New Zealand companies have a weakness for big, complex business software products with long implementation times, when something smaller and simpler — and often locally made — could get them early benefits in essential areas, says Intergen managing director Tony Stewart.
It sounds like the expected pitch from a company that provides just such smaller-scale and simpler software — and one that is, by Stewart’s own admission, facing a slow market. Intergen is the resurrected web-specialist formerly known as Glazier, which was temporarily part of the Advantage Group.
But Stewart insists he has seen the business from both perspectives, having been involved in the past in promoting large solutions like the ERP classics SAP and PeopleSoft, and the accompanying large-scale consultancy.
He says there is a real blind spot in the thinking of medium-scale organisations here. “If New Zealand is going to grow, we’ve got to think about now. We have to think about the outcome, not the process,” he says, alluding to a long and complex process of company-wide requirements assessment and development.
Much of the functionality that organisations unthinkingly take on with a big solution is not relevant to real needs and outcomes, he says. “You get systems with sophisticated document workflow when there are only four people [involved in the relevant area] and they’re all in the same office. Instead of passing the document to the person at the next desk, I put it into The System and wait for him or her to access it.”
Could user companies simply be providing headroom for future growth and enhancement of their own business practices? Often New Zealand companies find the advanced features they need when they grow are not the ones they thought they might need at the beginning, Stewart says. Buying them now is a false investment. It is better to start small and deal with the essentials, make the business work better and earn more profits. “Then you’ll have the money to spend on the advanced stuff when you know what you need.”
Companies may be driven by the lure of “best practice” and “best of breed”, “but you have to ask, ’best for whom?’” What is best for a worldwide market and best for the vendor, might not be best for a New Zealand organisation.
What about the vaunted international experience of the big vendors and big consultancies? It can be got here, Stewart counters. A business can get an increasing amount of that knowledge and experience from reports and case studies available online from reputable services.
One basic fear is over the financial security of a small local vendor as against a SAP or a PricewaterhouseCoopers, he acknowledges. But the real criterion behind such statements, he says, is: “If the whole thing collapses, do we have someone big enough to sue?”
Most vendors nowadays, big or small, have indemnity insurance against such claims. “So you’d effectively be suing the same insurance company either way.”
It’s hard to see how to get the lesson he preaches across to potential customers, he admits. One tactic Intergen uses is to hold “twilight seminars” every two or three weeks, where customers and prospects get to discuss a particular business or technical topic or hear some case studies from previous customers. “The answer is to talk to people about efficiency and value for money.”
Is a smaller solution necessarily that much cheaper if it still has to have the same essential functionality? The money saved is not so much in the cost of the software itself, Stewart says, but in paying for consultancy to develop, or at least accommodate less necessary features, which often need to be configured even if they are not immediately used, and in maintaining a complex system in the long term.
With a slowdown in the economy, are businesses likely to turn their attention towards smaller cheaper solutions? Sadly this does not seem to be so, Stewart says. Rather than cutting their cloth, businesses are postponing moves, expecting conditions to be better “next year”.
“January is going to be a very telling point,” he says. “Will all those projects that were sidelined to next year get started when they realise it is ‘next year’? Or will we start to hear ‘next quarter’?”