Throwback Thursday: The Origins of Failure for ERP – Jon Hansen on the Coupa Cabana

Keeping within the spirit of the social media world’s Throwback Thursday practice – I have used an old photo from my days as President of a publicly traded software company to comply with the image requirement – I thought that I would share the following article that was posted on the Coupa Cabana blog back in 2011.

Of course, the content has it’s origins in a series of articles and corresponding lectures I gave starting in the of Spring 2005.  At the time, I felt very much like a lone voice in the wilderness as very few in the industry were calling into question – at least publicly – the significant challenges that were associated with expensive, time consuming ERP implementations.

This is why the 2005 Fortune magazine article caught my attention.  I was as it turns out, not alone in my thinking after all.

“It ain’t easy leading a software company these days.  Customers are sick of poor quality, inadequate security, old-fashioned business models, and pie-in-the-sky claims for trends like open source.  They just want software that works.” from “Execs Tell Software Makers: Some of You Are Doomed,” by David Kirkpatrick (May 6, 2005)

This article really resonated with me when I read it in 2005, especially since I was just getting over a miserable, over-budget, misguided foray into EDS.  My experience with EDS led me to repatriate software development back in-house and back under my own roof.  The end product was a far more robust solution and was produced at a fraction of the cost and time.

Tight internal controls and being able to maintain capability and accountability from start to finish was the reason in-house succeeded where EDS failed so spectacularly.

But back then, I was blessed with a in-house team with the necessary experience to run an internal development process.  Many organizations either do not have this option or do not want to reroute precious development resources from their primary business focus to act a custom development shop.  (Or as one senior purchasing official from South Dakota lamented, “Are we in the software business or the procurement business?” after having to dedicate 2 full time resources to making their PeopleSoft application work.)  So then what?

Offshore outsourcing?  While a good idea in theory, the offshore outsourcing of software development requirements can quickly become a fool’s gold promise.  Many companies who outsource indicate they do so to focus on their core competencies, or because of an absence of the necessary skill sets, as well as budgetary considerations.  While these provide a reasonable basis for making the decision to outsource, they are not a Carte Blanche excuse for surrendering accountability for the project’s success.

The emergence of the Software-as-a-Service on-demand paradigm presents another option that is a perfect marriage of technological superiority and business model innovation.

Specifically, and with companies such as Coupa, getting what you want when you actually need it, in a manner that fits your requirements, is no longer an onerous process in which the procurement departments requests are relegated to a “we’ll get to it when we can” response from an over-burdened IT department.

In essence, today’s SaaS solutions are the programming tools of the next generation as individual platforms can be up and fully operational within a matter of hours versus the months or days associated with the consultancy model of the traditional ERP players.

Furthermore, and without getting into the single versus mulch-tenancy discussion, SaaS vendors provide a customizable solution — be it in the areas of supplier engagement and management or spend intelligence analysis and utilization — that correspond with the unique and specific requirements of your organization.

Finally, and when you add into the decision-making equation the fact that a company no longer needs to make a significant, up-front capital investment, it is undeniably clear that we are indeed in the throes of an industry that is truly experiencing a high quality, cost efficient transformation that for the majority has been a long time coming.

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