20 December 2009

ERP Software Predictions for 2010

    Again on Panorama Consulting Group’s 360 ° Blog post on Top Ten ERP Software Predictions for 2010. Sorry, given the current economical context, excepting the eventual acquisition moves and few sporadic attempts to change something in ERP vendors’ strategy I don’t feel anything big coming for the next year. Most probably ERP vendors like any other companies will be more focused on cutting down losses, reducing the headcount, introducing one or two features in their products, maybe putting on hold some of the projects they are working on unless immediate profit is expected, the shift changing from “thinking big” to “focused thinking”, keeping the flag up.

    It’s true that the crisis we are going through stresses the importance of having tangible benefits after implementing an ERP solution, cutting down the costs, breaking such projects in easily chewing pieces in the attempt of reducing the risks and obtaining results faster, though whether phased rollouts is best approach for that it’s more a philosophical question. Even more, an ERP solution is just a piece of the puzzle, you have to consider in the end the overall infrastructure, the many other systems floating around as isolated islands, the culture of people, the maturity of the business, and maybe the most important - the means by which an ERP system could be leveraged to higher level of performance, and maybe this is the best factor considered when calculating the ROI; however you can’t achieve that if you’re not having in place adequate (business intelligence) tools and mindset to derive benefit out of your ERP system! Maybe that’s the direction CIOs have to follow – striving for performance and eliminating waste, thinking lean and green, sustaining business value.

    The crisis stressed also the importance of having in place adequate risk management, though that have been on managers’ plate since several good years, and if they ignored it until now, most probably they won’t change things over night, as some experience and again mindset is required in order to get things right.

    I agree on the increased adoption of SaaS by SMBs, though I wonder if that can be achieved at large scale, how SMBs will deal with specific requirements, how they will integrate the SaaS ERP solution with the existing systems. I don’t think the ERP and SaaS market is mature enough to address the challenges concerning the merging of the two solutions, of course that don’t mean that attempts won’t be made in this direction.

    For small vendors will be difficult to enter on a market dominated of giants like Oracle and SAP, it takes lot of time and effort to come up with a feasible ERP system, maybe small vendors can better address the requirements of SMBs by offering more customized solutions, better and cheaper support than big vendors do. Everything is possible, first of all you need to have a good product, a good marketing strategy, gain customers’ trust and maintain it over time.

The right ERP software

    Reading an interesting post in Panorama Consulting Group’s 360 ° Blog on Top Ten ERP Software Predictions for 2010, I was struck by the syntagm “choose the right software for their organizations”. I know from my own experience that this is a quest for Pandora’s Box, no matter how much we like to be confident and connoisseur about it, in the end is just philosophy.

    Putting myself in the position of IT Manager or whoever implied in taking decisions related to software adoption I would ask myself: “what’s the right ERP software for my company?”. In theory things are not complicated, I evaluate my requirements and the functionality provided in the various ERP solutions, the costs involved with them, the amount of time and resources I can afford, and in the end I choose whatever may seem appropriate for my business model. It sounds simple, isn’t it? Of course, this supposing that I understand my business as a whole, its infrastructure and its culture, the issues it faces, the short term needs vs. the long term needs, that the requirements are defined upfront, etc.

    In order to be sure that I’m doing the right thing, I even discuss with the sales representatives of the ERP vendors, have maybe one or two presentation sessions supplemented by a Q&A session in which my most experienced workers from each department express their concerns, ask for details, etc. Now jumping over the fact that the presentational skills and convincing tone of the sales representative might be a decisive factor in choosing a solution, I realize that the most important ERP solutions offer relatively similar functionality, most probably the differences rely in details. Now, there are a few questions that might occur to me… How much the people in the room, who maybe never worked with an ERP system, would understand what an ERP system is about? How much can they articulate their needs, identify which are the details that makes the most important impact on the business? How much the sales representative has understood my business and the overall context? In definitive he’s just trying to sell a product, how much he’s willing to dive into my requirements, analyze them and identify feasible solutions? Actually for that a few presentation sessions are not enough, it might take weeks, a whole team of resources, multiple iterations until you’ll come up with a feasible solution. Even then, once the ERP system is in place you observe that it doesn’t look exactly with what you wanted, with what you team intended, but that’s normal for IT solutions, unfortunately.

    Sometime after Go Live, most probably the employees will understand what an ERP system is about – sticking to the processes, data ownership, more time spent on data entry and data management, unified implementation starting with the strategic planning and ending with the booking of revenue, dealing with issues not considered during implementation, functionality that is not so easy to use as expected so Excel or MS Access seems to be a more flexible solution, difficulty of changing the system and processes when needed by the business, more systems need to be integrated with it, that the 360 ° overview of the business is just a myth, and so on. From my experience I observed that the users have great expectations before and during implementing an ERP system, though the reality brings them down to earth, almost no magic behind the software the whole company was talking about, just a different way of approaching things!

    The fact is that the decision of going with one ERP solution is validated only by the final outcome considered on long term, the impact it has on the business, the overall adoption and the degree to which it will fit the business needs, the flexibility of modifying it when needed. On the other side, if the ERP system doesn’t impact the business in a negative way, then the system can be considered successful, even if creepy things come to the surface from time to time. Was it the right decision? That I will not know for sure unless I’m moving to another ERP solution and I can compare the outcome with what I had in place, otherwise we just consider hypothetical situations. Actually the comparison might not be well founded because in such situation I benefit from the experience of already implementing an ERP system, I better understand the issues I was confronted with and eventually better address them in the new implementation.

    The important point I would like to highlight is that a company needs to have a certain maturity when going with an ERP solution, situation that needs to be addressed by vendors or/and organizations themselves in order to increase the chances of success, otherwise the mixture of acronyms like ROI, CIOs, SMBs, SaaS, ERP, CRM in vision philosophies are just nice stories to read before going to bed. Of course the learning by doings syntagm can be applied to ERP implementations too, though the costs are too high for such a scenario. The state of art in ERP world – the vendor wants to sell you a product and profit on customer’s expense also after doing that, often not being interested whether the product fits the purpose as long more issues lead to be more income, while on the other side the customer wants an affordable flexible solution that allows bringing the business to higher level of performance. Most probable something must be changed in how the two parties work, and this might be, at least from my point of view, the most important challenge for the next years.

05 December 2009

A different introduction to databases – Part I

    So, you’ve heard the reporting guy or somebody else talking about getting some data or a report from the database, or you found out that you can’t use one of the fancy applications your company has in place just because the database is not available. Dam, that database must be something important! Thus you may wonder what a database is, and, with a few clicks, you find out in Wikipedia what all is about, a database is “an integrated collection of logically related records or files consolidated into a common pool that provides data for one or more multiple uses” [1]. This definition doesn’t clear up things at all, isn’t it? Terms like “integrated collection of logical related records” or “files consolidated into a common pool” even if they seem semantically right seems to be hard to digest. Ok, without pretending to give a better definition than the one from Wikipedia, I would define a database as logical and physical structure used to contain data in a consistent form. For sure, this definition won’t revolutionize the world of databases, and most probably might be other similar definitions out there, better formulated and sustained.

    Actually also this definition might need some clarifications, I’m talking about a logical structure because there is a logic on how the data are stored, physical structure because the data are stored on a physical device (e.g. computer memory, hard disk or any other type of storage device). I used contained and not stored, because containment imply certain control over the structure in comparison with the simple storage of data. Ok, this being said, somebody would question: hey, also a delimited text file can store data in a consistent form, what’s the difference between a database and a delimited text file? At a first view, I would say the difference resides in context, in the fact that a database “exists” in the context of a database management system (DBMS), a (software) system that provides a mechanism for storage, retrieval, modification and management of data. There are DBMS that store their data as delimited flat files, known also as flat file database, however such simple structures hardly cope with the requirements of modern DBMS, that need to provide a scalable, reliable and secure storage system. Why is a delimited flat file a simple structure?! This affirmation needs indeed some further explanation…

    A delimited text file is a text file in which the chunks of data are delimited by special characters and stored in a tabular format with rows and columns, much like in Excel if you want, though Excel offers a better visual structure that facilitates data visualization and manipulation. The delimited text file supposes the existence of at least two types of delimiters, one to delimit the columns, usually a colon, semicolon or pipe, and one to delimit the rows, usually a combination of carriage return and line feed. Unfortunately such a structure imposes one important problem: what happens with the chunks of text containing a character or a set of characters used already as delimiters? Therefore the text is typically encompassed between two quotes, and in case a double quote exists already in a text, then the contained double quote it’s duplicated facilitating thus text’s interpretation. There could be even more problems, given the two systems of writing a number, comma versus dot, could be tricky to use a comma delimited file, semicolon or tab would be a better delimiter. An application that reads such a file would need thus to understand the delimiters used, and even more the format in which numeric and date values are stored, of whether the first row contains the column names, being required to store such metadata in a second file.

    In contrast a database stores its data in multiple tables designed around logical entities (e.g. Vendors, Customers, etc.) with attributes (e.g. Name, Address, City, Country, etc) translated into columns and the actual values forming a record in a table, resulting thus again a row/column structure for each table. In a flat file database, each table is stored in one file, while in a typical database the tables are stored together in one file, this implying the existence of another delimiter for tables themselves, not to mention that each table has its own structure with different column names, though the columns names, their data types and several types of metadata on columns and tables are stored in auxiliary tables.

    And that’s not all, normally a simple search functionality might be enough in order to find a value in a text file, though for databases that’s something complicated to achieve because first of all a “search” is performed against one or more tables, and even against two or more databases, thus first of all, for efficiency, is needed a mechanism that reflects where a table begins, secondly it makes sense to have an explicit and/or implicit unique identifier (UID) for a record, that would allow identifying a record in a table in a unique manner. Such unique identifiers might be a combination of one or more columns, the best candidates from a performance standpoint being (positive) integer values, though text and as types of values could qualify as such too. A table could have more than one such unique identifiers, for example an integer running number (sequence) used especially for fast retrieval of records, and another attribute (e.g. Material Number) or a combination of several attributes (e.g. Material Number, Vendor, Serial Number) from a entity standpoint. One of unique identifiers, typically single attributes, is a candidate for the primary key, used by other tables to reference a record from the respective table. Why is needed such a mechanism when in theory one table can store all the data, much like in Excel fashion?! It’s mainly a question of design, storage and maintenance efficiency, being more feasible of storing redundant data in a table of their own and referencing the corresponding record from the main table, having thus a relationship between the two tables, the identifier that references the primary key of the table thus formed being called the foreign key. Even if not always feasible, the foreign key could be based on multiple attributes, fact that increases relation’s complexity, because when the data are retrieve, the primary/foreign key columns are used to merge the results from the two tables into a common result set. Even if logical, the mechanism can be become complicated, the relationship needing to be stored together with the actual data in a structure of its own, even more a reference constrain can be enforced in order to assure that references are not invalidated by the deletion of a record.

    Tables can become really big, ranging from a few thousand of records to millions and even milliards records, making data retrieval quite complex. Therefore it makes sense to have in place a mechanism that allows faster data retrieval at least for the most used attributes in searching, and that can be achieved with the help of indexes created based on one or more columns, they are stored in a dedicated structure and include a reference to the actual record. Indexes allow a DBMS to perform a search based on the columns used in an index on an optimized index structure rather than performing the search on the table itself, and this, from performance point of view, can make quite a difference for big tables.

    Data are retrieved from a database with the help of a query, a well structured statement based on SQL (Structured Language Query) standard, specifying typically the columns to be retrieved, together with the tables they belong and the primary/foreign columns used to build the relation (join) between tables, and the columns on which the search will be performed on. A query can be more complex than that, it can include other statement modifiers, subqueries, views and functions. A subquery is a query nested inside of another query, referred also as nested query, the nesting can go even several levels, making queries hard to “read” and maintain. Fortunately a database allows encapsulating a query in database objects like views, functions and stored procedures, enabling a better management of queries, facilitating also code reuse. A database view can be seen as a virtual table based on a single statement query, storing no data on its own and being used to limit the number of columns or records retrieved. In contrast with views, functions and stored procedures can be based on multi-statement code, the main difference between the two residing in the fact that functions can be used in queries, while stored procedures are executed individually, this implying also some differences on the manner they are executed; there are many more other differences between these two types of database objects, mainly DBMS vendor related.

    Another important topic in the world of databases is concurrency, handling “simultaneous” requests coming from multiple “users” and this involves access of the same piece of data by multiple users. A DBMS has to take care in the background of such scenarios, avoid when possible and address locks, restrict users the access to data they are not entitled to see or modify. The access to data and database objects is based on accounts and roles, and even if a user has accidental access to the server on which the database stored, above the binary encoding of data, a DBMS might even encrypt the data and database objects.

    As can be seen, there is a whole arsenal of database objects associated with a database, typically stored independently of the actual database that holds the data, in tables spanning over one or more databases that belong to the internal kitchen of the DBMS. This arsenal makes the difference between a simple delimited text file and a database, DBMS vendors building in their solutions even more concepts mechanism in order to address issues like reliability, accessibility, scalability, performance, security, heterogeneity and so on.

    Now, after this being said, the Wikipedia definition for a database seems to be relatively accurate, and that up to a point because relatively recently appeared the concept of in-memory database (IMDB) that primarily relies on the main memory for data storage. This doesn’t make the respective definition less valuable, though frankly I prefer my own definition, hopefully I haven’t left anything important out of it.

[1] Wikipedia. 2009. Database. [Online] Available from: http://en.wikipedia.org/wiki/Database (Accessed: 5 December 2009)
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