Often, we run into opposition from the IT departments at potential customers. A frequent refrains goes: “We should just go with our ERP vendor. It’s the safe bet.”
Remember the old saying that went: “No one ever got fired for buying IBM?” Well in this industry, the corollary is that no one ever got fired for buying Peoplesoft or SAP. IT groups at many large companies have embraced this mantra fully and completely.
The problem? It’s just not true anymore.
We hear frequent stories about companies joining our customer ranks after trying (sometimes for years) and failing to implement solutions from ERP competitors. The reality is that buying Peoplesoft/Oracle and SAP just isn’t as safe as it used to be. Furthermore, those solutions are not any more flexible or secure than those offered by On-Demand vendors. In fact, there are numerous arguments to be made that in fact SaaS solutions are MORE flexible and secure.
There’s a concept in the technology world called FUD that is a core component of sales strategies for ERP companies. It stands for Fear, Uncertainty and Doubt. ERP salespeople plant these seeds of FUD in IT groups around the world to cement their incumbent positions.
I’d like to suggest that we’ve reached the point where the FUD is facing the wrong way. The danger is not in On-Demand, where if it doesn’t work, you shut it off. Where vendors are aligned towards customer success, because they have to win the business again and again, year after year. Where professional services employees are domain experts who can ensure business results and not software consultants who can ensure software roll-outs.
The risk is shifting towards the incumbents. The installed, behind-the-firewall guys who require big hardware and software purchases with some consulting and implementation fees for dessert. Where you’ve got to pay for the software before you find out if it works and are between a rock and a hard place when it doesn’t.
The FUD, my friends, should be with the ERP solutions. Make a wrong call there, and you’ve spent untold amounts on failure. So, good IT folks, fear not On-Demand: We’re on your side.
Oh, and here’s an article from an IT guy that makes the point a little differently.
Quote:
For its part, on-demand is relatively neutral. But when coupled with something that enhances value or functionality, it’s an amazing solution that should be at the top of managers’ must-do lists. In the end, on-demand will make careers, not break them. It’s just too hard to keep a good idea down.
March 29th, 2006 at 7:46 am
Max, your remarks here are right on.
At a recent conference that I attended where many ERP and HRMS systems were presented and reviewed, I saw few people exercising emotional intelligence and leadership. After presentations on a variety of topics, the questions asked by prospective buyers and customers, focused on functionality of software, costs and finding answers to reassure people that software expenditures and other related costs could be controlled. Very rarely did I hear a question from potential customers related to leading a company’s performance.
If you do not tie your technology decisions to your business and human capital strategy, IT is going to manage the purchase of software as a software cost benefit exercise rather than examining how tools can be used to manage companies competitively with a view for quality of outcome.
Stephanie Overby, Senior Editor, of CIO Magazine describes this whiplash in BackSourcing Pain. This case study tangibly describes the impact of decisions at JP Morgan as a result of outsourcing that altered the lives of a workforce employed across 4 companies for “the sake of the bottom line.”
When you focus on performance, a solid IT leader will collaborate with peer leaders, to organize an information technology that serves people to have the information they need to learn what they need to do to achieve high performance.