Inspired? No home

Have best-of-breed won?

This is a cross-post of my guest blog at CloudAve.

Let's face it; enterprise applications will never be cool - and that is part of the reason why small-business focused applications such as Basecamp and Xero gets more buzz. But apart from NetSuite and 24SevenOffice, who else is offering all-in-one fully integrated business applications in the cloud? Surprisingly very few.

About once a year or so someone publishes an article saying "In 200X will Microsoft enter the web-based ERP-market and take it over". So far we have seen little of that. And seen little of other new entries into this market. What we have seen though is an increase of integration between various applications such as Xero and ProWorkFlow, Basecamp and Blinksale, FreshBooks and Bootstrap. And that's the Web 2.0 style in the cloud we all love and adore, right?

But in the real world larger companies are still going for all-in-one integrated solutions. Unfortunately the majority still opt for good old fashioned software but that is changing. So you would think that web-based ERP-solutions should be the coolest thing since sliced bread? Apparently not. But why? Mostly because they still suck:

No soup for you

While Blinksale, Basecamp and such clearly document their API's publicly on their website and makes it easy to integrate (as in no need to talk to a human and certainly no need for a contract meeting), web-based ERP-vendors only provide API documentation to certified partners. Freelance consultants or nerdy clients find it difficult and probably not worth the effort to create basic integration for their needs. There is no thriving public ecosystem such as there is for Wordpress. Web-based ERP-vendors have ironically still not embraced the web. Most of the integration they offer are towards old legacy software built by the same old consulting companies that created those overly complex systems businesses want to escape from in the first place. This even seems to be the case with SalesForce.com who, at least by the judge of their marketing material, seems to have done a good job offering developers a way to integrate to their CRM-software.

Tree-view hierarchy UI

Web-based ERP-systems talks like a desktop client, looks like a desktop client and probably even smells like a desktop client. In fact the only difference between a desktop client and web-based ERP is that you have to run the latter it in a browser. Tags? No, tree-view FTW.

The one-module user

Few employees use more than one or two modules in ERP-software. The account manager lives and breath in the CRM-module, web-designers probably only use time-sheets while accountants rarely find their way out of the balance sheet. Though integration between all these modules is critical it might not necessarily be that important that all modules reside in the same system. It should be noted that in smaller firms you will find most employees doing a bit of everything, but in the SME-segment I have found that the one-module user is very much the norm except for a few controlative entrepreneurial CEO's.

The eternal setup

While the SaaS hype promises plug-and-play from day one ERP has always been a complex affair. But with shiny new code and with the whole internet available for integration you should believe it would be easy to get started. Apparently not so with NetSuite. However it should be noted that is not my experience at all (disclosure: I am one of the co-founders and still a shareholder of 24SevenOffice); our clients usually had few problems switching from their old system except for the occasional data migration issues.

Ignored by the cool guys

The main reason why there is no hype when 24SevenOffice launches ability to use custom XSLT in reports or NetSuite offering integration with Google Maps is that most vocal bloggers do not use it; they are all freelancers, work in small agencies or employed as developers in a large organization. Can you remember seeing someone posting about a handy integration for NetSuite or SalesForce? Maybe if it was written in Ruby it might have got some attention. And while that might not be that important for a company with money to spend on account managers and advertising or for those who are well established in the game, for a new player in the game that blogger fame is priceless.

Is best-of-breed software better?

Could it be so that it is actually better to use Google Apps with Gmail for e-mail and Basecamp for project management instead of one huge fully integrated application? Even though web-based ERP vendors need to change and best-of-breed integration has flourished lately, there still are disadvantages to choosing five different systems compared to one:

UI inconsistency

Need to train employees to use different applications that behave and look differently. For well-established companies, and certainly with mature employees with computer fair, switching to a better and easier system can prove to be a big HR mess. Change resistance can be significant and with multiple systems to learn you might not only get a lot of headaches in the implementation stage but also see productivity fall later on.

Decreasing bargaining power

When you are putting all your eggs in one basket you are spending more money to one vendor and you expect to pay less in total. With five different suppliers you simply have less bargaining power compared to dealing with one.

Who to blame?

Integration problems? One service is down? Need to host custom code yourself? Whatever the problem is it is better to be pointing at someone else and for that someone else to be one person. The more chefs, the more the mess. With one vendor you have one contract, one SLA to verify performance against and one phone number to call when the shit hits the fan. 

Security

Five usernames. Five passwords. Five authentication systems. Five transfers of credentials from one server to another. You probably trust the security at Google but what if there is a security breach in your blogging software or any other system that hook into something much more important such as accounting or customer database?

ERP will always be complex, it will never be cool. But for all-in-one solutions to win they must make ERP, to steal the tagline from LessAccounting; suck less. Move the complexity behind the scenes and if necessarily only to those who really require it.

What did your company choose? Tell us about your experiences with implementation and usage of business applications.

Written on 06 January 2009.
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