Brian Sommer's Month in Brief - (flu-ridden) August

Profile picture for user brianssommer By Brian Sommer September 10, 2019
Summary:
Battling from behind his flu, Brian Sommer outlines the highlights of August in the enterprise tech world.

August

I’ve endured some kind of flu for the entire month of August. It sucked. I am so glad I wasn’t travelling this month (and will even miss this week’s Acumatica big Boston event this week as I continue to mend). I did, though, manage to clear out a lot of backlogged reading. And, through all that, I did manage to find a few pearls that we all should consider.

Governance

Let’s kick off the reading with a story that got a fair bit coverage earlier in the month. Apparently, approximately 200 big firm CEOs were signatories to a pledge to put someone besides Wall Street first. MSN reports:

The re-imagined idea of a corporation drops the age-old notion that corporations function first and formest (sic) to serve their shareholders and maximize profits. Rather, investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities are now at the forefront of American business goals, according to the statement.

Lots of people piled onto this story but my natural cynicism erupted right through my fever-induced rage on this one.  First, too many companies (especially ERP firms) are run by professional managers (not customer focused innovators) these days. They’ll pillage, audit, torment, etc. customer after customer to ensure they make their personal performance plan, President’s Club and other metric driven bonuses. That headline generating pledge is worthless if companies don’t change performance plans, company cultures and more.

Second, the growing appearance of PE (private equity) money in tech firms (and many other industries) is often contrary to the pledge goals. When PE firms ‘right-size’ acquisitions, raise prices, gut customer support, impose material ‘management fees’, and slash R&D, who are they helping beside themselves? I would have been more impressed if the list of CEOs had a number of major PE firms on it.

Activist shareholders are another counterbalance to the pledge initiative. Do you think for a minute that an activist shareholder wouldn’t pounce on a firm that isn’t as financially and operationally ‘focused’ as it needs to be?

That story was a like a rice cake: very airy but without any real substance.

Jon Reed’s Doppelganger

If you ever wondered what Jon Reed’s pieces would look like in Bloomberg BusinessWeek, then read Joel Stein’s pieces there. Joel’s latest bit was called “How to Hide From Silicon Valley”.  It’s a methodical look at what you’d have to do to really scrub your identity from all of those Silicon Valley firms. It’s an amazing read:

I had decades of digital exhaust to clean up. “Your data across different companies is being pulled together by data brokers and ad companies. If the government asked for it and spent some time correlating, it probably wouldn’t be that far off from what the Chinese government has,” says Rob Shavell, the co-founder of Abine Inc., a company in Cambridge, Mass. I signed up for Abine’s DeleteMe service, paying $129 a year for it to opt me out from databases run by brokers that sell my personally identifiable information. I gave DeleteMe all my current and previous home addresses, phone numbers, and email addresses, and it removed me from 33 public-records crawlers—database services with names like Intelius and Spokeo, plus a whole lot of yellow pages.

While that bit above might be what you’d expect in a story like this, it goes on, in detail, describing how so many other Silicon Valley firms are hoarding data about you that you didn’t even know about. For example:

In the early days of Nest, some of the employees would try to figure out where another employee was, and they’d look at the network to see if that person was home or not,” he says. Google, which now owns Nest, declined to comment.

This week, I just deactivated my account at a Silicon Valley photo developing online service. Why? I got their new terms and conditions that they expect to own my photos. I’m really tired of naked grabs of my privacy and IP.

ERP in the News

Oracle Shareholder Spat

Business Insider told an interesting story this month of how some of Oracle’s independent board members are supporting a shareholder in a lawsuit against other Oracle board members:

And in a truly unprecedented move, they are granting the shareholder who initiated the lawsuit — Firemen's Retirement System — permission to represent Oracle in suing Ellison and Catz. The three board members made the remarkable move via a letter written this month to the Delaware court where the original lawsuit was filed in 2017.

Agile and ERP

Agile and ERP? McKinsey Digital waded into this one.  In their article, “Agile in Enterprise Resource Planning: A Myth No More”, the authors start off with some sobering stats re: ERP implementations:

As fundamental as they are, three-fourths of ERP transformation projects fail to stay on schedule or within budget, and two-thirds have a negative return on investment.

Then the authors, sadly, start parroting the same drivel major ERP vendors have been pushing for years around “ERP transformation”. Sorry folks, doing a package-ectomy to yank out an old, technical debt-ridden and overly customized ERP product and replace it with one that has newer plumbing and some extra cupholders is NOT transformational. It’s incremental!!!!!!

I’ve got plenty of clients who want transformational solutions (and I wrote a book on this, to boot) and they must look to firms like Uptake  (and maybe Aera) as their ERP providers don’t really provide much out of the box.

While I can definitely see value in using Agile (versus Waterfall) methods for some of the newer solutions out there, I think it works best when a number of tailoring/personalization functions are being considered or for when new analytics, dashboards, etc. are being prototyped. However, in the real world, neither Waterfall or Agile helps when there aren’t ERP project leaders and architects who understand how and where ALL of the information is created, moved, manipulated, etc. It’s like new home construction, someone (e.g., the architect/building engineer) has to know how all of the systems precisely fit together. The methods that specific tradespeople use to complete their part of the process can vary. In ERP, where I see projects struggle is when there is no one single architect ensuring that everything (and nothing more/less) is coming together correctly.

Bottom line: Find the genius savant that knows how a specific ERP works in its totality and works with other systems first. You can argue about implementation approaches later.

If you’d like the full counter argument to the McKinsey piece, then read what Third Stage’s Eric Kimberling wrote here.

HR in the News

Ageism

Job board, The Ladders reported:

The aging workforce is formidable, and they're not slowing down or stepping aside: by 2024, workers 55 or older will represent 25% of the entire country's workforce, with the fastest annual growth rates among the 65+ set. A clear majority (67%) of workers surveyed plans to keep working after they turn 66. And yet, ageism is right there alongside a lot of workers. The number of age-related discrimination charges filed with employers and the EEOC by workers 65 and over doubled from 1990 to 2017.

Attendees may not hear a lot on this at the upcoming HR Technology Conference next month; however, I will endeavor to broach the subject during my presentation. There’s a real opportunity to use new AI/ML tools in the Recruiting space to fight age bias but I’m not sure how well the 20-something’s cranking code for HR software firms understand the ageism out there and how pernicious it is in the culture, mindsets, etc. of their prospective customers.

The aging workforce will make us rethink its impact on business. MIT Sloan’s Technology Review reported why we shouldn’t fear the gray tsunami:

But Maestas cautions that the projections are based on historical trends and may not be accurate predictions. Her guess is that productivity has fallen as the population ages because the most skilled and experienced people have left in larger numbers, since they’re more successful and wealthier and can afford to retire. If she’s right, then it’s not that workers become less productive as they age, but that the most productive ones stop working.

This means, Maestas says, that a big drop in productivity isn’t inevitable. New technologies and business policies might keep talented people working longer. (Less happily, so might shrinking savings and disappearing retirement plans.) Teams made of both young and old people, with diverse experiences, might even be more productive. “Are we all getting less productive, and we’re stuck with that?” she says. “Not necessarily.”

Funny, I never thought of myself as part of a tsunami….

Cornerstone OnDemand

HRMS vendor (and long-time Learning technology firm) CSOD reported a good quarter. The company remains a very focused firm since their Silver Lake investment almost two years ago. A recent client of mine evaluated CSOD, Oracle and SAP (as finalists) and chose CSOD in the end.

CEO Pay

CNBC this month reported on the growth of CEO pay.  This story, while intended to inflame, does have a lot of great graphs and data points. I was particularly struck with connections between CEO pay and stock market performance:

Top corporate executives have seen their pay grow by more than 1,000% over the past 40 years, nearly 100 times the rate of average workers, according to a study released this week.

Weaponized HR

CEO pay wasn’t the only polarizing matter in HR this month. In an interesting look at internal HR matters in Google, Wired reported:

That month, Fong-Jones made another calculated exception to her usual policy of keeping dissent within the Google family. She and 14 other current employees spoke to WIRED about the “dirty war” that was being waged inside Google over the issue of diversity. Most news coverage of Damore's case amplified its claims that Google was cracking down on conservatives. But the employees argued that something else was going on. HR had become “weaponized,” they said; Googlers on both sides of the battle lines had become adept at working the refs—baiting colleagues into saying things that might violate the company's code of conduct, then going to human resources to report them. But Googlers on the right were going further, broadcasting snippets of the company's uncensored brawls to the world, and setting up their colleagues for harassment.

Now that sounds like a culture that needs some TLC!

Trust and the Top Line

Harvard Business Review dove into the “Trust Crisis”. They reported:

Creating trust, in contrast, lifts performance. In a 1999 study of Holiday Inns, 6,500 employees rated their trust in their managers on a scale of 1 to 5. The researchers found that a one-eighth point improvement in scores could be expected to increase an inn’s annual profits by 2.5% of revenues, or $250,000 more per hotel. No other aspect of managers’ behavior had such a large impact on profits.

Trust is an integral part of management, for sure, but it also counts heavily in great customer experiences. I don’t spend money with firms I can’t trust.

Money, Money, Money

There was some news re: new capital deals this month.

HireVue did a new deal that brought the Carlyle Group into its investment group. According to HireVue:

HireVue, provider of the most comprehensive suite of AI-driven talent assessment and video interviewing solutions, today announced that global investment firm The Carlyle Group (NASDAQ: CG) has signed an agreement to invest in HireVue as its majority investor. Existing shareholders, including TCV, Granite Ventures and Sequoia, together with HireVue management, will remain minority investors.

Deal specifics were not immediately available.

TCV was also involved in a recent deal with Perceptyx. TCV, over the years, has put money into Avalara, IQMS, Xero and ExactTarget.

HR vendor Fuel50 also closed a Series B. According to VentureBeat:

Fuel50, a software startup developing a cloud-hosted career experience and talent mobility platform, today announced that it has raised $14 million in a series B funding round led by PeakSpan Capital, bringing its total raised to nearly $20 million. In a press release, CEO Anne Fulton said the fresh capital will be used to support customer acquisition efforts and drive “significant additions” to the Laguna Niguel, California-based company’s technology stack.

I did a phone interview with Anne the other day. I might document some of that in a standalone post.

Odds’n’Ends

Delighting the Customer

In the September-October Harvard Business Review, Adi Ignatius writes:

Consider want happens when a company makes ‘delighting the customer’ a strategic objective. As Harris and Tayler note, the company will probably track its progress through online customer surveys. But then employees start thinking that the strategy is to maximize survey scores rather than to deliver a great customer experience. So they may begin pestering customers to give them high scores or send out constant nudges to take the survey – pop-ups, follow-up emails, robocalls. These make for a more decidedly undelightful experience.

Although I immediately thought of airlines (and their tsunami of post-flight surveys) when I read this, I also thought about the disconnect between the CX (customer experience) products ERP vendors sell to their customers/prospects when their own metrics drive such anti-customer behavior that triggers wanton wallet-fracking.

Bribery for Beginners

In the latest issue of Chief Executive magazine (use this link and go to pages 54-57 for the article), there’s this nice primer on bribery, corruption and Foreign Corrupt Practices Act (FCPA) compliance. Given how many ERP vendors keep stumbling on this matter, everyone really needs to read this piece.

The Weak Link in Blockchain?

What good is a crypto-currency (e.g., Bitcoin) if the exchanges these things are traded on aren’t secure? Bloomberg BusinessWeek had this sobering bit:

While many cryptocurrency transactions occur on public digital ledgers known as blockchains, other trades take place on more than 200 global crypto exchanges. Major exchanges that trade traditional assets, such as stocks, are heavily regulated. Crypto exchanges mostly are not, and investors have no way of knowing whether the trading volume and prices they report reflect real activity or market manipulation.

Maybe these exchanges should use a blockchain?

Closing thought

Bad vendor behavior is something many colleagues of mine won’t call out (their livelihoods are too dependent on monies from these firms). That’s a shame.

ZDNet’s Mary Jo Foley recently reported:

Microsoft's cloud competitors have been making a lot of noise about changes in Microsoft's licensing coming on October 1. And Microsoft, which has been positioning itself as an ally of customer choice, found itself on the wrong side of accusations of untrustworthiness and price-gouging.

Thanks for that notice Mary!

I put somewhat of a spotlight on the cloud lock-in issues myself last month in this piece: Rope me in, tie me up - SaaS age vendor lock-in is here.

If you’re seeing some egregious vendor behavior out there, let me know. I live to highlight their best practices in wallet-fracking.

Until next month...