Robert Kugel's Analyst Perspectives

The Challenge of Making ERP Systems More Configurable

Posted by Robert Kugel on Jan 31, 2014 9:43:58 AM

In the wake of the past year’s usual crop of failed ERP implementations, I’ve read a couple of blogs that bemoan the fact that ERP systems are not nearly as user-friendly or intuitive as the mobile apps that everyone loves. I’ve complained about this aspect of ERP, and our research confirms that ERP systems are viewed as cumbersome: Just one in five companies (21%) said it is easy to make changes to ERP systems while one-third (33%) said making changes is difficult or very difficult. Yet as with many such technology topics, addressing the difficulty in working with ERP systems is not as straightforward as one might hope. ERP software vendors must make it easier, less expensive and less risky for customers to adapt the systems they buy to their changing business needs. To do this, vendors must design products to be more configurable. The goal should be that organizations can make changes and add new capabilities to their ERP system in far less time than it takes today and without having to engage outside consultants.

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Topics: Mobile, SAP, ERP, Analytics, Business Collaboration, Cloud Computing, Oracle, Business Performance Management (BPM), CFO, Financial Performance Management (FPM), Infor, Workday, Social, business process, FPM, Intacct

Next-Generation ERP Must Take a Giant Leap

Posted by Robert Kugel on Sep 25, 2013 12:09:01 AM

Enterprise resource planning (ERP) systems emerged in the 1990s. Even though they don’t do much in the way of planning, the systems provide companies a means of centralizing and consolidating transaction data collection (such as purchase orders, inventory movements and depreciation), automating the management of processes, and handling the bookkeeping and financial record keeping for these transactions and related processes. ERP systems are an indispensable piece of IT infrastructure in today’s enterprises. Alas, they also are inherently flawed. But perhaps not for much longer.

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Topics: Mobile, SAP, Social Media, ERP, Operational Performance Management (OPM), Analytics, Business Collaboration, Cloud Computing, Oracle, Business Performance Management (BPM), CFO, Infor, Supply Chain Performance Management (SCPM), Workday, Social, FPM, Intacct

Infor Demonstrates Steady Stream of Advances to Customers

Posted by Robert Kugel on Apr 26, 2013 10:58:55 AM

At this year’s Inforum user group conference, Infor representatives showed the progress the organization has made since last year in transforming itself from a ragbag of mostly small, often obsolete software companies to a competitive vendor of a modern enterprise management software suite. Infor was created by private equity investors employing a “rollup” strategy, aimed at combining smaller companies within an industry to form a single larger company that could achieve economies of scale and greater market presence. Others have tried this in the software industry in the past and encountered difficulty in making it work for two primary reasons. One is the technical challenge of achieving economies of scale in enterprise applications by turning a set of similar but separately developed software pieces into a single offering. Computer Associates achieved economies of scale through acquisition in the 1990s in the IT infrastructure software segment. But it did this largely by forcing customers of the various acquired companies to migrate to its single offering in the specific category. This is not a practical approach for business and finance enterprise applications because customers are willing to go off maintenance and eventually look for another vendor. The second difficulty is that newer or larger competitors can focus on innovation and overtake the rollup company while its attention and resources are focused on stitching the pieces together.

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Topics: Big Data, Mobile, Planning, Social Media, GRC, Office of Finance, Operational Performance Management (OPM), Budgeting, closing, Analytics, Business Analytics, Business Collaboration, Cloud Computing, Collaboration, Business Performance Management (BPM), CFO, Customer Performance Management (CPM), Financial Performance Management (FPM), Infor, Information Management (IM), IT Performance Management (ITPM), Risk, Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM), FPM, SEC

How New Information Technology Will Transform Auditing

Posted by Robert Kugel on Apr 4, 2013 11:04:58 AM

A recent news release by Robert Half, a staffing company that specializes in accounting and finance personnel, covered what it sees as the most important attributes required for auditors in the 21st century. “7 Attributes of Highly Effective Internal Auditors” covers the people dimension of the profession and focuses on the non-technical requirements of the role, including relationship-building, teamwork, and diversity. No doubt these skills are a must for just about anybody working in a modern (Western) corporation. For me, though, the most important quality on the list is at the bottom: continuous learning. That’s because the role of internal and external auditors will be transformed radically by big data, in-memory processing and other advances in information technology that will make enterprise automated fraud discovery and mitigation a reality before the end of this decade.

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Topics: Fraud, Governance, GRC, Office of Finance, audit, Analytics, Business Analytics, Governance, Risk & Compliance (GRC), Business Performance Management (BPM), compliance, Financial Performance Management (FPM), Infor, Risk, HANA, Oversight Systems

Infor’s Local.ly Could Help with Tax Provisioning

Posted by Robert Kugel on May 7, 2012 10:37:47 AM

One of the new products that Infor announced at its recent Inforum user conference (which I covered here) is Local.ly, which is designed to facilitate localization of its applications (that is, adapting them for languages, units of measure, statutory requirements, customary processes and other specific features of the places where they will be used). Local.ly is scheduled to be released in the third quarter of this year. Infor points out that among other tasks the software can be used to facilitate tax provisioning outside a corporation’s home country, thereby reducing the costs associated with determining tax liabilities. I think it also can be useful in calculating income taxes everywhere, especially for larger customers of Infor that have even a moderately complex corporate structure. Here’s how. The entity structure of a company affects its tax management processes. Our benchmark research finds that among companies with 100 or more employees, 43 percent have relatively complicated corporate structures, which is to say they have some combination of many legal entities and complex ownership configuration. This general finding masks a substantial disparity based on size. Relatively few (27%) midsize companies (those with between 100 and 999 employees) have complex corporate structures, large companies (those with between 1,000 and 9,999 employees) are split between simple and complex structures (56% and 44%, respectively), and almost all very large corporations (those with 10,000 or more employees; 88%) are overwhelmingly complex in their structure.

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Topics: ERP, Office of Finance, Local.ly, Tax, Analytics, Business Analytics, Governance, Risk & Compliance (GRC), Financial Performance Management (FPM), Infor

Infor Presents Itself as a Large Software Startup

Posted by Robert Kugel on Apr 30, 2012 11:28:33 AM

Infor described this year’s Inforum user group meeting as a coming-out party for a large startup company. Such a debut was necessary because Infor had been operating in something of a stealth mode for the past three years: a limited marketing presence, no unified message and a weak, sometimes inconsistent brand identity. It also needed to formally introduce Infor to customers of Lawson, the ERP supplier it acquired last year. The “startup” designation is meant to signal that Infor has been able to render a decade-long consolidation of dozens of smaller companies into one cohesive entity.

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Topics: Performance Management, Salesforce.com, SAP, Social Media, Sustainability, ERP, Human Capital Management, Marketing, Operational Performance Management (OPM), Epiphany, expense management, Lawson, Business Analytics, Business Collaboration, Business Intelligence, Business Mobility, Cloud Computing, Governance, Risk & Compliance (GRC), IBM, Operational Intelligence, Oracle, CRM, Customer Performance Management (CPM), finance, Financial Performance Management (FPM), Infor, Information Applications (IA), Information Management (IM), IT Performance Management (ITPM), Sales Performance Management (SPM), Supply Chain, Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM), Financial Performance Management

Workday’s Financials: Maturing

Posted by Robert Kugel on Feb 10, 2012 1:37:15 AM

I recently got an update from Workday that focused mostly on its Financials software. This part of the company’s business management suite has received less development attention than the HR aspects since the company’s founding in 2005. The bulk of Workday’s development investment has aimed at making its human capital management applications an industry leader and adding related capabilities such as payroll. It’s hard to argue against this strategy, if only because Workday is the spiritual offshoot of PeopleSoft; founded the company after Oracle’s hostile takeover of PeopleSoft, which he also founded. This pedigree gave the new company an advantage with workforce management software buyers. Moreover, adoption of cloud-based ERP has lagged far behind that of other cloud-based applications such as sales or workforce management, especially in the larger companies that have been Workday’s target market.

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Topics: ERP, Operational Performance Management (OPM), expense management, financial, PSA, Analytics, Business Analytics, Business Mobility, Cloud Computing, Oracle, Workforce Performance, Business Performance Management (BPM), Financial Performance Management (FPM), Infor, Tidemark, Workday, Workforce Performance Management (WPM), Professional Services, Project Management

Reorganized Epicor Has Strategy for Competing

Posted by Robert Kugel on Jan 19, 2012 7:42:48 AM

I recently received an update from ERP software vendor Epicor, my first since it was acquired in May 2011 by Apax Partners, a private equity company, and simultaneously merged with Activant, an ERP and point-of-sale software company serving midsize retailers and distributors. In my view, taking the company private is a good idea since it will have to make ongoing investments that would not have been treated kindly by the stock market. Bringing Epicor and Activant together (and perhaps adding other companies to the portfolio) could allow the entity to spread some development costs over a broader base of revenues, but software combinations are difficult to execute well.

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Topics: Big Data, Microsoft, Mobile, SAP, Social Media, ERP, Operational Performance Management (OPM), Dynamics, Epicor, Sage, Analytics, Business Analytics, Business Collaboration, Business Mobility, Cloud Computing, Oracle, Business Performance Management (BPM), CRM, Financial Performance Management (FPM), Infor, Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM), Social, Financial Performance Management

Infor’s Management Outlines Corporate and Software Strategy

Posted by Robert Kugel on Jan 16, 2012 10:58:19 AM

I recently met with Infor’s management team, led by CEO Charles Phillips. Phillips joined Infor in October 2010 after leaving Oracle, taking several other executives with him, including Duncan Angove, now president of Infor, and Pam Murphy, now the COO. In addition to the changes in the executive suite, Soma Somasundaram, who had been at Infor and its predecessor companies since 1995, became EVP in charge of R&D. A private company, Infor had been keeping a low profile for the past several years, probably because results were nothing to brag about, and I suspect Phillips wanted to wait until there were substantive improvements to point to before fully engaging with analysts. Subsequent to his arrival, Golden Gate Capital, the private equity firm that assembled Infor from dozens of once-independent software companies, acquired ERP vendor Lawson Software in July 2011. Lawson itself had merged with Intentia, a Swedish ERP company in 2005. I estimate pro-forma 2011 revenues for Infor plus Lawson for a full year at $2.7 billion (the company has not published this number). This is only a fraction of 2011 revenues for SAP (about $14.5 billion) and Oracle’s applications ($6.8 billion). Infor reported that organic growth in license revenues was 17 percent, roughly in line with comparable companies, and executives indicated in the meeting that maintenance renewals have improved.

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Topics: Salesforce.com, Social Media, ERP, Human Capital Management, Marketing, Operational Performance Management (OPM), Epiphany, expense management, Lawson Software, Business Analytics, Business Collaboration, Business Mobility, Cloud Computing, Business Performance Management (BPM), finance, Financial Performance Management (FPM), Infor, Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM), Financial Performance Management

Crystal Ball Is Cloudy for ERP Market

Posted by Robert Kugel on Nov 11, 2011 5:49:28 AM

As Workday continues to expand and the likelihood of its IPO becomes a more frequent topic of discussion, so does the movement of ERP systems to the cloud. Thus far, only a minority of companies have chosen to put their ERP and accounting systems in the cloud, but the numbers are growing and there’s evidence of success. NetSuite, for example, reported a 26 percent increase in its revenues to $145 million in the nine months up to Sept. 30, 2011. To be sure, this is not close to Salesforce.com’s size and growth rate over the past decade, but it does indicate a growing acceptance of the cloud for this software category, which I have commented on. Moreover, I expect that as more companies adopt cloud-based systems successfully, we’ll see accelerating adoption by more cautious buyers in the classic diffusion of innovation pattern described by Everett Rogers (and later reworked by Geoffrey Moore).

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Topics: Microsoft, Sales, ERP, NetSuite, Office of Finance, Operational Performance Management (OPM), Dynamics, Epicor, Lawson, QAD, Cloud Computing, IBM, Oracle, Business Performance Management (BPM), Financial Performance Management (FPM), Infor, Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM), financial software, Intacct, PeopleSoft, Software