ERP is so over so get over it

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Ben Kepes discussion about ‘fully featured’ and ‘ERP’ is so full of holes it would make a good string vest. I was going to leave a lengthy comment but realized that if I’m going into attack mode, it ought to be here rather than on another person’s website. Anyhoo. I should preface by saying I found the entire article unhelpful and riddled with out of date thinking. At least from *my* perspective. Ben starts:

Recently some comments around a review I did of AccountsIQ raised the question of what constitutes a fully featured app and what constitutes an ERP and where the divide lies.

Quite frankly, who gives a damn? I haven’t heard the term ERP used in discussions among my peers in many a year. It is a 1990′s throwback to a time when Gartner built a business out of TLAs and gifted the software applications industry with a way of flogging kit. I know the guys who did this dastardly stuff. It describes a cookie cutter mindset that was a marketing tool and right for the time but which is now dead. The IT fashion game has moved on. If you’re going to move a discussion forward, at least kill the lie to something that is no longer relevant.

The comments were in reply to my congratulating those SaaS vendors that consider such functionality as multi-currency, multi location, stock-control and BOM functionality as “core functions”. I came off this discussion wanting to compare the widely accepted SaaS ERP solutions (Netsuite and Intacct) with some second tier offerings. Bear in mind that Netsuite and Intacct are both multi thousand dollar per year solutions – one would only expect a difference between the breadth of functionality a customer can expect from them compared to solutions costing many times less per annum.

Utterly brain dead thinking. Comparing tiered applications is a futile exercise. It’s like saying let’s do one between Sage 200 and SAP ECC6. Sure – they both keep ledgers but beyond that? I’m not sure if Ben is aware but vendors hate these types of comparison because they are confusing and irrelevant.

Cookie cutter, vanilla applications may be fine for *some* customers but in the current world, customer are demanding vertical specific functionality. Pandering to the ERP moniker for a moment, the mother of all companies in this arena, SAP, only touches at best 30% of the functionality needed by the 23+ industries it covers. Not my assertion, but their agreement. So what’s all this BS about ‘core’ and ‘fully functional’ supposed to achieve?

What constitutes core to one is irrelevant to another. And what is this obsession with feature/function comparison at the cookie cutter level? Any cursory examination of the on-demand market would quickly reveal that offering business specific functions for verticals is a winning play. Xero does it as does FAC. They’re both doing very well. NetSuite and Intacct both have markets in which they are strong. So why bother making these waste of time comparisons? It’s confusing and un-necessary.

Ben then goes on to put AccountsIQ on the hook for definitions around ERP. What on earth was Ben thinking about? What part of ‘accounts’ in the name does he not understand? Next:

It’s a little bit of “horses for courses”. Those who want a single vendor, and can work within a single source ERP solutions will be attracted down the single vendor path. Those however wanting more agility would be more likely to take a piecemeal approach.

This is so naive I find it incredible that AccountsIQ gave Ben the time of day. Go to any reasonable sized business and you will find a multiplicity of applications – exactly as AccountsIQ pointed out – because there is not a single vendor on the planet that can run the business wall to wall. Any suggestion to the contrary is a lie. This was something the mega vendors tried to argue in the late 90′s during the one-stop-shop versus best-in-class wars. Best in class has always won. Ask Wal-Mart, P&G, Colgate-Palmolive. That does not preclude any vendor from extending its footprint but any pretence that goes beyond that is nonsense. Neither does it dismiss wider arguments about how businesses assemble a patchwork of applications. It’s a topic CloudAve has made an attempt to address.

Finally, Ben signs off with a partonizing hat tip to AccountsIQ and a generalized swipe at un-named vendors:

I have to give serious kudos to AccountsIQ for taking a realistic and humble approach towards their offering – contrast that to those who’d have us believe a simple invoicing application fulfils the requirements of all businesses.

I have NEVER heard a ‘simple invoicing application’ vendor claim to fulfill the requirements of any business so what earthly purpose this last sentence serves is a mystery to me.

I’d like to think that those of us who are commenting, dissecting and supporting the saas/on-demand community, while not necessarily singing from the same hymn sheet, are at least using critical thinking that takes the discussions beyond those that were rendered redundant in the 1990′s. After all, isn’t much of what we see supposed to be about innovation? I’d also like to think that the real message is this is a developing, emerging market. That should signal that none of the current vendors has it all but most are working towards providing an appropriate solution for their target markets.

Message to Ben: up your game please. This kind of stuff is neither helpful nor relevant. It is exactly the kind of thing that drives vendors nuts and leaves buyers confused. As Ben can probably tell, this kind of stuff puts me in Paul Carr mode.

UPDATE: Zoli Erdos, CloudAve’s editor has provided an extensive commentary to Ben’s piece. Zoli’s comments, while not reflecting my position, reflect a number of the things I said above. CloudAve should be congratulated for taking a self critical stance that takes the discussion forward in a constructive manner.

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Tagged as: Colgate-Palmolive, Enterprise resource planning, ERP, Gartner, netsuite, Software as a service, Wal-Mart