Original URL: http://www.theregister.co.uk/2009/12/10/business_application_suppliers/

Business application suppliers: What do we want?

Looking ahead to the next decade

By Dale Vile

Posted in Evolving Apps, 10th December 2009 13:50 GMT

Workshop As we near the end of another decade it is an appropriate time to look at the way in which IT supplier relationships are changing and what current and potential customers are likely to be pushing for over the coming 10 years. The fundamental impact application packages such as ERP and CRM have on a business makes this question particularly pertinent in relation to such solutions.

It would be nice to say that the main requirement looking forward is for suppliers to generally move the ‘state-of-the-art’ on, but as we have seen in recent polls, some are still yet to deliver against current expectations in areas such as architecture, standards support, tooling, documentation, and so on. Constraints on investment as a result of the downturn might explain part of this, but in other cases there may still be a cultural impediment as some cling to the old days when customers ‘got what they were given’ and highly proprietary software was the norm.

Whatever the cause of the gap, for a number of suppliers, the first job to be done in the next decade is to get some of the basics right for dealing with the open, dynamic and highly integrated world in which applications packages now need to operate.

To be fair though, the feedback we have received indicates that some package suppliers have done a reasonable job of keeping up with broader IT industry developments and the changing requirements of their customers. If you have a supplier that is clearly behind the curve and showing no indications of catching up, it might therefore be worth considering a change.

While switching can be painful and disruptive, the ongoing cost and risk represented by old-fashioned packages - not to mention the constraints they place on business from a value and flexibility perspective - means it might be worth biting the bullet sooner rather than later.

The only word of caution here is to make sure that it really is the application at fault, and not the way it has been implemented. It is perfectly possible, for example, that it’s those ten-year-old customisations and extensions that are holding you back, rather than the software per se. Indeed, counterintuitive though it might seem, some organisations have found that re-implementing the same package, but taking full advantage of the latest business functionality, ‘soft configuration’ capability and open interfaces can make a lot of the issues disappear and put the organisation on a much better footing for the future.

As one CIO put it in relation to an ERP re-implementation, “We realised we were spending a fortune maintaining bespoke code built over a decade ago to work around package limitations that no longer existed. When we re-examined the underlying package, it was clear that most of those same requirements can be met today with standard functionality simply configured to work as we need it through software switches and rules based process flow.”

The lesson here is to realise that both mainstream packages, and the criteria by which you probably want to assess them, are very different today compared to the 90s and early 00s when a lot of the existing ERP and CRM implementations were originally conceived. But beyond architecture and basic business process functionality, what else is likely to matter over the coming decade?

In terms of scope, feedback from Reg readers points to a growing expectation around packaged application suppliers being able to provide integrated capability either out of the box or as standard options in areas such as business intelligence, collaboration and mobile access (Figure 1).

Figure 1

As we look forward, we would expect medium and smaller-sized organisations to be particularly interested in this as they are more likely to take advantage of capability in these areas if it can be either ‘switched on’ or ‘plugged in’ to one of their core packages. Investment in dedicated infrastructure and solutions outside of the core system can sometimes be difficult to justify and manage, especially when IT resources are limited and over-stretched as they often are.

Speaking of resources brings us onto the role of outsourcing, and the role of alternative delivery models such as software as a service (SaaS). While the response to SaaS in the mainstream business sector has been very lukewarm to date, with many being suspicious in areas such as security, compliance, integration and lock-in, the emergence of relevant standards and a general maturing of behaviour among the service provider community is likely to open things up in the coming decade.

Whether core applications such as ERP are the most sensible place to start looking at where ‘the cloud’ fits into your strategy is still very questionable, but elements of CRM (eg sales force automation) and some of the abovementioned options around collaboration and mobile access are arguably better delivered as a hosted service due to their network centricity.

However, we need to remember that once you move into the cloud the need for systems integration doesn’t go away; there may be several suppliers involved in the chain, so it is important that they play nicely together to provide the level of support expected in a proactive ‘non-finger-pointing’ manner. This will put even more emphasis on ecosystems and communities, and perhaps lead to a greater role for social media to allow customers to help each other, providing mutual support and exchanging ideas and best practice.

Overriding all of this, the most sought-after attribute from business application providers over the coming decade will be value-oriented customer centricity. Too often in the past, suppliers have got away with restrictive commercial practices and imposition of constraints for selfish reasons. From licensing terms, through who you are allowed to buy maintenance and support from, to whether or not you are supported in a virtualised environment, there are many examples of suppliers maximising their profits, minimising their overheads and exerting market control through defensive business practices at the expense of customer value, choice and flexibility. This has to change.

But that’s just our view. What do you think is important in the packaged application arena as we look forward to the next decade? We would appreciate your comments in the discussion area below.