Category Archives: Open Source

Democratizing Innovation vs. Crowdsourcing

Crowdsourcing, as I noted in CrowdSourcing (Purchasing Innovation VI) and Cambrian House: Crowdsourced Software, which can be defined as the process of delegating various tasks for which you do not have the manpower or expertise from internal production to external entities or affiliations of networked persons with the expertise, access to, or raw capabilities that you require, allows you to accelerate product development lifecycles and innovation by taking advantage of the masses.

Democratizing Innovation, the title of a book by Eric von Hippel, is when users develop solutions and manufacturers base their new product ideas on the examination of user-developed solutions as well as their needs. It is the intersection of the emergent-solution and emergent-market model where individuals innovate for themselves (with steadily increasing quality and steadily decreasing cost using steadily improving tools that are becoming cheap and ubiquitous) and manufacturers learn to rely on users for innovation prototyping and the collaborative filtering efforts of user communities as the basis of their marketing research.

The concept of Democratizing Innovation is discussed in an interview between Eric von Hippel and Tom Austin of Gartner, that, unlike most of Gartner’s offerings, is free for anyone who wishes to read it. The interview, which is quite lengthy, discusses various aspects of Democratizing Innovation, and includes references to open source and user-centered innovation (which are fundamental components of crowdsourcing), but the most interesting aspect is the reference to a concept of an “intellectual commons”.

Eric von Hippel states that he believes that many fields are on the way to building an intellectual commons, which is increasingly becoming a viable substitute for intellectual property protected by patents and copyright and that, over time, information protected by intellectual property law as a monopoly will only survive in increasingly isolated corners of the economy since intellectual commons will eventually dominate. Interesting proposition. I hope it happens … which should not be a surprise since I am all for the abolishment of software patents as well as much stricter controls on the patent process. (For example, I would argue that a patent should not be granted unless a panel of experts in the field agreed that the invention contained within was indeed innovative. Considering Genrich Altshuller, the founder of TRIZ, found that, on average, only 20% of patents have somewhat inventive solutions, only 4% of patents contain a new concept and 1% a revolutionary discovery, it should be obvious that at least 75% of patents granted should never have been granted.)

But I digress. We’re talking about crowdsourcing and democratizing innovation – two concepts that look eerily similar – despite the fact that the Gartner interview does not even mention crowdsourcing. After all, both are based on user-centered innovation, and the emergent properties of a social collective which will slowly redefine productivity and innovation in this modern era.

We’ve left the world of Marshall McLuhan where The Medium is the Message and have entered the world of William Gibson where it’s impossible to move, to live, to operate at any level without leaving traces, bits, seemingly meaningless fragments of personal information. But that can be a good thing. We can leave more than traces and meaningful fragments of non-personal information as well. Others can do the same. These fragments can be combined into pieces, pieces into images, and images into collages that can be used as the foundation for new innovations. The future is here. It’s just not widely distributed yet.

It’s … It’s … It’s … Coupa-sonic!

The press-release hits the wire later today, but ISM started yesterday, and thus your chance to see the new version of Coupa‘s Enterprise Procurement Platform is here! It’s not only Purchasing Simplified, it’s the next evolution of on-demand procurement for the small and mid-sized enterprise.

The enterprise version of Coupa not only supports the procurement cycle from end-user requisition through delivery confirmation, but also supports approval hierarchies, attachments and automatic PDF creation, punch-out support, asset tagging, multi-way matching, and even RFQs! (I know, I know … everybody and their dog supports RFQs these days, but how many people include this basic e-Sourcing functionality inside an e-Procurement system at no-extra cost? And how many are designed with the straightforward needs of a SME in mind? And how many are easy to use?)

Based on Coupa’s underlying open-source Coupa Express platform, the industry’s first freely downloadable eProcurement solution, a company can be up and running on Coupa almost immediately. According to Lynell Rogeri of Cantaxx, Coupa Enterprise was delivering results within 24 hours of installation and the simple, ‘clean’, screens allowed them to be much more productive than they could have been with traditional procurement software. Furthermore, Coupa offers the breadth of functionality that gives them exactly the business process support they need.

As per the press release:

Small and mid-size companies that want a simple and affordable solution to automate their purchasing, invoicing, and eRFQ processes can now choose Coupa eProcurement Enterprise. Delivered as On-Demand or On-Premise software, Coupa eProcurement Enterprise includes full product support and offers a total cost of ownership that is 10 to 20 percent of what companies pay for traditional eProcurement solutions.

So, if you’re in Vegas, be sure to check out their ISM booth! If you weren’t able to make it, attend their webinar and check out the new Coupa website!

And if you missed any, here are the previous posts on Coupa’s product:
More Than Coupacetic
Riding the Rails with Coupa
Coupa Charges Ahead
Coupa Cabana Cafe: Open For Business
Procurement Independence at the Coupa Cabana Cafe

As well as the Coupa production chant in
Davie and the Coupa Factory

After all, It’s Coupa Time!

Riding the Rails with Coupa

As you may recall, Sourcing Innovation was one of the first blogs to bring you a detailed preview of Coupa, the revolutionary new enterprise open-source e-Procurement application from Silicon Valley. One of the most interesting aspects of this technology is that it is being built on Ruby on Rails (RoR), as discussed by co-founder Dave Stephens in this post on his blog Procurement Central.

This is a bold move considering that RoR is still a relatively new technology that is essentially unproven in the enterprise application market beyond the corporate website, but one that could pay off big time for Coupa when you consider the rapid development time enabled by RoR as compared to other enterprise platforms such as Java and .NET (where WORA* does not apply). Personally, I’m still a big Java fan, but I can see RoR becoming the platform of choice in a couple of years for a number of reasons:

  • faster development time
    following the mantra of “convention over configuration”, RoR sacrifices flexibility for convenience, allowing developers to do more, quicker, and better within the framework provided which makes basic assumptions that significantly decrease the amount of configuration required
  • MVC architecture
    unlike most enterprise frameworks that have preceded it, RoR was built on the MVC architecture from the ground up and has built in object-relational mapping capabilities
  • full stack framework
    whereas some platforms require extensions from multiple vendors, Rails provides all of the components commonly needed by most web-based systems
  • designed for reusability
    RoR adheres to the DRY (Don’t Repeat Yourself) philosophy and its framework was designed to allow every piece of knowledge in the system to be expressed in just one place
  • preconfigured application structure
    RoR automates the creation of project structure and automatically creates all files and components needed by default (no need for a fancy IDE to automate these tasks for you)
  • simplicity
    rails wasn’t designed to do everything, and its focus on the common features used by a majority of programmers a majority of the time removed much of the complexity inherent in many application frameworks; note that this does not limit its capability, as it includes a robust extension mechanism to allow development teams to add (only) the capabilities they need
  • strong community uptake
    a large number of developers, especially in the open source community, are latching onto RoR as their development environment of choice as it overcomes the shortcomings of web scripting languages such as PhP and the impracticality of J2EE for (rapid) web-based development
  • XML compliant
    so if you need to integrate with a non RoR app, no problem!
  • rapidly maturing environment
    just like Java, RoR is rapidly maturing from a neat language for cool web page development to a full fledged enterprise application development platform – I’d say it’s pretty close to Java 1.2 in terms of lifecycle, which is where Java truly became a solid language for application development

In other words, instead of jumping onto someone else’s bandwagon, Coupa has decided to jump into the driver’s seat and lead the charge in the development of eProcurement applications.

And if you want to join the RoR movement early, but don’t know where to begin, consider checking out, especially if you are in the NorthEast, for courses, resources, and best practices consulting.

*WORA: Write Once Run Anywhere

Eight Figures for an ERP? Think again. Think Compiere.

ERP – Enterprise Resource Planning – the be-all and end-all of business software – all of your transactional data in one place – everything you need to run your business – only seven figures! That was the promise.

The reality is much different. Seven figures for the software license. Multiples of that for the installation. That much again for the annual maintenance contract. In the end, it was an eight figure system – that if you were lucky recorded the majority of your transactions, in such a way that you couldn’t derive any intelligence out of the system without buying expensive modules for each business domain that sat on top of the ERP to allow you to create your financials, run human resources, create your manufacturing plans, negotiate your contracts, etc.

And that’s if you were lucky – if you weren’t, you couldn’t afford a real ERP and had to settle for a smaller, imitation system that probably only contained some set of transactions for the business unit that maintained it, was only accessible by a few people, and didn’t even meet their needs – leading to home-grown ad-hoc systems created by mavericks in an effort to do their jobs.

Either way – you probably have a solution that does not meet your needs. A system that requires more modules or third party add-ons than you can afford to be truly effective or a system that does not have the core capabilities or third party support. But what can you do? If you haven’t fully depreciated your mainstream ERP, you can’t afford to rip-and-replace, and if you don’t have one, you just can’t afford one.

You can look to open-source! And no, I’m not stark raving mad. Once the exclusive domain of big international multi-billion dollar software vendors, even ERP is now available open source. Compiere is a fully functional open-source ERP with built-in CRM functionality that is being used today by hundreds of companies all over the world. In addition, Compiere has amassed almost 100 partners in countries all over the world – so local support is available. And because it’s open, anyone can build extension modules on top of it, and custom modules for various domains are already being offered by it’s partners. Furthermore, Compiere and some of its partners are already hosting instances on-demand. And no, I do not believe I’m insane.

If you’re not an IT company, why not host your ERP on-demand? If it’s not your core business, why maintain an expensive 24-hour IT operation with redundant power supply, internet connectivity, real-time failover, automated off-site backups, IT security experts, always available on-call tech support, etc? After all, with today’s encryption and security protocols, communication security is probably the least of your security concerns.

For those of you who are already open source converts, you might be a little disappointed that Compiere was built on Oracle, but fear not! Compiere just received a significant amount of funding, relocated to Santa Clara, is in the process of completing a Sybase port, and it’s a safe bet that a MySQL(X) port may occur in the future!  (MySQL(X) may not have the required functionality to support Compiere yet, but MySQL(X) improves every year!)

It’s a procurement professional’s dream come true. No huge up front spending for an ERP system that may or may not deliver. With Compiere on demand, you’re paying for the system and support that you use, when you use it, and you’re not locked in!

Furthermore, you just know that a complete open-source-based on-demand procurement system with Compiere at its base is around the corner. After all,  Rearden Commerce is less than 30 miles away in its San Mateo offices and there are a number of e-Procurement companies, like Ketera, nearby.  If these three companies adapted their APIs to allow you to merge their solutions, it would not be long before you could manage 100% of your contracted materials and services procurement spend. Rearden excels at services, Ketera is good for indirect procurement, and ERP-based planning and forecasting systems are the foundation of your direct materials spending.

I know it’s just pure speculation, but if these three companies made it easy to integrate their solutions, you’d be able to run your entire procurement effort on-demand! Then you could run your entire sourcing and procurement operation on-demand! After all, with respect to a complete solution, we have only left out sourcing (remember, procurement is the acquisition phase, sourcing the predecessor negotiation phase) and visibility (since, at a high level the cycle is Source-Acquire-Monitor). But wait – companies like Iasta have been offering (complete end-to-end) sourcing suites on-demand for years and now we have companies like Apexon offering on-demand visibility solutions!

As a side note, Compiere is holding it’s annual Partner Conference next month in Santa Clara – October 20-21 at the Embassy Suites at 2885 Lakeside Drive in Santa Clara. Check out Compiere’s Events Calendar for more details.

Coupa Charges Ahead!

Yesterday I was fortunate enough to have a long chat with Dave Stephens, fellow blogger (Procurement Central) and founder of Coupa. We talked about a number of topics (and I’ll post more when I get the chance), including what Coupa is focusing on for their next enterprise release as they slowly grow (and set up shop in their new offices in Foster City, California).

Besides a lot of minor updates (which appear in both the open source and enterprise version), to appease the open source community at large (like better sorting and slicker interfaces), they are making improvements in three key areas – administration (much easier to use), buying templates and (visual) form construction (enterprise-only), and budget-based procurement (enterprise only) – probably the first “killer-app” for Coupa.

One of the problems with most approval-based eProcurement systems is that they don’t take budgets into account – which is very important not just in a budget-based shop where the approver would first have to log into another system to see how approving a large requisition would affect his budget, but in any business as a manager needs to see how an approval affects not only the total budget, but her unit’s spending to date. After all, you don’t want to overspend your (share of the) budget without a good reason, and you want to make sure that non-priority purchases are only made if it makes fiscal sense.

I was fortunate enough to see the work in progress on the enterprise edition, and it’s looking really good. The admin functionality, and functionality in general, has advanced nicely since 0.1 (and to some degree, since 0.2) and the form-based templates, definable and customizable at will by the system administrators, will give Coupa a great boost as it will now be perfectly suited for not only your office supplies, spot buys, and other odds-and-ends MRO spend, but also for your services spend as well. One-time legal services or consulting project spend, special advertising, promotional, or print spend, and other odd purchases (such as visa or passport application fees) will now all be able to be processed through the same system. This is VERY SIGNIFICANT. After all, Aberdeen has found that MRO is 26% of the total spend of a company (on average), and can be as high as 63%! Even if you’re not able to negotiate significant savings into your contracts, the presence alone of an eProcurement system, like Coupa, will save you bundles of cash since you’ll be able to virtually eliminate maverick spending with the built in compliance – one of the most significant costs to your organization!

I’ll post more later when I have the time, including some of the benefits of their forward thinking architectural choices, but for now, I suggest you download it and check it out. It might still be a pre-release, but there’s enough there to start giving it serious consideration – after all, it’s the early supporters and adopters that will get to guide its development over the next year or two, since open source projects build their roadmap based on customer feedback, not what an arbitrary executive or investor thinks is the right solution for the marketplace. Plus, they have documentation now!