work for you.  

Oracle Serves Up Another Quarter

Oracle issued its Q1 Fiscal Year 2008 earnings on September 20 after U.S. market close. Financial analyst consensus estimates were for ~$310m in application revenues. With a reported application revenue number of $376m, ORCL came in significantly higher than market expectations.

Oracle served up another great quarter. They blew their numbers out of the water so it's strange that they didn't set higher expectations with the analysts. Safra continues to maintain that there were no significantly large deals but I've heard otherwise. Oracle's deferred revenue stream is pretty big. Frankly, Oracle can cut its deals any way it wants and chunk up large deals across quarters. A lot of financial engineering to make it look however they want it to look. Adam Holt from JP Morgan even asked Safra about the deferred revenue and she replied:

Some of our customers are signing up for things that we just aren't booking right now because they don't meet our revenue recognition policies for booking now, so you'll see some of that.

That just means large deals are strewn from quarter to quarter. Of course, this is not to say that Oracle is not doing well. Everyone can see they are. But the majority of it is still consolidated revenue from acquisitions and that won't change.

I found it particularly interesting that Oracle is trying to position itself as having the broadest portfolio by referencing its competitors across apps, middleware, and databases. Larry keeps pointing to IBM and SAP in order to establish Oracle as a worthy contender. The marketing seems to work. What was hypocritical though, was that Larry kept saying on-demand and the SME market opportunity is a non-starter and that SAP is a fool to go down-market. Why is it then, that Oracle is investing heavily over the next year in Siebel on-demand?? Why is it that Larry has a stake in NetSuite?

Also, how is it that Larry is trying to box SAP into just an ERP or SME provider? Meanwhile, Oracle serves industries?? SAP has been serving industry specific solutions for years and years. I wouldn't call Oracle's strategy differentiated. More like copy-cat. What I will give Oracle is that they have turned a negative into a positive with its best-of-breed positioning - which in turn is its vertical industry pitch. They realized they couldn't deliver Fusion and decided to instead just sell the hell out of what they had. Only doesn't everyone remember when Larry said "best of breed is only for dog shows"?

In any case, Oracle is going to have good quarters going forward as pent-up demand from PSFT, JDE, etc. rebounds and it continues to cross-sell and make acquisitions. But I wouldn't count out Salesforce.com, Microsoft, BEA, IBM or SAP! Just because Larry says doesn't make it so!

A1S Debuts Tomorrow

SAP is finally unveiling its new SME software, A1S. This long awaited product launch is so secretive, they kicked us out of our NYC office today in preparation. A1S is an entirely new SOA-enabled platform entirely architected for small businesses. It's about time there's a real competitive ERP offering for this market. I think if SAP plays its cards right, it can freeze Oracle out of this opportunity. The real competition will come from the likes of Salesforce.com and Microsoft of course.

Having been with the company for even just two years, one can see that SAP does not shift in strategies lightly. I think SAP is betting on the right horse even if Wall Street is obsessed with Oracle's much sexier M&A moves. Long-term, SME market dominance will be critical, but that's not to say other important categories like middleware or industries isn't. I for one, would love to see some more SAP marketing around how we're kicking competitors butts in utilties and retail or how Netweaver is a natively integrated platform. But right now, the prize is SME and all eyes will be on it tomorrow when A1S makes its debut.

Congrats to Oracle

Oracle posted a 35% jump in net income on strong gains in revenue from new software licenses. Overall sales rose 27% to $4.41 billion.

It's hard to argue with a good quarter...so congrats to Oracle. It seems like the press and analysts are really buying into its aggressive M&A approach. What's paid off is the installed base that came with the acquisitions of PeopleSoft, JD Edwards, and Siebel. A year ago, these customers were on the verge of jumping ship but Oracle's Applications Unlimited program saved the day (offering customers lifetime support) . Now, Oracle is reaping the rewards as evidenced by its success this quarter.

Oracle's apps license of $423 million is however, still about 4x less than SAP's $1.7 billion last quarter. In regards to Larry's statement about growing consistently and rapidly to overtake SAP--assuming that Oracle continues to grow at 32% (very optimistic) and SAP continues to grow at 7% (overly pessimistic), it would still take Oracle 7-10 years to overtake SAP. A lot of what Oracle says about being on par with SAP is hype. But Oracle is a worthy competitor and it definitely has legs to stand on. What was interesting about the earnings call today was that there seemed to be a shift away to attack BEA instead of SAP. I don't envy BEA's position. Oracle has a great middleware story and BEA will have a tough time standing its ground.

The one thing that I did think was odd was the mention of SAP's A1S launch. Oracle's trying to spin a story about how SAP is launching "lots of ERP systems" while Oracle is taking a one suite approach. That just seems strange to come out of Larry's mouth when Oracle is actively developing, maintaining, and selling at least three separate ERP systems. The SME market is a legitimately lucrative opportunity, I don't think anyone would refute that; and the fact that SAP is offering apps that better fit these SME's needs is a step in the right direction.

Unbreakable Linux Expectations

Unbreakable Linux Proves Unpopular as Red Hat Shares Rebound
Unbreakable Linux was downloaded 9,000 times in the first 30 days, according to comments made by Redwood Shores, California-based Oracle’s president Chuck Phillips during the company’s recent earnings call. Compare this with the download rates for Red Hat Inc and Novell Inc, however, and it is almost insignificant.

While it may seem Oracle's Unbreakable Linux program is not gaining the traction it should, I highly doubt that Larry expected to convert the masses. The program is more a signal of a continuous shift for Oracle to cover the entire IT stack. Meanwhile, Oracle makes a few bucks on services without a significant investment. Moreover, it's really a defensive move against operating system providers. Oracle wants to neutralize Microsoft’s dominance in the OS layer, prevent open source competitors like Red Hat from inching up the stack, and cover an area that IBM and SAP does not own. So I don't think Oracle is spending any sleepless nights worrying about the progress of its Linux program and comparing it against Red Hat or Novell.

SAP Does Enterprise Search Widget-Style

InfoWeek did a short piece on SAP's Enterprise Search product and how it will offer flexible searches for back-end data. It's all a part of the Information Worker concept SAP introduced with the Duet partnership with Microsoft. I think it's about time we had something like this. Letting business users access back-end data through widgets and other easy-to-use tools is the way to empower the information worker. It's all about making information access simpler.

But that's not all SAP has in store for 2007. Enterprise Search, which the company will also introduce in the first half of the year, looks to me to be one of the more interesting products of 2007. As you know, most search products focus on text. If you're looking for news, reviews, or an esoteric piece of information about an obscure author, Google is the way to go. But what if you want to know the status of a customer shipment, how much inventory is left, who is so-and-so's supervisor, or whether I am authorized to give him or her a raise? These are the kinds of questions Enterprise Search is built to answer.

SAP is also seeding the development community with a toolkit to build what you might call it applets, widgets, or gadgets, ala Microsoft Vista, for SAP. The company is also building its own gadgets that give you an alert box for, say, an RSS reader that tracks business events rather than news or blogs. That way, a sales manager can monitor when a sales rep closes a deal, for example. There are also alerts for corporate KPIs (key performance indicators), as well as alerts for tracking workflow queues, such as notifying a purchasing manager of requisitions waiting for approval.

Sounds like a dashboard, but these applets embody more of a Web 2.0 approach — they’re updated over the Internet, you don’t have to install anything, they’re more dynamic than what you get with a dashboard, and you get to pick the ones you want.

Fusion Downgrade

BusinessWeek did a story on Oracle's earnings next week and how Oracle's integration project progress (or lack thereof) is the reason for its downgrade.

First Albany Capital analyst Mark Murphy on Friday downgraded software developer Oracle Corp. to "Neutral" from "Buy," saying the stock is pricey, growth is likely to slow and the company may have trouble integrating its many acquisitions.

"Investors are too complacent if they believe that the largest, messiest, most complex application integration project in the history of the technology industry will go off without a hitch," Murphy wrote in a research report.

Oracle Loses Key Retail Bid

InformationWeek did a story on the lack of integration of Oracle's retail solution set and how that led to a lost bid to SAP. Despite all of Oracle's commotion in retail, I think marketing is one thing but customer choice speaks volumes.

Oracle Loses Would-Be Customer To SAP Due To Integration Concerns

• One of the biggest turnoffs to Oracle, says Sport Chalet CFO Howard Kaminsky, was -- ouch -- lack of integration between Oracle financial applications and the retail apps of Retek, which it acquired about 18 months ago.
• SAP's offering for the retail market, by comparison, "was ahead of its time in that a lot of pieces were integrated," Kaminsky says.
• Such impressions on would-be customers aren't good for Oracle, as the potential difficulty of integrating its myriad acquisitions is the biggest question hanging over its success in ERP.
• "We went out and looked at all the usual software companies that relate to retail," Kaminsky says. "At the time we didn't expect SAP to be in the running; we didn't know they were that interested in the middle market. They came back very aggressively and said they were very interested."

A Would-Be Contender in Utilities: Oracle Buys SPL WorldGroup

Oracle announced its acquisition of utility vendor, SPL WorldGroup on November 3, 2006. As part of Oracle’s vertical market strategy, SPL adds a portfolio of best-of-breed revenue & operations management solutions for the utilities sector. SPL employees will be retained and join a newly created industry business unit for utilities, led by Larry Hagewood, former President and CEO of SPL, as General Manager.

Why purchase SPL? Oracle's rationale was the following:

1. Penetrate an industry where SAP is the clear leader. With SAP in a strong #1 position (over 800 utility customers & 300 CIS customers), Oracle saw an opportunity to buy a foothold in a market where it lacked presence.
2. Existing Oracle utility products were weak or functionality was missing

>Oracle had weak and overlapping Enterprise Asset Management products; it still has a long way to go in rationalizing disparate applications – Oracle eAM, JD Edwards, and the SPL-acquired Synergen product

>Oracle completely lacked Customer Care & Billing, Outage & Distribution Management, Meter Data Management, and Mobile Workforce Management capabilities

Oracle speaks of the integration work done between Siebel and SPL. However, the integration between Siebel and SPL is not as strong as Oracle purports it to be. Business processes are not integrated--examples include not being to move between applications to complete a business scenario.

There's plenty of marketing hype surrounding this acquisition. Sure, if Oracle succeeds in integrating all of the pieces SPL has itself purchased (CES, Axiom, Sidewinder, Synergen) and ties these products to Siebel, JDE, PSFT, and Oracle...then yes, we might have something. But Oracle has a bigger challenge in Fusion. The question is, will it really dedicate resources to utilities when it has much much bigger development issues at hand? I do commend Oracle for spinning out a separate utilities division. Whether it thrives or fails in the Oracle machine is to be determined.

Little Known MDM Successes

The success of a product is ultimately proved out by customer adoption. For some reason, MDM is an area where poor market perception has severly limited its progress. Shifting strategies by Oracle, IBM, and SAP have stunted this emerging market. It's caused concern over whether MDM is a viable opportunity, whether any vendors have a complete solution, and whether customers really want it. Well, I can tell you, customers definitely want it. Webinars on the MDM topic is consistently sold out. The pipleline for MDM is jam-packed, across several industries. Yet, it is that bias against MDM as the red-haired stepchild after several initial stumblings in product direction (mistakes committed by SAP and Oracle alike) that continues to stunt MDM growth.

Like I said, ultimately it depends on the customers. Today, SAP has more than forty customers live and more than thirty references. If that doesn't say "good product" with a solid future, I don't know what does. Only IBM may have more customers through acquisitions and service engagements.

A Note on the "Bloatosphere"

Tom Smith from InformationWeek makes a great point about the proliferation and longevity of blogs:

The number of blogs has increased 100-fold since 2003 to 50 million. In addition, the total has doubled every six months for about two years, according to a new report quantifying the blogosphere by Technorati. In July alone, there were 1.6 million blog postings daily, or 18.6 per second. Two blogs were created each second of each day.

While the report and its author say the rate of blogging activity and growth can't continue, the data begs many questions about the direction of blogging: Are quality blogs simply getting lost in the noise? Or more precisely, is quality even relevant in the blogging world? How do you find blogs worthy of consistent return visits when the universe of blogs has reached into the tens of millions? If you do have a quality blog, is it even possible to build a sustainable audience and consistently deliver valuable (or entertaining or insightful) information to readers?

I do think that we're getting to a point where there IS a lot of noise. But if you are an informed reader, you can easily make the distinction between a quality blog and someone who is just spewing. Starting a blog is easy but maintaining it and finding a voice in a sea of very opinionated industry insiders is challenging. I do agree that over time, they will consolidate, like any other market. However, I am constantly amazed at the breadth and depth of blogs and continue to discover blogs of note in every walk of life -- from ones dedicated to niche software markets to ones on fashionable purses. I mean, the key is community, right? As long as you can build and sustain a community interested in a certain topic, consistently providing updated and interesting information, then you are hardpressed to find another one just like it.

The Difference Between SAP MDM and Oracle Data Hubs

SAP’s MDM approach is to primarily synchronize and harmonize data, letting BPP or SAP solution modules retain their individual master data persistence. This is different from Oracle’s DH approach, which dictates DHs as the only master data storage. It does not allow EBS modules to retain master data persistence. In this way, Oracle had ambitions to control all master data in an organization, regardless of what systems they had, SAP or otherwise. This centralized hub and spoke model however, is highly inflexible and has its weaknesses. Oracle realized this and recently changed its product plans to shift all DH technology to the Siebel platform. This move improves upon Oracle’s DH offering because Siebel lends a federated or distributed master data management approach, where any installation can be a master and any installation can be a slave. This approach is more similar to SAP’s as it allows flexibility in adapting data management to whatever business process flow the customer wants.

If the customer wants its CRM system to be the single source of creation for customer master and the one that retains all customer records, then that is easily enabled. The rules for data mapping, data distribution, and data validation for source and destination systems are easily defined as processes for managing data. The customer would not have to continually ping the hub for master data any time updates or changes need to be made. While these are Oracle’s future DH plans, currently the DH product is still based on old Oracle technology. Oracle will likely maintain the old DH product as it develops the new Siebel-based product.

The Scarlet Letter "E"

This is hilarious. Same could be said for Motorola's Razr and its new lineup, the KRZR, the RIZR, and the SLVR.

Q U O T E D

Your absence has really thrown a spanner into the trademark and IP strategy of a lot of Web 2.0 firms. Where do you think you're missed the most?

"There definitely are companies that may be showing signs of having issues. In addition to Flickr, there are companies like Beggr, Coastr, Colrpickr, Fastr, Frappr, Gabbr, Mappr, Nabbr, Phrasr, Soonr, Talkr, Zooomr and probably a metric ton of other ones. A few individuals have flamed me for 'stifling innovation,' but I prefer to think of it as an opportunity to help those organizations out of a creative rut. Unfortunately, few seem to have risen to the challenge."

-- In an exclusive interview with BidnessWeek, the letter "e" talks about what he's been doing for the past few years

Prison Outsourcing

Prison outsourcing was heralded as the next India for BPO (close to home, no "cultural" barriers, and high productivity). How crazy is this suggestion? It's one thing to have prisoners do manual labor but can you imagine ordering a pair of J.Crew khakis through Sing Sing? I can think of so so many security breaches. In India, we're talking about highly trained professionals, many with masters and PhD's answering phones. I would fathom we won't find the same level of education amongst our prison population. Oh, well...it's nice to entertain the idea, albeit a bit scary.

SAP Buys Praxis

SAP AG acquired Praxis, n CRM e-commerce company to target the SMB market. This move is not so different from Oracle's continued acquisition binge, except that SAP is much more careful about which vendors to pick up. There's no reason that SAP shouldn't have an appetite for acquisitions despite its commitment to organic growth. While Praxis doesn't give SAP anything for its on-demand solution, it does lend important functionality that SAP needs for its on-premise offering which SAP can eventually offer as hosted somewhere down the line.

The bottom line on this acqusition is that it is a smart one if SAP is serious about SMB...and it is. Business One needed better CRM functionality and now it has it. Certainly, integration with Praxis will be far easier than the hairy monster Oracle is dealing with right now. Small aquisitions, small wins, for small businesses.

Quote of the Day - 7.11.06

"People think that we started Firefox just to take down Microsoft, just to win some kind of competition. Why would we want to win? There's no money involved for us. There's no (initial public offering) for this company; it's a non-profit. Why would we want to do this unless there's a real need? The truth is I think Microsoft is very directly responsible for spyware and adware and the pop-up ads in general that proliferated across the Web after they abandoned their product. I mean, this is the world's most-used software application ever ... and I just think it's irresponsible for a company to abandon it simply because they can't find a financial incentive to continue development on it."

-- Blake Ross, one of the founders of the Mozilla Firefox project

Oracle's 585 B.S.

Oracle recently released a ridiculous press release that said “585 Customers Selected Oracle Over SAP in Fiscal Year 2006.” In it, 12 customer names were named as examples of wins over SAP. Oracle also named yet another 15 wins against SAP in its Q4 2006 earnings announcement.

This is pure marketing b.s.! Having gone through this list of customers, only a handful were actually competitive deals. The rest, it seems, Oracle dreamt up or counted as wins on their own whim. The majority of claims were upgrades for Oracle or extensions of apps for vendors it recently acquired. Just a whole lot of smoke and mirrors...typical Oracle fare.

If Oracle spent half as much time on integrating its apps and finishing up Fusion as it did picking on SAP, it would have a killer product set. But no, it continues to pick petty battles and create false campaigns around its successes instead of focusing on customers. Face it, Oracle is just a big bully with a lot of hot air.

Quote of the Day - 7.4.06

"I would rather be exposed to the inconveniences attending too much liberty than to those attending too small a degree of it."

— Thomas Jefferson


Happy Fourth of July!!!

Demantra - Just An "OK" Purchase for Oracle

Oracle bought Demantra last week, which seemed odd at first. Then realizing just how bad Oracle's APS solution was shed light on why Demantra is a good buy. Certainly, this is a technology purchase and an industry play - Demantra does not boast of many customers. During my analyst days, I recall Demantra not making much headway in terms of customer traction or real innovation. Of course, if you ask the analysts out there today whether this was a good purchase, no one's going to say it's not, for fear of an Oracle backlash. But whether this really puts Oracle ahead or even on par with the likes of SAP and the one or two other SCM best-of-breeds left out there, I would say...probably not. Where Oracle can gain an advantage, I believe is tying Demantra together with ProfitLogic and of course Retek. But until those pieces are integrated, they are just that...random pieces of technology.

Interesting Database Innovation

IBM Database pioneer, Don Haderle innovates on database technology with Ants Software.

Since most database management software products are proprietary and incompatible, its costly and risky for companies to migrate from one to another. In comes Ants, which claims to be "universally compatible." This means it can mimic all database management software, enabling companies that tailored applications to run on Oracle or DB2 to easily run them on other databases.

But will Oracle or IBM just buy them up? What's the competitive differentiation here? According to Haderle:

"If Ants viewed itself as a DB2 killer, they'd die along with all the other object database companies," Haderle says. "Even if we could operate three times faster, those differences only last for a moment in time. IBM would throw the hordes on it and have it figured out and build it, or buy it. "The question in my mind is how to find growth in areas not supported by existing database systems and be synergistic with the big guys," Haderle adds.