Finance Reinvented

A few times a year a major IT project hits the headlines in the UK as it overruns, causes chaos or fails completely. Yesterday it was the Department for Transport’s shared services centre in Swansea - an official report from the Commons Public Accounts committee branded the project ’stupendously incompetent’ as it revealed that instead of saving £57m it will end up costing taxpayers £81m.

I recall 4 years ago at the Shared Services Week in Wales hearing a presentation by the project leader for the DVLA shared services implementation. It was clear to us in audience that they had spend 10s of millions on the software and implementation - for a relatively small sub-department of the DofT, it seemed a huge amount of money and too large a system for their requirement. They were clearly keen (or rather, desperate) for other parts of the Department to join them in the SSC, in order to share the costs…

Clearly this is another instance of ‘big ERP’ with all the associated high implementation costs. But it also highlights the critical importance of ‘post implementation agility’ - the ability for an ERP system to reflect changes in the business with minimal need for expensive consulting input. I know for a fact that various third parties made a lot of money from first implementing the original system here, then adapting it to bring on other areas of the Department.

It’s a message that Agresso has been pushing for some years now, and is getting a lot of resonance in the market and from clients. I guess high profile examples like this one will only serve to help our message get through…

Our findings seem to suggest they are. We are increasingly finding companies are looking for faster ROI from less expensive brands in the face of a global recession. 

Unit 4 Agresso, parent company of Agresso and CODA, recently reported strong third quarter results with 37% increase in revenue and sales including many significant new orders of more than €1m; this compares to leading market rivals like SAP who announced poor results for the same period leading to a 9% year on year decline in new license revenues. So clearly something is changing. 

According to Cal Braunstein, CEO and Executive Director of Research, from US analyst firm Robert Frances Group (RFG, www.rfgonline.com), “83% of companies stick with their current [ERP] supplier mostly because 1) it costs too much to switch, 2) they cannot afford to invest the time to switch, 3) it’s not the biggest pressing problem, 4) the end user training costs or other elements make the ROI too far out…”

That’s a frightening statistic, isn’t it?  (more…)

CODA and Agresso recently signed up to the BASDA Green Charter. The Charter, which is definitely a good move by the software industry, sets out four steps signatories will take to reduce greenhouse emissions :
- Take pro-active steps to increase their own carbon efficiency.
- Enhance their software solutions to help customers become part of a carbon efficient economy.
- Engage in the debate around green technology, including measurement, reporting, data requirements and standards.
- Work as an industry through BASDA to educate and increase awareness of green issues as they relate to ICT and business software.

This is  very positive, and fits well with Unit 4 Agresso’s currently roll out a new Corporate Responsibility (CR) policy and supporting programmes across the Group. This includes initiatives to formalise client and market involvement in product development, increase recycling, save energy and cut CO2 emissions, as well as initiatives to continuously improve the company’s reputation as a supplier, employer and member of its local and professional communities.

But isn’t the Green IT debate way off the mark today?

(more…)

A 2.5% cut in VAT (value added tax) was announced by the UK chancellor yesterday as part of a package of measures to help kick-start the economy. Some of the announcements were to be applauded, but this particular tax cut looks set to cause more problems than it solves.

CODA is the number one finance system in UK retail, used by 25% of shops on the high street. I spoke to a number of them yesterday to see how prepared they were for the rate cut. The picture was not great…

 We found that many believe it will cause more problems than it solves at a time when they are already discounting heavily. Among the concerns cited were:
• Risk of IT problems by overriding the pre-Christmas systems lock-down
• The time and cost associated with changing price tags
• Communicating price changes and setting a round number price point
• Handling customer refunds

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Last night in London a group of business and IT consultants attended an event debating this question. At Unit 4 Agresso, with two international ‘tier 2’ brands in the market (CODA and Agresso, in case you weren’t aware!) we are clearly well placed to give a view on this question.

Actually, I argued we don’t want to be like the big tier 1 systems – characterized as they are by huge cost, long implementation timescales and poor flexibility after go-live. What makes midmarket applications attractive are the speed of implementation, flexibility before and after implementation and dramatically lower cost. All adding up to much lower cost of ownership and faster return on investment.

More critically, mid-market applications like Agresso Business World and CODA offer greater agility to user organisations – the ability to support and reflect change in the organisation without the need for expensive external resources, specialist IT skills or long term projects. All of that delivers a lower total cost of change, something many organisations don’t consider when assessing applications.

We are definitely seeing increased interest in our applications over tier 1 sytems from end users (see recent wins like Bedford Council who chose Agresso over an incumbent SAP system). We are also seeing more consultants, large and small, wanting to know more about mid-market solutions. Why? Because they say they can no longer turn up at a client presentation and offer a choice of SAP or Oracle. Clients know there are other options out there – they expect their consultants to know about them too…