Thomas Otter on HCM SaaS/On Demand Procurement

If you’re involved with SW procurement and aren’t following Thomas Otter (@vendorprisey, Gartner blog here, personal blog here), then please do so.  I saw his post on HCM SaaS/On Demand negotiations (here) and silently nodded my head in agreement.

As SaaS HCM deals come up for renewal, and procurement gets involved, it is now crystal clear that most HR departments have been contracting for HCM software without IT procurement involvement. One of our findings is that most of the time, HR departments are rather poor negotiators.

If you’re a Gartner client, then check out the research note (here, subscription required).

Krigsman’s 2012 trends: three quick takes

The always valuable Michael Krigsman (@mkrigsman, IT failures blog here) weighs in with a 2012 prediction: that rapid implementation will get more sustained focus.  I believe that there has been considerable progress over the years in improving both ERP implementations and ERP sustainability (see here for a bit of the bad old days).  However, there’s room for further improvement, especially in achieving consistent success.  Here’s my quick take on the three initiatives Michael highlighted:

SAP SME Portfolio Précis

Yesterday, tossed Don Fornes’ post on SAP’s SME solutions over the Crossderry transom.  All-in-all it is a good overview, with a couple of caveats:

  1. Industry coverage of the SAP Business Suite and All-in-One is depicted as equal and that’s a stretch.  Perhaps I need to brush up on my SAP release strategy, but I recall that industry solution coverage for All-in-One is not nearly as extensive as that of the full Business Suite.
  2. I like that Don highlights the NPV calculations you need to make for on demand vs. on premise.  It is easy to forget that what looks cheap now ain’t so cheap after you’ve been paying for a few years.  However, he’s not clear what the $27,416 NPV represents.  It looks right per user (at $149/month and using his assumptions of a ten-year life for software and a 6% discount rate).

Pareto, Saas, and the “Real World” (Part 1)

All ERP customers lament the size and complexity of their implementations.  My experience has been that they just don’t get what they’re trying to do — create a real-time model of their businesses.  Most IT folks have been used to only automating bits and pieces, without looking at how they optimized the whole.

The seduction of SaaS is that you’ll be able to get “good enough” or “roughly similar” functionality as needed, at dramatically lower cost.  The core processes will work just fine for most everyone.  Per the consultant’s mantra to calm the customer: “We want the 80:20 solution, not the perfect one, right?”  Vinnie Mirchandani has hit this theme again and again (here, here, and here)

I don’t quite buy it.  Someone, somewhere is going to have to interface with the real world.  So many of the implementation cost drivers are that last 20% of customization — RICEF+Workflow objects — which provide the bridge from bits to bricks.

  • Reports for the pointy-haired among us and the authorities
  • Interfaces to other systems — e.g., barcode readers, handhelds, RFID, etc.
  • Conversions for systems that go away
  • Enhancements that add customer-specific logic
  • Forms for Customs, Shippers, IRS, Inland Revenue, Zoll, Douane, etc.
  • Workflow for approvals, alerts, etc.

This 20% that gets talked away during process design time gets talked right back in once the business gets its hands on the solution.

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