Enterprise software survey 2008

Using technology to improve the way you do business

By Michael Burns

Believe it or not, we’re now in our 10th year for our annual CAmagazine software vendor survey. As always, we have added new functionality and new systems. This year we have 54 systems, 17 more than last year. The results can be viewed at www.camagazine.com/ERPsurvey08.

Last September, in an effort to simplify things, we merged all the enterprise surveys — business intelligence (BI) / corporate performance management (CPM), customer relationship management (CRM), enterprise resource planning (ERP) and professional services automation (PSA). But we found vendors and readers preferred a more focused approach. So this year, we combined ERP with just PSA (which is ERP for professional service-based organizations). Since many ERP vendors have extended their systems for this market, a combined survey makes sense. We will publish the results of the CRM survey in November and the BI/CPM in December.

Tiers
The ERP products have been segregated into tiers based on customer revenue and employees and product cost. This is a convenient, albeit not perfect, means of differentiation. This year, we have reduced the number of tiers from five to three. We have found that many of the systems scaled beyond one tier and with our new approach, we don’t think there should be much overlap.

On the accompanying ERP chart, we slotted all the products into what we believe are the appropriate tiers based on cost and target market. Be cautious if you’re trying to calculate the costs for a system, as these numbers are just averages.

The charts include both large, well-known vendors and small ones that are most likely unfamiliar to you. Don’t rule out small vendors that might be able to respond more quickly to your needs and focus on just your industry. A small vendor does not have the same overhead as the major players and can succeed with only a few new clients a year. However, some of the larger vendors are also focusing on specific industries. For example, Microsoft has recruited business partners to extend the Microsoft Dynamics platform into specific industries.

This year, we heard about a number of ERP failures. For example, on March 27, 2008, ITBusiness.ca reported: “The trash disposal giant Waste Management is suing SAP over an ERP implementation it dubs ‘a complete failure.’ In its court complaint, Waste Management said senior SAP executives, including SAP Americas’ president and CEO Bill McDermott, participated in the ‘rigged and manipulated’ demos.”

It’s hard to fathom that SAP would intentionally rig or manipulate a demo. If a demo was canned, that would become obvious if you were asking questions. The demonstrator would be able to show only what was planned. It’s also unlikely SAP would have answered specific functionality questions dishonestly. That would pose a big problem in court. It would also harm SAP’s chances during the selection process, as intentional misrepresentation would quickly destroy trust. But maybe the requirements were not well defined. And maybe SAP was not forced to be specific in responding to requirements. A “yes” can mean many things, including out-of-the-box functionality, third party, customization or workaround.

That’s not to say the vendors are always blameless. We have recently heard about several failed implementations. In these cases, the problem lay with the value-added reseller who promised the world and failed to deliver. This raises an important question: to what extent should developers be responsible for the failures of their value-added resellers? Many of the developers have certification processes, but those cannot act as a guarantee.

We looked at the top 10 selection and implementation mistakes in the December 2007 and January 2008 issues of CAmagazine. In the end, failures are caused by people who did not do their job properly. It could be they didn’t know what they were doing, but it’s more likely they didn’t get sponsorship from their bosses to spend the time and money to do things right. (Next month, we will look at what we believe to be the roles, responsibilities and impact of a steering committee, project manager and subject matter experts, all vital to the success of an ERP implementation.)

Despite some bad press, SAP keeps on truckin’. As its airport ad says, “The best-run businesses run SAP.” Decision-makers are risk averse and think if the system works for the best companies, it will work for them.

SAP had the vision and ability in the early ERP days to build systems that would work across large organizations with complex business processes and infrastructure. It effectively won the first ERP war, which was about automating processes with one system while accommodating a variety of in-house computer databases and networks. SAP beat out combatants such as Oracle, PeopleSoft, JD Edwards, Baan, Lawson, GEAC and mainframe systems. Actually, mainframe systems, which dominated the landscape before ERP, were the biggest losers in the first ERP war.

We are now just entering the second ERP world, where systems are easier to use, collaborative, Web-based and offered not just on a licence basis but also by application service provider — the pay-as-you-play model, where you don’t need to invest in the infrastructure. NetSuite was one of the first to enter the new world but others are following big-time into the fray.

Unfortunately, some vendors, including Oracle, failed to respond to the survey this year. You would think vendors recognize CAs as key decision-makers and users of their ERP and PSA systems across all industries. If your system is not included, please contact your vendor and ask those responsible to participate next year.

The analysis in the charts at www.camagazine.com/ERPsurvey08 is based on the vendors’ responses. Although we tried to correct any obvious errors, we cannot validate every line item. As always, however, we do believe the vendors are inclined to be honest, especially if the questions are very specific. And as we said last year, vendors usually need to jump through hoops to win your trust during the selection process. Trust is hard to win but easily lost.

Michael Burns, MBA, CA, is president of 180 Systems (www.180systems.com/), which provides independent consulting services, including business process review, system selection and IT audit. Contact: 416-485-2200 or mburns@180systems.com.