News & Views | ERP

News & Views is published monthly by 180 Systems. Our objective is to provide recent articles to our readers on business technology topics. In some cases, our blog contains a title with a hyperlink to a source article, a quote from the article and our comments. In other cases, we have provided a blog without a hyperlink for original content by 180 Systems. We encourage you to post your own comments. You can also access our blog by topic.

ERP Pricing Models

ERP

ERP vendors don’t make it easy to calculate the cost of using their system. There are lots of variables to consider including:

  • License – buy a perpetual license to use the software
  • Hosted – annual or monthly fee to use the software by user
  • Named user – for anyone needing any access to the system
  • Concurrent user – for the number of people needing access at the same time
  • Full users – need multiple parts of the system such as a purchasing manager
  • Light users – need limited use of the system such as someone that just creates requisitions or enters their time or uses a handheld or needs read-only access
  • By module – each module is priced separately by user
  • By system – you get all modules whether needed or not

Our approach is to give the vendors all the variables they should need. However in the end, the costs really depend more on market conditions and how strategic/important the client is considered by the vendor.

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ERP software survey 2014

ERP

September 2014 from CPA Magazine and written by Michael Burns – “Welcome to our annual vendor survey on enterprise resource planning software. Back in 1999, when we published the first survey in CAmagazine, ERP was another mysterious IT acronym. Now it seems that everyone knows about it — although you will still hear a lot of variation on what it really means. Fifteen years ago, we had only a few ERP systems in our survey. Today we have 93…”

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Oracle in the Cloud

ERP

According to IDG News Service, “Oracle is now the industry’s second-largest SaaS vendor after Salesforce.com” As well, “Oracle is also seeing traction increase for its cloud ERP (enterprise-resource-planning) software, adding 120 new customers in the fourth quarter alone”.

This was news to us, so I contacted Oracle directly to get the inside scoop on their ERP cloud offering. Oracle Fusion has been rebranded as Oracle ERP Cloud and there are a couple of hundred implementations across North America with many new opportunities keeping the Oracle sales team hopping. Oracle ERP Cloud is so far targeted to organizations providing professional services, financial services, construction and engineering. Later the system will also include functionality for manufacturers.

Oracle has now jumped on the cloud not only to compete with other cloud vendors but also because it is a more profitable method of software delivery. They won’t make as much at the start of an implementation but will more than make up for it as the years roll by and the annual payments pour in through the clouds.

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Infor bets big on Amazon Web Services for cloud ERP

Cloud Computing, ERP

March 26, 2014 from Computerworld – “Infor is betting big on Amazon Web Services for its cloud ERP (enterprise-resource-planning) software strategy, with plans to begin offering a series of product suites on the company’s IaaS (infrastructure as a service)…”

180 View – We just completed contract negotiations with another vendor that uses Amazon for hosting its system. The vendors need to pay Amazon and also add a markup on the hosting fees leading to an expensive solution for the client. There are alternatives which are less expensive. The trouble is that the alternatives probably don’t have a lot of experience with the application. Our client wanted one throat to choke if there was a problem and so chose hosting from the applications vendor using Amazon Web Services.

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ERP Support Requirements Range Widely

ERP, Software Selection

March 2014 from computer economics – “…Our study, ERP Support Staffing Ratios, shows the typical range of ERP support staffing ratios for installations of all sizes. At the median, there are 58 users per ERP support staff member, rising to 131 users per ERP staff member at the 75th percentile. At the 25th percentile, each ERP staff member supports just 29 users…”

180 View – A key question in the selection process should be the effort required to internally support the system. It is really hard to get this information from the vendors and references should be asked this question.

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Enterprise Software: Suites Don’t Always Win

ERP

February 6, 2014 from The Enterprise System Spectator – “The major enterprise software providers promote their pre-built integration as a selling point in capturing new business from existing clients. They argue that, rather than attempting to integrate different systems from different providers, organizations should buy everything from a single provider and get the integration for free…”

180 View – The Enterprise System Spectator continues to be a good source of independent thinking. This article is about ERP vs Best of Breed and there is no winner.

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SAP defers profit goal to build cloud business

ERP

January 21, 2014 from Reuters - “…The global cloud services market last year grew by almost a fifth to an estimated $131 billion, according to research firm Gartner. IBM Markets Intelligence estimates the market could be as big as $200 billion by 2020…”

180 View - The big vendors such as SAP and Oracle are late to the cloud party. They are making up for it by making acquisitions of cloud-ready software. But it remains to be seen whether their flagship products will ever get off the ground.

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Disintegration of ERP into services accelerates

ERP

February 4, 2014 from ZDNet - “Gartner recently issued a prediction that massive enterprise resource planning (ERP) systems are bound for the scrapheap of history. In the long run, it ultimately makes sense - but Gartner only gives them another two years…

Now, cloud, which puts those abstracted services into extremely user-friendly packages, is accelerating the stripping away of ERP systems…”

180 View – Don’t believe that ERP systems are dying or that somehow they become extremely easy to use if they are in the clouds or integrate with “cloud point solutions”. Organizations have complex business processes and want systems to automate them and one throat to choke if there is a problem. Complexity does not go away if the system is in the clouds or has the slickest of user interfaces or integrates with point solutions. In fact, you could argue that integration with the point solutions actually increases the complexity.

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Top ERP Trend? Usability, Says Nucleus Research

ERP

January 9, 2014 from enterpriseAPPStoday - “Vendors realize they must make investments to reduce the complexity of ERP and make it more usable for end users. It’s not just doing mobile, but making mobile more intuitive. It’s not “just adding new features but really thinking about making the UI more user friendly,” she said. “Nobody is making their ERP decisions based on a long, detailed feature and function checklist anymore; they’re really looking for how to get more value out of it.”

180 View – We disagree that nobody is making decisions based on detailed features. Vendors typically need to respond to long lists of requirements. The article discusses getting more value from a system based on a “consumer-like experience they’ve come to expect”. Although we agree that a simpler user interface is very helpful, it does not eliminate the features needed by many organizations to solve complex business processes.

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ERP customer survey roundup 2013

ERP

December 2013 from CAmagazine and written by Michael Burns – “It’s been seven years since we last asked you to tell us what you really think of your ERP and accounting system. That is far too long, especially given how much technology has changed. So we decided to revive the survey and add some new questions…”

 

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