The Elephant In the Room – On Premise is Dead! - Part II

Before we begin I will openly state from the outset that the opinions outlined are written knowing that they will be interpreted as controversial by some in the market, including some of our competitors, but then again Certus has built its entire business around Oracle Cloud and positively committing to the right direction before everyone else thereby creating our competitive advantage.

So before I continue the story, I would like to make an important point…

….when Certus engages with a Customer for an Oracle Cloud implementation or any other project we have complete empathy and understanding of the sponsoring Executive(s) position within their organisation. Understandably with any IT enabled business change involving new technology such projects are considered to be “high risk” in nature. We are very aware that these individuals often put their career and sometimes their job on the line as they take the role of champion; securing the necessary board level support and funding to undertake these projects with the view of making a significant positive impact to the organisation holistically.

Certus sees its responsibility extends way beyond ensuring a successful “contracted” delivery in that we have a duty of care to these individuals. My own view has always been if these individuals have been brave enough to take that first step then it is very much our responsibility to protect them politically by ensuring we make good on our promises and that the customer organisation can achieve transformation. From our perspective the engagement becomes very “personal” as we strive for customer success.

So now let’s roll the clock forward...

November 2015

Since we started in 2011 the majority of organisations have been quite happy to sit it out on legacy out dated platforms with the majority even pretending that the Cloud isn’t real and in the knowledge Oracle was going to provide endless support and continued development of the existing platforms. During this time I have heard every argument for not moving to the Cloud - “it’s a fad, it’s not proven, it’s not secure, it doesn’t scale, it doesn’t work, we don’t want to write off what we already have” – when really such negativity was/is an attempt to hold back evolutionary change with organisations having their Ostrich moment with their heads firmly planted in the sand and ignoring the Elephant in the room.

Mark Hurd, Oracle CEO, said in his keynote speech at Oracle Openworld 2015 “The current IT on-premise Operating Model is unstainable. Companies must modernise in the cloud to survive”.

Now my interpretation of Mark Hurd’s message and in accepting the reality that Cloud applications footprint and functionality is accelerating makes Oracle’s legacy on premise systems looking not only older each day but also more critically increasingly becoming irrelevant to modern day business operations.

So to be clear the Elephant in the room is ignoring the fact that “Oracle on-premise systems are legacy and will not be developed any further and ALL true new innovation is ONLY going to take place on the Oracle Cloud platform”.

Last year Certus lost an Oracle Cloud deal to an organisation that said it needed to transform its HR business operational model as the company was losing market share; and one element of their new strategic outlook was to focus on their own people in terms of talent acquisition and development. We lost to a competitors (non-Oracle) archaic on-premise solution and whilst we undertook our usual analysis of what we did wrong in regard to losing, we knew on this occasion the issue was with the prospect – their rationale was just plain wrong.

You can argue we failed to change the prospects perception during the sales process (and perception is reality), however sometimes people just cannot be saved as they don’t want to be. On the procurement debrief I was bold enough to say directly that we would probably see them in 2 years time when their implementation had not achieved what they wanted and that’s if one of their competitors hadn’t taken them out first! Losing to a competitor’s alternative Cloud product is one thing, losing to a legacy on-premise system today is frankly complete nonsense.

On a positive note since 2011 Certus has taken 18 companies and organisations in Financial Services; Local Government; Charity Sector; Engineering; Manufacturing; Transportation; Environmental; Media and even a Sporting Governing Body into the Oracle ERP and HCM Cloud, and have implemented over 70 Cloud modules over 25 different countries. The Cloud is not constrained by industry and crosses all vertical industries.

The entire market has undergone a paradigm shift – please note my tense! All the tier 1 software vendors are now all established in the Cloud as well as a myriad of new entrants from Silicon Valley backed by significant Venture Capitalist and Private Equity money. Even the players that digitally disrupt our consumer lives daily, all of their mobile apps are in the Cloud. Is it early days still? yes, but nowhere near as those pioneering days and Oracle by its own admission was late to the Cloud. Today from an Oracle Cloud perspective the products are now mature and proven.

If you disagree, then I challenge you to just ask one simple question “Where is all the new R&D money being invested? Answer – Cloud”. (Just search Google)

Larry Ellison, Oracle Executive Chairman and CTO at Openworld 2015 “It’s only a matter of time that the majority of computing is done in the cloud and a minority on-premise”.

So in 2015 for the majority of organisations the Elephant is still in the room and it is really time he or she now left! To be absolutely clear with the few obvious known exceptions, you are going to be moving your back office systems to the Cloud whether you like it or not. It’s just a case of when.

Brutal – Yes! but that’s digital disruption for you and it has already happened to the back office. Your existing on-premise platforms are not going to transform your business; they are not going to solve the challenges of the 21^st Century when they were built in the 20^th – infact all they are just going to do is haemorrhage cash moving forward in becoming even more expensive to maintain and impossible to innovate on, consequently holding you back as an organisation. For some businesses the situation is so critical that they just won’t survive if they don’t embrace Cloud! (and trust me I am not dramatising this). Equally Cloud is not a universal panacea that will solve all your problems however it is THE platform for INNOVATION ENABLEMENT.

So think about this real hard when making strategic decisions? Continue to put the inevitable off by all means, but digital disruption of ERP and HCM gives back competitive advantage through efficient standardised best practice processes; modern ways to engage a workforce and manage your talent ongoing to enable delivery. If you do nothing, be assured your competitors will, especially the new kids on the block that have grown up in the Cloud and know no difference and have absolutely no fear in upsetting the status quo of any given industry.

Controversial – Yes, but in my opinion disrupting technology and markets is supposed to be just that. As for On Premise, the Back Office is Dead – Game Over! Not because Oracle says so but the entire industry as a whole has! Agree or disagree, for me I will see you all in the Cloud in the next 5 years, it’s just of case of when.

The Elephant In the Room – On Premise is Dead! - Part I

Whilst I don’t like to use my blog to focus directly on Certus-Oracle related business, but for those that follow me like all good TV series indulge me and consider this a “Two Part Special”. We are, in my opinion, at an inflection point regarding technology and I feel compelled to comment.

The post will, however, give you some insight into the evolution of Certus and also the “why and what” we did at the start of our journey into the Oracle Cloud. Most importantly you will see that timing is absolutely everything in business, yes cash is still king, but the ability to see the opportunity and move fast is what gives you the competitive edge. This is something we still very much leverage today.

2011 – Turn Back Time

In early 2011 we had our “epiphany” when we saw with absolute clarity the acceleration of enterprise Cloud based solutions, specifically the emergence of Oracle’s Cloud strategy, that would contribute to creating a paradigm shift both in how organisations would consume back office IT services but also how these would be implemented in the future. This provided a once in a lifetime business opportunity and our rationale was simple:

• The Overall Need - the reality that businesses would always need ERP systems for back office operational efficiencies but also the need for constant innovation to stay competitive moving forward

• History Would Repeat Itself - dot.com era of 1995-1999 and the opportunity first movers could achieve in creating a new market

• New Consumer Consumption Models - Salesforce.com and Apple Inc. operating models in terms of access to consumer applications with a view this would be replicated in the future for business back office applications

• The Evolution of Social Media – specifically Facebook and its move from a single pillar application to a cloud development platform  

• Access to New Markets – Removal of a barrier to entry for midsize organisations. Cloud technology would become accessible because its total cost of ownership would be significantly lower

…and naturally knowing that if Larry Ellison was going to steer the entire Oracle machine into the Cloud that he would not settle for anything less than being Number 1 in the market. Oracle were late to the Cloud, so they would need to play catch-up and the chances of starting a business that would be solely dedicated to implementing,  supporting and transforming organisations through Oracle Cloud actually failing in principle would be slim - well it certainly felt that way after the third or fourth large glass of red wine!

Betting on Red – The Economics of the Cloud - Supply & Demand

So we went “all in” and bet on Red. For the record our decision period from start to finish was around 4 weeks! We didn’t spend months analysing the market, we backed our gut feel and executed.

Oracle in our view would need a new type of partner as the economics of the Cloud are vastly different from that of legacy on-premise systems, especially for the mid-market. Cloud is a volume play, with rapid but phased implementations, and the need to establish an ongoing long term relationship with the client (the “customer journey”). In the world of SaaS it’s the second “S” for “Service” that is the key watch word.

As a consequence the operational economics of a consultancy practice would need to change. Overheads and costs would need to be kept extremely low, and whilst competitive pricing would be a factor, selling on “value” would be where money could be made. (please remember Certus, just like Oracle is a business!).

Value in the context of a Cloud Consultancy business operation being a combination of retained product knowledge, implementation capability and most importantly delivering excellent customer service over the entire period of the contract term (this is so much more than just providing support!) – this however is all fundamentally table stakes. If you can’t do this, then you can’t play.  

Anyone can sell on price, selling on value takes effort and time and you need a killer proposition. (more about that for another day). Whilst the challenges would be many, it could really be summarised by:

1. Could we drive consumer demand and “make the market” early?
2. Could we positively disrupt the existing Oracle Partner ecosystem (supply side) and create a niche and a different type of partner operation to service the need?

Speed would be a critical and we would need to move very very fast with ourselves banking that everyone else (our future competitors) would not see the opportunity or would just stall, wait or pay lip service and not be pro-active in embracing Oracle Cloud.

To do this, we decided to ditch on-premise! Our message would be clear, Certus would only exclusively do Oracle Cloud - no-more legacy upgrades specifically Oracle E-Business Suite R11 to R12 and we would just take you straight to the Cloud. In our eyes the old and tired on-premise systems were dead – keep in view this is still 2011 here!

Our strategy from a supply side was equally simple – we needed first mover advantages. Be the first Oracle partner in the UK to access the new Oracle Cloud product line early and acquire the necessary knowledge; be first to gain recognition from Oracle around our specialist skills; find our first customer gaining reference-ability (continued reference-ability is everything); recruit an executive team that could bring the necessary skills to the table; sell on value and most importantly do all of this before our initial investment capital ran out!

Equally to build long term company value, we would build a consultancy operation around employees, retaining knowledge and not a traditional contractor operation. This was key to our success, but also where the investment needed to be made, not just once but continually as Oracle innovation was coming very fast. You can’t provide world class customer focused consultancy on Oracle Cloud if you don’t know the product.

To create a new market you need both sides of the equation you can’t have a supply side without consumer demand! So to attract customers you need a compelling event so not only would we have to come up with a different service proposition around moving back office on- premise systems to the Cloud but we also really needed the old on-premise market to die, and hopefully die fast.

However the world doesn’t move as fast as we would like and organisations that had invested millions on their on-premise systems were in no rush to replace them regardless how great the new technology was and truly the positive transformation effect it could have on a business. Also some organisations just don’t want to be transformed and corporates take a life time in making decisions. In-fact some take so long or just physically can’t make a decision that they actually go out of business – how mad is that! (and yes I have seen this happen on more than one occasion, and it’s very difficult to have any empathy what so ever).

So in our attempt to take over the world (or at least the UK!) and positively disrupt the Oracle Partner landscape with Oracle Cloud back in 2011-2012 we overlooked the speed of consumer demand and adoption. The market wasn’t mature enough and to be fair, neither was the product set. However with all things someone is brave, has a vision and steps up to the plate and becomes an early adopter – in our case it was Lavendon Group – our first Cloud customer.

Part II to follow…

In Search of Excellence – Making it REAL!

Tom Peter’s 1982 landmark book “In Search of Excellence” is still relevant in today’s connected business world where your prospects and customers know more about you both as a company and the individuals that comprise your organisation before they buy, and finding excellence and maintaining it day-in day-out is the constant challenge. The bar today is set very high, customers are intelligent and well informed and social media commentary sets expectations (wrongly or rightly) and can make and break a reputation. Consistency is the watchword and if you become complacent then everything you have worked hard for and achieved can be lost overnight.

In any service orientated business individual people excellence and performance is key, and this reflects on the company and its brand. (Everything you see or touch is connected). For me excellence starts with living and breathing a company’s values as this is the very ethos and foundation on which you build your brand. As 

a leader this is the extension of your vision and how you wish for it to be delivered.

However to make it stick you have to make it REAL! – this means you need to translate what’s in your head into something your own people mentally buy into and can be truly passionate about. More importantly you need “collective” excellence in everybody and not in just a few individuals to be successful.

A successful service company today provides the platform underpinned by its values and culture as the launch pad for individuals to reach their own levels of excellence and through extension your organisation achieves "collective excellence". There are a number of elements that you have to ensure that are in place for this to be achieved by having (but by no means limited to):

• A “Winning mind-set” – when you fail, fail fast, learn and move on quickly – this sets the rhythm, pace and heartbeat of the company
• A “Value Set” that everyone can relate to – this is the ethos and tone of your organisation; and at the core of this is respect for one another
• A Strategic Vision – Communicate clearly where you are going and more importantly how you are going to get there as well as your expectations of your people
• A commitment to looking after and developing your people! - the equation is simple: Happy People = Happy Customers
• An Efficient & Effective Operational Engine – “Delivery and making good on your promises is everything” that’s how individual reputations and a company brand is built and also lost!
• A “Can do Attitude” (the “JFDI” methodology of project management) – delight and surprise your customers, use a positive customer experience to create customer advocates

For the individual to achieve excellence:

• You have got to want to do it! – having the right attitude is everything
• You need to have an insatiable drive and hunger that pushes you on
• A thirst for acquiring and sharing new knowledge with your peers
• Positive thinking and a deep personal commitment
• and most importantly you have to MAKE THINGS HAPPEN and GET THE JOB DONE IN THE RIGHT WAY!

From a leadership perspective you have to drill home the need for constant awareness in that “Without Customers, you don’t have a business” and remember no matter how successful you are “complacency will kill you in a heartbeat”.

Once you have climbed the mountain of excellence (if you can actually get there in the first place) staying there by achieving consistency is the even bigger challenge. To excel as an individual and subsequently as an organisation, you have to be constantly challenged and inspired. So as leaders of men and women, how do you inspire those around you?

In my opinion to be an effective Chief Executive you need to lead from the front. At Certus, I would never ask any of our people to do something that I wasn’t prepared to do myself.  I demonstrate this by still getting my hands dirty in front line delivery as a Project Manager and also undertaking Business Development (including the sometimes thankless but critical task of the background pre-sales effort) albeit in doing so this does stretch my own personal bandwidth. However I am not unique in this as ALL the Certus Executive Team are hands-on and by not having anyone in an artificial corporate ivory tower I believe is a key factor that differentiates us as an organisation from the competition. Our Exec Team are in the field on a daily basis with our people and our customers, ensuring excellence is delivered and maintained.

From a personal perspective there is nothing I enjoy more than leading a project and making what some consider the impossible “possible” happen before their eyes. In doing so I love sharing my knowledge and seeing the people around me equally learn and grow so over time they can excel themselves hopefully to higher levels than what I ever achieved as an individual. Also it gives me the opportunity to learn as well, you never know it all and you never stop learning.

As with everything, do I always get it right? – No (far from it), do we as a collective at Certus always get it right? – No, but we constantly are in search of excellence. The constant challenge is just one element in what makes building and running a business fun.

Confucius quotes “the will to win, the desire to succeed, the urge to reach ones full potential…these are the keys that will unlock the door to personal excellence”, however everyone needs help to achieve and subsequently maintain this. What’s the point of acquiring knowledge and learning if you don’t share it and pass it on??? As Kevin Spacy says “If you’re lucky to do well it’s your responsibility to send the elevator back down”. Could not agree more and as for Tom Peters, his writings will still be valid in another 30 years from now!

Degrees of Winning – You have to Learn to Lose!

There will be thousands of articles, blogs and arm chair critics about England losing to Australia and exiting the RFU World Cup 2015, however just like in sport you also have to accept defeat in business. We all play to win and none of us ever play to lose, but the fact is that you will probably lose more than you will win. Its all part of the game of life and this is how you gain experience.

However the manner in how we act in defeat is what defines us as an individual. I am not saying you have to like it (far from it!) but you do have to accept it, learn from it and find a way to move on quickly. I constantly drill this into my own children much to their disaffection and the obligatory “Yes Dad, we know” (delivered in that tone of voice we all know so well as parents!) - and by the way if your going to start a business you better get use to this real quick because it is going to happen to you daily when you start out and when you do win - remember to enjoy the moment!

Equally "Winning at all costs" is not something I would endorse as an outlook, if you do, at best you will have a tarnished reputation, and at worse border on the unethical that can get you into serious trouble. So for those contestants that come out with all the dog-eat-dog clichés in week one of the Apprentice (which by the way I absolutely adore) please take note. Unfortunately recently a number of large corporate entities have forgot this and just like in sport there is no excuse for bad behaviour. In the connected online world where social media is king, customers express their feelings if they are unhappy by simply moving their business.

As a life-long fan of Manchester United and Sir Alex Ferguson, and having watched more games than I can remember at Old Trafford I can tell you how the team played the game even in defeat is just as important to us as fans as winning. (and believe me we like winning!). I remember losing a match to Newcastle United at St James Park in the mid-90’s 5-0, we didn’t play badly but it was just one of those days and we got slaughtered. With 89 minutes gone, as a team United were still attacking looking for their first goal of the afternoon. That attitude says it all really and underlines why United are so successful. Steve McClaren (Ferguson's No2) famously once said "Manchester United never lose, they just run out of time".

If your smart every time you lose you will learn something. Not only about why you lost but also more importantly about oneself. I have to say I am a terrible loser. When we lose a business deal everyone in the office knows to give me space to let me get it out of my system for an hour or two but then I move on, and more importantly as a company “we” move on - quickly. This trait is ingrained in my personal makeup, something I can’t change and it comes out as I am highly competitive. I like winning, I never play for the draw and I hate losing.

Our behaviours define us and our outlook to life makes us who we are. None of us are perfect and we all make mistakes - that’s life. Our imperfections are actually a fundamental part of our makeup as individuals.

So when you lose how do you deal with it? First and foremost there is no place for knee jerk reactions and rash emotional decisions. This only creates a sense of panic and fuels the notion that something must be done immediately by all those around you. Believe it or not whatever you do in the moment after you have lost doesn’t turn the clock back and resets everything. There is never an instant fix but what is needed is a period of reflection and a chance to regain perspective.

“Teams” win and lose business deals and teams deliver or fail in the delivery of projects and not individuals. If you are leading an engagement - “the buck stops with you!”; and as a Chief Executive of a company regardless if you’re a handful of people or hundreds of thousands everything rolls up to you in terms of accountability. So before we get to the “we”, you have to be brave enough to evaluate the “I”. This is not about looking for some-one or some-thing else to assign blame. First you have to perform the equivalent of open heart surgery on your own performance! Start at the beginning and evaluate every detail, every conversation, every event and your own behaviour to see how you could have performed better and if you had done something different would there have been a different outcome? Only once you have evaluated your own performance, you can move on to the “we” as a team, but you have to be honest.

It takes a mature outlook to undertake this process and your people need to trust you implicitly as otherwise they will feel there in a blame game. What your trying to achieve is a learning experience for all and something positive out of defeat or as I would rather look at it – “Invictus – latin for unconquered”. Because if you learn something from defeat then you haven’t really lost at all, just try to look at it as “degrees of winning”.

Vince Lombardi, Coach of the Green Bay Packers and the winner of the first two NFL Superbowls in 1966 and 67 said “Winning is not everything, but wanting to win is”. I couldn’t agree more. As for the Rugby – Well done Australia, as for England we weren’t good enough on the night. We have a lot of talent and we should all remember "Invictus  and degrees of winning!". Our time will come.