Do you want an ERP, do you want CRM?

Feb 11, 2016
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I want an ERP, I want a CRM

John Tattersall, BDM Endeavour Solutions Limited

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It has to be big, sophisticated and richly functional, plus be expensive to buy and install so I know it's a great system!! Wait a minute that’s not what is meant to happen is it? Yet so often this is what does happen when it comes to implementing new enterprise software solutions.

Having worked in the software sector now for over 20 years, I have gained many insights into how successful businesses work with their IT and been a part of many successful start-ups. This included launching our own on-line e-commerce business that pioneered the concept of virtual retailing, (holding no stock) back in the day when Trade-me© was just getting underway as an experiment of Sam Morgan’s. I am also acutely aware of why IT deployments fall short on what the initial expectation said would be delivered and what actually does get delivered. That is not pretty.

What intrigues me is the number of companies these days mandating to their management, “The time has come to revamp our website”, “we need a new ERP”, “we need a new CRM”, “senior managers need smart phone access” I hear etc.

While all these areas are certainly worth pursuing in one form or another, I rarely see this done in a collegiate fully inter connected fashion by today's businesses. i.e. how are all these technologies established within the business in a seamless inter-connected way with the right parent / child flow of information and data repository set ups.

Understanding this before you embark on software systems procurement is critical. Businesses that create and visualize what their IT solution map should look like and how it all fits together, secure a much better business outcome and effective cost of ownership model once understood. This will also determine your IT landscape in terms of retaining on-premise systems, outsourced hosting, EaaS (everything as a Service!) evolving to Cloud or implementing a hybrid mix of all the above so the business stays within its cost resource constraints.

There are over 400 ERP suppliers alone across the globe. So to take a one off procurement approach to source software that is not aligned with the big picture is high risk and costly. By undertaking the above you are able to narrow down the field of selection, as not a lot of disparate systems that you could potentially buy play well together despite vendors saying. “Oh we can easily integrate to that” yeah right!!

An article in the Harvard Business Review, http://tinyurl.com/kp6hmgg by Barry Libert, Yoram (Jerry) Wind and Megan Beck Fenley draws our attention to - “What do Airbnb, Uber, and Alibaba Have in Common?” The research article settled on categorizing business into four models.

  • Asset Builders
  • Service Providers
  • Technology Creators
  • Network Orchestrators

The answer to the question is number 4. No surprises there with the benefit of hindsight in the market but it’s important to note that Network Orchestrator businesses have way out performed the other 3 categories in terms of gross revenues and business value in a remarkable short period of time.

Airbnb commenced in August 2008, and now has annual(FY2015) net revenues estimated at $US675 million and valued on a 20 times multiplier of approximately $US20 billion. The Hyatt Hotel chain, including the Wyndham hotel chain opened in 1957 and has annual(FY2015) estimated net revenue of $US88million which gives it an estimated business valuation on a 15 x multiplier of just $US1.3 billion.

The sensational performance of Airbnb illustrates the power of a Network Orchestrator in today’s world.

airbnb

 

 

The rapid growth and performance of these companies is based on fully collaborative, peer to peer software platforms that has blindsided the traditional models in the market.

They have achieved these results by having a great business idea to start with but also embedding the same philosophy into its IT platform that it based its business on. One platform, easily accessed, fast transactions and totally interconnected following the sun.

Uber is another case study that has done nothing the traditional Taxi companies could not have done, yet these taxi companies chose not to innovate and even if they did now, they would be a long way behind.

The term you have been Ubered is very apt as the concept exposes dinosaurs that are slow to change and inward focused. Uber has delivered systems that are self-accountable, believable and easy to use with high integrity and great back-up.

I am very fortunate to represent Microsoft Business Solutions here at Endeavour that really get what is talked about above. In New Zealand, creating and staying in business, being viable as well as sustainable is a constant challenge that a holistic IT solution map can go a long way towards supporting and mitigating the failure risk while creating opportunity for the future.

IT has removed the tyranny of distance for NZ suppliers from lucrative off-shore markets we seek to access. However, the reverse is also now true in that innovative businesses that reside in these far off markets can now also access our local market with the same technology and will cut our lunch in a heartbeat if we do not adapt and change.

If you’re looking for a CRM and or an ERP system, that’s great. However, before rushing down that procurement path, I invite you to enter into a visioning session first to expand your IT platform thinking around your new business idea that could be supported by an edgy “Network Orchestrator” model or your existing business open itself up to elements of a Network Orchestrator being implemented. I love having these conversations at the CX and board level and delivering a map for whole of business solutions not just one off procurements. Coffee/tea strawman meetings are a good place to start and I will shout the drinks.

Speak soon.

John Tattersall, BDM Endeavour Solutions Limited  john-h

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