deal architect

Don’t let the boring man in

Clint Eastwood, who is now 93. explained to singer Toby Keith his attitude towards aging - “I just get up every morning and go out. And I don’t let the old man in.”

Toby turned the words into a hit song for Clint’s movie The Mule

“Ask yourself how old would you be If you didn't know the day you were born”

I am a spring chicken compared to Clint but I thought long and hard about those words when I signed up for another 5 years at Deal Architect.

But honestly, I am even more impressed with Clint's wide body of work. He could have typecast himself as Monco in spaghetti Westerns or Dirty Harry but he also played Jonathan Hemlock, Red Stovall, Robert Kincaid and countless other roles. Importantly he has produced, directed, written songs, is a pilot, plays lots of golf and has played several civic roles.

I live in fear of becoming predictable. Like him I try to keep the old man out. Even more I try to keep the boring man out.

Every year, I look at new research areas and push vendors and customers to keep expanding their horizons. Other analysts focus on categories like ERP and CRM, we look at much broader, macro trends and their impact on technology markets.

As I discussed with Brian Sommer here and here we are researching 6 major areas - AI, verticals, reglobalization, accelerating customer base migration, broader automation to create much more productive ‘super workers’ and energy trends

We have long had a guiding principle. Make sure our personal voice is only a small fraction of our delivered materials. Do lots of primary research and quote lots of other smart people. And be unafraid to share what you find even if it is not the popular opinion

Our deliverables come in the form of books, blogs, videos, podcasts, slides, Instagram galleries and in person consultations. Lots of our stuff is delivered only to clients and not shared widely. But plenty is - see hundreds of our 2023 entries on Burning Platform, Analyst Cam , Instagram galleries and our YouTube channel

Next year we hope to introduce even more delivery formats. You will hear of them in the next quarter.

I like to say it is the most exciting time ever to be alive. Let’s experience more of it and focus on all the positives around us. And definitely keep the boring, cynical man out.

Happy holidays and here’s to a very productive and un-boring 2024!

Burning Platform: Workday Rising – Healthcare Panel

We recorded this 109th episode of Burning Platform at the Workday Rising event in San Francisco. We hosted Yolanda Redmond, VP Supply Chain, Vanderbilt University Medical Center (VUMC) and Keith Lohkamp, Senior Director, Industry Strategy at Workday.

VUMC in Nashville, TN is a perennial qualifier for the annual US News Best Hospitals Honor Roll. It is nationally ranked in 9 adult and 10 pediatric specialties and rated high-performing in 2 adult specialties and 19 procedures and conditions.

I spent some time with Yolonda at the event and found her very warm and hospitable – a very caring face for VUMC. In the video, she elaborates on their service ethos and what drives the hospital to deliver that level of care at their scale. As of 2022, the health system had more than 3 million patient visits a year, a workforce of 40,000, and over 1,700 licensed hospital beds.

Supply chains mean different things in different industries and I asked Yolanda to elaborate on her definition. She explains it has to ensure a wide variety of supplies and services at the right time and place across clinical, research and administrative areas. VUMC is a general medical and surgical facility and is also a teaching hospital.

Given the financial pressures on the sector it is also about ensuring cost efficiencies.

She oversees the whole procure to pay cycle, and that goes beyond the logistical aspects. Workday is providing them real time data on a unified platform to support the entire process. She emphasizes the time factor - ensuring supplies are available as promised, but also ensuring vendors are paid on a timely basis. She also mentions the collaboration benefits across supply chain, finance and hr.

Of course, COVID had a dramatic impact on the healthcare sector and that has heightened expectations of supply chain resilience. That puts pressure on vendors like Workday to make sure we don’t have a repeat of many of the issues the sector encountered during COVID. As Yolanda explains, a tornado had already impacted supply chain operations at VUMC just prior to COVID so it clearly was a traumatic phase for them.

Keith explains Workday has invested heavily in visibility into critical products, has improved demand planning, supports substitution of suppliers and SKUs and enables the sustainment of price points among other features.

Keith also elaborates how Workday’s Accounting Center product which has seen enthusiastic adoption across its financial services customers is allowing healthcare to streamline net patient revenue calculations.

AI and ML took top billing during the event. Both Yolanda and Keith talk about the opportunities around automation, anomaly detection and other use cases. Keith also talks about governance required to ensure trust in the data and related machine-enabled inference. 

We cover a lot more ground in the 28-minute conversation below. I would like to bring them back in the future to explain how AI use cases are delivering value.

It is really nice to see Workday develop richer functionality for verticals like healthcare, which is a key component of its focus on the services sector of the economy.

 

IFS 2023 R2 Cloud Update

IFS provided analysts a well-paced session which covered new features available in the recently released cloud version.

I liked a few things in particular

• While everyone else is bragging about GenAI use cases it is nice to see continued investment and focus on transactional capabilities
• It was crisply done – about half an hour of features over 4 solution areas
• They plan to update every 6 months

Few things which I would have done differently

• Instead of focusing on features as released, I would prefer a highlighting of areas where IFS is differentiating in the market – particularly in asset intensive markets and in service management
• Bringing out more of unique vertical and geography specific features like they did with DNV certification for oil and gas and maritime sectors
• Reassess their ESG messaging. As I discussed with Brian Sommer in a recent ESG focused conversation here, to me it risks becoming a money pit and political hot potato. Brian pointed he is seeing environmental “doing” v merely “reporting”. Given its operational capabilities across industrial sectors, IFS would do better to highlight operational use cases rather than focusing like so many vendors on the emissions reporting part.

 

Burning Platform 108: New Frontiers for Enterprise Applications – Part 2

For the 107th and 108^th episode of Burning Platform we hosted Brian Sommer of Techventive.

In Episode 107 he presented on 3 recurring themes he is hearing from customers and vendors  - War for Talent, ESG and AI.  For my turn in this episode I provide a 25 year retrospective of cloud applications and describe massive untapped opportunities as we Re-globalize, as Industries morph dramatically and customer base migrations scream to be turbocharged

Re-Globalization

Starts around 1.52 in video below

I tackle lots of idle talk around de-globalization, de-dollarisation and de-industrialization of Germany. I discuss how MNCs are rapidly churning their country portfolios. How several vibrant new economies are the new “Tigers”. How static software vendor functionality and global presence increasingly shows them stuck in the “Old World”

Brian explains that global expansion is expensive in the traditional software sales model. The reality is hyperscalers continue to lead the way with massive global investments and  a new class of software vendors is more adept at digital channels and will support the changing globe far more effectively

New Industry Landscapes

Starts around 16.50

I discuss how the pace of industries converging and morphing has increased given all the economic shocks of the last few years. Lots of vertical edge applications have become viable and now a new wave of AI use cases is coming which will leverage industry specific operational data.

Brian believes SIs are better positioned for verticals with their account control and large investment mindsets. He says most applications vendors love to enhance their platforms with new waves of technologies. They actually find developing new applications boring; He could well be right.

I believe a new wave of vertical application vendors will emerge. And customers will increasingly build v buy such applications. The reality is one way or another there are major market chunks waiting to be won or lost. Well-designed vertical applications have shown themselves to be very sticky with revenue streams stretching decades.

Customer Base Migrations 

Starts around 30.50

I present the depressing graphic that customer bases have migrated at a very slow pace and we have ended up with a “reverse shark fin”

Brian explains that is fairly common tendency with laggards in most customer bell curves. I counter that many vendors have unusually large 50 to 80% of their customers on very old versions. Even the risks of not being in audit compliance or projecting a negative recruiting profile have not motivated them to migrate.

It’s time to leverage GenAI, RPA, accelerators, conversion factories and other automation to dramatically lower the time, cost and risk of such migrations  

Every one of the three opportunities I present is massive. However, it will take a fair amount of focus and investment. Who will step up? The next few years should see a lot of churn and chaos. Or if you see the glass as half full, lots of new opportunities

 

Burning Platform 107: New Frontiers for Enterprise Applications – Part 1

For the 107th and 108^th episode of Burning Platform we host Brian Sommer of Techventive.

Brian and I had co-hosted the first few episodes in this series over two years ago. I invited him to present on 3 recurring themes he is hearing from customers and vendors. He discussed the War for Talent, ESG and AI.  For my turn in the next episode I will provide a 25 year retrospective of cloud applications and massive untapped opportunities around globalization, verticalization and customer base migration.

1. War for Talent 

Starts around 2.26 in video below

Brian talks about the toxic employer employee environment- lots of quiet firing, quiet quitting, silent sabotage, unwillingness to explore new talent sources  etc. 

I add from my research on ‘super workers’ we have focused too much on improving employee ‘experience’ and not on productivity and outcomes. I also add we keep neglecting the aging worker talent pool and how much noise there is around when and where employees are expected to work 

2. ESG 

Starts around 11.15

Brian has recently released a book on ESG and presents several themes from that 

I have done a couple of major projects in the last year or so on the global energy market and EVs and present my perspectives on why I am concerned ESG will be another money pit ( I invoke this blog post “1 billion dollars per word’ from the Sarbanes-Oxley era twenty years ago) and a political hot potato

3. AI 

Starts around 25.02

Brian presents a pov that application vendors are not showcasing exciting use cases. He also says firms like Accenture are making significantly more investments in AI and may relegate application vendors to commodity use cases 

I summarize several nuggets from the many BP episodes on Gen and other AI I have recorded in the last few months 

In the next episode I will present on 25 years of cloud applications from 3 perspectives - globalization, verticalization and customer base migration

You may not agree with what we say but I can guarantee you will hear perspectives you have not heard before. And we show several big holes a few vendors will step up and build massive revenue sources and market capitalization around 

Educational and Entertaining!