Darren Roos, current CEO of IFS and former President of SAP Cloud did an interview about ERP and integrating best of breed software and I could not agree with him more.
Will customers compromise on functionality for integration?
Roos’ comments point to critical shifts in the ERP marketplace that he and I debated. Here’s where we agree: I see functionality compromises finally happening, as customers get used to the regular updates SaaS software provides. But: I don’t see customers compromising on a good user experience in ERP anymore. What say you, Mr. Roos?
Your observation is right. They won’t compromise on that. No one’s going to continue to use old applications. The cost is too high. Customers want ease of deployment; they want ease of use, and they want lower total cost of ownership.
If you think about your line of business applications, CRM, HR, etc. when we redesigned our UX, we did them first. Unlike our competitors who have not redesigned the whole UX, our end of year release, now, is the new UX on every screen. It’s ubiquitous.
But Roos made a more provocative point. He believes customers are also willing to compromise on functionality due to their best-of-breed integration pain:
I saw John Donahoe from ServiceNow doing a chat a couple of weeks ago. I highlight this because it’s a validation of what I’m hearing also: customers are in this interesting kind of paradox where they recognize the value that best-of-breed applications are giving them, but they’re increasingly frustrated by the way in which the complexity of integrating them is the customer’s problem.
He sees a best-of-breed crapshow:
If you’re an enterprise customer, and you’ve decided that you want to go best of breed for CRM, and you buy your Salesforce, and you want to go best-of-breed procurement and you go buy Coupa or Ariba, and you buy your best-of-breed HR, and you go to Workday or whatever it is that you buy, and then you’re left with the sh*t-show of having to put all of this together. That’s exactly what I see.
Strong words, against the grain of many. Roos says this best-of-breed/integration backlash is fueling IFS:
I think what’s happening now is that customers are starting to make some compromises on the best-of-breed side and saying, “Look, it really needs to be easier. The things that matter to me are: how quickly can I deploy this, so that I start to derive value? How easy is it to own?”
And how should we define ease of ownership?
When I say “How easy is it to own,” it’s a combination of: is it difficult to get my users trained up on it, which is really a UX thing. How complex is it to keep maintained? That’s maybe a little bit more relevant in the on-prem world, but equally where people are customizing large cloud applications. They still have the issue of which upgrades do they take, and how do they keep it upgraded? Then the third thing is a big focus on total cost of ownership. How do I keep my costs low?
Ease of deployment, ease of ownership and total cost of ownership are becoming a lot more relevant. In this highly fragmented, heterogeneous, best-of-breed application world, customers are not getting those things