I continue my discussion with Victor Naidu. He views both ERP and the web as providing components for companies to build innovative business solutions. We attempt to dissect how.
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In this podcast (download iPod compatible, 49MB), Victor Naidu and I continue our conversation about innovating ahead of the curve. A surprising twist Ramsoft took in the late 1990's was to get into the Enterprise Resource Planning (ERP) business. ERP is essentially a form of packaged software for the enterprise, and one might not think much innovation is involved. Remarkably, we then relate ERP to tying together components over the Internet. Highlights of the conversation include:
- ERP filled a gap in the market place, one of Victor's innovation themes, for companies wanting to avoid the Y2K problem and also get out from under the increasing maintenance costs for their legacy system.
- Quite a bit of customization is involved in installing ERP systems. Companies might pay $1 Million to purchase the software but $10 to 15 million to customize it.
- The high cost of customization frequently comes about from companies' attempts to alter the software to match their specific business practices. Little wonder that Nick Carr suggests that a major way to trim IT expenses is to minimize customization.
- Victor views ERP as just another means of rapid application development to create services that meet company needs.
- Now, these sorts of services are starting to be created over the Internet.
- Victor's observation is that the Internet enables true global sourcing of business services. See our conversation with Jimmy Hsiao for a discussion of technical and cultural limitations on that observation in the case of China.
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