Executive Briefings

Opinion: Debunking Five Myths for the Supply Chain Buyer of Enterprise Software

At the end of my last call, I put down my headphones and smiled. It just happened again. What was it? I heard business buyers string together a set of "belief statements." These are commonly held as "truths" in the industry.

Opinion: Debunking Five Myths for the Supply Chain Buyer of Enterprise Software

The interesting thing for me is how false these "truths" are. The closer you get to the heart of the beast of software buying, the more you understand — and the quicker you realize them as falsehood(s). Here I attack the five myths I see the most often.

Before I start, let me share my bias. I am an industry analyst. I triangulate the market and rate software. I do not implement. I write for the early adopter business leader. In this role, I work with business teams as an adviser to build digital transformation strategies or drive improvements in supply chain excellence. My focus is quite different than that of a consultant.

Here are the five myths that I see the most often:

1. Consultants are an independent source of the truth.

On the call, there were four business leaders and three consultants. The consultants were recommending a software solution. In the discussion, there was no disclosure that the consultants get a percentage of the sale. By definition, they are a distribution arm for the technology provider. Tightly tied at the hip of the software provider leads to weird dynamics. For example, when I questioned the client on the consultant's recommendation, the consultant promptly called the software provider, and I quickly got a call from the CEO of the technology company. This happened despite the fact that both the consultant and I have NDAs (non-disclosure agreements)with the manufacturing client. Make no doubt about it. Consultants recommend the software that enables the most profit for the firm. As a result, the recommendation is usually an expensive solution requiring many hours of implementation. Consultants are not independent.

2. Software from the same technology provider will be easier to implement. Integration will be easier.

This is a commonly-held belief. The sad thing is that it is not true. For example, the recently introduced solution SAP Integrated Business Planning (IBP) is tougher to integrate to SAP ERP than alternatives. Yet, because the same suite is sold by SAP, there is a belief that integration will be easier. This week, I helped to arbitrate a polarized discussion within a manufacturing company. The Information Technology (IT) group was fighting for IT standardization. There was a 3X impact on cost and a substantial difference in business fit; but at the end of the day, the IT team won. As a result, the company got a solution that will be harder to implement, more costly and a poorer business fit. Software vendors perpetuate the myth that since the solution is sourced from a single vendor that integration will be easier. Most of the time, this is just not true leading companies to pick a more expensive solution, that may not fit their needs.

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The interesting thing for me is how false these "truths" are. The closer you get to the heart of the beast of software buying, the more you understand — and the quicker you realize them as falsehood(s). Here I attack the five myths I see the most often.

Before I start, let me share my bias. I am an industry analyst. I triangulate the market and rate software. I do not implement. I write for the early adopter business leader. In this role, I work with business teams as an adviser to build digital transformation strategies or drive improvements in supply chain excellence. My focus is quite different than that of a consultant.

Here are the five myths that I see the most often:

1. Consultants are an independent source of the truth.

On the call, there were four business leaders and three consultants. The consultants were recommending a software solution. In the discussion, there was no disclosure that the consultants get a percentage of the sale. By definition, they are a distribution arm for the technology provider. Tightly tied at the hip of the software provider leads to weird dynamics. For example, when I questioned the client on the consultant's recommendation, the consultant promptly called the software provider, and I quickly got a call from the CEO of the technology company. This happened despite the fact that both the consultant and I have NDAs (non-disclosure agreements)with the manufacturing client. Make no doubt about it. Consultants recommend the software that enables the most profit for the firm. As a result, the recommendation is usually an expensive solution requiring many hours of implementation. Consultants are not independent.

2. Software from the same technology provider will be easier to implement. Integration will be easier.

This is a commonly-held belief. The sad thing is that it is not true. For example, the recently introduced solution SAP Integrated Business Planning (IBP) is tougher to integrate to SAP ERP than alternatives. Yet, because the same suite is sold by SAP, there is a belief that integration will be easier. This week, I helped to arbitrate a polarized discussion within a manufacturing company. The Information Technology (IT) group was fighting for IT standardization. There was a 3X impact on cost and a substantial difference in business fit; but at the end of the day, the IT team won. As a result, the company got a solution that will be harder to implement, more costly and a poorer business fit. Software vendors perpetuate the myth that since the solution is sourced from a single vendor that integration will be easier. Most of the time, this is just not true leading companies to pick a more expensive solution, that may not fit their needs.

Read Full Article

Opinion: Debunking Five Myths for the Supply Chain Buyer of Enterprise Software