Practicing what I preach

Michael Alan Hamlin

Posted on November 26, 2008

For years I have extolled the advantages of enterprise software, the sophisticated systems that connect the myriad departments and functions of an enterprise electronically so that an action in one is seen throughout the organization, or even the supply chain, and reacted to in an appropriate way. For many years, these systems were meant for very large organizations that had the resources – and the patience – to invest in and implement them.

About a decade ago, enterprise software vendors – SAP, Oracle, Microsoft, and others – realized that the big-company market for their systems was saturated. Although these companies continue to buy systems updates and maintenance services, vendors understood that to continue growing and keep shareholders happy, they needed to develop and exploit new markets. And the market they chose was the obvious one: mid- to small-size companies.

Those early efforts to dumb-down enterprise software for smaller organizations were mostly painful. This was because it was difficult to get the balance between robust functionality and investment right on one hand and the right functionality for the mid-market in general on the other. Getting that mix right took about five years of experimentation and a good measure of grief. Since then, enterprise software for the mid-market has made some impressive headway.

Now, my boutique agency has never invested in an enterprise software license, so it’s fair to ask why, over the years, I’ve felt so confident recommending such an investment to readers. The fact is that my work often puts me in a position in which I interview executives in large, and more recently, mid-size firms that have made significant investments in enterprise software. In fact, our firm recently won a Philippine Quill Award for Excellence for a series of ads featuring CEOs of mid-size organizations endorsing a major enterprise software brand.

Based on the interviews my team and I have conducted over the years of executives in large and mid-size firms, we’re convinced that an investment in a major enterprise software system makes sense. Even assuming that our clients have directed us towards their satisfied clients, there are just too many satisfied clients that we’ve interviewed over more than a decade to make any other conclusion. Then of course there’s the fact that every major enterprise on earth uses enterprise software. They have to in order to be competitive.

So despite the fact that my own company doesn’t use enterprise software, I’ve felt safe arguing that it’s the way to go for any firm. Unfortunately in our case, we just didn’t feel that we had the resources to make the investment even though we felt we should. So instead, we’ve relied on an out-of-the-box accounting program, an Access-based customer relationship management and event management solution, and a direct e-campaign manager.

Now, finally, I think that’s about to change. Last week, I signed the first of a series of agreements that is intended to lead toward the acquisition of an enterprise software system designed for mid- to small-size organizations like mine. The agreement doesn’t really require me to do anything other than use licenses in accordance with the agreement should we in fact acquire them, but I wouldn’t have signed it if I didn’t feel that there’s a good chance of moving forward.

The terms of the ultimate agreement, if it is signed, are remarkable, and inclusive. For about half the price of the nearest competing major brand, we’ll get the licenses we need, the third-party database, a server to run the system, implementation, and training. That sounds like a pretty good deal, but it actually gets even better. The investment is financed over 36 months with no down payment and no interest.

Yes, it does sound too good to be true, and it still remains to be seen if it will materialize the way the deal has been offered. But we have done the requisite credential check of the implementing consultant, and received the feedback we had hoped for.

Given current economic conditions, this might seem an odd time to get such a great financing arrangement, or to even consider investing in enterprise software. But anecdotal evidence suggests that other companies in the Philippines are doing the same thing. And a new McKinsey study suggests that “IT investments deliver more value to a company’s top and bottom lines – by creating new efficiencies and increasing revenues – than any savings gained from traditional IT cost cutting.

That’s just what I wanted to hear. I love practicing what I preach.

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