Carter Cross's Profile

Solomon Waters

On the vendor side, the rise of the enterprise software supervendor (dubbed
"MISO" by many) has been an unyielding force: Microsoft, IBM, SAP and Oracle
have and continue to centralize their positions as software juggernauts. "The
traditional boundaries between integrated ERP and best-of-breed vendors have
disappeared," notes a recent Forrester report. "Over
the past few years, leading vendors have significantly extended their portfolio
via acquisitions and in-house developments to offer both: integrated packages
for core enterprise processes and best-in-class horizontal solutions for
procurement and sourcing, supply
chain management, CRM, and
other cross-industry application software," BI being most notable.

Oracle, for instance, will heavily discount license pricing upfront but will,
rest
assured, make that up on the backend—from its 22 percent maintenance and
support fees, on which it does not negotiate. Oracle President Safra Catz told analysts on a recent conference call that maintenance is
"very profitable part of our business, and as the number gets bigger and bigger
it's really impossible for us to actually spend our way through it, and so in
general that's the sort of overriding thing that guides our margins." Closing
its most recent fiscal year, Oracle achieved nearly 90 percent profit
margins.

But a funny thing happened on the next upgrade: Naturally, all of those
customizations done to the initial AX rollout—which were "plentiful," Berg
says—were going to have to be upgraded in 2009. Taser decided it didn't want to
go down that road again. This time, Taser ERP users would change, demonstrating
that vendor-purported "flexibility" has been both ERP's blessing and its curse.

The preponderance of corporate pain lurking throughout the lifespan of a
traditional on-premise ERP suite is unequivocal. To wit: ERP projects
have only a 7
percent chance of coming in on time, most certainly will cost more than
estimated, and very likely will deliver very unsatisfying results. In addition,
today's enterprise has a little better than a 50 percent chance that users will
want to and actually
use the application. Poor application design just adds to the
turmoil. In sum, "ERP success" has
become a very subjective metric.