October 12th, 2009

Oracle's integration strategy: Customer trade-offs

Posted by Michael Krigsman @ 9:16 pm

Categories: CIO issues, IT issues, Oracle, Vendor relationships

Tags: Strategy, Car, Oracle Corp., Michael Krigsman

Oracle’s dual Presidents, Charles Phillips and Safra Catz, today opened the company’s OpenWorld conference, which is taking place this week in San Francisco. Their keynote speech emphasized Oracle’s efforts to integrate its diverse product line in a bid to make life simpler for customers.

Catz opened her part of the keynote by explaining what she called the “back story” behind Oracle’s acquisition strategy. She did this with a humorous look at what would happen if we bought cars the way we buy enterprise technology.

In such world, Catz said we would go online to buy thousands of disconnected parts from many vendors, which our children would assemble into a completed car because the parts would not come with instructions. Just as we finished assembling the car, she continued, a light would go on indicating that an upgrade or patch is required. Catz said, “We would then do it all again.”

Catz used this car assembly story as a metaphor for product complexity in the enterprise. According to Catz and Phillips, Oracle reduces this complexity by bringing together under one roof infrastructure, hardware, and database products that are “engineered to work together.”

This diagram expresses Oracle’s end-to-end vision:

Regarding the “open” tag line on the slide, Catz said, “We are slavishly devoted to open standards.” Wow, that’s a pretty strong statement.

THE PROJECT FAILURES ANALYSIS

From a project failures perspective, important truths lie beneath the cute story about assembling cars at home from parts purchased online. As Catz correctly points out, many organizations purchase enterprise technology in pieces from multiple vendors, which can make the selection and implementation process time-consuming and expensive for the customer, relative to buying from a single vendor.

I discussed these points during a follow-on conversation with Paco Aubrejuan, Oracle’s Vice President of PeopleSoft Enterprise, who explained the benefits of single-vendor integration:

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February 25th, 2009

San Diego fires Axon over ERP implementation problems

Posted by Michael Krigsman @ 10:58 am

Categories: CIO issues, Consulting, Devil's Triangle, Government projects, IT issues, Implementation, Oracle, Politics, Project failures, SAP, Uncategorized, Vendor relationships

Tags: San Diego, SAP AG, ERP, Axon, System Integrator, Tools & Techniques, Project Management, Workforce Management, Advertising & Promotion, Outsourcing

The city of San Diego, CA terminated its software implementation contract with services provider, Axon, citing “systematically deficient project management practices.” The project is running $11 million (27 percent) over-budget to date, a number which will likely increase.

San Diego’s termination memo highlights key Axon governance and implementation process deficiencies. Tom Fleming, president of San Diego Data Processing Corporation (DPC), a municipal IT contracting agency, wrote the document:

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February 13th, 2009

NetSuite attacks SAP: hype vs. reality

Posted by Michael Krigsman @ 6:24 am

Categories: CIO issues, IT issues, Oracle, SAP, Vendor relationships

Tags: NetSuite Inc., SAP AG, Attack, Software As A Service (SaaS), Managed Hosting, Cloud Computing, Tools & Techniques, Enterprise Software, Emerging Technologies, Management

A recent NetSuite press release flamboyantly attacks SAP with outrageous tactics, mockery, and misleading implications. Although I enjoy colorful presentations of confidence and SAP is sometimes an easy target, scare tactics and innuendo cross the line of acceptability.

Let’s analyze some important aspects of the release.

PRESS RELEASE TITLE

NetSuite Extends ‘Business ByNetSuite’ Program for SAP Customers Eager to Embrace the SaaS Revolution.

Netsuite plays off SAP’s SaaS offering called Business byDesign. I like the ‘ByNetSuite’ moniker, because it shows confidence, pushes directly against SAP, and is plucky. However, much of the release presents a misleading comparison to SAP’s Business Suite 7, as I describe below.

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January 29th, 2009

Angst in Oak Park over failed PeopleSoft project

Posted by Michael Krigsman @ 7:38 am

Categories: CIO issues, Government projects, IT issues, Oracle, Project failures

Tags: PeopleSoft Inc., Corporate Governance, Tools & Techniques, Strategy, Business Operations, Corporate Law, Management, Michael Krigsman

For residents of Oak Park, IL, the failed PeopleSoft implementation is not just another IT statistic. Instead, it represents wasted money that should have gone to productive purpose. Reaction in the local newspaper ranges from anger to resentment.

• Related: Oak Park, IL cancels PeopleSoft implementation

An internal Oak Park memo from Village Manager, Tom Barwin, to the Board of Trustees highlights the confusion and pain this failed implementation caused to town officials. Local reporter, John Huston, obtained the memo as part of a Freedom of Information Act (FOIA) request to the town; John kindly sent me a copy.

Click here to download the August 2008 memo. I highlighted relevant sections in yellow.

The memo discusses two key points: questionable payments to a technical consultant and reactions to the failed implementation. The payments have little to do with the PeopleSoft system itself, so let’s examine comments directly related to the implementation.

Here are excerpts from the memo:

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January 28th, 2009

Oak Park, IL cancels PeopleSoft implementation

Posted by Michael Krigsman @ 2:03 pm

Categories: CIO issues, Financial impact, Government projects, IT issues, Oracle, Project failures

Tags: Software, PeopleSoft Inc., Financial, Requisition Document, Financial Accounting, Tools & Techniques, Personal Finance, Operational Accounting, Finance, Management

The village of Oak Park plans to terminate its under-performing PeopleSoft implementation amid accusations of consultant billing irregularities.

• Related: Angst in Oak Park over failed PeopleSoft project

According to local newspaper OakLeaves:

The village spent $1.65 million in 2004 to purchase PeopleSoft - a computer system which helps large businesses and organizations manage payroll and finances.

But the complex program never took hold in Oak Park, and some employees were still using adding machine tape to calculate things like tax increment financing districts’ fund balances, according to one village document.

The cancellation follows allegations that the village made excessive payments to a consultant brought in to help improve the troubled implementation. The Chicago Tribune reports:

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December 30th, 2008

Select Comfort: home-grown IT failure

Posted by Michael Krigsman @ 1:04 pm

Categories: CIO issues, IT issues, Oracle, Project failures, SAP, Vendor relationships

Tags: Oracle Corp., Implementation, Information Technology, SAP AG, Select Comfort, 10-k, Company, Strategy, Enterprise Software, Management

Sleep Number bed and mattress retailer, Select Comfort, has abandoned its SAP implementation mid-stream, raising serious questions about the company’s present and historical IT strategy. Select Comfort has not blamed SAP or any other third-party vendor for its problems.

According to Select Comfort’s December 16, 2008 press release:

Actions being taken include a workforce reduction of approximately 120 positions within headquarters, or approximately 22 percent of the corporate workforce, which includes general and administrative and customer service positions. In addition, the company will immediately cease all activities associated with the implementation of SAP-based IT applications.

The company’s 2006 SEC 10-k filing describes reasons behind the SAP implementation:

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November 3rd, 2008

Dreamforce: Salesforce and Facebook [podcast]

Posted by Michael Krigsman @ 7:08 pm

Categories: CIO issues, Dreamforce 2008, End-user impact, Enterprise 2.0, IT issues, Oracle, SaaS, PaaS, and SOA, Salesforce.com

Tags: Salesforce.com Inc., Facebook, Sales Force Management, Podcasts, Business Structures, Sales, Internet, Finance, Michael Krigsman, Marc Benioff

Salesforce.com announced a platform partnership with Facebook today at Dreamforce, its annual user conference, that will enable Facebook developers to write and run their applications on the Force.com enterprise cloud.

During a press conference following the announcement, CEO Marc Benioff commented the partnership is intended to increase “stickiness and reduce customer attrition.” Strategically for Salesforce, this partnership is about extending its cloud in every direction, including to consumer-oriented social networking. Only time will reveal whether this combination is a marriage made in heaven or an example of what happens when worlds collide.

To learn more, I spoke with Saleforce.com’s Clara Shih, AppExchange Product Line Director, and Dave Morin, Facebook’s Senior Platform Manager. Steve Gillmor, from the Gillmor Gang and TechCrunchIT, joined me for this interview.

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October 28th, 2008

Overstock.com accepts blame for ERP problems

Posted by Michael Krigsman @ 7:50 am

Categories: CIO issues, Financial impact, IT issues, Implementation, Oracle, Project failures

Tags: ERP, Overstock.com Inc., Enterprise Resource Planning (ERP), Retail, Enterprise Software, Software, Michael Krigsman, Financial, Financial Accounting, Finance

Online retailer, Overstock.com announced it will restate earnings, saying “fallout” from problems with a 2005 Oracle ERP implementation caused the problems.

In a letter to investors, CEO Patrick M. Byrne said:

Our 1st Commandment is “Maintain a bullet proof balance sheet,” But while the spirit is strong, the flesh made a mistake. The short version is: when we upgraded our system, we didn’t hook up some of the accounting wiring; however, we thought we had manual fixes in place. We’ve since found that these manual fixes missed a few of the unhooked wires.

Byrne added:

It also turned out there were errors cutting both ways which partially obscured the problem because we relied on reasonability testing to verify certain balances rather than a ground-up reconciliation. Now that we have found these errors, we have called a penalty on ourselves. The total effect of the errors over the five and a half year period (during which we generated nearly $3.5 billion in revenues) is a reduction in revenue of $12.9 million and a $10.3 million increase to cumulative net loss.

Overstock’s Senior Vice President of Finance, David K. Chidester, added more detail:

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October 14th, 2008

Social CRM: Interview with Oracle SVP Anthony Lye [podcast]

Posted by Michael Krigsman @ 8:06 am

Categories: CIO issues, End-user impact, Enterprise 2.0, IT issues, Interview, Oracle, Podcast

Tags: Podcast, Oracle Corp., CRM, Social CRM, Data Portability, Advertising & Promotion, Customer Relationship Management (CRM), Enterprise Software, Marketing, Software

Oracle’s Social CRM product combines social networking and Web 2.0 sensibilities inside a traditional enterprise software wrapper. To learn about the design goals behind this new product, I interviewed Anthony Lye, Oracle’s Senior Vice President for CRM.

Anthony offers much insight into CRM and Enterprise 2.0. Listen to this podcast if you care about social networking in the enterprise.

• Related: Oracle innovates with Social CRM; not ‘boring and lifeless’

On CRM data sources:

Anthony spoke about differences between traditional enterprise applications and Social CRM around data sources and “ownership:”

Historically, in enterprise software, one tries to own the data. Social CRM assumes we never own the data and that it’s created by independent systems. In this paradigm, aggregation from both internal and external systems, and adding social metadata, provide the value.

Since software vendors have used data ownership to prevent customers from easily switching systems, this is an important issue. In true social networking fashion, I posed the issue to over 1300 people following me on Twitter (read from bottom up):

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September 24th, 2008

Oracle innovates with Social CRM

Posted by Michael Krigsman @ 1:45 pm

Categories: CIO issues, End-user impact, Enterprise 2.0, IT issues, Oracle, Tools, openworld08

Tags: Oracle Corp., BEA Beehive, CRM, Social CRM, Denis, Java Development Tools, Enterprise Software, Social Networking, Development Tools, Software Development

Oracle’s innovative Social CRM product joins social networking with true enterprise features such as reliability, security management, and scalability. Given the different skill sets and perspectives required to build consumer and enterprise software, Oracle’s ability to combine both into a single package is a significant achievement.

Social CRM narrows the gap between users hungry for sophisticated, easy to use software and IT departments charged with maintaining centralized governance and control. Importantly, the product isn’t just a toy or whiz-bang demo; it solves real world business problems based on deep insight into contemporary CRM work flow requirements.

The following diagram shows Social CRM’s overall architecture. On the user side, the applications reflect a typical sales cycle; the product handles IT issues by connecting back into enterprise data and the corporate managed infrastructure:

Here’s a screen capture showing the Sales Prospector module, which tries to predict future sales based on various data sources:

More interesting than features and functions is just how thoroughly the product design team understands social networking applications from an end-user perspective. The designers obviously use and enjoy social tools themselves.

The following slide presents the “social” vision behind Social CRM:

The product’s depth arises from strength in three areas:

• Strong CRM business case and workflow
• Excellent social networking features and capabilities
• Deep enterprise IT integration

The product is appealing precisely because it handles all three areas well. I asked Beagle Research Group’s Managing Principal, Denis Pombriant, for his take on Social CRM:

Social CRM is important because it’s the first time a vendor has consolidated multiple, social-oriented CRM modules into a single product line. In addition, Oracle is taming the wild beast called social networking and harnessing it to serve a business purpose.

Denis’ view is not all sweetness and light, however:

On the other hand, it’s a version one product just being rolled out. I expect we’ll see refinements and enhancements based on market feedback. It reminds me of that old joke, “What do you call a thousand lawyers chained together at the bottom of the ocean.” The answer: “A good start.”

Paul Greenberg, noted CRM expert and guru, expressed surprise that enormous Oracle is capable of producing innovative, end-user CRM software:

Several years ago, I wouldn’t have imagined seeing this kind of thing from Oracle.

Buzzing Beehive. A few days ago, I wrote that Beehive, Oracle’s new enterprise collaboration product, would legitimize Enterprise 2.0 inside large organizations:

Oracle’s collaboration vision underscores the growing importance of enterprise 2.0-style communication products. By highlighting Beehive prominently in president Charles Phillip’s keynote, the company adds fuel to the legitimacy of bottom-up, peer-to-peer social networking.

Social CRM achieves a level of polish and completeness only hinted at by Beehive, even though online services such as Flickr and Twitter obviously inspired both products. While Beehive seems to have lost its way, currently appearing as little more than an Outlook plug-in, Social CRM is tight, focused, and on-message.

According to Oracle’s Vice President of Product Management for Social CRM, Tara Roberts, her group has been working with Beehive to implement a Social CRM application that exposes Beehive Spaces.

In conversation with members of the Social CRM team (shown at right), it was obvious this group loves what they’re doing. I see true passion reflected in the software.

Too often, enterprise software seems little more than boring, lifeless screens cooked up by corporate drones. Social CRM is a happy exception to that sad rule.

• Related: Social CRM: Interview with Oracle SVP Anthony Lye [podcast]

[Photo credit: Michael Krigsman (taken with a Blackberry Curve and cleaned up a bit in an image editor). Slides provided by Tara Roberts.]