Will you choose your next ERP from an App store?

8th October 2013

For 2013 alone, Gartner estimate that there will be a staggering 102bn Apps downloaded to mobile phones worldwide.  With 7bn mobile devices in circulation that equates to an average of 15 Apps per device!  Unsurprisingly, the phenomenal success of the mobile App stores has not gone unnoticed by financial software vendors such as Oracle, Salesforce and FinancialForce.com.  And as they set out ahead of the pack to establish their App stores Michelle Fabian, FSN writer asks, just how much influence could these App stores have over the evaluation and selection of enterprise systems?

 

 

While Oracle launched its Oracle Cloud MarketPlace only this month at Oracle Openworld, Salesforce.com launched its AppExchange back in 2005, prior to even the launch of the Apple App store in 2008.  This advanced thinking by Salesforce.com appears to have paid dividends with the announcement only last week that it has achieved its 2 millionth download, (1 million of which were realized in the last 2 years) with a new App being downloaded every 40 secs.

The milestone reached by Salesforce.com is evidence that end-users are becoming more aware of the applications on offer and along with this success the consumption of financial systems Apps is also becoming more commonplace. For example, FinancialForce.com, a financial systems vendor in the Cloud leverages the AppExchange to ensure that its customers, could if desired, have a range of complementary applications to work with, such as Rootstock.com for manufacturing.  But the evolution of a mature App stores signifies much more than that. They are also the hallmark of creativity and innovation.

Recently, following an FSN interview with Frederick Laluyaux, CEO Anaplan, the FSN LinkedIn discussion forum was asked “Is all the innovation taking place in the Cloud?.”  One theme that came to light, was that not all the innovation is necessarily being driven by the vendors themselves, but partly by end-users and 3rd parties, through the publication of custom built Apps, released on the vendors’ App stores. In fact Anaplan has announced plans to launch an App store in which it users could share custom business models – perhaps for reward.

Customers and 3rd parties offer a refreshing perspective from the traditional vendors, driven by the need to constantly innovate to overcome specific organizational or industry challenges.  They are operating where the action is taking place, tackling any problems head on, creating original Apps on the fly to propel their businesses forward. 

In addition, App stores allow organizations to extend their core services and leverage more from their underlying systems, and in some instances for free!  They provide the freedom to tailor their underlying systems to support a specific industry (from Financial Services to Not for Profit) or enhance a process, (from ERP to customer service).  Organizations once at the mercy of vendors awaiting new functionality built into long awaited upgrades are now able to seek out innovative Apps on demand which may satisfy their need ahead of any upgrades.

And since integration no longer presents such a formidable challenge, with Apps built purposefully for the platform there is less requirement for extensive customization or costly IT intervention.

But understandably there is some nervousness from organizations over the integrity of 3rd party developed applications as well as the quality of the software solutions, training and support on offer within the App stores.  While customer reviews feature prominently, vendors try to put organizations at ease with assurances that they conduct periodic reviews of the Apps listed.  But ultimately, it rests with the end users to make sure they understand the security and architectural implications of installing third-party applications with access to data. 

App stores provide an exciting new sales channel for the financial software industry, a home for fresh and innovative ideas.  While, previously organizations needed to consider the industry domain knowledge and depth of the solutions on offer from vendors, the importance of these stores may mean those vendors who previously would have failed to make the ITT list (Invitation To Tender) may claw their way back based on the strength of the Apps within their App stores.

And while there may be concerns over the quality of customer developed Apps, such challenges are nothing new for pure play Cloud vendors such as Salesforce.com.  Reaching the 2 million download mark is clear evidence that App stores represent the future. 

The challenge for organizations is what value to place on the App stores and how to compare what is on offer.  At present the marketplace is relatively immature, however Salesforce.com already boast in excess of 800 Apps and this is only going to increase over time.  Clearly the underlying ERP systems are an important consideration, they form the crux of financial systems and have traditionally been the key consideration.  However, as the App market matures these are likely to become a valuable resource and organizations are going to want to be secure in the knowledge they are invested in a platform which is bursting with innovation and tools which can give them the competitive edge. 

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