Links to Jim and Thomas
Jim Holincheck had a write-up a week ago about how SaaS is not necessarily the answer to compete with the ERP’s for the talent management space, but that the ERP’s don’t have the right technology to leverage their newest functionality against the market need. Basically, Jim points out a very important fact that I often ignore: ERP functionality might be (getting) better, but if you’re on one, you’re not going to upgrade for a few more years. Do you wait, or do you just get a point solution?
Jim also has a great idea. Decouple the modular functionality from core HR and allow ERP users to be on multiple versions. After all, there’s no problem having SAP financials, SCM and HR all on different versions. There are obvious cost problems with this such as redundant hardware all within HR, and multiple set-up of core HR that’s required, but if you could figure your way around those problems, theoretically SOA should help you out. (in fact, basic ERP integration should help you out). I’m a big believer that as far as vendors go, the ERP’s are way out in front for developing web services, but the model just doesn’t work in the current configuration. In fact, that lead doesn’t help them out at all – it pushes companies further towards the point solutions.
At the end of the day, I don’t know that the ERP’s adopting a SaaS model is the answer as Jim wonders. There is a place for the ERP in the market and not everyone wants to give up the control of their data and customization capabilities. I do think that Jim’s idea of decoupling the functional components is brilliant and I’d love to hear what the likes of Thomas Otter have to say.
2 responses to “Saas versus ERP again”
Dubs:
Following this SaaS vs. ERP conversation with great interest (we are a point solution provider in the HCM space with SaaS delivery model).
I don’t think the competition is really SaaS vs. ERP so much as it is point solutions vs. ERP modules.
As you mentioned, version(ing) is a huge issue – as is post-implementation care and feeding of complex HR applications deployed with ERP software.
My experience is that large organizations can make a good business/financial case for “building” HCM apps with the ERP vs. buying from a best-of-breed vendor – but there is usually one fatal flaw in the analysis. What happens after the big-bang deployment?
Users (HR Dept) have some experience with this and they know what tends to happen. HCM apps are almost never core to the business. People who program these things don’t want to stay on them (not core) and it is VERY hard for HR to get continuing support for the applicaitons on an ongoing basis. (Not core to business.)
Three years after deployment they end up with a poorly documented application that has had many tweaks and workarounds applied and nobody knows what is going on under the hood – a black box.
So the ERP HCM application works great out of the box, but HR can’t get IT to support changes as the requirements change. And the requirements WILL change. This ends up imposing a huge cost on the HR team.
There is the direct cost of having an application that doesn’t work exactly how you need it to – manual work, workarounds, excess errors, etc. Even bigger is the opportunity cost of not being able to optimize your HCM designs because you don’t have the software flexibility to support the changes.
I could go on . . .
When asked for the difference between our (configurable) solution and the ERP module my answer is “well, you could do your taxes in excel (which you already own) but why would you when you can use TurboTax?”
Tom O’B
TO’B HR Blog
Dubs
This is one to ponder…. day job in the way today I’m afraid
Tom, I’m a big fan of yours but I don’t buy the HR is special, IT doesn’t understand us, therefore we need need own toys line….