Interest rates have been depressed for some time. Ask anyone who's refinanced a home or tried to earn anything with a money-market account. Corporations haven't missed this observation with mainstream businesses retiring older, expensive (ie, high interest rate) debt/bonds with much lower cost instruments.

The impact of lower-cost debt on businesses means that they can:

• Fund more (and often less impactful) capital intensive programs cheaply: Projects that couldn't clear an internal hurdle rate previously can now get the green light. Low-cost debt makes marginal initiatives look real good re: their future impact on the bottom line.

• Retire older, more expensive debt and see a marked reduction in interest expense: This lower interest expense has a direct impact on the bottom line, and causes earnings to increase. Higher earnings make a stock more desirable to investors and stock prices (and market value) increase accordingly. Higher earnings can also mean greater dividend payments to shareholders.

• Take a more aggressive merger and acquisition posture: If you can get bondholders to accept a 1 percent interest rate while the company you acquire throws off a 10 percent ROI, you're basically making a 9 percent spread on every deal you can close. Cheap money is a big stimulator for M&A activity.

• Repurchase previously issued shares: Some companies repurchase shares (ie, treasury shares) with the express purpose of driving up their stock price. Some do so to make shares available to management or employees for stock options.

• Use borrowed money to pay shareholder dividends without repatriating offshore earnings: Firms with substantial offshore earnings hate to repatriate earnings to the US, as the taxes due on these earnings can often be a form factor higher than current debt interest rates. See this Wall Street Journal story of how Apple is using debt.

In recent weeks, the following high tech firms have raised substantial amounts of debt financing:

• NetSuite: In late May, NetSuite announced that it was raising $270 million in five-year term convertible securities. At maturity, holders may have the option to get cash and/or shares of NetSuite.

• Workday: Workday is seeking to raise $530 million in convertible securities. Like NetSuite, some of these securities will mature in 2018, while others will mature in 2020. At maturity, the securities can be converted to Workday stock at prices that are currently at a premium to Workday's current stock price.

• Cornerstone OnDemand: Cornerstone is raising $220 million dollars in convertible securities. Without sounding too repetitive, this debt is due in 2018.

• Salesforce.com: Salesforce has raised $1 billion in convertible securities that are, you guessed it, due in 2018.

• Concur: Concur will be acquiring $350 million in convertible securities with a 2018 due date.

Many of the securities above will pay interest between 0.5 percent and 1.5 percent annually.

In late 2012, SAP closed a $1.4 billion multi-faceted deal with several tranches. According to an SAP press release:

Due to SAP's excellent credit profile, the transaction received strong demand in the US private placement market. A group of 33 institutional investors participated in five tranches, 17 of which are new to the SAP credit. The transaction consists of a $242.5 million tranche with a five-year maturity, a $290 million tranche with an eight-year maturity, a $444.5 million tranche with a 10-year maturity, a $323 million tranche with a 12-year maturity, and a $100 million tranche with a 15-year maturity. The interest rates on the notes across all tranches range from 2.13 percent in the five-year tranche to 3.53 percent in the 15-year tranche. SAP's transaction represents one of the largest US private placements of notes of 2012 year to date, and the largest cross-border US private placement of notes ever.

Some of this debt is being earmarked to retire other SAP debt obligations.

These transactions amount to approximately $4 billion in capital. While each of these firms could use the money for many of the same reasons that other non-tech companies would, there are some distinct possibilities that I believe will get higher utilization. These include:

• Funding hockey stick growth: SaaS/cloud vendors consume cash faster than it initially comes in. Their subscription pricing means more of the cash to be received is back loaded in deals. This is the opposite for older on-premises firms. That said, rapid, hockey stick growth is especially hard on a company's cash flow. Expect SaaS/cloud vendors to use cheap debt money to help them grab a disproportionate share of their markets. Less well-heeled competitors will suffer under this scenario.

• Acquire their way to greatness: For older vendors who failed to create plenty of their own cloud applications, or for newer vendors who need to rapidly expand their product suite's footprint, acquisitions will deliver the fastest path to scale. The recent acquisition of ExactTarget (and more to come) is no fluke.

Bottom line

More of these equity deals will surely surface (like crabgrass in the summertime). And the availability of deeper cash war chests should embolden a new round of tech M&A. For another time, maybe I'll share with you which firms might be worthy targets.

We should also expect Wall Street bankers to descend on every tech firm pitching similar deals. If these, too, come to pass, there will be a lot of firms paying probably higher than warranted valuations for the companies they want to acquire. Great due diligence will be the order of the day.

On-premises vendors may be ones that should worry the most. The cost to stay relevant will get more expensive if a bidding war develops for newer cloud solutions. Also, cloud vendors that want hockey stick growth will now have the means to steal more on-premises customers away, and faster. This could be a really interesting phenomenon to watch.

Mercer, part of Marsh & McLennan, is a blue-chip, top-drawer HR consultancy that also happens to have a material amount of intellectual property (IP), thought leadership and software.  Like any good consultancy, Mercer probably can find a way to solve most big firms' touchiest HR issues.

When consulting and software are part of the same firm, there is often an evolution that will occur. I personally saw this earlier in my own career when I was a partner at one of the world’s largest consultancies. Consultancies often develop software applications as a by-product of client work. In fact, many of the software applications may have been jointly developed and materially funded by a client. When a client has this sort of influence, they can also dictate what platform, deployment method, hardware, etc. the solution will utilize. Before long, a consultancy can find itself with a large portfolio of products, each with its own unique technology underpinnings and marketing challenges. As long as the consultancy permits local offices and its local executives to cut these deals, the proliferation of non-standard solutions will continue.

This non-integrated approach to software development is opportunistic and short-term. A software company  has a different focus than a consultancy as it is trying to maximize the re-use of its intellectual property. Software firms create suites of integrated applications built on a common platform and sell the suite (and not just individual products) to its customers. Consultancies sell services and the odd software solution. The two businesses couldn’t be more dissimilar.

There’s a moment when a service firm realizes it is making a growing amount of revenue and profits from its IP-based software solutions. And, when it does, it starts to change.

Mercer’s changing today.  Mercer's technology suite is now starting to come together. The company has recently coalesced its diverse development groups into a single organization.  The company is now moving to two common architectures: a .Net architecture for many applications and a MicroStrategy platform for their more analytic intensive applications. The company is also working on bringing single sign-on capabilities to its numerous products. All of these are good moves.

Mercer has even more IP assets in its benchmarks, survey data, thought leadership and guidance. At their analyst event this week, I was given a couple of country specific briefing books of theirs. One contained excellent HR benchmarking and productivity data for China and another contained a different mix of benchmarks for the U.S.  The firm also has a wealth of real estate, cultural and other information to help companies and executives with geographic relocation.

Mercer spent a fair bit of time demonstrating how some of this knowledge capital is made available via online sites, tools and guides. I find this information particularly valuable for many mid-to-large firms as I routinely encounter companies that now want to become more global and/or want to promulgate a “one-firm” concept in their company.

The one-firm concept is easy to explain and is more important than ever to companies that want to create products (or deliver services) in a consistent manner worldwide. Unfortunately, a firm with a long-standing legacy of standalone, country-specific plants and operations probably never created any global leaders. How can you have a global operating committee when no one has ever worked at any other facility in any other country than the one that hired them? Ex-pat assignments help but it takes time to develop the talent that is both successful and possesses a global mindset/sensibility.  Some of Mercer’s tools take the risk out of these transitions (but neither Mercer nor other consultancies are able to un-do decades of non-global HR practices completely).

I’ve done an ex-pat gig and https://cms.zdnet.com/story/create/I’ve sent people on them as well. I didn’t have the resources Mercer makes available today and I wish I had.

Looking ahead, I believe Mercer must:

• Create a compelling vision and roadmap for its technology - I sense they’re working on more than they shared with us but much of what we heard seemed like state of the industry stuff not the stuff of gee-whiz innovation. For example, the analytics story we all heard was mostly about static ERP/HR/Talent Management data. While the company spoke about big data, the biggest dataset I heard discussed was only 100 million records. However, in a one-on-one conversation with a Mercer executive, I learned more about the team working on analytics. These people have software, not consulting, backgrounds. I learned that the execs really do understand where they must push the analytics envelope and how they were developing use cases beyond search & discover big data apps. This exec discussed how they were going beyond data correlations to finding actual causal relationships (replete with control group testing and more).  So, do I believe they possess the horsepower to get the job done? Yes. But their communication and marketing of the vision and tech roadmap needs some polishing.
• Create a rapid development/rapid retirement capability in its applications - The tech space is evolving very quickly and some Mercer offerings, like the Career Framework, simply take too  long to complete. That offering, one Mercer exec stated, takes a client 2-3 years to complete and must be frequently updated.
• Develop the full B2C product vision – Mercer has a solution, TalentSIM, that it is making available to workers anywhere who will pay a nominal sum to find out the answer to one question: “Am I ready to be a manager?”. If you are, great – employers should find that attractive. If you aren’t, Mercer makes American Management Association training available  to help you close any skill gaps.  But, given the company’s past success selling B2B solutions to large global employers, I wonder if Mercer has really thought through how to market a consumer product and what is needed to get mind share with workers long-term.
• Fix their demonstrations/messaging – For an analyst event, I would have expected crisper discussion around business challenges facing the client’s executive team not just the CHRO. How Mercer states a business problem is clearly more HR-centric than business centric.
• Make social a real part of their solutions, especially analytics – Social or collaboration popped up several times but neither really exists in any meaningful way in the products we saw. Mercer’s got to get something going here fast.

Bottom line:  Big companies have always loved Mercer and will likely find the IP-rich apps and content to be very attractive still. Mercer’s making some of the right moves in coalescing its development efforts into a single team and fewer architectures. The messaging still needs work but that’s a very curable matter.

Disclosure: Mercer provided airfare and a hotel night for this analyst event.

Businesses are all over the map when it comes to how their processes work.  If you thought that the business process re-engineering (BPR) wave of the 1990s sorted all of this out, you’re wrong.

A lot of businesses have processes that follow the very linear and internal focus of the old transaction based information systems they’ve used for decades. These processes were not designed with the customer, vendor or any other external constituent in mind. Nope – the process design follows screen input needs. And, sadly, these processes still work the same way today.

Don’t believe me? Twice today, I had to give my name (spelled out, of course), street address, city, state, phone number and more to my cable/phone/internet provider. This is remarkable as I am not only a customer but my phone service is with this provider. I even asked one of the reps why their systems don’t instantly cross-reference my phone number (it’s available via any Caller ID technology) and load that into their customer database?  I was simply told that their systems don’t do that.

If someone were designing a customer service process, wouldn’t it make sense to start with a design that begins with the customer first?

At Appian’s recent user conference, I ran into customers across a wide cross-section of process excellence. Let me categorize them into via a maturity model of sorts and let you decide where your firm fits in.

At the bottom of the maturity model are firms with broken or dysfunctional processes. Any company can periodically end up here. All it takes is a major merger, divestiture, bankruptcy, re-organization, etc. to push a lot of confusion and chaos into the business.  I heard Appian customers describe how they knew they had screwed up processes. These customers didn’t even have improvement statistics to share with others as the dysfunction in their firms was so acute that they skipped any benchmarking and got straight to design of newer functioning processes.  These organizations were more interested in stopping the ship from sinking than in measuring the rate with which it was taking on water. I get that.  One customer said they gave the Appian tools to their users so that they could start documenting heretofore undocumented processes. Only after these processes were sort of codified could the company begin to make improvements, add appropriate control points, fix interfaces, etc.  In effect, the Appian software was initially used as a documentation tool (but this is, in all fairness, a gross underutilization of the technology).

These firms with broken processes often had too many redundant systems, processes, procedures, handoffs and interfaces. Worse, no one understood them or had a command of more than a few percentage points of the total problem. If work was getting done, it was happening in small pieces and getting tossed over the wall to someone else to shepherd or reject. 

Another group of customers had functioning processes but they weren’t great. Yes, the business work was getting accomplished but it was often messy, slow and not oriented around achieving business strategy.

These processes are potentially expensive to operate and rarely exemplify best or top quartile process designs. More often, these processes simply work. Elegance, efficiency or effectiveness are afterthoughts to these processes. How did this occur? These processes are often the result of decades of enshrining old business methods, old technology and personal work preferences into an environment that may no longer be aligned with what the modern firm and its customers want and need.

I heard Appian users speak of situations where they have realized that THEIR processes were driving their own customers crazy. And, when the customers get perturbed, the processes drive the customers away. 

The late Michael Hammer would be appalled to see how badly so many customer-facing processes operate today. The poor outward facing processes we encounter as consumers are unconscionable but commonplace. In my opinion, Appian could make billions just selling its tools to the tens of thousands of firms that are in this very predicament.

The third group of customers has top performing processes. While that sounds like a cause for celebration, it isn’t. These organizations have very efficient and effective processes. Their process costs are very low. But, these processes are often designed to satisfy internal, not external, constituents. As a result, these processes are why it takes weeks to get a home mortgage, an insurance policy, or, in my case today, a new phone line (which I still didn’t get after two tries).

When processes are designed from the other perspective, revelatory moments occur. For all the talk of companies embracing the Voice of the Customer (VOC), improving Customer Experience (CX), etc. , few actually do anything about making the customer’s experience with their processes a success.

Of the few firms that get this last point, I have seen some enlightenment. It comes in small doses but an awakening is slowing emerging.  Here are some the things organizations must change to get to the next level of process performance:

• Design the process around the customer, supplier, etc. not around your 30-year old input screens.
• Create analytic and event technology to predict where the user, internal or external, should go next in the system
• Hire graphics designers to help your organization radically re-design how transaction screens, mobile processes , etc. ought to really work. These folks are NOT wedded to the old tried and true systems, process designs, user interfaces, etc. that traditional IT and business process users are.
• Spend time, a lot of it, with the other users of your processes. Keep your eyes and ears really open and you’ll be shocked to learn how hard it is for them to do business with your entity. That’s when you can really begin to design the kind of processes that deliver real value to the users you want.

The last group of users I expected to hear from at the event were those in the top-most layer of the maturity model. These folks have created outstanding processes that are re-writing the rules of competition in their industry.  But, I didn’t hear a lot of this conversation. Why?

Well, it turns out that major change in processes requires a combination of skills – skills that extend far beyond business process re-engineering. To create truly transformative processes, businesses must:

• Possess empathy so that their processes really connect with all of their users (Social Skills)
• Develop several, flexible process flows to accommodate a range of users, each of which possess different ways of doing business. Whether the process must accommodate people of differing ages, physical conditions, payment preferences, etc., it should adapt to these varied needs easily.  For example, if a business wants to get paid by my dad, they’ll get cash. From me, they’ll get a credit card. My wife might use a check and our children could be using tap’n’pay technology. If you only have one process, your firm needlessly limits its financial future. (Creativity)
• Utilize inputs from social, collaboration and other technologies in guiding the new process flows (Cosmopolitan outlook)
• Build analysis into the guidance mechanism of processes. Software should proactively understand the user, their needs/past transactions/roles/etc. to suggest the most relevant next steps in where the process user should go. (Analysis)

Of the Appian users I heard at this event, it was clear that many are still moving up the maturity model. They’re making one step/level change at a time. But, that’s an encouraging thing as it means that these firms, some of which are quite substantial, are prepping for even greater transformation to come. And, a couple I heard were well along that path.

Maybe Appian could license their software to my phone/internet/cable provider?

Disclosure: Appian did pick up my lodging for their conference.

When vendors craft the messages they wish to impart to attendees at user conferences it is not something taken lightly. There are basically four kinds of conference tones that can be taken by the vendors:

1. celebratory self-promotion re: past product introductions with no real net new news (50% of events)
2. lots of hype regarding several incremental enhancements to the product line (30% of events)
3. big technical changes to the product line (10% of events)
4. painting a vision of where they will take their customers into the future (10% of events)

Frankly, I really try to avoid conferences of the backslapping, self-congratulatory tone of the first type. All that rah-rah with no additional substance is a waste of time for me.  I really don't care much for conferences that dwell on lots of minor incrementalism either (the second type). Spending a couple of days to learn about some new user interface improvement to a Fixed Asset application is, well, kind of boring.  Sometimes the big technical changes to the product line (the third type) get my attention as I often wonder how the vendor is going to bring the installed base along for the ride.  I sometimes enjoy those conferences as the technology leaders in that firm often share fascinating perspectives about where they see the future of the technology market moving.  But, this third type of event is very technology (not business) focused and, sometimes their “big” changes get lost on the business users in attendance.

The conference you really want to attend is one where a vendor is painting a very fascinating vision of where they are taking clients into the future (the fourth type). The keynote speakers will describe “the afterlife” for those customers who join them on this adventure. These speakers are often passionate about the power of the new technologies that their firm and other technology firms are introducing. They can articulate realities that will soon be visited upon businesses across the globe. And they will challenge you to challenge your firm's leadership into preparing for an amazing and, hopefully, profitable change.

In the very best conferences there is a sequence to how this afterlife story is revealed. A visionary will describe what the future of business will look like. They will explain the different forces converging simultaneously on your firm, the technology space and competition that will predicate a significant change in the business technology ecosystem. The second speaker will describe both the opportunities available to those early adopters of the technology and the consequences to the laggards who refuse to adopt them or delay the adoption beyond a reasonable timeframe. This speaker creates a burning platform for change and puts hard economic consequences in front of the attendees so that they can more clearly understand the implications for their firm. The third speaker will layout the glide path which companies must follow to rapidly and fully take advantage of the new technology and the business results that it will help deliver.

This week, SAP had a fourth type of opportunity but, in my opinion, kind of flubbed the delivery of the message. They wanted to communicate a fourth level story to attendees but seemed to fall into a third level type of delivery. That is, they got all too excited about their new technology and forgot to explain the destination, journey and burning platform parts of the story.

So, I will attempt to fill in the gaps with what you should have heard there. Here goes:

The real story should have been around how different competition will be for SAP’s customers now and going forward. Businesses, large and small, will want to tap into vast amounts of internal and externally produced information to create competitive insights never possible with the mostly internally focused ERP data that predominates the contents of the corporate data centers today. SAP offered up several examples at the event showing how customers and others are capable of processing hundreds of millions of point-of-sale transactions in sub-second time. They showed how it is possible for small startup companies, small to midsize businesses and large enterprises to utilize new tools like its HANA analytics capabilities. This aspect of HANA is cloud based and uses massively parallel, in-memory computing.  

It is the power of analytics, specifically analytic applications that use BOTH internal and external data, which permits companies to gain insights into product usage, customer consumption data, competitor activity, social sentiment, etc. The insights into these kinds of questions give businesses outsized opportunities to widen their profit margins, extend their market share and otherwise disrupt the economic stability and underpinnings of their competitors. It is for this powerful, economic and timely reason that customers of SAP must change to a more analytic driven business model. ERP data alone will not be the catalyst for the second generation of business and process excellence. Rather, as computing has evolved to a utility computing model, internally based transaction systems such as ERP software are also becoming utility-like in their scope and purpose. The future of application software has moved to the analytics world and SAP's customers must make that move and move quickly.

It is this sense of urgency and focus around a different business decision-making model that is the burning platform SAP should have discussed more completely at Sapphire 2013. Second, SAP should have laid out a clear roadmap on how businesses will make this transition to a more analytically driven firm. I believe that roadmap would've included significant discussion around rapid change in the IT organization and how software is deployed for many organizations.

SAP has been working on a strategy for several years now to enable all of their customers to move to cloud computing platforms. Through a variety of initiatives, they have attempted to make the transition from on-premises applications and solutions to cloud-based products as painless as possible for their installed base. This part of the story though is merely an aspect of the journey for SAP's customers yet it was a considerable part of the conversation at this year's conference.

To this point, SAP’s  ECC product line (the Enterprise suite of products nee R/3) can now run on cloud environments. The transport mechanism for this is a HANA cloud platform that allows the software’s data calls to go through HANA instead of a relational data base. RDBMS ((Correction - it's SSD (solid state drives) are used instead of RDBMS - see picture I added to bottom of post)) technology will still be used as a persistent store for data but the real power of in-memory processing, particularly for I/O intensive functions (e.g., optimization and algorithmic programs), will supercharge the software ownership experience for these customers.

This ECC product can now be moved, relatively painlessly, to a private cloud system, a public cloud like Amazon’s AWS or to SAP’s HANA cloud center.

The SAP center, the subject of a press conference two weeks ago, contains servers, configuration tools, etc. to run essentially all of SAP’s current ECC customer base. Known internally as the petabyte farm, this center has rows of server racks that permit massively parallel computing via 200+ servers and (corrected) 600+ terabyte memory access. Sub-second speed for analytics, financial statement generation, optimization programs, etc. is now possible.

So, for ECC customers, there are fast, low cost options to get your traditional ERP solution into the cloud and to take advantage of the cloud analytics your company will need so that it can maintain competitive parity or gain competitive advantage.  Don’t move and your firm will still be trying to milk a few insights, slowly, from its ERP-only data. Laggards won’t win this scenario.

Other SAP customers include acquired SuccessFactors and Ariba customers as well as SAP product lines of BusinessOne, All-in-One and Business ByDesign. SuccessFactors, Ariba and Business ByDesign have been cloud solutions for a long time and support multi-tenancy. These products will now run on the HANA cloud hardware and may see additional architectural changes to bring them more in line with the HANA cloud platform. The remaining products (All-in-One, BusinessOne) can also run in the HANA cloud environment.  Hosted cloud (single-tenant) solutions of these products have existed for years.

In effect, all of the SAP product lines now are cloud enabled but some differences do exist.  These include:

• Not all product lines are multi-tenant and some may never go this way. SAP executives expressed no real product demand to make their ECC suite multi-tenant. 
• Partners may host some solutions. Third party cloud provisioners may host the HANA cloud environment and some big systems integrators may do so while also creating additional cloud add-on applications for this new environment. SAP is, obviously, offering their HANA environment, too.
• A number of new, small, entrepreneurs (approx. 400) have built applications on HANA cloud platform technology. Many of these firms created entire solutions in under 3 weeks and have never had an alternate platform.

The bottom line in all of this is:

• SAP customers need to get off the non-cloud, on-premises versions of their ERP software soon.  The cost to maintain this bygone computing model has reached the end of its useful life for many firms.
• These customers need to have their ERP data AND third party data accessible via in-memory analytic tools to gain the operational insights that will help them remain competitively relevant and vibrant. Keeping ERP data on fixed disk systems does not provide the speed and reaction that a modern business needs.
• Business insights gleaned from internal ERP data are facing a diminishing benefits curve. Better, more impactful insights can originate from marrying internal with external data.
• Traditional ERP reporting tools and architectures were appropriate for smaller volumes of data. To manage the data from machines, video, social networks, etc. a different technology environment is mandated.  Trying to manipulate this big data with ERP data on existing on-premises, traditional IT will not work (or work well).
• Competition will drive all SAP customers to move to cloud and in-memory solutions relatively soon. It is better to engage in the planning process for this now than find out that a competitor is clocking your firm with fast, nimble market insights your company cannot yet see.  The planning must begin now.

Disclosure: SAP picked up some of my travel and lodging costs for Sapphire.

To get your head around the thousands of products Oracle has is probably beyond the grasp of any one individual. Suffice to say, the big issues for Oracle investors, executives, and customers aren't necessarily going to be buried in the minutia of individual products, releases, features, and performance gains. No, the questions are at a macro level, and they parallel massive shifts in the world of IT.

Oracle has broadly spread their considerable research and development (R&D) budget across a number of very traditional IT technologies, new-ish IT technologies, and some newer still technologies. In their marketing-speak, they say they offer customers "choice" and aren’t dictating terms or forcing upgrades on customers. It's that thinking that's been behind their Applications Unlimited program for many years.

But what Oracle really does is use their considerable R&D budget to stay in many distinct IT markets simultaneously. Oracle does this because it can, and almost no other competitor has the economic muscle to match them. The hard reality is that they spend billions (USD) each year on R&D. Most of their competitors can't even scrape together a few percentage points of Oracle's R&D spend.

Oracle is like the old General Motors. GM had entry-level, mid-level, and premium car lines to offer different car-buying customer segments. In my opinion, Oracle segments the market thusly:

• Old school IT buyers — These buyers are very committed to on-premise solutions. Their fear of cloud computing may be rooted in overly heightened security concerns, IT power/job protection concerns, or just old-fashioned technology fuddy-duddy-ness. But it doesn’t matter if these buyers are paranoids, afraid of change, or conservative, Oracle is still cranking out newer SPARC chips, faster servers, lots of performance improvements, machines tuned for specific tasks, upgrades to on-premises applications, and more. If these buyers want to stay on-premises, Oracle wants the opportunity to gain/retain wallet share with them. This buyer will likely be a CIO or IT director, and will listen to many of the technical people Oracle can field on a sales call.

• Bespoke IT shops — This is that IT group that never met a package it liked. Why license software when you can write something custom? This buyer loves Oracle's continued enhancement of middleware, development platforms, app stores, etc. But this world is one that is shrinking. Where new application development is burgeoning though is in the development of mobile, social, and big data/analytic applications. Yes, Oracle has stuff here, too. This buyer is still an IT executive — one that Oracle knows how to sell to well.

• Cautious migrator — This is the company that is buying cloud solutions on the periphery. They now use cloud for HR, CRM, and other non-core ERP applications. This buyer has probably done some cloud experimentation (eg, office automation software in the cloud) and is tepidly expanding their cloud footprint. For now, this buyer may be considering a lateral ERP move by having Oracle help them create a private cloud computing environment (on-premises) or with a hosted Oracle suite (single-tenant). This buyer might entertain a few of the new standalone Fusion cloud applications if they are in low-risk functional areas. This buyer may be an IT executive, but don't discount the role that functional leaders will have here, too.

• Active migrator — This buyer is no longer interested in re-creating their datacenter with newer gear. Instead, as equipment and applications age and must be replenished, this buyer is moving to cloud solutions. While they may accept some single-tenant, hosted solutions, this buyer understands the value and lower TCO that is possible via multi-tenant applications. This buyer is more often a functional executive (not IT). They're ready for a change, and they like the speed of cloud installations, the continuous and rapid updates these products have, etc.

• Cloud convert — This firm has seen the future, and it is a future where data, apps, computing power, etc, are powered via public clouds. This is a different kind of buyer altogether. This buyer may well be a CEO, non-IT top executive, etc. These buyers are very focused on re-deploying IT personnel and budget to more strategic roles. They want IT working on mobile, social, and analytic applications. They want, to paraphrase an Oracle executive, to invert the current IT Pareto rule where 75 percent of the IT budget is spent keeping the lights on, and 25 percent on innovation initiatives.

• Beyond the clouds — These firms are some of the most intriguing customers out there. They "got" the cloud a few years ago. They do things with in-memory analytics that are already propelling them past their competitors. They're not using a BI tool to simply compare data in one ERP application with data in another ERP application. No, these firms have already been monitoring social sentiments; comparing big weather forecasts to labor scheduling; and examining the point-of-sale data of customers to create new marketing and product insights for their customers and customers' customers. These buyers aren't smug, but they do find the laggardly, slow ways of their competition to be more than mildly amusing. Sometimes, they see this old behavior as just pathetic.

So if these market segments have some relevance, then we must map Oracle's R&D efforts against them. As it turns out, they do have something in play in every segment. But I do not believe that this is the real issue on the table.

Shareholders and Oracle executives should ask themselves, frequently, these questions:

• What's the current and future distribution of our customer and prospect pools across these (and other segments)? How different are the existing customer and prospective buyer preferences/wants?

• How will Oracle know that more buyers are moving from one segment to another? How will it know how big these shifts will be? How well can Oracle move to match these market shifts?

• How long before an additional market change occurs that triggers a wide swing or change in customer buying habits and tastes?

• How much of what Oracle is hearing from existing customers represents a self-selection bias of current customers? In other words, is a JD Edwards World customer that is still running an old version of the product on an AS/400 ever going to be a cloud adopter? What makes a Workday customer so different than an Oracle or SAP customer? Bias around the existing customer base can trigger massive misunderstandings of where the real market is headed/moving. Smart technology companies build first for the customers to come, not the customers they already have.

• Are the allocations of R&D and Marketing budgets appropriate against the current segments? For example, is Oracle spending too much or too little on computing hardware?

My personal take

Oracle is definitely innovating.

Oracle's distribution of its R&D budget is unknown to me. I'd be happier if I knew they were spending more of their investments on the left side of the TALC (technology adoption lifecycle curve) — see first graphic.

Dell, HP, BMC, and even parts of IBM seem to be having trouble competing in a technology world where the buyers have been shifting. Whether it's the move away from desktop and laptop computers to smart mobile devices (eg, phones and tablets); the move away from datacenters; or the move away from mainframe, bespoke systems — buyers are changing. One memorable remark from an Oracle executive underscored this point. He offhandedly said that almost no one has their own datacenter anymore. They either outsource this or get it via a cloud provisioner.

Many of Oracle's hardware and systems software product lines may be in danger of being made less market relevant as customers prefer to get more of their computing power in the cloud. Relevance is the key word here. For Oracle, their continued advancements in performance improvements appear to be keeping their products technically relevant, but how important is it to be relevant in declining markets? While I don't know what percent of Oracle's R&D is going to these hardware and systems software product lines, I'd like to see them start weaning this downward soon.

By the way, I had two sidebar conversations with other analysts at this week's Oracle Analyst event. Each of us had a different metaphor in mind, but we were all thinking the same thing. That is, is all of this focus on speeds and feeds really relevant? It's like a conference on the latest improvements in horse-drawn carriage manufacturing when the market is moving to automobiles. Several of Oracle's customer segments are in long-tail market scenarios. Growing market share in declining markets is a delicate act to get really right.

While I get it that Oracle has the R&D money to continue to pour money into older on-premises product lines (acquired or otherwise), I'm really starting to see the need to put a plan in place to unify code lines and move more of the product line to a more streamlined offering. Yes, it's great that Oracle has PeopleSoft and Oracle EBS HR products on-premises and hosted, and they have Taleo and Fusion Human Capital apps in multi-tenant cloud versions. But these products, while capable of integrating with one another are available in on-premises, hosted, private cloud, single-tenant hosted/cloud, multi-tenant cloud, etc, formats. The amount of code to support these is significant and only grows when one adds in code for Oracle's mobile HR applications and their TAB tablet solution. If the application market makes another significant move technically, the time it could take Oracle to adjust would be significant (and the cost quite high). It's time to rationalize the product line some.

The next 3-5 years may remain a muddled time as buyers near the end of life for older servers and applications. Tech providers and integrators need to find out what the buying intentions of companies will be for servers and applications in 2016. At that time, these buyers will have accumulated a lot more experience with cloud applications. They will have moved more spot-computing needs to cloud service providers. And they will need to either replace or forgo new server and other hardware. When IT, in 2016, has to go to the Executive Committee, they will likely meet a skeptical group should they try to maintain more traditional hardware and software expenditure patterns. I'll bet the Executive Committees of 2016 will require future spend go almost exclusively to cloud unless IT can put forth a most compelling rationale the other way.

Now if my 2016 hunch is right, then that would suggest that we'll start seeing a more pronounced uptake of cloud application software and a corresponding falloff of sales of anything, hardware or software, that is intended to support local, on-premises solutions. Oracle should be researching the timetable that these shifts will occur.

Cloud applications are going to be the future. Oracle's got a lot going for it here, but the messaging is really muddled right now. For example, take Oracle's cloud HR products. Now marketed as Oracle Cloud Human Capital (HC) Solutions, this "offering" includes cloud products from Taleo (a recent Oracle acquisition that brings a lot of recruiting and learning functionality) and several Fusion HC applications. Oracle has also created some standalone HC applications that also carry the Fusion moniker. When Oracle executives shared their product roadmap for these applications though, the distinction between core Fusion, Fusion extensions, and Taleo disappeared. Now it's one product roadmap for a single business process.

I actually support that thinking, especially if it means that the company ceases to market products under older product family names, and gets to selling process-specific solutions. However, other process areas are still not so clean, with some functionality from acquired products being redundant with functionality from native Oracle solutions or prior acquired solutions. Simply stated, Oracle still has too many general ledgers, accounts payable products, CRM product lines, etc. Moreover, some processes require on-premises customers to get some advanced functionality via cloud service applications. When you add mobile and social to the mix, the combinations get even crazier.

The product lines must get rationalized.

Disclosure: Oracle covered Brian Sommer's travel expenses for its analyst event.

I checked in with my colleagues over at Blithering Media (my sub rosa PR firm). They shared their best/worst practices with me. Here goes:

So, suppose you've got a new a new tech client and it finally got its first customer after eight years in business. How do you spin that?

Let's see, we'd probably issue a press release that starts like this:

NewCo experiences record infinite sales growth

NewCo, the internet's fastest-growing provider of ISP Velocity Impenders, has surpassed an amazing industry milestone with infinite sales growth. NewCo's CEO, Hardly Home III, says that "Coming off last year's wildly successful year, we've now vastly exceeded all prior years' sales combined."

Quarter over quarter, year over year, and other metrics were simply blown away. And NewCo did all of this growth without adding any additional headcount.

But it didn't have any sales in those prior years!

Precisely! Brian, those years weren't zero sales years, they were instead:

For eight years, NewCo has been developing a revolutionary new solution to take the ISP Velocity Impender market by storm. NewCo has been singularly focused on developing the most technically brilliant solutions the market has ever seen.

So, you're saying they weren't bad salespeople, but rather brilliant product engineers?

Now you're getting it. We'll make you into a PR machine yet.

Don't we need to say something about the cloud, mobile, or social? Isn't there a law about this for press releases?

You're right. When the Client Server Buzzword Mandate of 1993 was replaced in 2011 with the Cloud/Mobile/Social Dictate, we have to get at least one of these in every press release.

Well, this firm has nothing going on in any of these areas. What do we do?

Try this copy out:

NewCo is currently investigating how its newest solutions will integrate with the latest social, mobile, and cloud technologies available. "We're taking our time to ensure customers will not get caught on the wrong side of future standards in these early technologies," says NewCo CTO B Hine Times.

OK, so how do you handle the fact that these folks are all in a small town in Nebraska and have never even been to Silicon Valley?

Hmmm, well, we'd probably say this:

The global reach of NewCo is simply staggering.

How? How can you say that?

Oh, that's easy. I bet someone on that team lives on this planet. Don't they? So, if they exist somewhere on the globe, then they're global. Plus, I bet at least one of them has been on vacation – probably to Iowa. That's global, too, isn't it?

So, how do you handle the press release without a customer reference?

Oh, that's easy. We'll get some no-name industry analyst to give us a quote. We'll even write the copy for them. It'll probably be something like:

"NewCo's announcement is staggering and will send shockwaves through the industry," says Ponce Tificate of Buzzword Research Analysts. "We're starting coverage on NewCo immediately (if its check to us clears)."

And, of course, you'll pepper the press release with a lot of three-letter acronyms (TLAs), too?

You bet we will!

NewCo delivers industry-leading, dynamic WXYZ and QWERTY tensioning to the already competitive Velocity Impender market. But, with its new features for Matter Inversion (MI), Choke Resonance (CR), and more, the company is poised for even more explosive growth.

But how can it have "even more explosive growth" when this announcement is about it achieving "infinite growth"?

Brian, you're not supposed to take these paragraphs literally. We're trying to get the reader into a whole growth gestalt with our copy.

Growth gestalt?

That's a PR term — you don't need to worry about it.

OK, what else would you recommend NewCo put in its press release?

Well, we'd want to add something about potential partners or venture capitalists.

But it haven't got either of these. In fact, it has been rebuffed by everyone.

No problem. For example, we'd probably add this:

NewCo has already attracted the attention of numerous venture capitalists and potential alliance partners. "We're currently evaluating whether any of the current suitors are worthy of the NewCo banner," adds NewCo CEO Hardly Home III.

Is there anything else you'd recommend our readers cram into their tech press releases? Have we missed anything?

Absolutely. Your readers need to find a way to fit as many of these things into any press release if you want to get a high Google search optimization result. To make it easier for your readers, they can just paste this paragraph into their release.

About NewCo: NewCo helps Fortune 500, SMB, B2B, and B2C firms shift paradigms and morph their 24/7 initiatives into strong, industry leading, and transformative bricks-and-clicks outcomes. This comes while customers transition best-of-breed infomediaries into world-class schemas. Granular, next-generation solutions are simply future proofed into a knowledge economy context that approaches multiple singularities. The result is ground-breaking, aspirational, revolutionary, and pivotal to propelling outsized corporate growth and employee engagement.

Do you go to church?

Recently, I was briefed by both Workday and Adaptive Planning. The former was stepping me through the myriad of enhancements to their Release 19 product available today. The latter was showcasing their all-new consolidation product.

What is so impressive about both is the sheer volume of new product capabilities, features, etc. that each cloud solution provider can deliver. For example, Adaptive Planning built their entire consolidation product in less than a year. The regression testing of an on-premise product could consume a considerable amount of that time frame. And for those of you inclined to skip the rest of the blog copy below, that product is pretty solid and correctly positioned for up-market, large multi-nationals.

First, let's cover Workday's announcements. I will not try to recite all of the new capabilities, but instead simply identify some of the more material ones that caught my eye.

• Brainstorm Suggestions: Stan Swete indicated that this release incorporates some 67 items generated via users.

• User fields: At last year's Workday user conference, Workday management announced the impending availability of this capability. To say the audience was overjoyed would be an understatement (Ulitmate Software has followed suit with this capability, too). In release 19, the company expanded the number of objects with which users can extend additional user defined fields. Some of the user-defined fields can be pre-populated via third party data sources.

• Cross-field edits/rules: These are now supported for custom fields, too.

• Custom labels: Nowm users can do global find/replace on field labels. For example, changing "Employee" to "Exalted Colleague" is done via a parameter change, and is immediately reflected throughout the system.

• HR enhancements: Workday's Cloud Connect capability now also supports e-Verify capabilities. Some 274 benefits carriers are now a part of the standard integration connection set. Additional Payroll and time tracking technologies are supported out of the box. Competencies can now be exported from the Workday HRMS while data from LMS (learning management systems) can now be imported into Workday.

• HTML5 Adoption: The company continues its direct support for this mobile display standard. Workday now supports Android mobile devices. A new time entry capability exists for iPad and iPhone devices. This is part of a manager self-service app.

• Financials enhancements: This aspect of the product line has been maturing rapidly in recent months. A beefier fixed assets capability in now available, as are better analytics and controls. In a nod to the far-ranging penetration of shared services in many F&A operations, Workday added a number of "On behalf of" capabilities to the product to better support shared services environments. I suspect that this will be of interest to Finance & Accounting BPO (business process outsourcing) firms, too.

Adaptive Planning's announcements were very impressive, too. Let me back up first, though, to put matters in a better perspective. Originally, Adaptive Planning had a single product line that facilitated the creation of budgets. About a year ago, they acquired MyDials a cloud analytics provider that the company had teamed with frequently. Apparently, around the same time, they embarked on the creation of a new consolidation capability. That new consolidation solution was the focus of last week's briefing.

Consolidation software is something I've covered since the late 1980s. Who else would remember Consco; or IMRS (before it was renamed Hyperion, who was then acquired by Oracle)? I've had countless conversations and briefings with Fortune 500 firms regarding how they'll consolidate financial results from joint ventures, partially owned subsidiaries, operations with different functional currencies, sales agencies and commissionaires, etc. To do them well, one needs to understand intercompany accounting, foreign currency translations, etc. Consolidations are a sticky mess and not for the faint of heart. There's a reason that few financial accounting software firms ever build a robust consolidation module.

Nonetheless, Adaptive Planning entered the breach and has produced a pretty solid product. I peppered the executives on the briefing call with questions intended to poke holes in the initial release. I must say that all I came away with was one shortcoming: The product currently only supports 12 accounting periods. Granted, few firms need weekly or daily closings, so this isn't really a show stopper for most companies except for financial institutions and some retailers. So if your firm uses calendar or 4-4-5 accounting periods, you're good to go.

What helped Adaptive Planning get this product functional fast (besides the cloud architecture mentioned previously) was that many of the same rules and software that map a different chart of accounts from one subsidiary to an overall consolidated corporate chart of accounts for budgeting and planning were used in the creation of the consolidation tool.  

Other noteworthy points include:

• User Interface/Experience — The look, feel and navigation of this product, especially the displays regarding intercompany accounting entries, is pretty nice.

• This solution is all cloud based — The product is designed to connect to all manner of cloud and on-premises financial accounting solutions. Pervasive's integration software is used for many of the pre-supplied connections.

• Adjustments can be done to the consolidated or source books.

• It is targeted for mid and large sized firms.

Bottom line for both firms

The amount of new functionality that each firm released is impressive. Even more impressive is the very short time each firm took to develop the new capabilities. All of this is a testimony to what single architecture cloud products can do. The lack of baggage that requires a lot of additional code and regression testing to make on-premises solutions viable is a drag on software development and the bottom line.

Disclosure: Of the few tech stocks I own, I do have a small number of Workday shares.

What kind of integration has SumTotal achieved now?

Is it the kind of integration where a vendor leaves the underlying code of its acquired product lines alone, but creates a common middleware? Is the new architecture a full rewrite of the individual products or a cosmetic change of the user interface? Has a new single, employee record been implemented, or is employee data retained in redundant data stores throughout the diverse product portfolio?

Today, I had a follow-up call with Hardeep Gulati, EVP of Product and Customer Support for SumTotal. Here's his response to these concerns:

• All of SumTotal's products, acquired or otherwise, are on a Microsoft .net architecture. This common development platform enables a number of platform and product line synergies.

• SumTotal has a single master data management (MDM) core. This is used with its business process management (BPM) toolset and permits the tailoring of business processes to specific customer needs or circumstances.

• All of SumTotal's services occur in real time. Calls to specific data, objects, etc, go through the one .net architecture and not across a network of connectors to different products running on different architectures. This connector-style integration has been used by a number of acquisitive software companies, but is not the method behind the elixHR approach.

• SumTotal has a number of common objects that can be utilized in creating its user interface and other functions.

"Punch-out" integration, where an application needs to send data out to a third-party application for some work (or "punch in" to do the reverse) is not the brunt of the new SumTotal environment. The company re-did the plumbing for its products. Customers can do "punch-out" integration to another system (eg, financial application or third-party benefits administration system) via elixHR. This punch-out capability is a part of the elixHR architecture, but is not the way elixHR works with the SumTotal products.

There is one exception to all of this, though. SumTotal acquired the Cyborg Payroll technology (nee Accero), and this solution is not on the .net stack described above. This product has a different user interface and technology stack. From what I remember of Cyborg, it was mostly written in Cobol. When or if this product line will be re-platformed was not disclosed.

Bottom line

Like I had previously written, SumTotal did redo the plumbing of most of its acquired products. It didn't, like some competitors, change only the middleware stack to continue to use old code with new connectors. While it didn't change the Payroll product (yet), it did change all of the other products. ElixHR does possess the ability to connect to third-party products, but this isn't the bigger point re: ElixHR. ElixHR is now an engine to help SumTotal develop all-new apps faster.

Previously undetected recruiting errors (PUREs) have bedevilled employers forever. I've hired some and yet I'm one of the most inquisitive and discerning employers you'd ever have the opportunity to meet. I really want to know a candidate, at a deep level, as I abhor negative surprises at a later date. Those kind of surprises are costly and not a lot of fun for the employee or employer.

Over the years, I've gotten better at spotting future problem situations, but I haven't cracked the code to totally eliminate them. Technology may never help us eliminate these mismatches altogether, but it could help us get closer to the ideal target.

Two announcements last week put this issue back on the front burner. One of these came from Wowzer and the other from a joint deal involving SilkRoad and Nobscot. Each of these is tackling the problem of improving the recruiting process, but they've each got a unique slant on the matter.

Let's start with the Wowzer bit first.

I've been a fan of video interviewing for some time. I've written several pieces about some of the players in this space, like HireVue, Montage , Async, and Wowzer.

Last week, I did a call with Rodrigo Martinez, CEO and co-founder of Wowzer. Rodrigo wanted to tell me about its new Match technology that is a companion to it video interviewing solution. Typical video interviewing technology usually has a process like this:

• A candidate gets an email to participate in a video interview

• Once logged on, the candidate gets a bit of time to formulate an answer to a question. Most of the questions are pre-determined and are often the same for an entire group of candidates.

• The candidate then looks into their web cam to record the best pitch they can muster. Their response is generally limited in duration, with most responses coming in at under 3 minutes.

• Once all candidates' responses have been received, a recruiting or operational leader peruses the videos, in whole or part, to winnow the long list of candidates to a couple of folks they want to meet further and in person.

While this process can be great for some hiring situations, it can be a bit off-putting to some candidates. What candidates can face is a double standard, where the company's leaders or HR personnel will not appear on-camera, but the candidate must. Worse, the company has an opportunity to create an employment brand with this technology, and it doesn't. Without some humanizing video to show the jobseeker what the job could be like, what the culture of the firm is, etc, the candidate is left guessing. Worse, the candidate has already developed an ugly taste about the employer and may terminate the interviewing process early. Some of the best possible talent may walk before the initial video interview is completed.

Rodrigo and I moved the conversation to a list of factors that change the interview dynamic to become more successful. These factors included:

• Bringing authenticity to the interviewing process: If your recruiting videos or collateral feel like a cheerleading rally, they're probably perceived as a joke. If the content doesn't come across as genuine, real, and authentic, it's not doing any good. Quit hiring camera-friendly models for these videos and get real employees instead. Nobody wants to work with a bunch of fakers.

• Make the process one where employers learn about the candidates and vice versa: This sounds easy, but it's really quite hard to pull off successfully. If your firm has bosses/executives that refuse to be involved in recruiting until the very last step, you've got a problem. Honestly, who'd want to blindly work for a firm where you've never met your future boss? One of the largest, if not the largest, reasons why people leave their jobs is because of their boss. If the boss is narcissist, maniac, milquetoast, paranoid, or some other manifestation of evil, the candidate needs to know ASAP. Quit hiring people that the future boss will drive away anyway.

• Show the real work environment: Sure, it's great that your firm has this beautiful headquarters building in downtown Manhattan. But if this potential worker will only see the insides of the 45-year-old plant in rural Texas, why are you showing them something they'll never see or experience? It's deceptive, cruel, or stupid – take your pick.

• Make video part of every aspect of recruiting (not just for screening): Sure, you can limit video if you want, but, I'd suggest that's a fool's errand. Get your entire team involved in showing the full context of the company, the job, the bosses, and the future opportunity.

The folks at Nobscot Corporation and SilkRoad are coming at the problem from a different angle. SilkRoad will marry its Talent Management on-boarding solution with Nobscot's FirstDays new hire and quality-of-hire surveys.

In their combined approach, SilkRoad and Nobscot are using surveys of recently departed and recently hired personnel to identify causal factors that trigger employee attrition. Given all of the hand wringing of late about the War for Talent, we should see some interest for such a solution, so that companies can hang onto their best and brightest talent.

Nobscot's FirstDays surveys zero in on the causes of "quick quits" — those factors that trigger a person to leave a new job within the first 90 days. Any manager that has had someone quit in that short of a time period needs to do some serious reassessing of their recruiting processes, work environment, and themselves to understand what's behind their hiring PURE situation.

The value in this combined solution comes from helping firms to improve their on-boarding process. It can also highlight information gaps and misunderstandings found in an on-boarding portal. Longer term, the combination should help companies pinpoint causes for employee dissatisfaction (including cultural and supervisory issues), more clearly set worker expectations, identify needed training and improve retention.

PUREs are very expensive to companies. And they often reflect problems in the managerial, recruiting and/or people in the firm. Solve your firm's PURE problem, and the savings will go straight to the bottom line.

Oracle

Before I get to today's announcements, let me begin by starting with my conversation with Paco Aubrejuan of Oracle's PeopleSoft team about 2 weeks ago. He filled me in on a whole pile of enhancements that were announced under the version 9.2 release of that product line just days ago. The bulk of his news revolved around a new User Experience (UX) for the entire product line. The most noticeable aspect of the new UX is that most anything you'd like to see or do can be accomplished via search bars now. Oracle has indexed all of the software's business objects to make instant access to relevant data and functionality possible.

The UX changes also include the tying of objects to "related actions". Here, the software suggests the next (or other) activities based on the context of what the user is looking at or doing. It is, of course, tied to the search function mentioned above. Why didn’t Oracle do this before? This functionality change required a lot of work with the product's security, as users who shouldn't have access to sensitive data (eg, payroll information of co-workers) can't be allowed access to it (or transactions that affect this data) via a search capability.

Paco also mentioned the company's continued efforts to move to native HTML 5 for its mobile apps.

He also spoke of their "Update Manager" technology. In the interest of space, I'll summarize the improvements here to this: Multi-tenant cloud solutions are pressuring Oracle to make on-premise and private cloud software updates more efficient and less labor intensive/costly. They're introducing more pre-bundled, pre-tested groups of updates to achieve this goal.

As to today, Oracle had a number of technology announcements, mostly involving in-memory technology and performance improvements.

The company announced the following new in-memory applications that cross the PeopleSoft, EBS, Siebel, JD Edwards, and other product lines:

• Oracle E-Business Suite In-Memory Cost Management

• PeopleSoft In-Memory Project Discovery

• PeopleSoft In-Memory Labor Rules and Monitoring

• PeopleSoft In-Memory Financial Allocations Analyzer

• PeopleSoft In-Memory Financial Position Analyzer

• JD Edwards EnterpriseOne In-Memory Sales Advisor

• JD Edwards EnterpriseOne In-Memory Project Portfolio Management

• Oracle SCM In-Memory Consumption Driven Planning

• Oracle SCM In-Memory Performance Driven Planning

• Oracle SCM In-Memory Logistics Command Center

• Siebel CRM In-Memory Policy Analytics

• Siebel CRM In-Memory Next Best Action

• Hyperion EPM In-Memory Virtual Close

The best uses of in-memory technology, where you want to crunch vast quantities of data fast or do complex multi-variable equation solutions/optimizations, are in these kinds of application extensions. Traditional RDMS-based datasets on conventional storage devices are often too slow to run these applications or make the running of them something that can only occur on nights/weekends when other business applications are seeing light usage.

The company also announced a number of performance improvements, too. These included:

Oracle Fusion Applications

• User experience response time improvements of up to 1.5 times across all Oracle Fusion Applications

• Oracle Fusion Accounting Hub journal entry throughput is 5 times higher

• Oracle Fusion Global Payroll Gross to Net process throughput is 2.25 times higher

• Oracle Fusion Global Payroll Prepayments process throughput is 1.95 times higher.

Oracle E-Business Suite

• Order-to-cash application flows run 3 times faster

• Self service HRMS and Procurement flows run 8 times faster.

PeopleSoft

• HCM Self Service and Edit and Post batch processing run 2 to 5 times faster

• Period Close batch processing runtime improved by 2 times.

JD Edwards EnterpriseOne

• Order-to-cash processes' interactive response time is 5 to 8 times faster

• Financial Close runs 5 to 8 times faster

• Job (Project) Status Inquiry runs 4 times faster

• Materials Requirements Planning runs 5 to 8 times faster

Oracle Supply Chain

• Oracle Value Chain Planning

• Existing benchmarks show up to 70 percent reduction in collections, release, and plan run times

• User interface response times with 10-16 times improvement.

Oracle Transportation Management

• Messaging and Workflow processes run 9 times faster

• Transportation Bulk Plan process runtime is 5 times faster

• Shipment Persistence process runtime is 8 times faster.

Siebel CRM:

• Universal Customer Master throughput time 7 to 11 times higher

• Universal Customer Master user experience response time 7 to 10 times faster.

Caveats: These are numbers that Oracle provided, and I am not aware of any independent third party validation of these figures. I do believe that Oracle's hardware and systems software is being optimized to run Oracle applications. I've seen customer applications perform materially better once applications, data loads, hardware etc, are balanced and optimized.

That said, I suspect that a number of application software buyers will care less and less about these kind of stats over time, as performance will be the purview of a cloud provider more and more often. Performance is becoming a lower priority buyer value compared to functionality, global capabilities, and other differentiators. These buyers expect performance from their cloud provider. Performance is becoming a cost of doing business. 

SumTotal

Another vendor, SumTotal, officially announced their elixHR platform today. If memory serves me right, elixHR came about because of SumTotal's rewrite of their product line's diverse product architectures. The company's highly acquisitive growth brought with it a lot of different code with a lot of different plumbing.

To SumTotal's credit, they didn't just develop a bunch of connectors between the acquired products. They did a gut-job on the old products and got them to a single technical architecture.

Going forward, the new elixHR platform supports integration with other external systems, including other HRIS software, ERP products, LinkedIn, and more. Fast integration is important, not only for cost reasons, but also because it helps collect all employee information into a standard set of databases and reporting tools.

So why is that important? You wouldn't believe how many companies today still cannot calculate how many employees (employee equivalents) they possess globally. Larger, multi-divisional/multi-country firms may find this capability particularly fetching. Would your top executives like to see all of your employees' performance data in a single report? Can you identify all of your firm's high performers at the click of a mouse? Kludged-up HR solutions are often a staple of bigger firms, but they shouldn't be.   

Lumesse

Lumesse had an Executive Summit today. It was sort of a mix of an analyst event and top executive customer event all rolled into one. John Sumser organized a big part of it and I had a whopping 15 minute presentation today. My mini-talk was on the issues with global HR deployments (eg, shared services, HR ERP, business cases) and delivery strategies.

This event was also the public debut of Lumesse's new CEO, Thomas Volk. I'd love to have had a peek at the notes he took today.

In my opinion, the last hour of the event was the best part (aside from the killer Tex-Mex buffet for lunch). In that time, attendees were asked to opine on the future of HR, HR tech, and the CHRO. I'll probably spin out a separate post on that topic alone in the next few days.

I did hear some spirited conversation, though, on issues like:

• Social HR and how HR professionals and technology providers must create the network effect around their company's solutions if they hope to compete with the decidedly more consumer-friendly smart apps coming from non-traditional HR solution providers

• HR needs to resemble Marketing more than IT — the way Marketing people segment buyers, use social and traditional media to reach/educate/convert buyers, etc, are the new skills HR and recruiting people must have

• Why segmentation of the workforce by generation (eg, Millenials) is not a good thing to do

• Why some hiring/recruiting is very local and other work is far from it

• How recruiting or sourcing needs a new language around targeting instead.

Well, I need to get this out and start to review my deck for tomorrow's SYSPRO keynote. I’ll be speaking on Customer Experience. Let's hope my delayed flight experience still delights me somehow....

Disclosure: I will be receiving reimbursement for my travel costs to the Lumesse event and a small speaking fee. 

A second trinity of recent importance has involved big data, analytics and in-memory computing. That confluence has yielded some great insights for large and small businesses. It is the democratizing impact of cheap second trinity technologies that has driven their adoption up quickly and is redefining several business processes along the way.

I’ve identified at least four trinities that are currently or will soon emerge in our technology space in prior articles.  But now, I'd like to discuss a different potential trinity. This one involves event, social and BPM technologies.

The impetus for this was due to a conversation I had this week with Appian CEO Matt Calkins. We had a spirited discussion around the future of social and BPM (business process management) technologies.

Matt sees the social enterprise concept as more of a feature, not a product. While social technologies, in a business setting, are a great way to get worker participation, they often miss a couple of very important things. According to Matt, the shortfalls of first generation social enterprise solutions are:

• That many users are "takers" not "providers" of content. Unless these solutions bring in more external content and viewpoints, these systems will experience high abandonment rates

• "Talk" is often the outcome not "action". Matt believes that social enterprise solutions are too removed from business actions and processes.

I agree with his premise. I even participated in a recent ZDNet debate with Dion Hinchcliffe on the social enterprise and I see the same takers vs. providers issue. I also agree that social commentary that doesn’t drive or assist business processes/decisions is not worth a lot.

At this point in our conversation, Matt made the case that social and BPM technologies must be linked. Of course, I know his firm has such a product, Worksocial, but I wanted to push the discussion even further.

I argued that what businesses need is to tie these two technologies with a third: an event driven architecture. In this way, the social content is targeted around business events and news that need input from the social community before the rest of the process can be executed.

I shared an example with Matt that went something like this: Suppose the Federal Reserve Bank of the United States raises its lending rate to banks. That external business event should trigger a series of discussions with all sorts of business executives within your firm. The CFO, Treasurer and Procurement executives should be assessing what the change will do the company’s internal cost of capital, its borrowing capacity, etc. Decisions that could affect R&D investments, IT project portfolio funding decisions, vendor purchases, etc. could all be affected. The discussion could be initiated via a smart event-driven engine that looks for the appropriate external and internal triggers that business people should be discussing as these have a likely impact on corporate strategy, competitive positioning, capital structure, etc.  Who gets invited into the social conversation could be a combination of evolutionary social conversation growth or driven by a smart process tool. And, in the end, when the discussion has produced the appropriate responses, a BPM tool can help drive the needed changes within the enterprise.

This trinity of event, social and business process management technologies may take a fair bit of evangelizing in the near-term. Each of the individual technologies has been out in the market for several years.  Putting them together into coherent solutions will take work, imagination and vision. In contrast to other technologies (eg, a basic consumer mobile app), it takes some effort to make these solutions industrialized and still deliver value to the users. But what may be more vexing is that the process flow may differ significantly from customer to customer. Likewise, the potential universe of business events out there is so numerous that it would require a serious prioritization process to figure out which ones should be developed first. (Hmm — maybe that would be a great question to posit on a social network...)

I'll be at Appian's user conference later this month. I'm actually looking forward to seeing how well they're connecting the three pieces and what kind of client traction they’re building. I guess the rest of the story will have to wait until then.  

Phil's very clear that this book is not oriented to the gear head that wants a real deep dive on Hadoop. It's a business person's guide to big data and the evolving technologies and business uses for companies exploiting it.

If you don't think big data is a big thing, read the book. Phil's got gobs of examples of firms, and, surprisingly, several local governments using big data to achieve any number of benefits. For example, he tells how one city has a smartphone app that collects road condition information from the local citizenry so that pothole repairs can be done as fast as practical.

I've been covering the big data space for some time, and much of what Phil covers isn't exactly new to me, but it is covered in such an eloquent and easy-reading way that I wish I had written it. To Phil's credit, he took a complex tech subject and made it very accessible without getting thin on the details.

Of the book's eight chapters, the sixth one left me wanting, though. That chapter, called Taking the Big Plunge, has some guidance for businesses wanting to go the big data route. I thought the material could be deeper, richer, and more prescriptive. Certainly, Phil didn't intend this to be a how-to manual, but from what I'm seeing in the field, companies that have experimented with big data or are thinking of doing so are frankly stumbling in the dark.

Big data, as a space, needs some big leaders — leaders that are sharing the lessons they've learned and coaching others on the mistakes/strategies to avoid. Big data is a rapidly evolving space, and companies don't have the luxury of waiting years to finally "get it right". When it comes to big data and analytics, huge competitive advantage opportunities await the first movers. The laggards can get really clocked if they can't match the insights possible from these new technologies.

What I'm saying is big data is related to technologies that can really widen the gap between the technology sophisticated organizations and those that lag or are nave. If your organization falls in the latter camp, get a couple dozen copies of Phil's book and make them required reading for your leadership group. And then get busy exploiting big data.

Global Payroll

Ultimate has been content to be a provider of payroll and related solutions to U.S. based firms for years with expanded coverage to Canada in recent times. Global expansion, if it happened, would occur in a measured way consistent with the fiscal and growth plans of the company.  But at this conference, the company announced a new strategic relationship with Celergo, a payroll solutions provider. 

Founded in 2004, Celergo appears to offers payroll capabilities to approximately 110 countries (or 156 countries/territories via a fact sheet they provided me). Celergo has support centers in Chicago, London, Budapest and Singapore. Celergo boasts some 150 companies as clients and this deal should, in time, open up additional customers for the company.

But, to deliver true global payroll, Ultimate has to do more than create a global payroll interface connector (which it has already done). Ultimate is adding localization capabilities to its core product and should be able to support some 30 countries in short order. Ultimate added custom field capabilities to the product that will help with the capture, editing and forwarding of critical local, regulatory and customer-specific data needed to successfully process payroll or other local business requirements.

Globalization means more than payroll, though. Ultimate will need global HR functionality beyond payroll processing. It will need language support in these countries, too. And, in good news, the company already supports several languages natively as well as double-byte character languages.

Connectivity & Faster Installs

To help customers implement Ultimate solutions faster, the company announced a partnership with Informatica.  I’ve always liked the approach Informatica has had with cloud-to-cloud, cloud-to-on-premises and other integrations. As one of Informatica’s executives stated at the event, companies will need more integration technology as “data will continue to fragment apart from the enterprise”. What he’s referring to is the growing volume of non-ERP data that businesses want to peruse, connect to, analyze and incorporate into their decision making and/or internal systems. These new data sources are growing dramatically in number and the size of same can be astounding. He’s right on that. And, software vendors, be they HR or ERP, are fools to assume their systems will remain (if they ever really were this) the center of the computing universe. It’s a different world now and customers need to connect to it.

Ultimate did this deal not just because of the new data issue but they also saw an opportunity to speed up systems implementations. By permitting faster integrations, clients get systems up faster, reduce implementation costs and improve the ROI (or reduce the TCO) of a new Ultimate installation.  This is a partnership that is a win-win-win for customers, Ultimate and Informatica.

When asked about use cases for integration, analysts heard that customers want:

• Integration with insurance carriers, benefits providers, etc.
• The means to bring in other data into critical HR processes re: new hires and terminations
• Informatica and Ultimate to incorporate more of Informatica’s business process modeling (and master data management) into the solution mix
• to use a service like Informatica’s for things other than basic ETL solutions

Other Announcements

Ultimate is working on a fourth generation cloud data center technology stack. We will likely learn more of this tomorrow. Ultimate has already expanded beyond its current data centers in Atlanta and Phoenix with new sites in Toronto and Vancouver. This amplifies their stated intent to pursue a greater focus on Canadian deals.

Other announcements included more mobile capabilities, a new HTML 5 mobile interface, a neat timeline feature re: an employee’s work history, and more.

We also got hints that recruiting and identity functionality may also be in the offing.

Conclusion:

Today's announcements suggest a stiffening in the competitive battle for mindshare and marketshare for Payroll, HR and related technologies. The parallels between Ultimate's announcements and recent ones from Workday suggest a bit of an arms race may be shaping up in the HR tech space. Competition is good thing for tech buyers as it drives up innovation (and sometimes drives down costs). This should be a fun one to watch.....

Disclosure: Ultimate Software covered my travel costs to this event. I will be a speaker on a panel tomorrow with several HR analyst peers. Ultimate is compensating me for my time on that effort.   

The accumulation of that many product lines, brands and applications has created a big maintenance revenue income stream for Infor, but customers want to see these product lines enhanced and periodically re-architected. If they don't get value for their maintenance monies, they'll stop paying these monies and/or move to another vendor.

Approximately two years ago, Chuck Phillips took the top job at Infor. His gig wasn't going to be an easy one, as there were so many products that needed a major refresh. It wouldn't be a cheap fix, either.

Chuck has a great pedigree for this kind of assignment. He's a long-time Wall Street executive. I knew him in his Morgan Stanley days where he really made a name for himself in the enterprise software market. His tenure at Oracle gave him not only M&A chops but also exposed him to a number of the operational nuances that make a software company tick.

Infor has been relatively quiet since Chuck joined. In that time, the company replaced a number of the management team, moved the headquarters to New York City, hired 4,000 programmers, created a captive design firm, and spent a massive half a billion dollars on re-tooling the product line.

While the re-tooling isn't finished, the company has made enough significant progress that it is now opening up to analysts, customers and prospects. It is sharing its latest works and some of it is pretty clever. We outline the details below.

Shifting focus to vertical suites

The company is shifting away from selling individual product lines (ie, Lawson) to selling "micro-vertical" solutions. Why is it doing this? Infor has a number of new products (like its ION cloud data warehouse), some alliance solutions (eg, Salesforce's CRM solution), and some solid best-of-breed on-premise solutions that it wants to connect together into end-to-end industry solutions. Infor channel partners selling one of the older product lines will now have additional solutions (and more) to offer to prospects. However, some partners will now find Infor offering some of the missing vertical functionality that those channel partners used to create and offer on their own. Users should appreciate this, as deeper vertical capabilities will now be part of the core products and not an added cost.

The captive design capability and new user interface

Infor has hired a number of folks to be part of its Hook & Loop subsidiary. Infor executives specifically sought out non-traditional types (ie, non-traditional to the software world) to help them design a user interface that significantly improved user productivity. It didn't want just a prettier, artsy interface that did the same things as the old interface. It wanted to eliminate screens, drive user effectiveness, etc. The result is that a single screen has analytic data on the far right. That information is sensitive to the user and the role they have in the company. To the far left of the screen are short synopses of transactions that the user probably should initiate or complete. In the center of the screen is some macro-data, possibly displayed pictorially, that is of value to this specific user. Data for all of this is coming from several Infor, Infor partners, and Infor data warehouse systems. Users stay in this system and not log in/log out of differing applications to get their work completed. The new user interface is a key component of the Infor re-boot, and is not a simple facelift overlaid on top of old code.

New data warehouse

Infor's ION is a cloud-powered data warehouse. It acts as a repository for all Infor application data as well as data from Infor partner Salesforce and, possibly, other data sources. Data for the new user interface is predominately sourced from this warehouse. This tool uses OAGIS XML formats for over 200 standard events. Data is physically stored in what Infor calls the Business Vault. With all manner of data accessible here, and, the new user interface populating its content from this source, users will not need to utilize the older screens or databases of predecessor application code. These two improvements represent, effectively, the biggest upgrades to most Infor products in the better part of a decade. Users of Infor products ought to be elated at these improvements. These improvements are what Infor has spent half a billion dollars and needed all of those programmers to complete.

Tech stack modernization

I give Chuck and his team credit for candidly assessing the Infor situation and devising appropriate strategies. Just look at what Infor isn't doing. It isn't getting into the hardware business, but it will partner with Oracle on Exadata machines. It isn't going to develop systems software like an in-memory database, but it will partner with SAP to use the HANA software. In effect, Infor's done a very correct job of allocating capital and people to the things it should be doing and partnering where it should not. The result is a very modern technology stack that will power its applications. This was smart.

And a lot more

Infor shared with us new mobility solutions, new business process management tools, and more. There's simply not enough space to cover it all here.

So, is it enough? Is this something that will bring net-new customers to Infor?

• Existing customers will like this – mostly. As I mentioned above, users should be ecstatic with the magnitude of these improvements. However, some of the Infor customers are, and I want to charitable in saying this, laggards. They have stuck with a product for decades, even though the product may not have evolved much at all. These software users either don't want to change or can't change (as they lack the money or have customized the product too much). Either way, they might not rush into these re-done products. Nonetheless, I bet Infor users will be happier at this year's user conference than in many prior years.

• Net-new customers will come, but the new converts may be heavily oriented around plant, divisional, and business unit solutions; with the micro-vertical focus Infor is pushing, the main buyers of new Infor solutions will likely be plants and business units where the business needs are satisfied via a micro vertical answer. While a conglomerate could buy these products, plants and divisions will be the hot spot.

• Infor is clearly turning lemons into lemonade: The old Infor would get slammed for being a holding company overloaded with too many, redundant products. The new Infor now uses different combinations of its products with the new UI and ION environment to create purpose-built micro-vertical solutions. These products will be more competitive in these micro-verticals and definitely more competitive against firms selling more horizontal solutions.

• The new Infor strategy works for a company like Infor (not startups): The micro-vertical strategy is great for a company with lots of different vertical applications in its portfolio. The UI re-work is correct for a firm that needs to re-tool its older products to deliver a new level of user productivity. The ION warehouse works for a firm needing to pull data together from a slew of different applications, many of which may have different underlying technology architectures and code bases.

• Infor still has rebranding work to do: I'll admit I was skeptical as to whether they were making progress or just putting lipstick on a pig until I went to this event. I saw the changes, I talked to the execs, I walked in the new office and I heard the people behind the changes. The new Infor is real. But a lot of people who knew the old Infor (or its predecessor product companies) didn't get to do what I did. As a result, Infor will really need to educate the software buying world that is certainly a very changed entity.

• Will all Infor products get a lift from this? I wondered that, too. When I asked Chuck this, he said every product line got the new UI treatment. But, in time, Infor will want to rationalize its product line. It possesses, for example, general ledger applications from Software 2000/Infinium, Baan, Walker/Elevon, and more. For now, do not expect to hear any discussion of this matter. It may be years before a rationalization game plan is announced.

Disclosure: Infor covered air and hotel costs for the one-day analyst summit.

I had an opportunity to interview Yury, and here are some of the highlights of that conversation.

What should readers know about Yury?

Yury was born and raised in Russia. He had a reseller business of his own there before joining Microsoft Russia. There he worked on expanding channel opportunities for Microsoft. Yury moved to the United States 3.5 years ago with Microsoft.

What new directions will Acumatica take?

Yury indicated that the company will continue to develop more and deeper horizontal functionality while channel partners will continue to build out more and deeper vertical extensions to the product line. Yury indicated that 10 of its channel partners are using an Acumatica programming kit to build these vertical/industry extensions.

What size firm buys an Acumatica solution?

Yury stated that a number of its customers are SMBs (small- and medium-sized businesses). Yet, the company's channel partners frequently sell and deliver deals to $1 billion-sized firms. Currently, Acumatica has, according to Yury, approximately 20 such customers with more in the pipeline.

Why is Acumatica in Seattle?

Yury believes that Seattle affords Acumatica access to a great talent pool. When I pressed him about Russia, he said that while Russia has historically been a source of inexpensive technical talent, it has become more expensive and challenging.

How committed is Acumatica to the channel?

Yury made it clear that Acumatica does not and is not going direct. The firm remains totally committed to channel partners for new product sales and support.

What else?

Yury indicated that Acumatica will be expanding its platform capabilities (it is a big user of Azure Server, Azure Cloud and other Microsoft core technology products). He also expects the firm will be even more competitive in the ERP space.

I like taking a call with Dan as he and his team are perpetually rethinking how recruiting and HR ought to work.  So, during yesterday’s call, Dan told me of two new products they’ve developed: Engage and Refer.

Let’s start with Engage. I believe the best way to imagine Engage is to ask “What if we took the best attributes of a CRM (customer relationship management) solution and applied those to job seekers? More specifically, what if we applied these to passive job seekers (the ones already employed somewhere else)?”

A CRM system treats customer and prospect information like a scarce asset. It tracks and records all interactions with prospects as they progress from being a raw lead to a paying customer. The software knows all of the touch points a prospect has had with the company and its people.  The whole point of these systems can be to drive a ‘conversion’.  These systems can also manage a large number of contacts. It knows who in the company has a relationship with this customer/prospect.

Applying concepts like these to recruiting can be compelling.  The new process would have to look like this:

1. Recruiters could seek referrals from current, active employees or tap into the social networks of these workers (incidentally, this is part of the Refer solution mentioned earlier).
2. These referrals should be added to something more than an ATS (applicant tracking system).  Why? Some of the potential candidates might not be in the market for a job or career change at this time. Yet, if they possess great skills, their information should be captured for future use.
3. The candidate’s data needs to be continuously updated. Refreshing candidate data with current social media content can help significantly here.  ATS data frequently gets stale but chances are a job seekers’ LinkedIn profile is always current.
4. Recruiters would want to place prospective employees into pools that can be targeted for specific outreach campaigns.  Recruiters want to target specific, narrow pools of potential candidates to avoid overwhelming passive job seekers with lots of irrelevant opportunities. In fact, fewer, better targeted messages to passive job seekers might actually help these individuals perceive the company in a better light, improve the company’s recruiting brand, reduce recruiting costs and improve candidate quality.

Jobvite’s Engage is constructed around this new recruiting process flow. Check it out.  And, maybe more importantly, ask yourself if your HR/Recruiting organization is ready for new performance metrics. Are they ready to work to ‘click-thru rates’, engagement statistics, etc.? There’s a different vocabulary about to hit the HR scene.

Jobvite’s Refer works the other angle. Refer helps employers push content into the social media that workers use. It publishes job opportunities to Facebook and Twitter. 

Used together, Refer will help add to the richness of a company’s prospect pool while Engage keeps this information current and helps focus the recruiting efforts on targeted conversion campaigns.

IBM sees "social" as the way to accelerate sales of a raft of related applications (and the services work that implements and integrates these products). At this week's IBM Connect 2013 show, many customers are being trotted out to discuss how they've implemented one or another product and how they can now connect people to collaboration threads to social media to insights and more. And, sometimes we'll get data points that show the business outcomes that result from this effort.

I'm having a case of Dj Vu at this show though.

In the early 1990s, I led a small team at Andersen Consulting (now Accenture) to see if there was a market for knowledge management. My team and I were definitely thorough. We interviewed people all over the world. We found out fascinating aspects to successful and unsuccessful knowledge-management initiatives. And, in the end, we concluded that the time wasn't right and that the market wasn't mature enough yet.

In the 1990s, there wasn't social technology but there was collaboration software, email, Lotus Notes, and other tools. We didn't have analytics but we did have data warehousing and ETL technology. We didn't have the cloud but we had networks, the Internet, and intranets. And we definitely didn't have much in mobile--no smartphones or tablets--but we did have analog brick mobile phones and laptop computers.

It is my theory that we could have had the "social business" that IBM is talking about 20 years ago but we would have worked mightily to get a less elegant and simpler version of it. The interesting questions are: Why didn't social business explode then? And, how likely will it explode now?

Why social business didn't take off earlier

Social systems require people to voluntarily produce content. When you get right down to it, if people contribute nothing, the social technology is barren and will never have much of a user base. Twenty years ago I learned that large segments of the workforce are "users" or "takers" of knowledge-management content. Salespeople were often the worst examples of this selfish behavior. They would gladly be a user of any system that gave them insights into prospects but they never seemed to have the time to add to the data store or the inclination to share their data with other, potentially competing, sales reps.

Twenty years later, I still find that many in business are "users" or "takers" of information. Way too few business people can actually write. Have you ever tried to write a thought leadership piece for your firm? Have you ever created a big piece of intellectual property (eg, a methodology)? Could you write three to five solid blog posts a week? No. Most people can't or won't do these things. Worse, businesses rarely let people be cosmopolitan enough to mix, mingle, or visit with customers, colleagues, suppliers, etc, to develop the world view needed to craft especially relevant content. So, content rarely, if ever, gets built.

I see symptoms of this every day. Some people believe that simply re-posting another's work is creating knowledge. It isn't. Some folks think that blatant plagiarism is adding to the richness of the network. It isn't. I would suggest that real value from a social or knowledge system occurs when new, original insights are available to all.

While third-party data is important in populating a knowledge base, the employees have to also create their point of view or the official point of view of their employer. Data without insight is not knowledge. It's just data.

This creates an immediate problem as great knowledge tools (and I'd include most social technologies here) must find a way to trick, cajole, or otherwise incentivise users to volunteer information. And businesses must allocate time for employees and executives to add to the richness of the content. In the intervening years since knowledge-management systems first came out, social-media successes like LinkedIn and Facebook got better at understanding the psychology of the people who both consume and populate the data. They have found ways to get people to want to update their content, sometimes many times a day. The best sites keep participants engaged for years. Blogs, in contrast, often lose steam fast as writers either run out of things to say or get too little psychological validation from too few readers to keep them writing and writing and writing. But, 20 years ago, we were only just beginning to understand the psychology of social users.

The network effect was another unknown concept back in the day. Rational, logical builders of knowledge systems could build the needed technology but getting the great unwashed masses to join and be active in the new intranet/network/knowledge ecosystem was a little-known concept. Sure, some businesses mandated your participation and some found that went over like telling a child to eat their cauliflower. Network effect in knowledge systems didn't really start to hit its stride until the emergence of Internet marketplaces a decade later.

The bottom line for the 20-year-old world of yore is that many passable piece parts were there and they did enable some notable successes from a number of forward-thinking and creative businesses. The winners saw things like Notes as more than an email system. They marshaled the subject-matter experts, content and more to make these first-generation social systems work. But, for most firms, it was just too far to go, too ambitious and too difficult to figure out how to make these a huge success.

Related stories:

• IBM suggests how social business can work
• IBM relying on more cloud services, software to accelerate social business
• IBM makes aggressive push for social business as future of work
• Advice for marketing people and others who won't join Facebook, Twitter
• Social business experts name 4 trends to watch in 2013
• Q&A: IBM's GM of social business on C-level strategies, Microsoft, and Oracle

Please continue to part 2 to see what will be needed for the social business to take off now.

Will the social business succeed now?

I found myself pondering this question a lot these two days at Lotusphere/Connect.

First off, the tools are better, richer and enabled with more goodies than ever before. If anything, this alone should prove a positive for the social-business push. For today, the new social tools include fast cloud-analytic capabilities; servers that are massively more powerful; accessibility to vast data stores of traditional and new information is mind boggling; and, richer and more different types of data are solving heretofore unknown business problems. No doubt about it, the technology has clearly improved, adapted, expanded, and evolved.

People may not have changed that much though. Yes, most of us have smartphones today. We have different shopping habits. We showroom. We brag about ourselves on Facebook. But, physically and psychologically, I'd argue that we're mostly unchanged. If a person wasn't motivated to create and contribute content to an internal or external social network 20 years ago, are they going to now? Nah...

As before, there is a huge change-management, training, and motivation issue that can stop many a well-intentioned social or knowledge project dead in its tracks. Change is the biggest challenge here and it must be front and center in any discussion of new social initiatives.

Related to change is the network effect. Business leaders have to grasp what their role will be in making these new social systems a success. Several times at this conference I heard customers describe how employees valued the closeness that social systems brought between them and the leaders of their firm. The problem is that hierarchical, command-and-control firms don't like upward communication. Management in those firms likes communications that go one way: Down. They have "people" to communicate with subordinates. Social systems expose this and unless addressed appropriately, it will doom some new social-business experiments.

But, you say, isn't that a bit harsh, Brian? Nope. Just think how you feel when you write a letter to the CEO of a company and you get back form letter #326 from some flunky working there. You know the letter, "We appreciate input from our customers here at Company XYZ. Your feedback is important to us." I hate it when a business is dismissive to me. As an employee, I find a leader's dismissive attitude to workers a major morale problem and a reason for wanting to leave the company. In fact, the number one reason people have for changing employers is to get a better boss. But, if a boss won't join the social network, will the network succeed? It's doubtful. If the boss fobs off all of their network interaction to underlings, will the network succeed? Again, it's doubtful.

I have grave reservations about management changing to meet the requirements of a new social-driven work world. For example, how many of you work for a company where leaders have outsourced the content development of "their" company blog to outsiders? So, here are "leaders" who can't (or won't) articulate the company's vision in a blog post? These are the leaders who are too busy to communicate with the workforce or customers? These are the leaders who can't write or put together cogent thoughts? Outsourcing the leadership component of modern business' social systems is a prescription for failure.

What will drive greater adoption though is that the psychology of content creation has blossomed. Pinterest, Flickr, LinkedIn, and Facebook (to name but a precious few) rely on the fast, easy, and frequent additions to their social "content" that contributors make every minute. They've cracked the code that gets people to contribute, a lot and often, to their social networks. Businesses must learn the best practices from these firms so that adoption, permanent adoption, of the social systems is rapid, transformative, and game changing.

Related to the psychology point above is that it is often easier for people to contribute non-textual content to these networks. Pictures, video, music, drawings, and more are now acceptable and possible contributions to the shared data store. Take heed of the age-old expression that a picture is worth a thousand words. If someone doesn't like to write (or write well), can't they at least post pictures of the cool graphics people were drawing on the white board? Images can be some of the most powerful communication and collaboration tools there are. Now, we are surrounded by a rich abundance of tools to capture and share all of this non-traditional data.

So what's the bottom line now?

Today, I'd say the social business has a real, fighting chance. But the biggest challenge now won't be technical; it will be people. Business leaders must change and the social-business champions will need to understand people better than ever to get the adoption and value from these game changers.

But there's one other big point that needs to be made. The "social business" can't be a collection of tools sold by an integrator or software vendor. It has to be a solution that's desired or demanded by top executives. Sadly, some businesses will opt to be the social wallflowers hanging out in the shadows while the social butterflies will be everywhere. Which firm will your firm be? Are you sure your leaders want this, too?

Also read this piece I did early last year on the social business.

Related stories:

• IBM suggests how social business can work
• IBM relying on more cloud services, software to accelerate social business
• IBM makes aggressive push for social business as future of work
• Advice for marketing people and others who won't join Facebook, Twitter
• Social business experts name 4 trends to watch in 2013
• Q&A: IBM's GM of social business on C-level strategies, Microsoft, and Oracle

Disclosure: Years ago I was with Accenture (an 18-year veteran) and still own a few shares in the firm. In fact, they absolutely got the knowledge-management concept 20 odd years ago. IBM covered my hotel expense for this show.

Recently, the company has undertaken a new capital financing structure. Previous private equity investor Apax Partners (and others) sold their stake to Francisco Partners in June 2012. In December 2012, the company took a $30 million investment from Accel Partners. Now, in January 2013, Plex has a new CEO, Jason Blessing.

Jason and I first came to know each other from his days at Taleo (although I maintain I might have known him when he was with PeopleSoft). The fact that many of the firms that Jason has worked for have been acquired by Oracle is strictly a coincidence.

Late last week, I got Jason on the phone and we chatted about all things Plex.

Jason took the Plex CEO role as its brings him back to Michigan, where was raised, and to ERP (he apparently did a lot of ERP implementation work early in his career at PriceWaterhouse).

Where he'll drive growth

The $30 million investment from Accel Partners is the cash component of their new growth strategy. Jason outlined several vertical industries that the company is planning to target--each builds off of knowledge, intellectual property, and experience gained in serving the automotive manufacturing sector. These new verticals include: electronics, food & beverage, and civilian aerospace. When I probed as to a possible run at medical devices, he countered that the regulatory, documentation, and reporting requirements for that sector and the pharma and defense aerospace sectors were significant, and those spaces would not be expansion markets for Plex at this time.

Jason also added that the company will be making moderate investments in sales and marketing while expanding their overseas operations. This makes sense as Plex customer sizes keep growing. Plex has sold well to Tier 2 and 3 automotive manufacturers, and the Tier 1 manufacturers have noticed this. Several of them have engaged with Plex, and as they do so, they will undoubtedly pull Plex into more geographic markets with ever bigger customers.

Why cloud ERP

Jason was interested in Plex as he sees the cloud deployment model being especially attractive to SMB manufacturers. The fact that other major software firms, like Oracle and SAP, are now focused on cloud should bode well for the space overall.

Plex investors on new CEO

Jason stated that the current investors (e.g., Francisco Partners and Accel Partners) specifically want him to move Plex up market into larger accounts. They apparently believe that his experiences at PeopleSoft, Taleo, and by extension, Oracle, give him insight into how to sell and service larger customers.

I asked him if that also means that Plex will need to supplement its skillsets/employee contingent to better serve a different, more global, and more complex prospect? He replied that some new capabilities will be needed over time.

I pressed about the ability of Plex's channel partners to meet this growing up market requirement. Jason expressed great satisfaction with two of their current channel partners, Plante Moran and Baker Tilly. He indicated that a rapidly growing Plex will attract more partners, and the company may need bigger partners to handle the larger customers.

Plex competitors

Jason believes that a lot of older JD Edwards, Infor, QAD, Epicor and other products are ripe for moving to the cloud. He also thinks that Plex has "true manufacturing execution<" and was "built from the get-go in the cloud."

My assessment

The competitive landscape for Plex is definitely heating up. For years, many of the large application software vendors chose to ignore the cloud space, and many mid-market firms simply re-packaged a hosted version of their on-premise solutions as a SaaS ERP (I call these SaaS-querades). That left much of market for a multi-tenant cloud ERP to Plex. Now, SAP has Business-By-Design out, Kenandy is here as is a robust Rootstock. Other mainline vendors have found the cloud, too, and will doubtlessly turn up the competitive pressure on Plex. Jason will need to make continued enhancements to the technical architecture (e.g., expand the PaaS capabilities) to keep the product competitively positioned ahead of advancements from others.

Some new CEOs inherit a mess and are expected to turn it around overnight. Some get handed a firm at the peak of its market popularity and must conduct an orderly transition to a smaller firm. Neither of those jobs are very desirable. Jason got handed to him a pretty solid firm with solid growth prospects, good buzz, and lots of happy customers. His challenge will be to expand the SMB market penetration, expand the verticals served, and grow globally. Each of these have their particular challenges, but if he's smart with the development of his team, is particular about how the capital is deployed, and executes the global expansions just right, he should do just fine.

I hope he got a good equity package as part of his deal--he could do well with it.

There’s a lot of aspiration pouring out these days regarding analytics and, like the unicyclist to Mt. Everest, it will never happen for most firms. Why? Most firms are still living with kludged technology that delivers data with passable but not extraordinary results. Somehow, the same people that delivered this are now supposed to turn pigs’ ears into silk purses with the magical help of analytics software and maybe some big data thrown in, too. Call me skeptical, but I don’t think it’s always going to work.

Many companies may be overlooking their real analytics opportunity: common sense analytics. These are the first generation analytics they ought to be implementing instead of the shoot-for-the-moon stuff of motivational dreams. Here are some examples of the common sense analytics companies should already be doing (but, sadly, some firms still aren’t):

• Look before you promote – Before a company promotes someone to a highly visible, global executive role, shouldn’t the firm look for evidence that this person likes to travel and do public speaking? A quick glance at the person’s Facebook profile might shed a huge light on the person and whether they’re a private, shy person or a xenophobe who will not travel.
• Pay attention to customer history – I had a phone plan with a major cellular carrier for 10 years. I kicked them to the curb last month for a couple of reasons but the final straw occurred when I returned from Europe in late November. No phone on this plan had ever, in the 10 years we had service with this carrier, had a data plan. Never. While in Europe, one of the phones was set to use data services with a European cell carrier. Upon return to the U.S., the data option was still on and in minutes some 20 mb of email was downloaded to the phone. This triggered an $21 additional charge to the monthly bill. After calling the US cell carrier to see how to prevent this, the carrier offered no suggestions and left me to stew. If an analytic app had seen that we never had a data plan and had not downloaded anything in 10 years, couldn’t it have proactively stopped the downloading until I would have authorized it? No, that would make too much sense.
• Where did our customers go? – I’ve dropped my main airline carrier for long periods of time. I’ve gone six month without using the carrier and I do so when the carrier has failed to deliver appropriate service or has blown me off one time too many. Interestingly, I’ve never once gotten an email or a call from this airline. Had I died or changed jobs? Did I switch carriers? Why?    No, this simple data element wouldn’t be hard to capture if only airlines had an analytic app that could access something like a frequent flyer system that maintains a rich history of a flyer’s patterns. Hmmmm, I wonder if any airlines might have a frequent flyer system whose data they could analyze?
• Check before you offer – It really sets me off when Marketers think I might need something before they’ve done the slightest checking to see if it is even relevant. Why my broadband provider wants to sell me increased download speed when we’ve never needed it, is perplexing. Why some hotel chain thinks I want a timeshare condo in Orlando when I’ve never owned a timeshare and would never vacation in Orlando, is perplexing.  Why are car dealers trying to sell an elderly relative who hasn’t been able to drive for many years a new car/truck, is perplexing. When mainstream businesses make this mistake, they come across as seamy as Internet email spammers.     

What businesses need are common sense analytics – not the kind that require triangulating information from weather satellites, cell phones, third party credit databases and vast feeds from every participant in the company’s supply chain. No, let’s see some real progress with common sense analytics.  What are the guidelines for developing these analytics?

• Before analytics and IT, how did businesses and management know that….? – When you ask this question of business people, you get some great, easy and inexpensive analytic application ideas. For example, how did people know a competitor was failing years ago? They’d see a flood of resumes hitting their inbox. They would notice desperation pricing by a competitor or would hear of quality or delivery problems from this company. How did executives sense a key employee was about to leave? Was it because this person, usually a paragon of attendance, was now suddenly out ‘sick’ a lot? Was it because this person has exercised all of their stock options? The clues are already present for most firms and many problems. You just have to ask one of the older workers how they solved the problem back when.

• Realize that great analytics will require feeds from social and non-social content sources – Now, for you Facebook fans, not everyone in the world uses Facebook. Some people aren’t on LinkedIn or Twitter. Some have accounts but don’t really use them much, if at all. So, relying on these data sources exclusively is likely a mistake. If you want powerful analytics, supplement the social data with other data sources like: transaction data, interviews, phone calls, etc. Sometimes, the old methods can provide additional insights as well as insights into certain demographic groups that may be under-represented in a particular new media source.
• Beware of subversion in social and other data – Teenagers have been misreporting their sexual activity levels to researchers for decades. Don’t worry so much as to why they lie, just know that they do. People leave all kinds of bogus data out on the Internet. Adults on dating sites may provide some of the least reliable information of all. Apparently, there’s a cottage industry of people having long-term dating relationships with non-existent people via social media (e.g., Catfishing). So ask yourself, is it worth targeting a non-existent person for a sales promotion? I rarely provide the entire truth on surveys as I don’t want certain data to come back and bite me as part of an identity theft gambit.  So, how good can analytics be if based on such corrupt data? This is why old and new kinds of data and analytics must be used as well as a healthy heaping of common sense. Verify everything before commiting your firm to a course of action.

Seriously, the best analytics are solving problems businesses have always had. It’s just that now (with low cost analytics, in-memory computing power/speed and access to big data sources), businesses of all sizes can get more accurate answers, more frequently and at lower cost.  These technical innovations are impressive yet they shouldn’t be viewed in isolation. Common sense is still needed – and – from where I sit, businesses need a lot of it.

If you’d like to see where this is especially challenging, ask an HR recruiter how easy is it to find qualified, technical people. You know – folks who are not just proficient but amazing in three of today’s hottest programming languages or are brilliant research scientists, electrical engineers, etc. It’s hard to recruit for open positions in Accounts Payable one minute, a shipping clerk the next, a training coordinator after that and then have to find some seriously deep, specialist in a field that almost no recruiter understands. Let’s face it – if a recruiter has to ask what JAVA, SOA and other acronyms stand for, the search candidates they produce could be problematic. (If a recruiter thinks someone with Java skills is someone who once worked at Starbucks, your firm has a real problem.)

Which brings us to today’s announcement from HireVue.   While known initially as an HR video interviewing firm, the company continues to push the envelope as to what recruiting really should look like in a cloud-mobile-social-video world. Their latest re-engineering effort has been to re-imagine what technical recruiting should look like.

In a nutshell, HireVue has determined that technical positions are the most difficult for recruiting personnel to fill and maybe the most frustrating for the line of business executives doing the interviews. What they’ve found is that recruiters may not be able to make the needed judgment calls to weed out candidates that don’t possess the needed technical skills or are trying to fake their way through the recruiting process. Either way, unqualified candidates clog up the recruiting pipeline and waste a lot of executive time. And, as a result, executives that feel their time was wasted by these unqualified candidates will have a negative opinion of HR recruiting.

HireVue briefed me on their new CodeVue solution the other day. Like the video interviewing solution they already offer, recruiters and/or business unit executives can ask a number of pre-defined questions that the candidates must respond to via their personal computing device. Answers may be typed in some cases (e.g., choose an option from a list of possible answers) or provided via video interview response. CodeVue also permits recruiters to embed any number of code challenge questions where interviewees are asked to read the sample code on the screen and then type the remaining code needed to achieve a specific outcome. CodeVue has a code grader/compiler that assesses the quality of the code entered (within the three minute time window permitted for the response). Employers can schedule a video question behind the code challenge where the candidate must immediately describe “How” they solved the code problem.

Right now, HireVue has more than 60 code challenges in its library with many more under development. These challenges cross some 13 programming languages.

Business unit/IT leaders will like the solution as only the candidates that can actually write the code get moved along in the interviews. Employers can also populate the interviews with knockout questions that further reduce the number of applicants to get to the most qualified persons as fast as possible. Business unit/IT leaders only need to spend time reviewing the interview results of the best candidates and do so in the most expedient way possible. The internal HR/Recruiting organization need only refer the very best candidates for in-person interviews. Total interview time is minimized with better overall results. HR wins, the business unit wins, etc.

There are several traps in place to prevent cheating as applicant fraud is something that is very costly and frustrating to employers.  The short amount of time that candidates have to respond to the problems/questions makes it harder to do. There are other techniques used but I will keep this confidential.

If you still believe that recruiting is best handled via want-ads, reviews of paper based resumes, etc., then your recruiting processes may be significantly out of date. Worse, you may be drowning in needless work when it comes to assessing personnel for technical positions.

If you hire technical people, even if you don’t use video interviewing, you might want to get your HR representative, your recruiter and your managers together to at least try a trial of something like this. It might change your view of how you view the recruiting process, how you source recruits, how you vet them, how best to use your scarce time, etc. A different perspective can sometimes be an illuminating asset to an organization.