Salesforce has seen a decade of tremendous growth, expanding from being a CRM vendor into the space of service and beyond into the Salesforce ecosystem. Wave Analytics, Big Objects and other new features may allow Salesforce to grow it’s ecosystem even further. However, every good growth story is bound to come to an end.
In order to further penetrate markets, Salesforce is horizontalising it’s sales structure and announced vertical solutions such as the health cloud or the financial services cloud.
Commentators doubt that relying on partners and takeovers to build horizontal solutions can be sufficient.
There is a shortfall which is not addressed in this approach: Horizontal business processes are not 100% industry specific. Instead the business processes chains in verticals often consist of cross-industry best-practice processes. Human capital management and supply chain management are examples of cross-industry processes, that might need some horizontal adoption, but they are clearly not horizontal. These cross-industry processes are generally called ERP processes. The shortfall of all partner solutions is a lack of coherence of standardized ERP processes which are available cross-industry. Even worse, the Salesforce ISV model is encouraging partners to build their own objects rather than building upon Salesforce objects. It would be better if central objects provided a common ground between solutions such as financial force, vertical solutions and ISV solutions. These objects could be called ERP.com.
Salesforce success is not god-given. Competitor’s leverage Salesforce strenghts the same way Android mimicked iOS. Dynamic ERP vendors like Infor have adopted the Salesforce Cloud model including chatter (there called Mingle) and analytics and see more and more sales in comparison to SAP and Oracle.
It is time for Salesforce to define more central objects as a common framework for all horizonal solutions. That is, Salesforce is to define realtively lightweight objects with few standard fields to enable ERP.com. It is advisable to equip Salesforce standard objects rather with more features than less, such as business processes and assigment rules. For ISV partners / custom objects it is not possible to leverage these features to your own objects, which can be a real drawback. Even standard objects can benefit from more business process and rules support. For example, almost all large B2B enterprises have processes for creating and retiring Accounts in place – yet we are waiting for Salesforce to give us “account processes” similiar to lead or opportunity. Salesforce ideas is great in driving commonly “missed” features, but not for innovations.
There is multiple options for Salesforce to get fast access to cross-industry business processes in order to build ERP.com:
a) Allow partners to contribute objects into the Salesforce core. The standard idea voting process is not suitable for this kind of innovation
b) Take over a company that is specialized on ERP business processs template libraries.
c) Take over an ERP vendor with process know how and port the core of their objects/processes onto the Salesforce platform
Contributions – Passing objects into Salesforce core
The open source model does not need explanation to the reader. Salesforce is making internal use of opensource, also for example to drive the Aura framework. Forbes magazine has benefited by allowing gifted invividuals to contribute to their magazine. In order to grow into the ERP space Salesforce could allow contributors to pass in objects into Salesforce ERP.com in a managed fashion.
Which company to take over for process template libraries
For example, SAP’s early success with R/3 was partially due to their close partnership with IDS Scheer and their template libraries, which lead to the creation of SAP business process builder and Aris. For exmple, there is small companies around in Germany – mainly in SAP space – who own process libraries.
Which ERP vendor to take over
The time for merger is good. Interest is near a low in many thousand years and listed companies can swap new equity for the shares of the company taken over. Not only in the tec space (Dell-EMC) but also in energy (Shell-BG Group), beverages (Anhaeuser-Busch – SAB Miller) we see companies expanding their market share before the next economic downturn. My favourite is a SAP takeover by Salesforce, with a subsequent port of the complete SAP business processes onto the Salesforce technology stack: Why Salesforce will overtake SAP in the next 3 Years.
Klaus Tulipan
