The Month in Brief - October 2018 (it was a busy month!)

Profile picture for user brianssommer By Brian Sommer November 13, 2018
Summary:
Brian Somer looks back on a very busy October of events.

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Okay, this edition is late. I was on the road 28 of the 31 days last month. In addition to the usual vendor madness in Orlando, Vegas, Las Vegas and elsewhere, I also spent time in Spain and Panama. But, through it all, I did get a chance to catch up on my reading and review my notes from all of those vendor events. Here are the highlights:

Bloomberg shone a bright light on how all that cloud data gets backed up: tapes. Yep, that’s right – tapes. In “This is the Backup Cloud”, we learnt that a major lawsuit between Sony and Fujifilm is threatening how cloud data will get backed up. And, this is coming at a time when the amount of data on cloud platforms is exploding (see below).

Forbes published its Cloud 100 for 2018. It was good to see a number of companies (e.g., Uptake, Slack, Qualtrics, Snowflake, Apptus, Anaplan, Automation Anywhere, Gainsight, Workfront, FinancialForce, iCIMS, C3 IoT, Namely and Glint) that I know well/cover. SAP has already snapped up Qualtrics. A number of these are in the HR space and some are clearly in the IoT/preventive maintenance space. This list provides clues as to the direction software markets move.

Inc. in its November 2018 issue ran a piece titled “Building an Ethical Machine” by Tom Foster. Foster takes the readers through a number of ethical dilemmas that AI coders could face. He uses a number of autonomous driving situations to prove his points. For example, do you want your autonomous vehicle to always save you no matter what? What if to save you it has to hit a number of school kids waiting for the bus? Or, should the car have to choose between hitting one or several people, where should it go? Would it change things if the one person is a nun and the crowd contains ex-cons?

Why do chatbots/virtual agents frustrate me so? That should be the title of an article I could write with ease. In this destinationCRM piece “Virtual Agents Hear What You Say, Do They Know What You Mean?”, I found this tidbit:

In the article, Cooper keenly observes, “Just because your computer recognizes the words you say, don’t extrapolate from that it understands what you mean.”

Maybe because I’m left-handed, I tend to ask probing, deep questions. When I encounter a chatbot, I find the ‘intelligence’ within one to be extremely limited and my questions unanswered. So when I find a chatbot that can answer the question “What are you going to do about it?”, then maybe I’ll like this technology a little bit.

Bloomberg BusinessWeek’s October 29, 2018 issue had this piece “When AI Writes the Court Ruling”. While this program helped clear a 6 month case backlog, I’m still uneasy about a program doing this kind of work. Wonder what the US 'Supreme Court would think of this?

The Big Hack” is an investigative piece in Bloomberg BusinessWeek that is a 'must read'. It tells how server motherboards were allegedly compromised by Chinese operatives. If you read this and don’t walk away thinking that your supply chain needs re-evaluating, then I don’t know else could be said.

MIT Sloan Management Review had this “Is Technical Debt Undermining Your Digital Strategy?” The article tells us that:

Some 70% of the 1,000 C-suite executives recently surveyed by Accenture say that technical debt severely limit their IT function’s ability to innovate.

I see this all the time. Lots of firms want to ‘modernize’ but can’t because they’ve still got both feet stuck in the past with their old IT.

Everyone seems to have an opinion on whether new tech (e.g., artificial intelligence) will create or destroy jobs. This MIT Sloan Management Review piece states “AI Isn’t the Death of Jobs”. Their chief conclusion is that “companies using AI to also drive innovation are more likely to increase head count than reduce it.The article and its companion piece “Four Ways Jobs Will Respond to Automation” have some insights as to which professions will/won’t change and how that change will manifest itself.

Barron’s had this intriguing piece: “Data Center Gold Rush Boosts Hard-Hat Firms”. In this we learn that:

“This year alone, four US dot-com behemoths – Amazon, Microsoft, Alphabet, and Facebook – will put a combined $40 billion toward new data centers…. Spending is up 36% from last year; and growth has been accelerating.”

Beyond these numbers, it was interesting to read how 5G and other technologies will drive demand for these cloud services to even greater levels. The data deluge is upon us.

Uptake Technologies announced the availability of its asset performance management solution this month. Uptake does more with IoT by 10 a.m. most days than many ERP vendors get done in a year. If you haven’t checked them out, you should

Finance/Accounting in the News

Workday – The month kicked off with Workday’s Rising event. There were a number of sessions involving Workday’s recent acquisition of EPM (enterprise performance management) vendor Adaptive Insights. I can see how some cross-sell opportunities will manifest themselves with this deal. What I don’t know is how many of Adaptive’s 4000 odd customers would fit within Workday’s target market, but they estimate the number to be around 1900.

(BTW – Workday recently implemented Adaptive’s toolset for its internal use. Total implementation time for this was only ten weeks. )

Adaptive may create two new planning tools. One will be for Territory Planning and the other for Workforce Planning. Workday sees the market for their EPM solution to be around 200,000 firms.

The company  also showed  off its accounting transaction generator and its ability to predict anomalies and recommend actions. Analytics and benchmarking got some air time, too. And like just about every ERP vendor, spent some time discussing their now open cloud platform. 30 customers are using it now with GA coming in 2019.

Oracle – Client travel commitments prevented me from staying at Oracle’s Open World long. However, I did manage to catch a front-row seat at CTO/Chairman of the Board Larry Ellison’s keynote. Larry clearly has Amazon’s AWS solution in his crosshairs. He provided all kinds of performance slides to bolster his case that Oracle’s Cloud Platform was a better choice for customers. We’ll have to see if the market shares his assessment.

We also got lots of updates re: Oracle’s enhanced database security and its semi-autonomous database capabilities.

I got an update on Oracle’s EPM (enterprise performance management) product. This solution is the cloud successor to the Hyperion products Oracle acquired many years ago. So many EPM vendors target older Hyperion installations for replacement deals, this was a timely briefing.

Oracle’s got a planning cloud product today. Oracle sales teams now sell this cloud product and not the EssBase on-premises solution anymore. Oracle partners are bein encouraged to migrate from the on-premises Hyperion product to the new cloud planning solution.  Oracle also has a 2-year old product that provides much of the same functionality that can be found in Blackline software.

Bottom line: Oracle’s planning, budgeting, consolidation functionality has been updated and complements its cloud Financials products. This will make it harder for competitors now.

Sage IntacctSage Group is now about 1 year into its ownership of accounting vendor Intacct. They had their annual confab in Nashville this year (yee-haw!). My diginomica colleague Jon Reed and I did a podcast at the show and it covers many of the highlights from it. Whenever Jon and I end up at the same event, we try to fit one of these in. Take a listen, you’ll enjoy it.

(BTW- the new budgeting solution we discuss on the podcast came from Budgeta. Sage bought it recently and integrated it with Intacct. It’s pretty sweet.)

Alliances in the EPM/CPM space are important as large systems integrators can be crucial extensions to the vendor’s sales and marketing efforts. Anaplan has had success with this route. This month, OneStream announced a deal it struck with consultancy PriceWaterhouseCoopers.

HR in the News

Age discrimination/Ageism is a problem I’ve written about and one I’ve seen affects a number of folks I know. It’s a very real, common and illegal problem and it needs more HR teams to tackle it. AARP has conducted a study (The Value of Experience) on it and it’s worth a read.

The IndyStar business section had a great bit of analysis on the current labor shortage. Its piece, “Harsh facts on labor shortage” is a great read. Author Michael Hicks includes some eye-opening stats mid-way through the piece. Here’s a sample:

Nationally, by the end of 2017, truck drivers’ salaries haven’t returned to the inflation-adjusted rate of 2002. In inflation-adjusted terms, warehouse workers earn 81 cents for every dollar they earned in 1998 and new hires earn 30 % less each than they did two decades ago.

So, we have a talent shortage because employers aren’t offering viable wages. Can’t say I’m surprised to see this,, but what will HR leaders do?

,That IndyStar piece wasn’t the only one on this subject. Both it and a Barron’s piece titled “An Amazon Effect on Wages” discussed how sub-par wages are preventing firms from winning their war for talent. The fact that Amazon is raising its minimum wage to $15/hour will pressure some firms to offer better wages. They may need to as baby boomer retirements will shrink the available workforce more in upcoming years.

Bloomberg BusinessWeek also had this piece “Companies Give Worker Training a Try”. The stats in it caught my attention. 19% of U.S. workers received employer-sponsored training in 1996. That fell to just 11% in 2008 when the economy was in the dumps. Now, companies appear to be spending money on training as they can’t find qualified talent outside the organization. It’s about time! The article also points out that many of the new training courses are teaching skills that might be automated soon. So, read this piece to see what others are doing to creating a viable long-term workforce.

Workday Ventures showcased a number of their portfolio firms at their Rising show. I spent time with HR neuro-science tool vendor Pymetrics and education-as-a-benefit vendor Guild. While I’ve seen Pymetrics several times at other cool HR events (e.g., HireVue’s user conference), it was my first exposure to Guild. I approached the Guild discussion warily, but the longer we met, the more impressed I was. I was particularly impressed with the Guild people as they really had their story/value prop together.

Workday teased us with a number of upcoming announcements for its recruiting module. A key organizing principle for this involves a skills cloud, machine learning to identify candidates with the highest skills match, a talent marketplace and more. We also learned of their organization studio that permits what-if organization structures.

While at Rising, I also had the opportunity to meet with Workday partner OneSource Virtual. We had a wide-ranging conversation. Part of it centered on their robotic-process-as-a-service and the opportunity for this in HR. The other dealt with their market success in recent times.

Ceridian had their user conference this month. At the event, they made a pile of product enhancement announcements for Dayforce Version 55 including:

  • A new succession planning module (new compensation and learning modules were released earlier this year)
  • The functionality for the mobile Recruiting app has been enhanced
  • Rollout of UK solutions continues with a UK Benefits module. Dayforce already had a UK payroll product
  • A new DocuSign partnership
  • New report building tool
  • A new native Australian Payroll module is coming in 2019 – New Zealand and Ireland may be next

IT Service Management firm Cherwell made it official. Their service ticket technology will now be available as a HR solution. This puts them squarely in ServiceNow’s competitive space for both ITSM and HR.

HR big data innovator Entelo has been busy lately. One of the many press releases I saw this month from them had this nugget:

The recruiting automation leader announced three new customer wins of companies in the top 10 of the 2018 Fortune 500 list of largest US businesses by revenue.

CRM/CX in the News

I recently penned a diginomica piece on why I thought the new craze in CX solutions won’t be as spectacular as some vendors might hope. I posited that the changes that firms would have to undertake to put the customer first wouldn’t occur in many firms. These changes would require material and structural changes to companies where sales compensation, culture and more would be affected.

So, this great article in the MIT Sloan Management Review, “Selling Solutions Isn’t Enough”, comes at a great time. This article adds a key learning to my piece: “B2B companies need to focus on helping each customer achieve better outcomes”. Software companies will have to be outcome, not just sales, focused to win over the next wave of customers. In fact, software companies will have to re-earn the right to a customer’s business each and every month. Every software house should read this piece.

“Salesforce Launches Customer 360” was the headline in this destinationCRM piece. It describes Salesforce’s latest CX push – unifying customer data regardless of channel or Salesforce tool used. Here’s a snippet:

Companies can quickly deploy experiences for common use cases: a Service Cloud experience that allows agents to see purchase and browse history from Commerce Cloud, for example, or a Marketing Cloud journey that is automatically triggered by an event in Commerce Cloud, such as an abandoned cart. Each package is designed with an eye on accelerating the delivery of connected experiences: Components in Service Cloud have prebuilt connectivity to Customer 360; prebuilt journey and email templates in Marketing Cloud include content and data sourced from Customer 360; and data and events in Commerce Cloud are distributed to every system connected to Customer 360

SAP conducted its CX Live event in Barcelona.  SAP’s event had some of the same themes and messaging of Salesforce’s. I don’t think that is a coincidence but rather a reflection on the rapidly maturing space.

At this show, SAP aired its five solution clouds (marketing, customer data, commerce, sales and service) that make up its C4Hana Suite and expanded on SAP’s new alliances with Adobe and Microsoft (for its Dynamics 365 products), as well as demoing Upscale. It’s a fast tool for creating e-commerce sites. It should do well for smaller businesses.

SAP did a good job of reminding attendees of GDPR requirements re: customer data. While they got lots of nods on this, I’m not convinced the mostly technical crowd really understood some of the more subtle and ethically sensitive matters. In particular, I watched the crowd eat up Nir Eyal’s keynote. He’s the author of the book “Hooked” and he did a phenomenal job of explaining the psychology behind some the successes of great web commerce companies and websites. What bothered me was the fear that the audience would implement many of his ideas without fully appreciating the ethical issues behind some of these decisions and the adverse impact these design elements could have on their employer’s brand. What I wished more people got at this event was that CX is not just about goosing a company’s sales, it’s also about finding great ways to positively engage with customers and prospects. I hope SAP pounds on this point more next year.

In “Master the Challenges of Multi-Channel Pricing”, MIT Sloan Management Review looked at whether consumers and retailers are ready for a world where pricing varies by channel. It turns out many consumers are okay with the different prices but there may be some operational challenges to making it a reality for businesses. From my perspective, I play the arbitrage game almost daily looking for better air and hotel deals. Once businesses bring about this pricing madness, consumers and other websites will get creative and design counter-measures to bring transparency to pricing differences. There wouldn’t be websites like Trivago if prices were consistent everywhere.

For the month to come:

In November, I’ll be dealing a lot with client matters. I’ll still keep scanning for great bits of insight but the events, thankfully, will be fewer.

Until next month…