Aiming for Agility: Challenges and User Recommendations
Written By: Predrag Jakovljevic
Published On: October 19 2006
Agresso, one of the top five providers of people-centric enterprise resource planning (ERP) solutions, will encounter the challenge of changing deeply-rooted mindsets, especially given its lower brand recognition and market clout. This is all the more true since many competitors have significantly greater financial, technical, and marketing resources—and worldwide presence—than Agresso.
Part Four of the series Enterprise Systems and Post-implementation Agility—No Longer an Oxymoron?
Background information on Agresso and its product Agresso Business World (ABW) 5.5 can be found in Enterprise System and Post-implementation Agility—No Longer Necessarily an Oxymoron?. How Agresso achieves this agility is covered in How One Vendor Supplies Agility to Post-implementation Enterprise Systems. Also see Soured on Expiration: The Value Proposition and Strategy for an Agile Enterprise Systems Vendor. For information on the opportunity Agresso is addressing, see The Post-implementation Agility of Enterprise Systems: An Analysis and The Modelling Approach to Post-implementation Agility in Enterprise Systems.
Still, some customers with fewer custom applications might be willing to wait for their backbone vendor to deliver their service-oriented architecture (SOA)-based platform, even if that will take a few years in a best-case scenario (see Oracle Further Orchestrates Its SOA Forays and Multipurpose SAP NetWeaver). The "no decision" and "wait to see what the market (and mind share) leader will deliver" verdicts might work against Agresso at this stage. Also, since experiencing an organic deceleration in their core large enterprises business, these competitors have refocused their marketing and sales efforts to the upper mid-market where Agresso actively markets its products. Consequently, one should expect such competitors to implement increasingly aggressive pricing programs.
Agresso's advantage (which is also a limitation of sorts) is apparent within the people-centric environments where the vendor can provide all the necessary functionality, possibly by completely replacing the legacy system. However, its value proposition might be eroded (similarly to other providers) where business processes extend beyond the underlying scope of native Agresso applications (for instance, asset and facilities management, earned value management [EVM], customer relationship management [CRM], or enterprise incentive management [EIM]). That would be the case when existing applications have to be assembled into new, composite applications to support such extended business processes. The business process layer would thereby shield users from the complexity of multiple systems, while new functionality should be rapidly developed to provide support where existing applications fall short, in order to fill the gaps.
In addition to not having much experience in developing disparate composite applications, Agresso would likely have to painstakingly convert the non-native application into its coherent architecture (which might be prohibitively expensive for the vendor) or else opt for the suboptimal SOA arrangement (which would again be at par with the value proposition of Microsoft Dynamics, SAP ESA, Lawson Landmark, or Oracle Fusion).
In theory, one could abandon the existing infrastructure and go to an ideal, agile applications world, but this will not prove practical to the vast majority of heterogeneous environments. For most of us, the IT world is a mix of multiple applications, technologies, and so on, and the preferred architecture will be the one that can rationalize business processes without ripping out the current application investment that most companies have made. In such cases, Agresso will have to explain clearly whether and how its solution will leverage existing applications and fill in the cracks that exist in current business processes.
Some deeper-pocketed and better-resourced big competitors can eventually "steal" the brilliant marketing campaigns or sales ploys of smaller competitors, and then outspend them. Agresso will thus need to stay alert and "sniper-focused" in its sales and marketing efforts. Given the likely buyer audience's reluctance (except possibly for brand new or "greenfield" customers) to "start over" with Agresso (or anyone else for that matter), the vendor will have to make a very compelling argument and proof of concept that this is a one-time "ERP with NO Expiration Date" fix. This will be part of the effort to convince prospective users that they will spend a lot less time and money in the long run if they fix things now rather than limping along with their old and suboptimal system.
Summary and User Recommendations
Change happens, and it will always happen in virtually every business environment. The underlying enterprise system should thus be an aid to changing the business, rather than an obstacle, as is the usual case today. The enterprise systems architecture of the future should accept and assist in the reality that business changes and that software must change with the business. User companies do need best practices, but they also need "differentiating practices" and the ability to respond to the needs of customers, employees, and trading partners. Modification projects are often very large, but to be responsive, the applications must be economically changeable for small and large requirements alike.
Prospective customers in Agresso's target markets should evaluate ABW, especially if they are in the current geographies that the vendor covers, and if they would also benefit from the vendor's inherent broad people-centric footprint and decent scalability (up to several thousand users). Prospective customers should always insist on a contractual timeframe for delivery of a solution, and seek reference sites (preferably in their vertical market space) that have been successful with the product suite. Moreover, customers outside Agresso's successful geographies may certainly want to conduct due diligence and check regional support before moving forward.
Enterprises that will probably find Agresso functionality most appealing are service companies that have unique business processes as competitive differentiation, but that still want to avoid expensive upgrades. Those organizations will have sophisticated information requirements and may also wish to exploit change in their business, market, or organization. Such prospective customers have a more pragmatic and result-oriented business perspective and are looking beyond functionality which is simply "good enough." Agresso also comes in handy wherever user firms have to cope with additional data elements due to transitioning to a new financial reporting framework while simultaneously providing comparatives according to an old accounting standards regime—while needing to report and understand the differences.
ABW is a modern, flexible business system answering requirements for ever-faster flows of information and changes, via extensive native analytical capabilities adaptability. Existing Agresso customers share the common feature of medium size and the desire to have a business system that is modifiable according to their business (rather than having a system that requires them to adapt their business). This desire to have something more than an off-the shelf system has meant that in many cases, customers choose Agresso when they have been disappointed with other, often better-known enterprise systems, that need significant "feed and care" resources for adaptation (if not merely for operation). Potential local competitors, or system integrators and consulting firms with a certain vertical savvy and leadership in some local markets, but which are in need of an advanced underlying "organic" ERP or project portfolio management (PPM) product platform might want to check out Agresso for prospective mutually beneficial partnerships down the track. This is in light of their need for an integrated approach overall, with support for distributed accountability and delegated responsibility within people- and service-centric environments.
The bottom line is that the likes of Agresso may lead many lethargic and jaded chief executive officers (CEOs) to wake up at long last, and to examine the longer term impact of their mission-critical enterprise system buying decisions. There are indeed alternatives in the market that are geared to fast-change companies (or "businesses living in change" [BLINC], to use Agresso's appellation), and in Agresso's case, there is quite a good alternative for mid-market people-centric and project-based businesses and organizations. Agresso's value proposition of post-implementation agility—resulting from the tight interweaving of information warehouse (financial and non financial data), business processes, and the delivery methodology (analytics and reporting) should be seen as a refreshing option. Namely, there is the promise of business being able to change systems as required, often without the customary business pain and costs associated with IT re-architecting; this means that user enterprises can pursue business strategies (or a new way of doing business) that they might previously have avoided (likely in order to choose the "path of least resistance"—in other words, the path of mediocrity).
This concludes the series Enterprise Systems and Post-implementation Agility—No Longer an Oxymoron?