When you think you have it all figured out and everything under control -think again.   Your evaluation of the situation has likely been developed without proper consideration of the biases that each of us invokes in decision making and evaluation situations.    In Part I of our series on Risk Management, “Don’t Become an ERP Horror Story”, we identified how failing to recognize and address decision and assessment biases can repeatedly derail proper ERP risk management.   In this blog, we explore the concept of cognitive biases and what steps to take to reduce their influence.

Project risk management is about making decisions regarding uncertain events that might impact the business or the project in a negative or positive way.  It involves estimating the probability that these events will occur as well as the potential magnitude of their impact.  These assessments and decisions on mitigation can be erroneous for any number of reasons.  In my experience cognitive biases are often times at the foundation of these assessment errors.  Cognitive biases are psychological tendencies that cause the human brain to draw incorrect conclusions.  The concept of cognitive biases as it relates to decision making was introduced in literature in 1972.  Since that time, more than 100 specific biases have been identified.  These tendencies can be a product of experience, social or cultural environment, or motivational. Continue reading →

Senior executive engagement is always listed as high on the critical success factors of any ERP implementation project.   Often times, how this engagement should manifest itself in the execution of the program is unclear.   Here is the simple answer: Risk Management.

Good program management practices in risk management focuses teams on the following two aspects: treating risks that they can control and working on contingency plans for risks that are uncontrollable. It has also been demonstrated that people are more likely to accept risks they view as controllable and voluntary.  It then stands to reason that by increasing the span of controllable risks there is a higher probability of overall program success.  This expansion of control can be realized through exercising the appropriate level of executive engagement.  In this post, we will look at some of the nuances of structurally engaging stakeholders / executives in the execution of the program risk management processes. Continue reading →

If you are one of Adobe’s highly valuable enterprise customers, it is my expectation that your Adobe Account Executive has started to push a migration to Adobe’s Enterprise Term License Agreement (ETLA).   Mark Garrett, EVP and CFO of Adobe, made it very clear during Adobe’s recent Q1 earnings call that this will be a focus for Adobe’s sales team in Q2 and throughout 2013.

Quite simply, an ETLA represents Adobe’s contractual means to move all of their enterprise customers to a subscription based licensing model.  The writing should have been on the wall (and it was at UpperEdge) that Adobe was going to push their enterprise customers in this direction after Adobe introduced the subscription only offering Creative Cloud to the consumer market last year. Continue reading →

In “Don’t Become an ERP Horror Story – Implement Solid Risk Management”, we contend that project risk management is the silver bullet in the successful implementation of a business transformation and outline 5 areas where risk management can go off the rails:

1. Failure to establish the proper context of the risk management process
2. Neglecting to engage senior stake holders in the risk identification
3. Not recognizing and addressing biases in the identification and assessment process
4. Failure to account for risk interrelationships and the potential amplification of risk
5. Lack of rigor in tracking and treating risks.

In this post we dig deeper into the first of these items: failure to establish the proper context.

There are a number of good standards and practices prescribed to effectively manage project based risk. PMBOK (Project Management Book of Knowledge) and ISO 31000 Standard: Risk management – Principles and guidelines, are two examples. A gross simplification of the processes is as follows:

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If you have not been following the software market as closely as UpperEdge, you may have missed the sudden shift in messaging from traditional on-premise software vendors like SAP and Oracle. It was not that long ago when these providers were mocking the practicality of cloud applications for the large enterprise. These providers are now pushing a new message: the cloud is here to stay and you will all eventually move to our cloud solutions. Not only are vendors embracing the cloud, they’re salivating over it to the extent they have even changed how they report on it to Wall Street. For tips regarding your upcoming dealings with your cloud provider, please be sure to check out our blog post “3 Keys to Negotiating Cloud Agreements”. Below are some of the key reasons explaining this behavior change and the potential impact to customers.

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Nowadays it is both impossible and impractical to avoid the Cloud. Regardless if your organization is a growing SMB or finds itself within the Fortune 500 or Global 2000 list, it is highly likely a cloud solution is currently under serious consideration or has already been implemented. Many different types of cloud offerings have been implemented such as Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS) as companies have been drawn to the cloud’s promises of agility, flexibility, reduced costs and faster time to benefits realization. The debate on whether these promises are delivered is for another post, so please check back in with us in a few weeks as we debate the cloud’s impact on fostering and sustaining vendor lock in.

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We’ve received a lot of calls from organizations concerned that the cost/value ratios of their existing maintenance/support contracts are skewed. This is not in the least surprising because the increasingly high cost of SAP and Oracle support fees has naturally driven organizations to seek our advice on cost effective alternatives and negotiation strategies. During a slow economy where organizations are faced with finding ways to reduce expenses, this trend is even more pronounced. From what we’ve seen, it is evident that third party support is an excellent option for many organizations. However, it is not right for everyone. In fact, for many organizations the potential savings are not worth the tradeoffs.

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We predict that SAP will begin annual support fee increases by 2017. This prediction is not something SAP has announced nor is it based on leaked information. It is a prediction based on an analysis of the factors detailed below.

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Over the last two decades the road to business process transformation has been cluttered with ERP implementation disasters. Over the last 5 years we’ve seen the following incidents:

• Waste Management sues SAP for $100M
• Overstock.com Restates Earnings Due to ERP Implementation
• Levi Strauss Earnings Drop 98% with ERP Implementation
• Marion County California Starts Over and Sues Deloitte Consulting for $30M
• Avantor Sues IBM for Implementation Disaster
• US Air Force Scraps ERP Implementation After $1,000,000,000 in Spending