On Friday, CIO Journal reporter Rachel King elucidated a trend in the enterprise ERP space that has many CIO’s rethinking their approach to complex systems development. For decades, ERP giant SAP has been the go-to vendor for these implementations, particularly in big auto and manufacturing. The post raises the question: is the ‘Buy’ option in your Build vs. Buy decision really worth it anymore? “It can take more than a year and millions of dollars to roll out SAP software because of all the integration required,” explains Tesla CIO Jay Vijayan. Instead, Elon Musk – the man behind SpaceX, PayPal, and now Tesla – reportedly told Vijayan to build it himself.
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This thought process is coming out of organizations that don’t have time to dredge through multi-year, multi-million dollar configuration projects. While the ERP giants certainly have their place in enterprise IT, smart CIOs are choosing in-house development for strategic and differentiating projects in order to avoid technical debt, and get their system to market faster. In this case, what could easily have taken over a year to implement took only 4 months. Using the right technology, the notion of a 4-month ERP extension or even an extensive upgrade, is certainly plausible. To put it kindly, enabling quick innovation isn’t what SAP is known for, and anyone who has looked to upgrade their ERP system in a pinch knows they better either have cash to burn or a very forgiving deadline.
What I think is really exciting here is that Elon Musk, one of the most well-known innovators of our time, is getting talked about for building a mission-critical system in-house in order to be more agile, rather than conforming to the traditional Buy-and-Configure method. This build strategy is rising up out of the trenches following a decade-long war between imperialistic ERP vendors. Leave it to Musk to be one of the high-profile first-movers in the crusade. He certainly isn’t shy when it comes to telling the media what he think is or isn’t possible.
In response to Box Inc CIO Ben Haines’ warning about trying to scale a home-grown, light-weight ERP system, Vijayan says “I’m super confident that it’s going to be able to scale very well” and that “It’s now one of the best systems we have.” My guess is that most CIOs say this about their latest big-impact project. That being said, we’ll have to wait and see what happens at Tesla down the road. We do however have to keep in mind just how much scaling Tesla plans to do. To that end, I’d ask – why buy the ERP system GM needs when you’re Tesla? To me, it sounds as though Vijaya built what he needed, not what the industry deemed appropriate.
King further explains, “Because Mr. Musk made a clear decision, it also helped Vijayan get immediate cooperation from business leaders.” He demonstrates a seriously underrated influencer in big software implementations that we frequently see at Mendix: top-level business buy-in is as important, if not more, than any one team’s capacity to build software. Cutting through red tape and aligning business needs from the start is the difference between a tediously long project that almost inevitably fails and a quickly accelerating burst of output that propels the business forward.
Business leaders can really learn something from Musk, the world-renowned rocket scientist: you need to put power behind a project if you want it to take off.