ERP on the Salesforce1 Platform?

Everyone is talking about moving to the Cloud.  ERP companies such as SAP and Oracle have been on the path to the cloud for some time and hundreds of companies are running their ERP in a private cloud.  But running your ERP on a public cloud such as the Salesforce1 platform has been a concern especially for large companies.  For small to mid-sized companies that have not yet made an investment in ERP, a cloud-based ERP solution could be ideal.  But is the public cloud ready for ERP?

I have now seen first hand, how an ERP can work effectively on a public cloud.  I was the project manager on the Kenandy ERP implementation and Salesforce platform migration for which Dave McLain won a 2015 Consumer Goods Technology Industry Visionary award. (see the article).  Congratulations to Dave!  I think this was a well-deserved award.

Kenandy is one of a very few companies that has developed an ERP on the Salesforce platform.  As an independent consultant, I have now worked on 2 Kenandy implementations and I have learned quite a lot.

Prior to going into consulting I was an IT executive who was very successful rolling out SAP.  I developed a fast implementation approach using an agile project style to roll out SAP to new acquisitions for a large high tech manufacturer.  During my tenure, I migrated nearly every application the company used to the SAP NetWeaver platform.  My strategy was based on my belief that applications built on a single platform can be easily integrated with one another and require less maintenance to keep them working.  They also do not require a wide variety of skill sets to develop and maintain.  My IT Strategy was sound and it drove a very low TCO.  

At the time, the thought of paying a subscription for every user license really hit a nerve.  I could not imagine paying a never-ending fee for ERP software.  Until one day I realized that I had been doing so for years.  The annual maintenance fee on a large ERP package was such that I was basically re-buying the software every 4 to 5 years.  And this annual maintenance fee was never-ending.  I may as well have been paying an annual subscription fee for a cloud solution.  In fact, my ERP was already hosted on a private cloud which also came with a never-ending cost.  I had incorrectly compared it to buying or renting a home.  I thought you should always try to buy a home rather than throwing away money on rent.  But my analogy was not right.  When you buy a home you don't have to pay 20% annual maintenance on it.  You don't effective buy it over again every 5 years.

"It is always good to learn from your mistakes, but it is far better to learn from other people's mistakes." - Dan Raven       You can quote me on that, but unfortunately this was an occasion where I learned from my own mistakes, and perhaps you in turn, can learn from mine.

Now that you know a little about my background, you can better understand my thoughts on the public cloud's readiness for ERP.

My first Kenandy implementation for was a small company.  It was a company recently acquired by Del Monte and we decided to use it as a bit of a guinea pig.  That implementation was extremely fast.  In fact, we went live 90 minutes after the funds transfer for the acquisition.  The entire project only took about 3 months.  There were a few bumps in the road much like any ERP implementation, but kinks were worked out very quickly which is one benefit from being on the Saleforce platform.  Development on this platform is very fast.  The users of this small company really liked their new ERP.  It was far superior to their legacy applications.

This implementation gave us some experience and we found some functionality that would need to be added before rolling it out to a large company.  I won't bore you with the details of the large company implementation, but I will say that go-live went smoothly and the large company is now operating on the Kenandy ERP in the Force.com cloud.  In fact, I was very pleasantly surprised with the smooth cut-over which I attribute to an outstanding team that had a good plan and was well prepared.

The question remained, "How well would it work for a large company with many application interfaces and large volumes of data?".  The Salesforce1 platform is already an enterprise platform.  It was built to handle volumes of sales lead and opportunity data.  It was build to enable the development of many more applications that just CRM.  It was built to handle masses of users across many companies.  So in theory, we thought, it should be able to handle the data volume and complexity of an ERP for a large company.   

There are challenges for a large company running their ERP on the Salesforce1 platform.  Because this platform is a multi-tenant platform, there are governor limits that need to be complied with which presents some difficulties with batch job management and APIs used for interfaces.  We have worked through many of these issues and the company is operating within the governor limits.  We have now been live for over 4 months and through a fiscal year end. There is still some optimization that is underway, but this experience as proved to me that it can be done.

Witnessing this has made me very excited about the opportunities it brings to the SMB space.  If the Kenandy ERP can be run on a the Salesforce1 platform for a large company, I have no doubt that small and mid-sized businesses can benefit greatly from this as well.

Please note the disclaimer on this blog.  I would like to reiterate that this is a personal blog and the opinions in this blog are not meant to represent any company or brand that is mentioned in this blog.  I am only writing about my personal experience and my personal opinions.     
  

It's a Platform Play (Part II)

I have had the privilege of working with ERPs on a couple of different platforms.  The first ERP platform I worked with was SAP's NetWeaver platform.  As we implemented a series of SAP products on the NetWeaver platform we had tremendous success.  The applications built on this platform were built to work together.  We were able to simplify the IT architecture and lower the TCO (Total Cost of Ownership).  We ended up with a very lean IT applications team because the skill set required to maintain all of the applications concentrated on a single platform.  I took a few years, but by the time we were done, all of the applications except the shop floor control system (MES - Manufacturing Execution System) were on the NetWeaver platform.  Everything was humming alone rather smoothly.

The road to get there was a challenge.  As an IT executive, my job was to convince the business to go along with my IT strategy.  I was able to do so by partnering with the CEO and the CFO.  Showing the benefits of a unified platform and proving the savings, helped me to gain the support for my platform strategy.

At the time, I was blamed for drinking the "SAP Kool-Aid".  But I was able to prove that the SAP Kool-Aid was actually good for you.  I was also labeled as an "SAP Only" guy.  That was not completely true.  I was actually and "SAP First" guy.  Once I had the support of the executive team, business folks who brought solutions to IT had to have a very good reason for deviating from the platform.  It was a challenge to say the least, but when business team members brought solutions to IT, we would explore the business need and look to see if there was an SAP solution for that need first.  Sometimes that meant enlisting our ABAP developers to build a solution on the NetWeaver platform.  As a result of enforcing this IT Strategy, our company had one of the best and leanest IT footprints in the world.  We were a billion dollar global high-tech manufacturing and distribution business on a single globlal instance of each enterprise application on a single global private cloud platform.  Life was good.

But that was 10 years ago.

Now companies are taking a serious look at the public cloud offerings.  The public cloud offers the low cost of a multi-tenant environment.  On a private cloud, companies' enterprise applications are hosted on a dedicated set of hardware and therefore the company bears the cost of all of the hardware and support.  In a public cloud, companies share the cost of the multi-tenant environment, therefore the costs are lower.  Public cloud companies such as Amazon, Google, and Salesforce are leading the way.  Amazon and Google started with the public in mind and offered their solutions to individuals first.  Salesforce started with enterprise applications (such as CRM) in mind.  Now companies such as Kenandy, FinancialForce, and Root Stock are offering ERP solutions on the Salesforce platform.

The public cloud offering has its share of limitations for enterprise applications, but companies are already reaping the benefits.  Originally the public cloud offerings targeted the SMB (Small and Medium sized Businesses), but now the first large company has successfully implemented the Kenandy ERP on the Force.com platform.  (See Dave McLain on the Consumer Goods Technology link. http://consumergoods.edgl.com/news/2015-Visionaries100268)

With the Force.com platform, applications built on the platform are built to work together and are perhaps even more tightly integrated than my experience with the NetWeaver platform.

The moral of the story is regardless of the platform you move to, the platform itself must be a driving force within your IT Strategy.  Enforcing the "Platform Application First" stance politically difficult, but it must become a way of life within your organization.  You must be able to prove that the functionality cannot be achieved on your platform before you allow an application deviation.  Without an enforceable platform strategy, your company will end up with a messy, complicated and expensive architecture that may eventually become unmanageable.  Unfortunately I have seen this in many organizations.

If your company needs help to develop and enforce a platform strategy, please reach out to me.  I now have experience in both private and public cloud platform strategies.