An exec at a failed on-premise ERP project told me he was delighted the project crashed. I thought he was joking. No, his later SaaS project alerted him to the fact that even if his on-premise software had worked, he would have continued to pay premiums on on-going maintenance, hosting, upgrades, application management – it would have been an on-going car wreck. Now, his SaaS provider bundles all that in his annual budget. And for his industry, the SaaS provider has much more relevant and recent functionality.
That made me think, how many so called successes in the on-premise world – success declared loosely as going live on the software, irrespective of the implementation time or budget – are actually failures when you look at total cost of ownership. And that is just to keep that system up – a system designed 20 years ago, or even further back in the pre-internet, mobile, sensory world of today.
I was reminded of that episode when NetSuite told me about a recent customer, Dent Wizard, which specializes in car cosmetics including Paintless Dent Repair services. .
After it was acquired in 2010 by a private equity firm, Dent Wizard needed to transition off its legacy IBM AS/400 environment. They looked at some on-premise alternatives, but decided on doing a cloud implementation on NetSuite. Now, when they talk about NetSuite, they talk about not having “to manage servers”, and as a consequence, running lean IT, even as revenues have grown 60% since they started implementing NetSuite.
Dent Wizard also describes the ease of integrating their field service technicians, who make up 80% of their staffing. The efficiencies are showing in customer invoicing (1.8 million invoices a year) and inventory management, which the technicians can manage through their mobile devices.
A number of customers groan at the thought of another ERP implementation having gone through the pain of their on-premise project. Cloud implementations, especially when the vendor’s services teams are involved, are showing to be far more pleasant. During the recent quarterly earnings call, NetSuite CEO Zach Nelson called his services organization “among the largest, if not the largest midmarket consulting firm in the world” reflecting the fact that his services team is delivering lean implementations to many of his customers.
It’s NetSuite’s version of “Paintless Dent Repair” for the IT world where so many on-premise ERP implementations are the equivalent of a major accident pile-up that clog up customer systems “highways”.
(Cross-posted @ Deal Architect)