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Everyone knows that ERP systems are large and costly. They take years to implement then constrain business processes for years to come. The sheer scale of the applications means that it is impossible to justify the investment for all but the most joined up and revolutionary business process overhauls.

ERP systems are incredibly complex applications and ERP vendors are designed to provide solutions to large scale problems faced by big clients. All of this big thinking leaves departmental leaders with innovative ideas somewhat under-whelmed when their small, elegant solution to a pressing problem means dedicating three months to putting together a business case and presenting to a board of directors, in the hope of securing a place on the capital expenditure budget for three years from now.

For small, elegant solutions to large problems another approach is needed: an approach that allows revenue budgets to be applied in a low financial risk profile, with tightly focussed iterative roll-outs that allow early return on investment; clear and frequent stop points that allow current investment to be retained; and no need to commit to a seven figure change programme.

This is not the domain of the traditional large ERP vendor. It requires a different approach to business and technical analysis, project management, quality control and, of course, software customisation. Such a solutions provider must of course be an ERP aware outfit. Leveraging ERP in an agile, cost effective way cannot be accomplished without strong awareness of large scale ERP and business process modelling.

All modern ERP systems allow powerful integration interfaces for other applications. This is necessary as ERP owners often leverage the ERP system to create better inter-departmental links or improve communication throughout the supply-chain. In these environments, an ERP vendor cannot assume homogeneity, so must open the application to access from other systems.

While many software development houses specialise in agile software development, and most ERP vendors have first class software customisation capabilities, there are far fewer who bridge the gap between the two.

Open Plus Ltd are a specialist open source ERP business who bring together agile software methodology experts, schooled in early ROI analysis and implementation techniques, with ERP specialists from large scale implementation and integration backgrounds. Open Plus has developed a unique set of tools and processes aimed at addressing just the kind of small, elegant solutions that are usually overlooked by the traditional ERP vendors.

This powerful combination of agile methodology and in-depth ERP knowledge brings ERP leverage to innovative departmental leaders, freeing them from the constraints of large-scale corporate strategy.


We are often reminded that retail software implementations are a partnership. In the midst of the current global turmoil, the need to choose partners carefully has been brought into stark relief. Open Plus Ltd, bring a business model designed for difficult times that introduce a whole new selection criteria to retail partners and ERP vendors, the watch-word is leverage.

With financial strains starting to hit high street retailers, furnishings firm, Rosebys being among this week’s casualties, it’s becoming clear that innovative bottom-line savings are to be the crucial survival differentiator for 2009.

Recent developments in the financial markets have introduced the term “leverage” to the retail Zeitgeist. The act of using debt to amplify the effects of the business’s revenue generating model, or leverage, is what allows a hedge fund to generate such large returns. Leverage however is not the lofty preserve of esoteric financial transactions, but the fuel that drives our entire enterprise ecosystem.

With the cost and availability of capital increasing, prudent retailers are seeking inventive new ways to decrease reliance on the financial leverage, until recently, readily accessible from the now ham-strung banking sector.

Like great retail businesses, great retail solutions has been built, not solely on the equity investment of shareholders, but on the financial leverage extended to software vendors by banks. De-leveraging a retail business will take innovative new operational strategies and with that, innovation within the retail software industry. Yet with retail software vendors facing the same leverage constraints as the retailers themselves, innovation will inevitably come at a new price.

Just as software vendors are likely to face unprecedented downward pressure on price, they are also going to find themselves instrumental to retail de-leveraging strategies. Margins can of course be squeezed and capital reserves drawn upon, but software vendor’s pockets do not have infinite depth and the extent to which these reserves can be drawn upon will depend on the individual software vendors reading of the financial future.

The question for the prudent retailer, having carefully constructed a de-leveraging strategy, is “to what extent is my software partner leveraged?”. To answer that, the retailer must look to the vendor’s approach to product development. Heavily leveraged product development is a double edge sword for the retailer. Not only can the retailer expect to face price increases, but the rate of product innovation from the software vendor is also likely to be reduced.

Open Plus Ltd is uniquely placed to answer the leveraging question. As a specialist in open source software, product development has never been a function of how much debt or investment the business has available to it. Product development exists as a community effort aggregated over many vendors. While other vendors seek to find solutions to the debt drought open source products chosen by Open Plus continue to accelerate in their rate of innovation.

World opinion is united in anticipation of tougher times to come. Successful retailers will be those that transition to modified business models as smoothly and painlessly as possible. To facilitate this transition, retailers will need a software partner who specialises in agility and whose business model is not predicated on the easy availability of bank credit. Open Plus stands uniquely poised.

Andrew Sykes. CEO of Open Plus Ltd takes a stroll through the technology options open to the multi-channel retailer and explains his own preference for open source.

For growing retailers particularly those in the multi-channel retail market, technology can be a major hurdle to the smooth growth of the business. Software vendors can foster innovation at best and constrain development at worst.
Retail software vendors package features into generic modules, typically each module is licensed separately. A retailer with specific operational needs will find themselves drawing from a shopping list of features spread across many modules, but with only partial utilisation of each.

The constraints of the vendor’s packaging policy can mean small experimental projects using new features can have disproportionate price tags if they happen to straddle the module boundary. Innovation as a result is stifled. Retail software vendors attempt to counter this problem by leading retailers down the “best practice” path for which the software was designed. Unfortunately, best practice implementation of generic software leads to homogeneity, the retailer’s nemesis.

Bespoke software while addressing the homogeneity problem, comes with far greater risks, higher costs and a more profound and continued investment of money and energy in maintaining any competitive advantage that the software provides. Bespoke is therefore not an option for most, instead choosing a software provider with a base system which can be customised.

Having chosen a vendor and committed to the base license costs of the relevant system modules the multi-channel retailer has stepped deeply into a relationship with the software vendor. The software vendor is now in a unique position to serve the changing business requirements of the retailer. As the creator and license owner of the base system, the turnkey software vendor appears to be the only outlet for customisation assistance. Large proprietary base software systems bring with them a large burden of knowledge management and transfer, software professionals can’t simply be recruited with fully fledged and relevant skills, training and retaining software professionals in the unique base system therefore accounts for the premium price tag which accompanies such customisations.

This principal of premium service costs and vendor lock-in, pivots around the retailers need to license a base system. Were the base system open and accessible to all software vendors to modify, the premium chargeable for those skills would be reduced significantly, and with the increased competition, the imperative to better serve the retailer’s needs, conversely, would increase. Similarly, if the base system came without license costs, there would be significantly less constraint on the retailer with respect to innovative or experimental pilot projects.

Today the open source movement boasts many fully fledged base-system products for the multi-channel retail market and with these products a new class of software vendor has emerged. Open Plus Ltd is such a software vendor, bringing industry vertical awareness once seen only in the turnkey providers yet using license free base system technologies and open standards that allow the retailer both to swap vendor at their leisure and focus investment on the uniqueness of their business rather than on a generic system that then must be modified at a premium. Because software vendors like Open Plus employ open standards in their software customisations, the ready availability of capable staff allows them to scale faster and access fully-formed knowledge workers in a fraction of the time a traditional proprietary vendor might.

The traditional retail solutions vendors see the value of open source too. Increasingly their product development includes open source products, yet there’s not much evidence that these cost reductions are being passed on to the client. Perhaps the reasons for this are best illustrated by their ambivalence to open source. Scare stories about the lack of security involved in community projects abound, yet since most of the vendors outsource software development to developing countries, the model differs little. The criticism not only reveals a lack of understanding of open source, but of security issues in general. To make real gains from open source software that can be passed to the client, a business needs a complimentary culture not a set of internal conflicts.

Retailers selecting a multi-channel software solution have a number of choices open to them. Traditional (proprietary) software vendors can bring years of experience with them and well formed generic solutions, yet may ultimately constrain the direction of the business, either due to inflexibility of product, or required investment. Bespoke software development services are typically far more flexible, but can have a hidden cost in internal resource utilisation required to support the development process. For retail businesses with innovative plans and a careful eye on budget, a new breed of license-free vendors can, if carefully selected, offer the vertical sector knowledge, and production proven solutions of the traditional vendor, but with the flexibility and innovative technical mindset of the bespoke software development house.

Given the pace of today’s technology it’s never been easier to access business software that helps you to express the individuality of your business. It doesn’t require a degree in computer science; a geekish obsession with erp software systems or an army of consultants. When you cut through all the smoke and mirrors surrounding technology you arrive at a very simple truth, a truth that you already apply to the rest of your business.

If you find yourself terrified by business management software; overwhelmed by the seeming morass of systems and hardware required to run your business and appalled by the associated cost, it’s most likely not your fault, nor are you alone. Supporting all the complex infrastructure your business needs is a major accomplishment in itself.

But to achieve the lean business system, empowered, but not obscured by technology, we must first dispel the myths that surround business software. We must reclaim the business from the techno-babbling software vendors by looking at what lies beneath their smoke and mirrors.

If the current economic situation tells us anything, it’s that we don’t save money by going shopping. Families feeling the pinch of the credit crunch have pared back their spending to bare essentials, that is, identifying needs from the wants generated by advertising campaigns. Despite every point of sale on the high street screaming “Christmas discount!”, retailers still report slow sales. The reason is simple, shoppers aren’t looking for ways to spend money, they’re looking for the items on their shopping list.

Marketing serves a range of purposes from identification of need through to the creation of want. Emotionally it can be hard to discriminate between need and want, but as shoppers are showing, economic adversity makes the division far easier. Business software vendors, like retailers, upsell by blurring the lines between need and want.

The flagship strategy of the business software vendor’s marketing department is to redefine business management software as “solutions”. To illustrate how ludicrous this is, imagine your grocer selling a “grocery solution”. Would you allow the retailer to judge what was best for you and your family? Would you pay a premium to have the grocer train your family in the best way to cook the exotic ingredients? Would you gladly welcome the additional premium garbage collection service every week, to empty your fridge of rotting perishables? Worst of all, what would you think if your grocer told you he could only remove items from the grocery solution, as part of a premium customisation service?

It’s an absurd idea, yet this is how a software solution works. When you buy a business solution, you’re buying a generic system that suits no-one perfectly, you might not need all the features, but if you’re going to get value out of that system, you better buy the training! Of course you don’t have to use the whole system, just like you don’t have to eat all the food in your fridge, but you’ve still paid for it and you’re still going to have to maintain the whole business solution whether you use it or not. You could customise the solution to remove these items, but then you’ll pay for the customisation not to mention a maintenance premium.

No one would buy a generic grocery solution, even if it did seem like a bargain, because however much you hate grocery shopping, the cost of relinquishing control of the weekly shop to the grocer would be a whole lot worse, not to mention inappropriate. This sleight of hand transformation of business management software into business solutions has achieved with seven figure sums, what no grocer would dare try with three figures.

Like people with fridges overladen with high-margin confectionery, businesses with business software brimming with enticing features quickly get out of shape. Before long, no-one can imagine living without the features and what’s more, ill-disciplined processes lead to even greater appetite for new business software “confectionery”. Is it any wonder then that you find yourself struggling to keep business processes lean and technology costs down in the face of ubiquitous solutions rhetoric?

The business solution myth feeds on the fear that tells us technology gives competitive advantage and more technology gives more advantage. By generalising business process, the fear becomes self-perpetuating, the more like your competitors you become, the more you are required to upgrade and upscale your technology to out-perform them. Meanwhile, the business solutions vendors become more ubiquitous selling ever more licenses.

In every area of business, we strive for competitive advantage through differentiation, yet business solutions vendors are poorly equipped to serve this need, their highly lucrative licenses mean they positively penalise differentiation through high customisation and maintenance fees. Businesses are expected to compromise on differentiation, or ignore the large costs in light of the candy shop of features presented to them. This feature confectionery is the loss-leader of technology sales.

Differentiation is not impossible, nor is it the case that all software vendors base their business model around license sales. The recent abrupt about-turn in the economy has seen an upsurge in interest in open source. Open source vendors typically charge nominal license fess and in many cases no license fee at all. Their model tends to be more consultative, the open nature of their business management software means no single vendor has a monopoly on services which as a result are more competitively priced. Without recurring license costs, open source vendors make margin from consultative activities associated with differentiation, not from reselling generic systems.

Open source, is not for everyone, there are those who will be well served by the traditional solutions providers and there are those for whom the idea of stepping out of a bloody battle with highly similar competitors would involve far too much of a loss of face. The reality of course is that mature open source systems are a far newer concept than traditional solutions vendors. Stepping off the solutions conveyor belt shouldn’t be seen as a poor indictment on past judgement, but rather capitalising on modern technology trends to closer align with business goals.

Regardless of the business’ choice of vendor, software is not the solution, businesses need to leverage technology to empower business process, and that means not seeking solutions. To seek a solution is to walk into the confectionery store without a shopping list. To succeed, businesses must seek technology partners who value long-term relationships and will collaborate on finding the correct solution for the business.

Software is not the solution, there’s no quick fix, but that applies to your competitors too, like everything in business, if it’s easy it’s not a differentiator. Given the deep penetration that modern business software has on the enterprise, looking for a solution closes a vast array of competitive differentiation options that the business can ill-afford to lose. Software is not the solution, the solution is the problem.

The recent financial turmoil may not offer many reasons for cheer, but for those evangelicals with a vision for lowering expenditure, the audience is growing and even the ranks of corporate mainstream are now listening.

Those profligate IT departments, which ran in excess of their typical 2% of revenue target during recent happier financial times, will find an increasing number of eyebrows raised in their direction as revenue figures plummet. Leading software vendors have been criticised for adding to the pressures during a recent round of hikes in support costs. Prominent among these, but by no means the only example, was SAP’s recent spat with The UK and Ireland SAP User Group over a 29.4% increase in maintenance costs. Despite strong protestations from SAP spokesman Bill Wohl – “I can state emphatically that no component of this decision is about improving SAP revenues in reaction to industry market slowdown. This is purely a reaction to changing customer needs.” – strong downward pressure on technology budgets was no doubt a major contributor to the frosty and rather cynical murmuring among clients left to balance the books.

Waiting in the wings are a new breed of software vendors. Their view of the world is radically different, offering software at dramatically lower license costs or in some cases, no cost at all. Andrew Sykes, Managing Director of open source ERP vendor Open Plus Ltd explains it like this; “we do this because we are passionate about software and believe passionately in the positive impact it can have. We want nothing more for the legacy of our R&D than to see the world benefit from our endeavours”. Open Plus is one of a number of new companies whose goal is to level the playing field for software buyers. These “third way” companies offer the low cost benefits of open source while adding the industrial rigour required of mission critical systems.

The old maxim “no one ever got fired for hiring IBM” may have taken a beating in recent years, but in the current economic climate the real career-stopper could turn out to be renewing licenses and support agreements at an increased rate against a backdrop of shrinking revenues.


July 2018
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