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October 31, 2012

Best of Breed is Coming Back to Retail, but....

Is craving for best of breed applications coming back? It appears so, at least increasingly more, in the retail industry that I am part of for the last 15 years. Users and increasingly IT managers have started to ask for BoB applications replacing either their legacy ERPs or so called State of the Art ERPs. As a context, there was a time, may be 15 - 20 years back, when the IT landscape in a retail company used to consist of predominantly heterogeneous group of homegrown or purchased applications that met or exceeded retailers needs and were cobbled together with manual or point-to-point interfaces that worked in fits and starts but users and SMEs clung to such system because it appeared to have tailor made for their requirements - a so called best of breed application for them. Retailers maintained them at great cost with huge manpower locked in IT that was not their core competency. Then came the wave to enterprise ERP vendors like Retek (now Oracle Retail) and SAP, who started to sell their wares to retailers and pretty soon retailers - at least the top ones who could afford such costly systems - started to jump on the bandwagon to reduce their IT manpower. Pretty soon, such enterprise ERP were the norm, at least among the top retailers.

Well the wheel seems to have turned a full circle, and retailers have started to clamor for best of breed applications again, but for entirely different reasons.

There are many reason why retailers moved to ERP in the first place earlier. Some of the key reasons are:

  1. ERP allowed retailers to focus more on their core competency of selling the product and customer service instead of having the headache of developing and maintaining enterprise applications. With rapid change in technology of software development and newer languages and paradigm it was increasing becoming difficult for retailers to retain top software talent in a market which was dominated by huge software companies. In addition to resource retention, maintaining the skills for software development was again a huge ongoing headache that was better done by software companies.
  2. ERP allowed them to reduce total cost of ownership, whereby you pay cost upfront to license the product, and thereafter maintenance fee to stay on an upgrade path provided by the vendor
  3. ERP provide them 80-90% of the features they needed, sometimes even less, with workaround or customization to take care of the rest. This was not the ideal whereby every whims and fancies of the user group will be satisfied but was a good workable solution. Well, in some cases retailers also got features that they didn't need, but that's was ok as they were getting more than what they bargained for!
  4. ERP brought in, or at least the perception created by the vendors was that they brought in best practices of the industry and therefore retailer could stay on the "bleeding edge" by leveraging experiences of other retailers built into the ERP system by the vendor on an ongoing basis.
  5. ERP allowed them the convenience of well integrated suite of applications that was the bane of the earlier era having point to point interface paradigm.
  6. ERP also allowed retailers to scale as the backend servers and middleware constantly being developed by the vendors allowed them to ride the wave of growth without having to worry about technology innovation.

However the retail industry, and more importantly customers have changed quite a lot almost leapfrogging to an era of mobile commerce in less than a decade. However, as anachronistic as it might seem, even today many brick and mortar retailers don't have a robust web commerce presence let alone mobile commerce. While web commerce is just about 15 years old, mobile commerce is already upon us for over 3 years. This is forcing not only a change in retailer's business processes, but also waking them up to the fact that they need to equip themselves to be extremely nimble footed and agile to be able to effectively serve the customers of future. This is forcing increasing clamor for best of breed again as currently available ERP solutions seem to have missed the bus. Here are the reasons:

  1. Though ERP works at the enterprise level, it was and still is architected primarily for the brick and mortar era and is increasingly not able to change fast enough to provide functionality that the retail industry needs for web and mobile commerce. 
  2. ERP suite applications talk to each other well but don't provide hooks for applications from other vendors to talk to them. This was a boon in ERP but is increasingly becoming bane. Now an ERP not only requires to speak to one another of its own kind but also to another kind from another vendor that provides the functionality that the industry needs. That means building additional interfaces that the earlier era did not need. However, newer middleware technologies such as SOAP and web services are increasingly making it possible to build generic interfaces that only need to talk the language of the function and not the language of the application. For example, a Product Information Management (PIM) application could talk to a merchandising application exchanging product information with the SOA based connector sitting in the middle and translating the PIM speak to Merchandising System speak and vice versa. PIM could now also talk to other downstream systems such as Store POS or Warehouse Management system directly facilitated by this SOA layer.
  3. Now retailer could go and buy a best of breed solutions and interface it to its ERP if the latter doesn't provide the functionality it needs with the middleware taking care of the translation thereby enabling business processes and protecting investment.In the long run, they might not even want or need an ERP and let multiple BoB applications talk to each other facilitated by the middleware layer.

That said, ERPs are still in place and probably will continue to be in place to tie everything together at the enterprise level until either retailers or BoB application vendors could think enterprise and put in standardized retail processes and technology in place to integrate various applications seamlessly including with the financial accounting system.

ERP vendors need to heed that fact that best of breed applications are nibbling away from them individual functionality that the ERPs earlier provided. Unless they shun the rigidity and become more agile - in time to market with new releases and functionality that the retailers need - more best of breeds applications will be brought in lessening the need for ERPs completely. Coming out with one major release in 3 years is a call for the death knell in long run.

October 5, 2012

Social Business Update: Infosys BrandEdge and Oracle SRM

Guest post by
Michael J. Lee, Social Strategist, Infosys

 

Shibu and Radical Progress

Continuing the tradition of preceding Larry Ellison's keynote, Infosys CEO S. D. Shibulal opened by celebrating 3 ideas which changed the world: the Wright brothers' flight, the discovery of Penicillin, and Berner-Lee's first web site. In chronological order, this progression came from individual inventors, research institutions, and then corporations. Now corporations are the new centers of innovation and discovery, and they are driving radical progress in 3 ways: product and process innovation, creating new consumer experiences, and business model innovation.

These concepts were brought into context through customer stories: Peter Pilawa (Sr. Manager of Strategy Implementation, Audi America) emphasized how Infosys transformed Audi's business processes which directly impacted it's products and business objectives. Christian Anschuetz (SVP and CIO, UL) explained how UL's new business models are making the world a safer place.

Simplify Digital Marketing with Infosys BrandEdge

As a solution to manage multiple digital campaigns, reduce time to market, and create consumer loyalty, BrandEdge was introduced as the new cloud-based marketing automation and collaboration platform by Infosys. Competing directly with Adobe Creative Cloud and Salesforce Chatter communities and Radian6, brands can collaborate with agency partners and utilize the analytics and customer data tracking.

Sustainability + Profitability: Infosys Cloud Ecosystem Hub

Ming Tsai reinforced that cloud computing can drive both sustainability and profitability, but which initiatives will support your company strategy? In the next 5-7 years, 65% enterprise workloads will be moved to the cloud. Enter the Cloud Ecosystem Hub, a one-stop solution integrating legacy systems with public and private clouds to create a unified environment. 2012 Chief Sustainability Officer Award winner Ian Winham (CIO and CFO, Ricoh Europe) explained how their new IT infrastructure project with Infosys resulted in an 85% reduction in carbon footprint and energy consumption.

Oracle Social Relationship Management (SRM)

During the much anticipated keynote, Larry Ellison presented his vision of SaaS applications across multiple business functions. He stated that by acquiring a SaaS product, you also acquire the technology behind it. Included in the $45 billion Oracle spent on acquisitions since 2004 were social technology companies Involver (social marketing), Vitrue (publishing), Collective Intellect (monitoring), and RightNow (customer service) to complete the company's cloud suite.

The SRM platform is composed of three products:

  1. social network for internal collaboration
  2. social engagement and monitoring, data and insights (Involver and Collective Intellect)
  3. social marketing, includes apps on Facebook and more (Vitrue)

Continuing the Social Media Arms Race

Social M&A activity in the technology industry may have hit its peak since the past two years. Just two weeks prior, Salesforce.com hosted it's annual Dreamforce conference at the same venue to unveil its Marketing Cloud offering after acquiring Buddy Media (social marketing) and Radian6 (social listening). The public drama between Larry Ellison and Salesforce.com CEO Mark Benioff were a notorious topic at the previous OpenWorld, but surprisingly no comments were made between the two billionaires this year. Oracle continued to cater towards its engineering and data following, while Salesforce.com shifted focus to the sales and marketing audience.

At OpenWorld 2012, the fight card was Oracle vs. SAP. Larry Ellison took the first shot on Monday by claiming Oracle's new flash memory Exadata X3 server beats SAP's HANA in-memory database. This prompted an immediate response from SAP, including blog posts and promoted tweets on the official #OOW hashtag defending against the claim.

These enterprises have the platforms to encourage more discussion, but who will own the topics? In the context of social business, the takeaway here is that some conversations change, while others continue to get more interesting.

October 3, 2012

Radical Progress : Infosys Keynote at Oracle OpenWorld 2012

Guest post by
Abhishek Sabharwal, Principal Consultant, Infosys

 

They say the time stops at Oracle OpenWorld (OOW) when a keynote is on! Thousands of folks from our industry (clients, partners, media, analysts, academia) get charged up to know more about what's coming in the ever dynamic IT world, waiting patiently much before the keynote actually starts. While yesterday's keynotes were focused around innovations in hardware, social, cloud that Oracle continues to drive, the focus of Infosys keynote was about Radical Progress. I quickly reconfirmed the meaning of the world radical on my iphone and it said, something that changes the fundamentals. The first thing that I could think of was the world moving from flat to being round by Galileo which was then challenged by the church as well.

 

Shibulal's Keynote.JPGOur CEO S D Shibulal, fondly known as Shibu, gave examples of radical progressive ideas over the last 200 years, recounting his 3 favorite ones - Wright Brothers, penicillin and the first website. He went on to explain that when these progressive ideas were being born, no one actually knew they were so radical. It was years after these inventions, were we able to understand the impact these had caused to our day to day lives. Shibu also paid homage to our father of nation, Mahatma Gandhi with it being his 143rd birth anniversary and gave example how Bapu was able to change the world through his path breaking ideologies such as non-violence.

The other great concept that Shibu spoke about was how innovations have over the years moved from individual innovators to labs and now to corporations who are trying to innovate just to sustain themselves in this competitive environment. He highlighted there are 3 ways of achieving radical progress:

  1. Product and process Innovation
  2. New Business Models
  3. Creating new customer experiences

To explain these concepts, he invited Infosys clients who shared their own stories of radical progress.

The first one was Peter Pilawa, Leader-Strategy implementation, Audi-USA. With aggressive targets of doubling their existing units on the roads in 10 years, where they reached this figure after 100 years of hard work and perseverance, is no easy task. To achieve this, Audi focused on both on product and business process innovation. One example that was quoted was how Infosys and Audi worked together to streamline 5 different hitherto disconnected processes into a single cohesive process, to bring about transformation that could help them achieve their business objectives. To reinforce the concept, Infosys platform BrandEdge was explained whose processes are  based on best practices and how it is  a game changing example of product innovation.

The next one was from Christian Anschuetz, SVP and CIO of  UL. Christian definitely made us all do maths when he said that no time was an average individual more than 9 ft away from a UL tested product and how their motto was not of earning dollars but to make world a safer place. He explained the concept of how business models were changing and how UL is now helping its customers to now get safety built into the products at product design stage itself rather than test the product for safety once it's been developed. Definitely a huge progress required to manage those 23 Billion UL certified products put in market every year.

With this, Shibu explained the concept of how radical progress needs to be sustainable. He invited Ming Tsai, Global Managing Partner, Infosys, on the stage, who explained the concept of how Cloud computing was a game changer in not only yielding cost savings to the organizations but also brining about a greener planet (and a talking cloud). He explained the concept of the latest offering from Infosys, the Infosys Cloud Ecosystem Hub which was recently launched. He then invited Ian from Ricoh, who won the Chief Sustainability Officer award during OOW 12. Ian explained the story of Ricoh and simplified sustainability as a combination of 3 Ps: Profit, People and Planet. (thought provoking !!!).He explained how Infosys and Oracle have together run in Ricoh's journey undertook multiple initiatives that reduced waste.

Shibu again connected all the pieces together and wrapped up the keynote.

Looking forward to next year and yet another radicaly changing keynote from Infosys, making us all more consicious of all changes that are going about in our world today, who knows which may turn out to be radically progressive when we look 10 years from now!

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