deal architect

Thinking outside the Magic Quadrant

First an apology, I could have it titled this post as well with the Forrester Wave or the IDC MarketScape.

Next a mea culpa, I unleashed a few MQs during my tenure at Gartner in the 90s. However, in the years since I have become much more aware of the disconnect between tech buyers and vendors about the value of such tools.

When I was at Gartner, its revenues came largely from buyers. In the run up to Y2K, my colleagues and I did thousands of calls with buyers actively making ERP decisions. Coming up with the MQs - the leaders, challengers - was pretty easy with that market driven data. We did not have a composite win/loss analysis but we could make some pretty educated guesses about market share and momentum.

In today’s much more fragmented IT marketplace, especially since analyst revenues have become more vendor centric it must be so much more difficult. Analysts have to poll vendors for what we used to gather from market signals. You hear vendors whisper in frustration at how much effort it requires on their part.

The bigger issue is how buyers use MQs or Waves. It is just the tip of a spear. It is used to come up with a short list of vendors to evaluate. Detailed RFPs, demos, site visits, reference calls, lengthy negotiations are far more influential in the final decision. Nearly 15 years ago, I wrote about the ‘1,000 points of influence’. With growth of social media, the influence points have only grown. In composite, they help buyers derive their personalized "Interactive MQ".

Also, once they have decided on a vendor, most buyers don’t pay much attention to that MQ category till their next purchase - that could be a couple of decades. Oh, if a vendor drops precipitously from the Leader to the Niche quadrant, they would be concerned, but such moves tend to be glacial.

Vendors, in contrast, get their microscopes out to measure how much they moved from one MQ to the next. It’s fodder for press releases. I especially enjoy the Triple Crown announcements. “We are a leader in Analyst A, B and C’s tools.” I want to ask them - and how many buyer steps above did that eliminate?

MQs and similar tools also tend to reinforce silos in analyst firms. That can drive what I have described as Addressable Market Myopia 

There is a whole community of very committed Analyst Relations folks at vendors. Ignoring MQs would be suicidal, but does so much talent need to be invested every year on the MQ/MarketScape process?

Some of them will ask me what would you do differently. I am happy to help them think outside the box - ok, the square - in how to directly help their sales colleagues in their pursuits. How to help their companies think about and present their products differently and much more creatively. How to look around the corner - the analyst intermediary.  

No press release needed.

Analyst Cam: Alpine Supply Chain Solutions and Warehouse automation

As we have moved to virtual briefings, I have increasingly been excerpting short video segments (with permission ) as part of my Analyst Cam series. 

This time, it is Tom Ryan, my former Gartner colleague. Along with Michael Wohlwend, Managing Principal at Alpine Supply Chain Solutions, they recently presented an hour-long webinar "Battle of the Bots" focused on warehouse automation. They kindly allowed me to excerpt about 18 minutes below.

One of the most sophisticated examples of warehouse automation has shown up in Amazon's massive fulfillment centers. I wrote about my tour to one here. I also excerpted from their virtual tour of 5 of their centers in the Analyst Cam episode here. I also interviewed the co-CEOs of 6 River Systems (now part of Spotify, both Amazon alums) last year, and also had an Analyst Cam episode on their bots here.

Tom discussed 6 fulfillment methods/use cases where robots increasingly participate. I have excerpted 3 below - Goods to Person, Order to Person and Long Distance Product Moves. He also discusses some of the vendors and models for each.  I have also included his commentary on economics of such automation.

Very nicely done in plain English and with crisp graphics.

The full webinar which contains more commentary on the evolution of warehouse automation, some polling and q&a during the webinar and 3 other fulfillment scenarios is available here. 

Analyst Cam: Aisera

As we have moved to virtual briefings, I have increasingly been excerpting short video segments (with permission ), as part of my Analyst Cam series. 

This time, it is Muddu Sudhakar, CEO of Aisera.

He presents on their Conversational AI driven workflow automation. How it helps takes conversational service requests from what he calls today's "happy hour platforms" where users are spending several hours every day like MS Teams, Slack, Zoom and from traditional IVRs, bypass human intervention and route them appropriately to facilitate as much self-service as possible.

The investment he says is easy to justify - savings in service agent (especially in large, multi-lingual settings), IT and HR time and service licenses can be significant.

He uses the term "hyperautomation" - I asked him to clarify and they support automation in the white collar world (both with on prem and SaaS applications) , not around physical world automation with warehouse bots, drones or industrial robots. 

ERP - Generation Next

I read Jon Reed's  Diginomica interview with Rondy Ng, Senior Vice President, Applications Development at Oracle. He cites some very large cloud ERP customers - Bank of America/Merrill Lynch, FedEx, Kroger and Albertsons. Encouragingly, he also cites plenty of global coverage. Good to see that traction.

But what functionality have they deployed? I saw General Ledger mentioned a couple of times along with procurement and analytics. But no mention of manufacturing, logistics, banking/brokerage functionality, micro-fulfillment, or reverse logistics. I have heard Larry Ellison similarly use the ERP moniker in earnings calls and event keynotes, but never really discuss any operational functionality. Leads me to ask: Is that the new, shrunk definition of ERP - core financials and possibly human resources?

While I was pondering that, I found myself going down memory lane to 1995 when I joined Gartner. Gartner had coined the ERP term and they had made a conscious effort to bring in several new recruits with business process expertise. Tom Ryan, as part of the ILS service, brought warehouse management and broader logistics experience. Chris Jones, part of CIM, brought process manufacturing. As part of AAS, I brought financial and hr expertise from years at Price Waterhouse. There were several others who focused on PDM, MKT and other functional areas. We definitely contributed to a proliferation in TLAs but I know for a fact we drove vendors to sharpen their process breadth and depth.  Talking of TLAs, I had coined one - AMM - Addressable Market Myopia for vendors who were narrow in their functional reach, but did not dare propose it to Gartner censors :) 

When I left in 2000, I was confident Gartner would expand its ERP focus beyond manufacturing sectors. After all, in most western economies, nearly 3/4 of jobs were in the service sector. And each has unique books of record - insurance needs those around policies and claims, health care had unique clinical and compliance requirements and so on. The manufacturing sector itself was morphing significantly. The products are smarter with embedded software and sensors. The plant was becoming more autonomous. Asset management was no longer just about calculating depreciation for the CFO. It is about predictive maintenance, more sophisticated servicing via digital twins and augmented reality.

But Gartner has only inconsistently focused on this functional evolution. Many of the process experts they had hired in the 90s were gone by the end of the decade.  If anything, it swung back to its IT comfort zone and has emphasized the architectural aspects of cloud computing. And, almost on cue, many ERP vendors made transitioning to the cloud their major focus of the last couple of decades. Functionality and process expertise took a back seat. No wonder, some vendors are shrinking their definitions of ERP to suit their limited functionality. And CRM, EAM and other categories have encroached on spaces ERP vendors have neglected.

I sense a new generation of ERP coming. The pendulum is swinging from a technology focus to a functional focus. The pandemic has sharpened industry specific needs. Telemedicine in healthcare, distance learning in higher education, virtual open houses and digital mortgages in real estate are just some of the examples.

Just last week, I had several reminders of the functional evolution. Zoho gave me a pre-briefing on its updated Zoho One suite. It will officially be announced in a couple of weeks, but the suite has now grown to 45 applications. SAP has lined up 9 briefings for me across its verticals. I met with Mike Ettling, CEO of Unit4 and we discussed how his verticals are evolving. I was part of a virtual event on Servitization and heard how automotive, construction and many other sectors are increasingly moving to "everything as a service".     

Gartner coined the term ERP just prior to when I got there. But for a couple of decades companies had already been deploying MRP and MRP II functionality. We will similarly see a next generation. It may not even be called ERP - to shed the baggage the moniker has acquired with too many delayed and bloated projects.

But the market is definitely marching forward. One thing I am fairly certain of - the next gen of ERP will not suffer from AMM - Addressable Market Myopia.

Adding from a twitter thread with Jon

In fairness many other vendors have not evolved their functionality especially during the pandemic and with recent supply chain issues. Lots of brilliant architects but few process visionaries. Need both.

With brilliant architects but no process visionaries you would never get Amazon’s fulfillment center with chaos theory models, miles of conveyors and hundreds of robots. You would deliver the old process model.