Nov. 26, 2019

Value In ERP

As I make my way around clients evaluating ERP systems, they are primarily looking at SAP, Oracle, Workday and Infor.  As unique as everyone tells me they are, such as school districts, public sector, healthcare, retail, gaming or other industries, they really aren’t.  You may have complexities, either in your payroll due to perhaps unions or in your supply chain due to a complex distribution channel, but most of these ERP systems can accommodate you.  You will spend countless hours evaluating these systems versus your current platform, guestimating  costs and setting unreal timelines.  Sadly, many will state that their key driver in this whole exercise is to achieve value.  Maybe you will add some cute tag phrase, like, “achieve value through digital transformation”. I’ll try and break down the honest reality here.

SAP is just darn complex.  With great power comes huge implementation costs. If you tell me value is your driver and you aren’t manufacturing widgets, you shouldn’t even consider this.  Okay, that was easy. Now we get more complex.

Oracle—well, Peoplesoft. Or is it Fusion, today? Who knows.  The reality is they never integrated Peoplesoft into Oracle, then declared a move to the cloud by Larry—yep he simply willed it to be so.  His whims cause this potentially great software to ebb and flow more than your nearest ocean.  When sales aren’t great, they blame the sales team and fire them all about every 8 years.  Oracle has probably the strongest financials and the most mature products like CRM if you are looking to add that Siebel complexity because you think Salesforce is too expensive and overrated.  They do have a spot but not really aligned to any industry.  They will be more expensive than Infor but about the same as Workday.  They don’t incent their people to sell Peoplesoft anymore (yes you can still buy on prem Peoplesoft) so good luck having them tell you about it.  It is all about Fusion, ready or not.  What do you mean you opinionated Unicorn?  Well, they don’t really have supply chain yet.  Is it coming? Sure.  Will Oracle pour oodles of money into it? Yes.  Don’t worry, Larry won’t have to sell his sailboat, they can afford it.  I personally think robust supply chain is about 2-3 years away at a minimum.  Base functionality is here today, but nobody uses base. Remember how complex you’ll tell me you are.  So, Oracle: Good but not a great value prop, and not fully baked yet.

Let’s move on to Workday.  I like Workday, I won’t lie.  I almost went to work there and with their partners in full disclosure.  They have a great Human Capital Management solution. Hands down the best.  Remember that, I said they are the best in HCM. Damn opinionated Unicorn telling you what he thinks, I know.  They also have by far the best support and customer focused support I have seen in ERP land.  Lots of salespeople, support people, success people, consultants, etc.  Guess what? People cost money.  Now, Dave who started Workday from his beginnings at Peoplesoft, is very wealthy.  One of the wealthiest people in America. How did he get that way? … see where I’m going?  Supply chain is not fully baked here.  Finance is pretty basic, too, but you can do most things.  This is a great choice if you want the best HCM solution but finance and supply chain maybe are a bit less important to you.  Perhaps you’re in a people only business like a nonprofit.  Careful, though. Remember I said Finance was pretty basic, so reporting on financials will be pretty but limited a bit as well.  They’re also a great choice if money isn’t really an object (adopt me please if this is the case or fund my blog).  Will they get there on supply chain and finance? Yes.  They are in a race with Oracle to the finish line and they don’t have a Larry Ellison to randomly jerk their chain.  They are 110% focused on the customer and that drives their product direction.  

If you are fed up with Infor, well so are they!  In recent months they have let go key folks and hired more in customer focused roles.  They are changing their product, their people and their approach.  I accredit a lot of this to a fiery Irish woman, Pam Murphy, COO of Infor.  They honestly had to do something, the strategy of not really investing and riding out maintenance wasn’t working.  So, if your angry, good.  Plug into the organization and take the time to learn about the direction, look at the CloudSuite product, and you may raise an eyebrow.  Their HCM product is on par with Workday.  Yep I just said that.  You can get Workday quality (remember I said it was the best), for an Infor price.  Now buy quick before they realize what they have and raise the prices!  Their Finance is finally dimensional.  Yes, they now have what the others have had for half a decade, so get excited.  Their supply chain is by far the best, not SAP manufacturing best, but will meet most industry needs very well.  They aren’t confused like Oracle trying to produce software in every capacity for every need (it slices, it dices, it chops…).  They know their verticals and they have solid functionality.

Now for my Unicorn rant on value.  Pricing almost always runs like this: Infor is the lowest, Oracle next, and then Workday is more expensive.  How much more? Quite a bit.  Remember, I said they were the best, so you pay for that.  All good if 1. You can afford it, 2. You only need HCM, 3. You like lots of people dotting over you, 4. You chase shiny objects.  I only part jest. Workday is good but pricey.  Oracle is okay and annoying.  Infor is highly improved and a great value.  Given these thoughts, my analogy is this.  

I need a good quality shirt and I want it at a good value.

We can go to Target where they have great shirts, or we can go to Nordstrom where they also have great shirts.  When you go to Target, you navigate to men’s shirts and select one on your own for about $12 and head out.  It fits great and will last many years. In Nordstrom you step inside and Biff, your sales rep, greets you, walks with you and lays out multiple shirt options.  You choose a similar shirt to the one at Target, but you get to pay $125.  Both shirts are great, but the key word “value” is the question.  Do you feel that you got good value at $125? Nope, you probably feel like you got great service and had a great experience.  The Target experience was also good, perhaps faster and you leave happy that you got a great value.

Let’s face it, ERP people, our software is key to our business—both in people and resources. But we don’t need a Bugatti, we need a Ford.  It must meet our needs (and there are a lot of them, called requirements) and our business case must make sense.  We can’t go to our board and say, “This is a cool, shiny ERP that doesn’t have all the functionality developed yet and we would like to pay a premium for it because the universe is all abuzz with it.”

As a Unicorn, I really look at all these tools and look at the business needs.  If you need a manufacturing solution, look at SAP for sure.  If you need robust finance coupled with CRM and powerful database performance, look at Oracle.  If you want the latest and greatest cabbage patch doll of ERP, then talk to Workday and if you’re looking for a solid ERP solution that will meet 95% of your needs, then let’s discuss Infor CloudSuite.  

Hey, Unicorn, you ignored Payroll! The tooth fairy told me Infor doesn’t have Payroll in the cloud.  Okay, you saw through my magic, and it doesn’t yet.  Guess what, mere mortal? Their cloud payroll is a lot closer than robust supply chain is in those other systems.  We are probably 6 months away from fully operational payroll in the cloud.  Infor knows they can’t screw that up, they can’t have “basic” payroll, so they won’t release it until it works.  

There you have it. If you talk to me about ERP and want to tell me about your selection, don’t mention value and then tell me about Workday.