Dan Tynan, writing for CIO.com:

For the past decade, ERP has been the poster child for IT projects that overpromise and underdeliver. It was notorious for painfully complex rollouts that took years to implement, required massive customization, and were often only partially realized. Billions of dollars were spent just trying to get ERP systems to work as advertised.

Now ERP is back — and not just for big enterprises looking to refresh legacy systems. According to surveys by Forrester Research, roughly one out of four SMBs and enterprises plans to either upgrade their existing ERP solutions or implement a new one over the next 12 months.

We see this too. Every day.

What’s different? Isn’t ERP’s sometimes-broken promise giving way to the new promise of SaaS and cloud computing? Not just yet — ERP has been around forever, and in that time companies have learned a great deal. They now fully understand what works, what doesn’t and what mistakes to avoid. They’ve gotten their technology down, integrations minimized and streamlined, and they’ve tied smart business processes to their operations.

In short, they’ve grown up. Learned a thing or two.

Our clients tell us that while they’re looking at cloud apps, they have too much tribal wisdom wrapped up into their existing applications and business processes. Many of our clients have just now put in their first real cut at business intelligence and are using that information to make actual, real-world, daily business decisions.

Their ERP systems may be old, and they may not look as shiny as some of the new cloud platforms offered up by Oracle and other vendors, but they work. And organizations understand them completely. That’s why they aren’t afraid of expanding or upgrading their ERP systems — because finally, they’re delivering the promise that they whispered years ago.

In short, they’re finally humming.

It takes a brave soul to scrap something wholesale that is finally working in favor of something that, in essence, represents a great deal of starting over.

What’s your take? Does Tynan’s article sound like you?

###

More links:

MIPRO Consulting main website.

MIPRO on Twitter and Facebook.

About this blog.

Barb Darrow, GigaOm:

Wolf’s numbers show that a select group of SaaS companies saw their values grow 313 percent from January 2009 to October 2011, compared to 154 percent growth for other software companies over the same period.

No wonder Oracle shelled out $1.5 billion for RightNow Technologies and Salesforce.com keeps snapping up smaller SaaS players every month.

“With Saas, the more vertical the better,” Wolf said in interview. SaaS companies offering financial services, healthcare services or employee benefits outsourcing services, are all hot now, he added.

So who’ll be buying? The usual suspects: IBM, Oracle, SAP, Microsoft.

Increased valuation begets consolidation, and SaaS is where all the buying is going to be happening. That much is clear. But this bubble, as it were, seems awfully vulnerable to macroeconomic factors and externalities. And as legacy software companies acquire SaaS players to broaden/deepen their portfolios, eventually valuations will get pretty muddy.

Something to watch.

###

More links:

MIPRO Consulting main website.

MIPRO on Twitter and Facebook.

About this blog.

With all of the talk focused on the new Oracle Fusion HCM applications with their on-premise, on-demand and SaaS options, it seems that the old PeopleSoft workhorse of 9.1 HCM applications may have been forgotten.  But wait!  Here comes the latest feature pack (v2.0) which shines some new light on the PeopleSoft HCM suite.

PeopleSoft 9.1 HCM Feature Pack 2.0 has a Fusion flavor to it: usability enhancements through the expanded use of related content, highly configurable/flexible dashboards and embedded reporting and analytics.  While Fusion takes all this to a different level, taking some of the Fusion concepts and including them in PeopleSoft 9.1 better positions Oracle to stave off the Workday strategy of poaching their existing HCM client base.

Workday has been, in the past, been able to position itself with HR as the more user- friendly alternative to the many-clicks, menu-driven navigation and pages that PeopleSoft customers have endured over the years.  With Feature Pack 2.0, Oracle has shown that it has authoritatively produced a user-friendly, efficient and modern user experience.

The embedded reporting now available with PeopleTools 8.52 can be used to counter Workday’s embedded analytics story.  It still requires PSQuery to extract the data, but the flexibility and presentation of the data lends itself to providing the user the data they want to see in the way they want to see it.

With the Feature Pack releases, Oracle is also combating Workday’s strategy of saying that it will take Oracle years to provide new functionality and it’s a major upgrade to do.  While Feature Packs aren’t released as often as a SaaS product releases (and many organizations can argue this is a good thing), it certainly provides customers with significant new features and functionality in consumable doses.

So while it is the same old workhorse of the integrated HCM suite, it is starting to have a whole new look and focus.  Take a look at the latest Feature Pack and let us know what you think. In the meantime, here’s an overview of PeopleSoft Pivot Grids and how they represent your data based on PSQuery.

###

More links:

MIPRO Consulting main website.

MIPRO on Twitter and Facebook.

About this blog.

Two days ago, Oracle acquired RightNow for $1.5B, and many analysts immediately said the purchase was, for all intents and purposes, missiles aimed at Salesforce.com.

But  how? What does this mean? How to decipher this? What does the acquisition do for Oracle? Won’t Oracle’s ‘Public Cloud’ be comprised of technologies already in Oracle’s stack?

Not exactly. According to ZDNet’s Phil Wainewright (and Larry Dignan), Oracle’s purchase of SaaS pioneer RightNow basically signals Oracle’s intent to go cloud shopping and pick up a slew of tier 2 SaaS players.

With the acquisition of early SaaS pioneer RightNow Technologies, Oracle has signalled its intention to build out its Public Cloud offering with what will likely become a string of acquisitions of second-tier SaaS vendors. I’m in total agreement with my ZDNet colleague Larry Dignan that the official press statement was “basically shorthand for ‘Oracle is going cloud shopping’.”

So who might be on the list?

I’d expect the shopping list to include public companies including Taleo and several others in the talent management sphere, along with ServiceNow.com in the IT service management space and various less well known names from other sectors.

Things are going to get interesting in the next few months. The most interesting part of all of is is the ideological shift that’s taking place: Oracle might not be building out its Public Cloud with primarily in-house technology; it plans on creating it via acquisition. And we all know Oracle’s extremely good at identifying smart acquisition targets.

Popcorn, anyone?

###

More links:

MIPRO Consulting main website.

MIPRO on Twitter and Facebook.

About this blog.

Carolyn Duffy Maran, reporting for NetworkWorld:

The outlook for IT budgets is solid, with 83% of survey respondents reporting that their 2011 IT budget was greater than or equal to their 2010 IT budget. This figure compares to 48% reporting stable or growing IT budgets in 2009.

Similarly, 85% of IT executives are predicting that their 2012 IT budgets will be greater than or equal to their 2011 figures. Only 65% of respondents made this prediction two years ago.

Another positive indicator is that IT budget allocations will remain steady in 2012, with internal staff expected to receive the largest share of the pie at 37% of spending compared to 38% this year.

Also note the outlook on outsourcing, forever IT’s boogeyman in the closet:

The SIM survey indicated no plans by management to increase offshore outsourcing, which has been a fear among IT professionals over the years. CIOs reported that they spent only 2% of their 2011 IT budgets on offshore outsourcing and 3% on domestic outsourcing. For 2012, they are projecting the same level of investment for offshore and domestic outsourcing.

And finally, don’t underestimate this surprising finding regarding cloud computing spend:

One surprise finding was that CIOs are not planning to allocate a significant amount of their IT budgets to internal or external cloud computing services. Although cloud computing was listed as one of the top applications that CIOs are investing in during 2011, they are spending only a tiny amount of money in this area: an average of 6% of their 2011 IT budgets on internal cloud projects and 5% on external cloud efforts.

Emphasis mine. Interesting that despite all the marketing and the buzzworthiness of cloud computing, the pursestrings are still on hold. Maybe it’s a value realization thing — that cloud, while promising, can’t be presented to the C-level in terms of actual ROI yet? Maybe it’s the backlog of IT services that have been neglected over the past few years, so cloud is hot, but not as hot as things that have been on the to-do list for 24 months?

ERP salespeople, take note: there’s still unmet demand out there. Enterprise cloud/SaaS salespeople: your challenge is to prove that the cloud is now, the value is real and time time has come for private clouds.

What’s your take?

###

More links:

MIPRO Consulting main website.

MIPRO on Twitter and Facebook.

About this blog.

The Register’s Timothy Prickett Morgan scoops what is some of the best (and latest) Oracle Fusion information I’ve seen. Here he is with the overview of the modern-day Fusion, what it is, and how it’s built:

Ellison started off talking about the Fusion apps, a reworking from the ground up of all the business logic embodied in the Oracle E-Business Suite, PeopleSoft, Siebel, JD Edwards, and other applications that the software giant has either built or acquired in the past 15 years. The plan, said Ellison, was to get these Fusion applications out the door in four years, but it took six years. The Fusion suite is written in Java and uses BPEL as a means of linking the apps to outside applications. It includes more than 100 modules encompassing financial, human capital, supply chain, and project portfolio management as well as procurement and governance and compliance apps.

For our more visually-inclined readers:

(Click to enlarge)

But the most interesting aspect of this latest volley of Fusion information is Larry Ellison’s edgy, almost pugnacious presentation of the what the Fusion-powered Oracle ‘cloud’ is, especially as it relates to proprietary clouds, like, he says, those powering rival platform Salesforce.com. For those who missed the drama, note that a year ago, Benioff tweeted, during an OpenWorld keynote, “Beware of false clouds.”

Ellison didn’t pass on the opportunity this year to swipe at Benioff’s comment.

“That is such good advice. I could not have said it better myself,” Ellison sneered, rattling off a list of differences between the Oracle Public Cloud and Salesforce.com. The Oracle cloud is built on “standards,” by which Ellison meant Java, BPEL, SQL, SOA, Groovy, Web services, and so on, while Salesforce.com is a proprietary cloud platform with proprietary applications, with its APEX language, the Heroku platform cloud, and extensions like Force.com, Appforce, Siteforce, and vmforce.

By contrast, the Oracle cloud runs glatt kosher Java and supports Oracle’s database and Fusion middleware, which means you can run your applications on premise, in the Oracle Public Cloud, or even Amazon’s EC2 cloud. Salesforce.com’s applications, said Ellison, run only on its own cloud.

“It’s kind of the ultimate vendor lock-in,” said Ellison, winding the crowd up. “You can check in, but you can’t check out. It’s stickier than a roach motel.” He paused for a second and then added: “It’s like an airplane you fly into the cloud and you never come out.”

Ellison also took a few swings at Salesforce.com’s multitenancy model, which, he says, was a good idea 15 years ago, when people had no other options. Today, that’s no longer the case.

Fusion is just taking shape for many people, and it’s becoming clearer that it’s a cloud-powered, elastic layer that will use BPEL and other web services to connect your existing applications and data stores. It’s a major shift for Oracle, but one that I admire — the company couldn’t evolve without it.  Is it formidable? Of course it is — it’s Oracle, after all. And how can you not admire an enterprise company who communicates so boldly and plainly?

What are your thoughts? Is Fusion what you thought it would be?  More? Less? Still need a better understanding of what it is and where it will fit into your business?

###

More links:

MIPRO Consulting main website.

MIPRO on Twitter and Facebook.

About this blog.

Bill Kutik talks about Oracle’s perception problem with Fusion after their five years of secrecy, what the early adopters so far look like, and how customers are slowly looking at Fusion in earnest. But an interesting subplot is the Oracle v. Workday cage match that’s going on, one that will be ultimately considered a function of time if Kutik is correct:

What nobody talks about publicly is Oracle’s effort to derail Workday’s late-stage sales efforts to Oracle clients. Again, business as usual: It’s called capitalism. Apparently, it may have contributed to Workday’s not signing Charles Schwab, but Oracle’s efforts failed at Thomson Reuters, which was recently announced as a Workday customer.

That’s the cage match to watch going forward — with Workday currently having the advantage of older battle-tested software, being able to pursue larger customers and 230 of them already signed. But given Oracle’s much larger size, resources and installed base, those Workday advantages will shrink over time.

Fusion became generally available on June 1, Leone says, and now anyone can buy it, though still with careful qualification.

Leone confirms that Oracle is looking to HCM as its best source for larger company Fusion sales.

It will be interesting to see how Fusion gets a foothold in the market and builds momentum. It’s been a long five years, and people are interested for real developments and releases. We hear it firsthand every day.

###

More links:

MIPRO Consulting main website.

MIPRO on Twitter and Facebook.

About this blog.

Over the past few weeks, several people have asked me about the “cloud” and how I think it will impact the future of ERP.  Well, I’m not an expert in cloud computing, nor do I have a crystal ball.  But what I do have is 20+ years of industry experience.  So, while I can’t give you a definitive answer on the future, I can share with you my observations.

First, people have been talking about the possibility of distributed applications for over a decade.  Remember when Bill Gates said he envisioned a time when people would “rent” Microsoft Office over the web and we all snickered and scoffed?  Well, Mr. Gates, as it turns out, just may have one of those crystal balls.

So the cloud, or distributed processing, has arrived and will more than likely be here for many years.  But even with its many benefits (reduced hardware requirements, limited internal support needs, global availability, etc.), distributed processing has its limitations.  One can argue that distributed processing is great for user-focused applications like CRM, word processing and logistics because these applications reach a broad range of industries with a minimal amount of customization.  It’s much harder to say the same thing, however, about back-office enterprise systems.

In the world of back-office enterprise software, applications must be configured to meet a wide and growing range of business processes.  Trying to herd all business types into “standard” business processes would keep change management companies busy for the next century and remove competitive advantages that some companies have built their infrastructure to support.  And there’s no way a discreet manufacturer would adopt the business processes of a healthcare provider — or vice versa.

So the next alternative is for enterprise software vendors is to utilize distributed applications to provide multiple “versions” of the application for various industries.  Viable?  Probably not — this alone would drive cost and support models out of control.  And I must admit, in my twenty years in the industry, I’ve never seen two companies attempt to configure the software the same way.  Even in similar industries, there are always differences that need to be addressed.

With all that said, I do think that you will begin to see additional applications being moved to and supported in a cloud environment.  Anytime a software vendor can standardize their product it lowers their support cost and appeals to a wider audience.  So look for the trend to continue.  And by all means, don’t confuse a hosted or managed services offering with a SaaS model.  Hosting and managed services are essentially your custom environment running on someone else’s equipment.  SaaS is a distributed software environment.  Lots of confusion, but the gods live in the details. Maybe I can talk more about that next month!

###

More links:

MIPRO Consulting main website.

MIPRO on Twitter and Facebook.

About this blog.

Without getting academic about it, Vinnie Mirchandani breaks up technology markets into old and new, which mean, nutshelled, traditional and innovation-driven revenue, respectively.  I’ve often looked at it the same way; in fact, one of the reasons I’m linking to Vinnie’s post is because he articulated my thoughts better than I could.  Here it is in its entirety.  You should read it.

Key quip:

There is old revenue and new, innovation generated revenue. The poster child is Apple. The iPhone has gone from zero to half of Apple’s revenue in less than 4 years. When you add iPad, barely a year old, you get even more of revenue which is new, innovation generated.

Contrast this to SAP, Oracle, Verizon, IBM and so many other large technology vendors. SAP has been talking in-memory applications and its BYD SaaS product for almost 5 years now, and related revenue is less than 5%. Oracle has been talking Fusion apps for over 6 years and it only has 50 or so customers. IBM markets the heck out of its “Smarter Planet” projects, but most of its revenues come from decades old Lotus, Tivoli and other software and data centers that often go back to the Cold War times. Verizon spends a disproportionate amount of its advertising budget on its 4G LTE offerings, when that is less than 1% of its revenues. There are plenty more examples in techland.

It’s not for a lack of want that these lip-service vs. performance discrepancies exist; it’s for a lack of an encouraging corporate culture and the fact that these companies must perform quarter after quarter, so radical new behaviors (and sales force incentives) are very difficult.  When there are analyst targets to meet and compensation plans to fulfill, nobody is going to push the avant garde products and services unless the company culture specifically demands they do so.

Another key point by Mirchandani:

It takes an Apple (and historically Intel) to actively develop and launch new products, and not worry about cannibalizing older revenues.

Exactly right.  When Apple designed the iPhone and, later, the iPad, it knew full well that the iPod’s days were numbered.  Think about that.  The iPod – an iconic device if there ever was one – was certain to be massively cannibalized by new products.  Not just new products, mind you, but new products forging new markets.  How many companies would have the courage of their conviction to walk headlong into that algebra?  Not many.

Eventually, as the competitive landscape firms up as it relates to these next-gen products and services, companies will make the internal adjustments based on market pressures.  When that happens, you’ll start seeing the shift from ‘old’ revenue to ‘new.’  And, ironically, my money says the products responsible for the ‘old’ revenue get a new (albeit perhaps short) lease on life.  Why?  Innovation increases the luster of everything in the house.

###

More links:

MIPRO Consulting main website.

MIPRO on Twitter and Facebook.

About this blog.

I watched the most recent webinar on Oracle Fusion HCM last week.  As someone who works in the trenches of HCM/HRIS every day, I must say I was impressed with what I saw and heard.  There are still a number of unanswered questions, but those will likely be explained over the next couple of months and most certainly at this year’s Oracle’s OpenWorld.

The Fusion Human Capital Management (HCM) modules being offered do not represent what you would consider a full suite of HCM products (for instance, there is no Recruitment module), but it’s a beginning — a strong beginning.  The message about co-existence (implement Fusion modules that solve a business problem and use the delivered integration with your existing PeopleSoft system) is a savvy — and logical — first move.   Already this message is making hay with some of the prospective Fusion clients (who are also PeopleSoft customers) I’m talking to.

One thing you hear from up-and-coming and niche vendors is that when the RFP is issued, Oracle can’t check yes to all of the boxes with Fusion because they are still building out functionality.  With the co-existence strategy they are talking about, Oracle Fusion HCM can not only check ‘yes’ on all of the RFP requirements, but they can now go head-to-head with an HCM SaaS offering.  It’s that compelling.  No longer can Fusion be dismissed as vaporware before moving to the next topic on the meeting’s agenda.

What was of most interest for me regarding the SaaS offering is that, unlike some other vendors, Oracle is allowing for “upgrade protected” personalization and extension of the application using the “Composer Tools.”  More on this will be revealed in the months to come, but from what I saw it was pretty impressive.

So while there still remain questions, the testimonials by the Oracle HCM Fusion early adopter clients prove that Fusion HCM applications are here, and are real.

Time to start thinking about what Fusion means to your organization.  Do you have serious plans for Fusion? If so, on what timeline?  We’d love to hear your views in the comments.

(Naturally, if you want to discuss the future of your HCM system as it relates to PeopleSoft and Fusion, I’m happy to chat with you.  Drop me an email and we’ll get going.)

###

More links:

MIPRO Consulting main website.

MIPRO on Twitter and Facebook.

About this blog.