Fool’s Gold - “Best of Breed” – Part II

In Part I, I raised the spectre of the return of a “Best of Breed” strategy for slicing and dicing up the Back Office corporate Finance and HR systems and outlined the drivers for this behaviour.

The questions I pose too anyone thinking of doing this are: Knowing the benefits of Finance and HR working together why would you separate them? What are you really achieving by having multiple Cloud platforms for the Back Office? Why go to the expense of doing this? Are you really better and have deeper pockets than that of the Silicon Valley fuelled Research & Development (R&D) investment that has taken place over the past 15 years?

Powerhouse of R&D Investment 

Oracle, SAP, Workday, Unit 4, Infor, FinancialForce et al collectively invest billions of dollars a year in R&D. Oracle’s R&D budget in SaaS applications is quoted to be around $6 Billion a year! Where does it all go? 

Engineering world class software is a capital expensive business and it is fuelled by R&D. It starts off with an abundance of initiatives that over time are whittled down into the final product. Constant iteration against a moving marketplace can easily mean investments can become sunk costs and write-offs as the sands move under you. Software engineering is a high-risk poker game. The rewards can be massive, but the risks required to be undertaken are equally substantial. It all requires money and lots of it and that’s why Venture Capitalists and Private Equity exist in the first place. It is also a game played by experts with a lifetime of experience.

So why do Organisations and the Users of these systems now consider that their new world Enterprise Structure should consist of multiple Back Office platforms? In effect re-engineering and undoing all the benefits and learnings that has been derived from the billions of R&D investments undertaken. If you pursue a strategy of breaking up the Back Office across multiple platforms hosting multiple SaaS applications just why do you think you can do it better? and what business benefit are you really delivering?

The power of SaaS Cloud applications is in the intrinsic value that is created in terms of operational insight of bringing Finance and HR together in a single fully integrated instance. One data model providing the foundation for technologies like adaptive intelligence and machine learning for many years to come. The R&D at great investment has already been undertaken bringing together the very best talent across the world including, but not limited to: the most current thinking of subject matter intellectuals and thought leaders; behavioural scientists; data scientists; creatives; and the very best software designers. 

No organisation, private or public sector has the money, time or experience to pull together what the major software vendors have achieved in regard to Back Office SaaS applications, let alone keep pace with the underlying forward investment required to continuously drive innovation. Their sole focus should be on front of house and their business.

Fool’s Gold – Challenges of a Best of Breed Cloud Strategy for the Back Office

Not one of the Tier 1 Software Vendor powerhouses I know would openly endorse multi-platforms for the core enterprise applications (HR & Finance). The challenges you open yourself up to include, but not limited to:

• Barrier to Entry for Technology Innovation – Technologies like AI and Machine Learning are embedded in the applications and work off a single aggregated data model as they are data driven not process driven. Split the data model up and potentially you can’t necessarily make full use of this type of innovation that comes with the platform. The Software Vendors are always building for tomorrow and not for today so you won’t be able to keep up 

• Continued Investment to Stay Current – One of the biggest benefits of SaaS is the ability to constantly stay current on the latest release of software. To replace Back Office functionality with microservices means you are going to have to replicate similar types of on-going investment. Do you really have the finances and the investment capability to continually do this?

• Reduced Negotiating Power – SaaS vendors love to do commercial deals on bulk of modules and volume. By not selecting one Vendor for the core product suite, you are at risk of losing significant commercial discounts and your negotiating position becomes weaker

• Higher Implementation Costs – Now you have multiple Cloud platforms to implement and then integrate. The costs include but not limited to are significant everything from contracting, commissioning, mobilising Consultants with different skill sets to implement, and then on-going support. You lose economies of scale in terms of cost

• Multiple Patching Cadences - Multiple SaaS packages from different vendors will be on different patching schedules; trying to get these to align throughout the year is not realistically possible. The risk is constant that one side of the two systems (possibly more) is going to change and something is going to break. You are going to be in constant state of regression testing 

• Consistency of UX is lost / Accessibility Impacted – Multiple SaaS packages from multiple vendors means by default multiple UX. Accessibility is also significantly impacted which will result in compromises through off system work-arounds. Consequently, to regain consistency another layer of the enterprise potentially, though not required, would need to be added

• Integration or Interfaces or both – Open systems aside. Are you integrating the data, or just building point-to-point or a middleware enterprise service bus? Regardless, data models and interface technology changes; these all require ongoing support. It doesn’t take much for either to stop working  

• Disaggregated Data Model – Instead of a single data model, we have data replicated all over the enterprise. This naturally needs to be constantly synchronised and in all probability in real time 

• Increased Security Risk Profile – Integration and Interfaces require security. Transferring data between platforms naturally introduces greater risk of data loss. Neither SaaS vendor is going to take responsibility for the data while it is being transferred; that’s for you to take responsibility for 

• Increased Support Costs – More products, more integrations, more knowledge, different skills required both inside and outside the tent and also the cost of managing multiple vendors and contracts

The bottom line is your total cost of ownership is going to be significantly higher over the long run. Welcome to the 90’s!

Where does Best of Breed Make Sense?

Now there is a place for integration of SaaS application platforms that can leverage huge benefits and that area is in Organisations connecting their Front Office to the Back Office. This is where integration and use of open systems architecture comes into play – at the macro level, not at the functional module micro level in the Back Office.

There are Software Vendors that have laser like focus and have transformed software development for the Front Office from a customer experience perspective. One stands head and shoulders above the rest and that is Salesforce - the blueprint for Cloud in terms of product but also as a service organisation. Being a platform itself it has enabled a myriad of specialist SME’s to bring highly innovative products to the market that should not be ignored! SME’s are the powerhouse of innovation, especially in the United Kingdom. (Definitely a blog for another day)

Personally, I think Oracle still have much to do in the CX area and this is becoming an area of greater focus for them. CX encompasses a whole host of different products usually acquired through acquisition. It is only matter with time with Oracle before they get this right.

However, one to look out for is the company “Service Now”. Once merely the domain of the IT Helpdesk, it already is and looking further to extend a suite of “vertical experiences” over the top of other platforms. Personally, I have high expectations for Service Now. 

Finally, the “Qualtrics” acquisition by SAP could be their saving grace and a potential game changer here as this is key to their future strategy of delivering “experiences”. However initial reaction to their "X" (eXperience) and "O" (Operational) data strategy has not been overly positive.

What Should You do?

1. Decide upon a single core platform for all the core back office business functionality and stick with that platform vendor for better or for worse
2. Use your single core platform Open Systems Architecture that is rich in API’s to extend the functionality by creating bespoke microservices that provide services that are specific to the Organisation but are not delivered by the core platforms functional modules. (Look to host these as a Platform as a Service, preferably on the same infrastructure supporting SaaS)
3. Collaborate with your chosen platform Software Vendor to continually raise the bar and help them become an even better delivery partner than they are today. Cloud isn't just about product its about customer service. You will ultimately benefit from this
4. Leverage new core SaaS innovation as and when it arrives looking as to how this can positively impact on your business operation and then make sure you implement it and use it (so many don't and this becomes missed opportunity)
5. Consider a Best of Breed strategy for the Front Office; looking to take advantage of those Software Vendors that have innovated in this area (especially SME’s) or the further build of local specific microservices that reflect your offerings with a view if connecting to the Back Office and driving value end-to-end across the enterprise delivering superior customer and employee experiences

Fool’s Gold 

Regardless of platform preference for those that proceed with the approach of splitting up an already fully integrated back office suite of HR & Finance SaaS applications on a single platform need to be challenged. 

It doesn’t take much to look into the crystal ball, roll forward the clock five years and listen to the noise around “total cost of ownership”; the unreliability of the integrations; the cost of managing all the integrations; the size of the internal Information Technology department; and then for the penny to drop and those Organisations starting to strategically retire such applications and finally move to a single core platform. For me this is and always will be simply “Fool’s Gold”.

So, if you have made it through to the end of these two blogs – thank you and congratulations as I have probably just saved you somewhere between £250-500K and 3-6 months in expensive Consultancy fees to point out the same findings. (Nice work if you can get it though). Cheques in the post are still always kindly accepted. 

I very much look forward to people’s opinions and the ongoing discussion, but as I stated in Part I, the answers to many of today’s problems can usually be found in the past.

  

Fool’s Gold - “Best of Breed” – Part I

You can probably guess from the title that I am not a fan of the recent emergence of “Best of Breed” as a strategy for separating out the individual functional components of ERP and HCM SaaS Cloud platforms for the Back Office. 

As my thoughts became written-word I took the decision to split this blog into two parts to keep readers focused. Part I looks at the business drivers where Part II the implications and reality of undertaking such a strategy.  Yes, this has a heavy Oracle Cloud slant to it and for good reason, however I have commented on the wider market throughout. I want to stress from the outset that I am not talking about the Front Office where equally brilliant innovation can be found amongst both the Tier 1 and Tier 2 SME market providers for niche solutions that can add tremendous value to a business and can be integrated into the Back Office.

Many will disagree with my views but I genuinely hope many will also find them useful and gain some insight from my observations and arguments which is built upon my 30+ years’ experience as a practitioner who lived through the first generation of on-premise “Best of Breed”; has been involved in 40+ Oracle SaaS Cloud implementations as well being a former Chief Executive who was responsible for the vision, strategy and ultimately the successful exit of the UK’s premier Oracle Cloud professional services company.  

Urban Myths and Missed Opportunity

Over three years ago I published a series of blogs titled “The Urban Myths of Oracle Cloud Implementations” (https://www.linkedin.com/pulse/urban-myths-oracle-cloud-implementations-part-i-mark-sweeny/). Technology innovation has advanced relentlessly to the extent that I honestly struggle to understand Organisations that are still “dithering” about moving to the Cloud. The costs involved in making and justifying the many known benefits for what is a “no-brainer” decision too many is just perplexing to me. Add this to the opportunity cost of delay itself or just doing nothing and the missed opportunity in terms of return on investment, both tangible and intangible, becomes eye-watering.

Since then, Oracle Cloud has accelerated in its maturity and functionality across the organisation’s Back Office. Whilst the offering still isn’t perfect (what product ever is?), it’s become THE platform play for combining Finance and HR onto a single data model providing operational insight; possessing a rich depth of business functionality; and become an engine for the constant delivery of technology innovation that makes use of new technologies like Adaptive Intelligence (AI) (a subset of Artificial Intelligence) and Machine Learning (ML) that are already embedded into the platform. 

Oracle’s strategy of re-architecting the “Fusion” products for the Cloud a decade ago is now paying off big time. Acknowledged as being late to the Cloud, Oracle Product Development has now created so much momentum it has pushed itself to the front of the pack in the on-going Tier 1 “Cloud Wars” for the Back Office. This is now universally recognised, with even the likes of the mighty Gartner and Forrester (who Oracle have never had the easiest of relationships with) acknowledging this through their magic quadrant analysis.

Missed Opportunity? Not On My Watch

People will argue I am naturally biased because of my own rich Oracle heritage. But anyone who knows me well will also know that my argument is that I always saw “Cloud” purely as a business opportunity and Oracle created the best environment for future commercial success and a healthy long-term return on investment.

I will also tell you quite freely what everyone knows already that SAP is not true Cloud but a suite of products collected through acquisition that are “stuck” together and requires somebody else’s Cloud infrastructure to be installed upon. The core was never re-engineered for the Cloud so SAP is effectively “on-premise” in someone else’s data centre. However, the recent “Qualtrics” acquisition by SAP was an inspired strategic move.

Workday is a great company and truly has a great product for HR but soon as you need to stretch the product across the enterprise it becomes exposed with a lack of breath and depth of functionality. Its financial offerings are not as broad or as deep as Oracle or SAP. Will it catchup? Yes, but it feels like the “Peoplesoft” product development market cycle again and time is against them. Workday continue to develop their HR product in terms of depth and position it from a system of record to a collective set of capabilities. Its Achilles heel is that “experiences” go across an Organisation and finance functions touches every employee in some way so both HR and Finance need to be present. People just don’t work inside functional modules or silos.

The result of all of this is multiple core applications makes the underlying data model disaggregated and you immediately start to compromise on a consistent user experience and accessibility; data mining and insight; and future innovation delivery across the suite becomes much more complex as it is not naturally embedded into the product, not to mention the underlying integration between modules that has to be wired in and maintained. 

The Experience Economy

The fundamental point here is the game has changed and regardless of platform choice we are now in the business of delivering “experiences - a collection of end-to-end capabilities combined togetherover standardised processes ensuring a single record of truth is maintained”. Software Vendors are investing more than ever to innovate at speed and win market share. In doing so tighter integration is required between traditional functional modules as well as a data model that is used by the new technologies like Adaptive Intelligence and 

Machine Learning.

Employees do not work inside functional modules whatever platform you ultimately select. In-fact with the advances in voice recognition technology the new “UX” is in-fact no “UX” whatsoever. Try doing that effectively on an on-premise system and by the way “putting lipstick on a pig” isn’t the long-term answer either! (See https://www.linkedin.com/pulse/welcome-experience-game-mark-sweeny/) 

Graveyard of Acronyms & Phrases

However most recently there has been murmurings across the market of a phrase that I had personally hoped would remain in the graveyard of acronyms and phrases. 

“Best of Breed” the first time around in the 90’s was probably the most-costly ill-conceived technical strategy ever created and its possible return is now even more concerning. Promoted at the time to be the universal panacea to all of one’s problems it failed on an epic scale. 

What seems theoretically an idea of merit in taking the best solutions that each of the market software vendors possess and integrate them to deliver the ultimate enterprise Cloud Application SaaS platform in reality I will assure you will quickly become a nightmare! An absolute money pit of despair and frankly “Fool’s Gold” for carving up back office functionality by module as well as possibly creating a barrier to entry for use of new future technology.

History Repeating Itself 

I vividly remember such visions of corporate Best of Breed architecture excellence from a previous generation of leaders with business cases stacked full of healthy ROI for justification.

It was then left to the Technical teams to work out how to get all of this to work. No surprise to any of us that we seemed to spend a lifetime wiring it all together (often with sticky tape and string) to then having to constantly plaster over the cracks. IT departments got bigger as we had to justify keeping this rat’s nest of cobwebs all hanging together as systems were upgraded and interfaces broke. Business got frustrated and hence “IT fails to deliver” became the mantra of the day.

2020 - Roll forward to the start of a new decade and now we seem to be talking about it again. The technology may have changed and we have sexy new architectures and tools: Open Source; PaaS; middleware; integration clouds; advanced transport mechanisms and REST API’s etc… to play with but effectively the conversation appears to be returning to the thinking of 25-30 years ago. So, what’s driving this? 

1.     Market Competition– the thinking that by continually playing Software Vendors off against one another through constant beauty parades prevents monopolies, drives excellence and value for money through competition. Wrong on every count – you cannot manipulate the market as the market adapts accordingly. The tier one SaaS market is already an oligopoly with Oracle, SAP and Workday the only three large scale enterprise solutions in play. Their growth plans are based upon known market behaviours, economics as well as the need for future innovative products

2.     Avoiding Vendor Lock-in - Whilst every SaaS contract has exit clauses and great stress is often put on this during procurement cycles ensuring the customer is not locked in forever into one given platform. The reality is the transition and exit costs are on par with undertaking a new platform implementation. Changing the core SaaS platform on a regular basis (say every 3, even 5 years) is not going to stack up commercially. It is this that locks you into the platform and not the Vendor’s

3.    Procurement Competition Structure - the way procurements are often structured (especially in the Public Sector); it’s still feature function against a scorecard. Completely the opposite way SaaS systems are designed and used in practice. But because business users often see functionality in isolation during a procurement sometimes the prettiest system just wins (fickle!)

4.     Pandering to the Business- “We’re Special”- not really prepared to adopt Cloud processes and adapt business processesaccordingly. Best of Breed can be perceived as a way of providing greater flexibility which in reality it won’t

5.     Build v Buy – There is a real need for the core data held centrally in a Cloud SaaS system to be accessible to feed local satellite systems or “Microservices”. It is these microservices that are specific to the Organisation and used on a daily basis that cannot be delivered through the core SaaS functionality is where local investment and development should reside. However, extending the “build” thinking into the Back Office SaaS domain with moving to a “plug and play” scenario where functionality can just be swapped in and out accordingly at module level is just wrong

Recognise any of these? I am a great studier of history often citing that the answers to many of today’s problems can usually be found in the past. But similarly, the thinking in some quarters of a new generation is obviously skipping these valuable chapters of the book and are unwisely setting their organisations on a course at best can be classed as “lost at sea” or at worse “a train wreck”. 

Look out for Part II where I explain the rationale in further detail and also where “Best of Breed” thinking does have a place.

Some People Just Don’t Want to Be Transformed…

Experience in sales usually comes from one’s ability to read people within the first 30 seconds into the opening salvo of “discovery” questions, whilst working out simultaneously if there is real interest in the conversation rather than just having a meeting exchanging pleasantries. Body language being the key indicator as you cast your lure to see if the prospect is actually going to bite whilst delivering that important open question, followed by a moment of silence, which hopefully prompts an information download in return.

When it comes to the world of digital the word “transformation” usually follows in the same sentence.  Both front and back office Cloud Software as a Service (SaaS) based applications have the power to drive permanent change and can positively disrupt the way organisations work as they impact on underlying business models. Throw in some AI, RPA and whatever the current flavour of the month is (acronyms that are now banded around on a daily basis) and with a clever manipulation of an Excel spreadsheet your ROI in such a venture is going to go off the scale. Happy days!

However, there is one major problem and its simply that your prospect’s people don’t want to be transformed – how dare they!

Human Behaviour – It’s in our DNA

Your prospect may say they want to transform the organisation and may even be working on that very business case that is going to return hundreds of ROI percentage points in tangible (cashable) and intangible benefits to support their vision of a brave new world. However, the reality is they really like the status quo and the way of doing things, why? because “Change is Hard!”.

People that like change are, in my experience, very much in the minority. (Exclude entrepreneurs here as we are generally on a mission to disrupt the status quo for the better regardless and the fact that you don’t find many entrepreneurs working inside large organisations as they are often the most unemployable type of people that exists. Anyway, I digress; that’s for another blog on another day).

Basic Human DNA is that when we are comfortable and happy the last thing we want is somebody coming along and up-setting the apple cart. Remember Maslow’s Hierarchy of Needs? well its true today as it was in 1943 when he came up with it. Mess with the basis of our emotional state and the unpredictable or in this context the predictable happens – instant subconscious resistance to change. 

From a sales perspective again experience usually allows you to identify this within that very first sales call. It is at this point you have to decide your strategy and tactics moving forward to achieve a close. The danger being that you close a sale upon the false emotional context of the buyer.  Congratulations on the sale, however this only sets the ensuring engagement up for immediate failure as both buyer and supplier expectations are instantly out of alignment regardless of what it says in the contract. Instead of having the foundations of success, you have the foundations of a fractious relationship.

What do People really want? The thing they value the most – their time!

Most of us just want an easy life and most people don’t want to change the world. Those that do embark on that journey start by understanding that they usually need to change one’s self first. Change is hard; it introduces risk; it can be unpredictable; your job can change & even worse disappear; and change is not always for the better. 

However, people are genuinely receptive to a positive “experience”, especially one that makes their lives easier. Think about it. Why would you not be receptive to something that makes your life easier? It is quite possible to use the new innovative technologies that are now available to deliver new “experiences” without having to transform one’s entire world. Believe it or not you can even deliver new experiences without technology simply by stopping doing unproductive irrelevant tasks that most of us undertake on a routine basis.

It is equally possible to deliver enough of these new experiences that over time you transform an organisation’s world by stealth by changing people’s mindset and behaviour incrementally. 

A positive experience will resonate and open an individual’s mind to something new. A negative experience will naturally have the opposite effect. More importantly they will remember both.

At this point everyone says “thank you for telling us the obvious”, however brand loyalty is built through customer advocacy - the most powerful type of marketing that exists. It creates the holy grail; eutopia; the universal panacea that we all crave for as it underpins success through repeat business by returning happy customers. Undertaken correctly you create the snowball effect for greater product/service demand and consumption. You would be surprised just how many people don’t understand this fundamental business concept.

From Front Office to Back Office

The last decade has seen digital disruption in the front office take a grip and you only have to look at the likes of Adidas and Nike who create as much as possible an immersive customer experience through their online shop windows as they do in their physical stores. They are no longer just retail companies but technology companies in their own right. 

What is now taken for granted as a way of doing business directly with consumers is now targeting employees inside these businesses. Happy employees make happy customers. A positive mindset and behaviour promote superior customer service, creating positive experiences.  

In the context of a people dynamic at work we can answer the question simply through this equation:

What do People really want? = Positive Experiences that Creates Time

The most valuable thing we all possess is our time. The one thing we all have in common is that everyone’s time is limited and the cliché quote “time is money” is absolutely spot on. We all need to use our time wisely. 

In the workplace we want employees to feel they are valued and too achieve that we want them spending their time doing purposeful work that adds value to the business and that usually means people using their time to interact and collaborate with other people. The social and behavioural elements of work cannot be under-estimated. Part time Mum’s and Dad’s often return to work, not just out of the necessity to earn a wage, but because work provides an environment that provides social interaction with others. Intelligent and stimulating conversation, problem solving, and making a difference, being proud are all characteristics that help us make us feel valued.

The mundane, but absolutely necessary, back office processes need to be executed easily and quickly, in doing so this drives down the costs of operation whilst maintaining control. Result “Better, Cheaper, Faster” executed – the best business strategy ever created fuelled by happy employees who are focusing on using their time to create value, rather than wasting it in the back office. 

So how can Technology play its part in Creating Time?

Stephen R. Covey say’s “The key is in not spending time, but in investing it”. How do we achieve that? by creating positive time saving employee experiences. 

Things are moving fast in tech as I stated in one my recent blog “The Experience Economy” (https://www.linkedin.com/pulse/welcome-experience-game-mark-sweeny/) the technology industry has already jumped aboard this ship turning its attention to the employee experience in the back office with the differentiator of data driving experiences and not process.

Imagine the day when you log on to the company work portal, and the technology based upon your individual behaviour (and even one day your emotional state of mind!) has already worked out the working day - prioritised the mundane back office tasks; informed you of things you must address; even setup meetings automatically and ensured that any “industry breaking news” of interest you are made aware of. In doing so it creates a personalised experience. 

We now square the circle in terms of argument and end back up in the 1990’s around the “efficiency v effectiveness” debate, but this time it’s not about the process but rather about an individual’s time delivered through personalised positive experiences at work. The additional benefit possibly being greater work-life balance, allowing even more leisure time that allows for focus with family and friends. Isn’t that’s what life is really about?

Help the Buyer, Be the Honest Broker and Change the Conversation…

Final words of advice - always help the Buyer, especially if they can’t find their way through their own “transformation” strategy let alone their buying process. If you detect that the Buyer isn’t being honest with themselves about their stated intentions - help them, even to the extent of pushing the issue by painting them a different picture that achieves the outcomes they are striving for without having to turn their world completely upside down. Change the conversation.

Full Digital Transformation (as Consultants know it) in the context of the back office is not always the answer and even if it is it, cannot be done overnight and realistically takes between 18 months to 3 years to do it properly. It is also hard work. Winning hearts and minds is never easy. However, using technology to create new experiences can be done today more quickly it just takes creativity, technology innovation and will power to make it happen. 

We are now living in a world where experiences are personalised over standardised processes. Remember long-term value isn’t necessary in standardised process but in the experience that gives back that most precious of assets – “our time”. 

Views? discuss and comment. As always, I look forward to hearing other’s perspectives…

"Welcome to The Experience Game"​

This is probably one of the most important blogs I have written and something I am going to look back on in years to come as we have reached yet another inflection point in the world of enterprise software. Something I began to see at the beginning of 2019 is now becoming reality and I thought I would share my perspective on the direction of travel as the major Software Vendors play their next hand from the deck of cards called “technology innovation”.

In my last blog I previously highlighted the importance of understanding market cycles to seek new business opportunities and now, with certainty, what I was seeing at the beginning of the year is fast becoming reality and in my opinion is going to redefine the ERP marketplace. 

Cliché it maybe, I first wrote about it over four years ago, but the saying “look after your employees and they will look after your customers” is now more important than ever and it just seems like the same light bulb has just gone on simultaneously all over the world. 

Enterprise Cloud based solutions are now taken for granted and whilst many businesses and organisations have still yet to make the move in terms of technology innovation this is now seriously old news. I have commented extensively about bridging the “innovation gap” as all it does is increase and as businesses and organisations continue to defer the decision to move opportunity is naturally lost. A source of personal frustration when I have conversations and find myself having to smile politely when listening to what amounts to poor justifications as to why one has deferred moving to the Cloud. This is usually based upon a poorly informed perspective through the lack of knowledge. Now we have reached an inflection point and the market is moving again.

The conversation in the future for the back office enterprise is no longer going to be about Finance or HR systems in the Cloud nor will it be about Finance or HR transformation (large SI’s please take note!) or even worse the most over used term of a generation - “digital transformation”. Even the abbreviation “ERP” will possibly now be consigned to the history books as this inflection point takes hold.

Enter the “Experience Economy”

The term "Experience Economy" was first used in a 1998 article by B. Joseph Pine II and James H. Gilmore and was subsequently used as the basis of their book “The Experience Economy” where they articulate that businesses to differentiate themselves must constantly create memorable events for their customers and that the memory itself becomes the product, i.e. the "experience". (A revised edition is coming out in December ’19 this year!). This is another example of looking to the past to find the future!

So now apply this thinking to the employee and not necessarily the customer. Imagine a world in the business context where every business experience is personalised just for you whilst the underlying business processes are standardised. What has dominated the B2C market for years over the internet has now arrived in the back office. The technologies used pre-dominantly throughout social media and modern retail orientated websites to track our behaviours and influence us subconsciously are now going to become common place in the working environment.

It’s the technologies like AI, RPA and predictive analytics that are underpinning this. Remember though the conversation an organisation wants to have is what experiences are we delivering up to our employees, customers and suppliers and not what the enabling technologies we are using. (A rookie mistake that I see many Consultancies make day-in-day out especially those who still try to be all things to all people). Always focus on the business problem you are trying to solve, whatever you are proposing why is it "Better, Cheaper, Faster" than what currently exists today?

In all it’s a new kind of enterprise platform play providing a single employee integrated experience.

Imagine logging onto your work portal to find all your work for the day is already organised for you to undertake. The new platform understands the corporate calendar of business operations, it knows about your personal calendar, it knows your role, and subsequently understands what is required for you to execute your job on a day-to-day basis and it knows how you as an individual like to operate across work and non-work systems (read internet) you interact with.  And if something of interest occurs in the field of your expertise is going on in the world, it already has scanned the Internet bringing that article or point of view to your attention. It ensures you have the tools ready and available 24x7 so you can always be on top of your game. This is something that goes across multiple back office systems, drawing in data and metadata alike to build a personal digital persona reflecting your role and the work you undertake.  

No more navigating screens, no more having to go look for something, it’s just there ready for you. Your life at work has just become easier and you feel good because you have more time. Throw in speech recognition and you won’t even have to touch a keyboard.

Superior employee experiences will drive positive customer experience. The two are positively correlated and a single personalised employee integrated experience delivers this.

Sounds great? Good! because this is where we are now all heading.

The Market Place – The pieces of the Jigsaw Assemble

In my opinion this time Larry and Co at Oracle are ahead of the game. They have talked about this extensively at Openworld and their HCM Captains of Industry and Ambassadors currently are on a World-Wide tour driving home this message leveraging off their current new User Experience tactically, but clearly articulating the future which is here and how they are moving towards it. Give credit where credit is due they even gave the Oracle brand a positive face lift, but watch for greater technology innovation arriving over the next 24 months as Ellison doubles down on his direction in regard to SaaS applications. However Oracle isn't the only game in town.

Salesforce, as you would expect are already talking about this but they still lack the penetration in my opinion across the back office enterprise but to discount them would be fatal. 

Mike Ettling, CEO at Unit 4, made his announcement and a big push into this space just last month at Unleash19 and last week Bill McDermott, the industry veteran CEO of SAP moved to Service Now even more interestingly the ex-CEO of Service Now is moving to Nike! – That tells you something about the retail industry and the value of those who truly understand we are in the “experience” game. McDermott’s forte is acquisition, so watch out for strategic acquisitions that puts the employee experience front and centre. 

Meanwhile SAP are blitzing the SkyNews channel in advertising regard to experience management through their “Qualtrics” acquisition. This could be the solution to what I think is their Achilles Heal in that HANA is not really Cloud, and they need someone else’s – usually Microsoft and also their enterprise suite is a collection of products from acquisitions.  

Workday suddenly appears to behind the ball for the first time so it will be interesting to see what announcements they make in this area. Microsoft will no doubt follow in due course as even the newbies on the block UIPath new marketing message is breaking out from just Robotics Process Automation (RPA) into the experience game. Personally, I always thought Microsoft would try and acquire UIPath.

Just like when Cloud became mainstream the SaaS Platform Vendors are now setting the pace and the tone of the future. The industry has already moved to the new market that being the “experience” play. SME’s take note there is opportunity here. You can argue that the digital design agencies saw this coming over a decade ago, but lacked the technology and capability to deliver, however the point being now is that the “employee experience” is the new “customer experience”. That also leaves a nice gap for the “Supplier Experience”. 

Brave New World brings New Business Opportunities

So a new game is afoot and many new business opportunities exist. The questions are (1) Can the Customer base get their head around what is happening and see the many benefits that this is going to bring? (2) Can the Software Vendors deliver on their marketing messages? – my bet is very much yes they can and already have started to albeit this is still going to take time (3) Can the Systems Integrators see the new market plays recognising that the conversation has changed?

A final thought is that most technologies become commoditised over time and so do the surrounding services. Will this happen with the experience game? Personally, I don’t think so, my rationale being that experiences are intrinsically linked to human behaviour. Our behaviours over time change, and therefore our expectations around personalised experiences will also change consequently the technology platforms providing these personalised experiences will also need to change accordingly.  Whether I am right or wrong with this only time will tell? but I don’t think you can commoditise a personal experience.

I know one thing with certainty though it’s getting really exciting again and the industry is pivoting - I can see it and more importantly I can feel it! “There is gold in those hills…and fortune favours the brave”.

Market Dynamics – The Secrets of the Crystal Ball & Finding the Gap

My insatiable curiosity for watching market forces is an addiction I have never been able to fully reconcile. For myself my market of choice has always been Information Technology. An interest fostered by my father, who was by his own admission a fledgling IT Director in the late 70’s early 80’s, alongside a teenage hobby fuelled by my home computer (my weapon of choice being the “BBC Micro Model B 32K” because I couldn’t afford an Apple II) and a fledging schoolboy entrepreneurial venture writing “O” level projects for £25 a pop which subsequently led to a professional career spanning over 32 years and counting, comprising many ups and downs. 

Over time I have watched my industry change beyond all recognition. More specifically watching the Software Vendors and the Systems Integrators landscape both globally and locally (UK) is something I have always found fascinating. It will always be of great pride and a high degree of satisfaction that in my own small way I was able to put all my knowledge, learning and experience into practice and contribute by founding a niche player which took advantage of a gap in the market and subsequently sold it, with my business partner, to a much bigger fish in the sea. 

Understanding market dynamics and the supply and demand equation is just one continuous learning experience. On one-side is the demand which requires you to have insight into customers business operations to comprehend the challenges and drivers that comprise the market forces that are in play. Balancing the equation is the supply side comprising the “players” - the service providers that come in all shapes and sizes with their different value propositions and all trying to differentiate themselves from one another (well the smart ones are at least!).

As technology innovation continues to accelerate and knowing that the technology of today and tomorrow is truly transformational my endless curiosity has always been three-fold. Firstly, if consumer organisations can really take advantage of technology innovation and adapt to new ways of working or will they become another tombstone in the graveyard. Secondly, if the existing players in the market can actually change their service offerings and underlying operating models to serve the consumer’s needs not only of today but more importantly of tomorrow. Finally, and for me the most interesting, is whether new market opportunity attracts new entrants with new go-to-market strategies and product/service propositions.   

To have a successful business, of any size, from the corner newspaper shop through to the likes of the very large global Systems Integrators, one thing they both have in common is that need to provide products and/or services that are relevant to a market of consumers who are willing to buy through delivery channels that can service the markets efficiently. If you become no longer relevant to your market you will simply, over time, go out of business. Consequently, understanding the market and the buyer’s needs is absolutely critical, especially when market forces and external events are constantly changing. The sand is quite simply moving underneath your feet and remember no one is ever too big to fail, and that in itself is a business opportunity.

Finding the Gap

Now the exciting part is spotting the market opportunity or in layman’s terms the “gap”. This either comes about when either the needs of the consumer are not being met by the existing players or when an advancement, usually but not always, in technology creates a new business model and new ways of working and a new need materialises upsetting the status quo and the natural order of things. This is market disruption. 

Consequently, the market changes and metaphorically the planets come out of alignment in regard to supply and demand. Being able to spot this and react quickly is the trick as this can happen almost overnight. Even better if you can predict it in advance and position yourself accordingly as this is where you make the real money. Success in business is always about timing and having the cash to fund the venture.  

Now I could go on at this point quoting much more advanced economic theory, however everything in my opinion comes down to basic market analysis of factors (Social, Economic, Political, Technology, Environment, Legal) and the basics of supply and demand. Then throw in some outcome scenario planning (cause and effect) and gamification theory and you end up with a comprehensive model you can apply. Research is necessarily, but it is important to remember that markets are in a constant state of flux and “windows” of opportunity appear and close. Richard Branson once said that his top team make investment decisions within a six-week window, after that, they believe that they probably have missed the boat.

What’s the Magic Formula?

For me it’s simply this. Markets are cyclical in nature and therefore to a degree predictable. Combine this with what you know about the supply side and again the predictable nature of incumbent players and the formula becomes complete. History really does have a habit of repeating itself. 

Ones focus should always be on the market, the consumer, and not in the first instance the companies that service that industry. They are obviously very important pieces on the Chess Board, but the market – the consumer need, overrides everything so this is where the focus needs to be.  To para-phase “don’t take your eye off the prize and get distracted by what others are or are not doing”. 

What have I have Learned? 

Now I am not going to go into detail as to how Certus Solutions cracked Central Government with Oracle Cloud here (that’s coming in my book – first shameless plug), albeit in my eyes it is the ultimate case study. But I can assure you it was not down to luck. Luck is a fool’s game, and every entrepreneur knows you create your own luck through vision, focus and a lot of bloody hard work. Several factors were involved and just like when we sold the company it was a case of all the planets aligning and the predictability of the market. 

Once you can see this alignment, that’s the sweet spot. But also remember, planets only align for a point in time they then come out of alignment and the opportunity doesn’t materialise again (if at all) until the next cycle. The things I have learned and I pass on here to those that are interested… 

1.     Know Your Market, Know Your Customer, Know Your Competition - Articulate the target market segment carefully, understanding all the elements that comprise the market, especially both sides of the supply and demand equation. If the market is the Chess Board, do you know and have a perspective on all the pieces?

2.     Tailor Your Proposition – Differentiation is Critical to Success – Naturally to be successful you need a killer proposition and it needs to be different from everyone else. This needs to be highly focused and targeted at the gap you have identified. Don’t be generic and chase what appears to be the latest trend it will be “fish and chip” paper next week, and the market won’t understand what you stand for and what you are all about. Remember the focus should always be on the customer problem you are trying to solve and not the technology you are using. Also, part of any proposition I honestly believe is “brand” development its key in regard to differentiation – but that’s for another day

3.     Markets can be Influenced - You can never ever control the market, however for periods of time you can heavily influence it and in doing so drive consumers towards you and if you can create the “me to” effect so much the better. Ultimately the market will decide its own direction and course 

4.     Don’t Get Caught Up in the R&D Hype - Markets are constantly changing, the speed of technology innovation always outpaces supplier’s capability to deliver it let alone consumer organisations ability to deploy it effectively that it creates business value. Some technologies are “fads” and come and go in a blink of an eyelid. Why? put simply they have no relevance to delivering a solution to a problem, the technology and its use is just immature, or the market is just not ready for the innovation. Example – around 2000-2001 the IT industry started talking about “Application Service Providers”, where Service Providers would host the application and lower a consumers Total Cost of Ownership as they would not need a data centre. The initiative never took off and no one wanted to buy. Hang on – doesn’t this sound like Cloud and Software and a Service, a generation later??

5.     First Time Mover Advantages - As per one of my favourite quotes from the film “Margin Call”, “Be first, be smarter or cheat, and as I don’t cheat it’s a dam site easier just to be first”. Being first is easier because in being first you can define the market to suit you, not the other way around. Now for those naysayers I know you don’t have to use first time advantage as the only winning formula, i.e. Google were the 14th available search engine when it launched and look what happened to them! I am also not saying you can’t enter what appears to be an established market, as you can it is just harder but you can redefine an existing market by providing a solution for a new consumer need. Classic example was the Systems Integrator market for on-premise Oracle systems in the UK, the technology shifted, and the market became all about the Cloud; Certus Solutions entered an established market and became the first Oracle partner in the UK to be specialised in Oracle Cloud and disrupted the existing players and filled the gap. We then let everyone else play catch-up, whilst we set the narrative and banged the drum  

6.     Control the Narrative – Controlling the story and the message to the market is totally in your power. If your first, you get to do this easier than when the competition arrives, and they will arrive be certain of that. However messaging needs to be local and personal. Too generic, corporate like and wide-ranging means absolutely nothing to nobody. The narrative is driving a call to action. What is the problem you are trying to solve? How are you going to solve it? and in solving it what is the value you are delivering? Don’t sit on the fence, you have a point of view, so amplify it. Remember if you are not controlling the narrative and the story someone else will be! 

7.     You Can Create Barriers to Entry - Set the barrier to entry as high as you possibly can, this gives you time before other entrants enter the market or the existing suppliers change tact. In-fact the more barriers to entry you can create, the better it is for you to establish yourself. The beauty about being first is that everyone else is immediately playing catchup. Examples of barriers to entry I have used include Brand, Talent, Customer Advocacy (very powerful), Commercial Proposition and Intellectual Property. When you combine them all into a winning value proposition you can really make your presence felt in the market, especially if you can scare the competition into not even competing with you. Perception is reality regardless of size 

8.     Markets Behaviour can to a degree be Predicted – Gamification and outcome scenario planning are the most useful tools and of course a Crystal Ball with a glass of Red wine usually helps. Plot the cycles of the local economy, the behaviour of your consumers and naturally the competition, over time and look for the patterns, it is this that often shows up where the gaps are. Predictability of both consumers and suppliers behaviour is a powerful ally 

9.     Trust Your Gut - Finally, and most importantly always “trust your gut” – you can do all the research you want, but as they say if “something looks like a duck, swims like a duck, quacks like a duck then it is a duck”. Don’t kid yourself and read things into the data that aren’t actually there just because you want to

10.  Execution is Everything – Even if you can see the gap, if you cannot execute then it all becomes nothing. You need to live and breathe business strategy. Anyone can put a set of power point slides together but few in my experience can really execute 

Lessons Applied in Practice - Predicting Market Behaviour

Scenario planning - now I am a big fan of this technique and it’s just like Chess. Can you plot out your customers and the competitions five moves ahead? There are numerous combinations, but just like a Chess board as the game develops and the pieces move around so does the market. This simple technique of playing “What if?” with a small team to generate ideas can give you tremendous insight very quickly on not only what could happen but more importantly as to how your going to play the game. 

Again, look for the cycles and patterns over time. Don’t worry about what your competition are doing but play the game your way. Execute your strategy, and if it doesn’t work change it. This is totally in your control. Reacting to everyone else in a knee jerk manner is not a strategy as all you are doing is playing someone else’s game. It’s at this point you subconsciously begin to chase the market and this is always a losing position. 

So in summary I have probably dismissed 100 years of more complex economic models, discussion and theory by those who are a way lot smarter than me but what I have provided is the way I approach it and knowing what works for me. However, I do hope the above provides some insight into how to spot opportunity and position yourself accordingly. Alternatively, if you just believe in luck just buy a lottery ticket and see if the numbers drop. PS mine are 1, 7, 8, 22, 42 and lucky stars 1, 7.

8 Years On from 2011 and 15 minutes of Fame – Cloud was it Evolution or Revolution?

Three years on since I last blogged and now its time to restart – why you might ask? Simply it’s been gratifying to hear from Customers, Colleagues, Business Partners and even Prospects who didn’t buy from me (how dare they!) that have told me how much they missed my blogs, which for the uninitiated are still all available on LinkedIn, so by demand it’s time to metaphorically put pen to paper once again. 

For those that are new to my style you will simply get my opinion on things that I am generally interested in and I will no doubt cover topics like Entrepreneurship, SME’s (of which I will always be a champion of), the Market, Tech specifically Cloud and Oracle Cloud and anything else that is running through my mind that I think might be of interest to a wider audience. 

Blogging for me is a way of bringing structure and order to the chaos that is often going on inside me. What you won’t get is any talk of politics (I think we have all had quite enough of the “B” word), albeit I might comment on what I see the future challenges the UK Civil Service faces when we know what we are doing! My opinions are direct and no doubt will be viewed by some as controversial. So please feel free to agree or disagree with me as its only through experience, conversation and difference of opinion that we all learn and you will actually find that it is this that fuels real innovation.

As we enter into Autumn 2019 and on the last day of Oracle’s Openworld in San Francisco let’s turn back the clock as I am reminded that nearly eight years ago on a very dark and wet night in October 2011 in Fenchurch Street at a then Client’s offices Tim Warner, my long term partner in crime, and I discussed at length a new world called Software as a Service (SaaS) and Oracle’s fledgling offering – Fusion (how many times have they interchanged that name over the years?) and what was then still really amounting to a bunch of powerpoint slides that had been touted around for years but rumour was that it was actually not only a real product but an absolute game changer. 

In-fact Larry Ellison, against popular belief, had already made his big bet albeit it is well known that Oracle were a late entrant to the enterprise Cloud game. The more that night we talked the more we felt a paradigm shift was coming that was going not only to change the industry we knew but also the world. It was looking like 1999 all over again. 

Looking back when you realise you are staring into pandora’s box and you suddenly know something that possibly very few others on the entire planet know is, on reflection, quite scary and sends shivers down your spine once you understand the ramifications. 

A period of our own due diligence subsequently followed, so I will dispel the myth now that entrepreneurs are a bunch of mavericks and cowboys that often make knee jerk decisions. However we do move very fast and just three weeks later we were in the position to make an informed calculated risk decision to follow Larry’s fledging vision and “bet everything on Red”. (this story is covered in the blogs of the past so I won’t repeat it here). Cloud was the new market place and we needed to get their first and create the necessary space in the Oracle ecosystem in the UK to thrive, albeit in reality and we do look back and laugh that we had half a product (most of that had key functionality missing), we didn’t really know how to implement it properly (that took us 2 years) and nobody wanted to buy it – the perfect time to start a business.

Roll on seven years and Certus Solutions the company I originally founded in my bedroom and evolved into the first dedicated Oracle SaaS Cloud professional services company was sold to Accenture in May 2018. My 15 minutes of fame had arrived and after 10 years of hard graft, near two bankruptcies, and a host of other personal challenges that I won’t bore you all with, Tim and myself became overnight successes and for 15 minutes complete legends in the Industry and the Oracle ecosystem. 

Now that's over moving swiftly on…   

So was Cloud Evolution or Revolution?

It is just amazing how the software industry has had to change its operating models. Oracle specifically from a product orientated company to a service one (a journey for those involved in the service industry knows never ends!). Something that was started by Salesforce (a company I personally massively admire) is now the norm. Customer success and advocacy are the constant watchwords and rightly so as regardless of Cloud a business does not exist without happy customers.

I once famously told someone very Senior in HM Government in early 2016 after they had spent 18 months pontificating over whether they were going Cloud (as it was a “fad”) that the decision had in-fact already been taken for them by the industry five years earlier and they were going Cloud regardless and it was a decision that was no longer in their gift to make.  Shock! Horror! no just a black and white reality check over the seemingly then obvious state of affairs. The only element of control they had was the WHEN they were going and the longer they continually took no action the cost would just increase. Why? simply the gap exponentially grows between legacy technology and the speed of technology innovation, making it more complicated to move both organisationally and technically within a business. 

Remember the true cost being not just the financial cost of undertaking the implementation, but more importantly the “opportunity cost” of missing out on the digital innovation that is continuously coming at pace. This is something that is constantly missed from business cases both in the private and public sectors. The bottom line being extremely blunt is “just get on with it because you really are missing out”.

So was it an evolution or really a revolution? Three years ago, I used the word evolution, why? Because even in a blog I had to be somewhat careful not to scare monger and evolution is a much softer word to use in regard to change. However looking back, it really was a revolution but through stealth. Salesforce, Oracle, Workday and SAP are all highly successful companies, and Cloud technology has facilitated the emergence of whole host of exciting mid-market vendors and start-ups. Many of these are British! and something I am proud to have been and continue to be associated with. The smaller ones just love turning the world upside down – go for it!

But still why the change of mind? What I never factored into my crystal ball, as I have said many times before, is the sheer pace of technology innovation and its corresponding impact on business operating models. The biggest lesson I learned was that Cloud is TRANSFORMATIONAL – done right it will transform (no going back) your business operation positively for ever. 

It truly is frightening but also at the same time so very exciting. The possibilities of improving our working lives seems endless and the opportunities to challenge the status quo and drive positive change especially in the Public Sector (my undying love for it however frustrating it is at times) still invigorates me today just as much as it did when I first got involved with the HM Prison Services Phoenix Shared Services Programme back in 2004. 

We can make Cloud platforms change the way we work better for everyone – employees, suppliers, and customers alike (and anyone else I have forgotten). More importantly in changing the way we work, we also should benefit positively to the way we conduct our personal lives. We just need to look for the win-win opportunities that exist out there. At the very least, it should help make work less stressful and as mundane tasks are removed through automation creates time for value added activities. Our time whether at work or play is the most valuable thing we all have as our time is always limited.  

So where has this first blog taken us? Simply I revisit my earlier statements and change my position - Cloud was a quiet revolution as it not only transforms business operations but can also positively (if used in the right way) change our personal lives for the better. The pace of change and technology innovation is not letting up and remember the technologies we are dealing with will continue to transform business operations continuously. The next generation of technologies of the likes of AI (which incidentally has been around for years, but now we are looking at mass adoption) and Robotics (another one in the same categorically) are already available having being built and embedded on Cloud technology platforms.

Still for those who continue to delay their migration to the Cloud it is just delaying the inevitable and at significantly higher cost. History is littered with case studies of what happened to those that did not adapt and remain relevant to what was going on around them. You only have to watch the evening news and look at our high streets for recent examples of this.  

There is just as much opportunity today to make a difference as there was when the quiet revolution started. Cloud technology is extremely mature and well proven. The only question one has to ask constantly regardless of your role in society and the economy is are you up for it?

Comment, and let you know what you think, after 3 years I am a bit rusty...