April 02, 2001, 10:11 AM — The New Economy must truly be dead. In the New Economy, I've been told by experts, the customer is king. If it were alive, how would you explain Larry Ellison? Even notorious industry bad boy Computer Associates thinks good customer relations are important, and it is promoting a new image as a kinder, gentler software company. But then there's Ellison, who, at Oracle AppsWorld, told his customers -- his customers! -- that they should customize their companies to his software. This means that customizing the software is wrong. Complementing it with third-party software is wrong. Building applications in-house? Don't you dare! That would get in the way of your company's primary mission according to Oracle: software integration.
What's the right thing to do? Adapt your business to the predefined processes Oracle has thought up for you, and run your business on nothing but Oracle software, of course.
This attitude would be predictable coming from a communist, but Ellison's a rich guy. So what is he thinking? He's telling us to trust a central planner (Oracle) to anticipate everything we need and to assume that if he didn't anticipate it, we don't really need it.
That's a centrally planned information economy. Memo to Larry Ellison: Centrally planned economies don't work, and it takes a long time to recover from the failed effort of trying to make them work. If you don't believe me, take a look at the Russian economy.
Ellison's mandate is bad for his customers for two entirely different reasons, both related to the fall of world communism.
First, Ellison ignores the complexity built into every real company -- the same complexity that causes all centrally planned economies to fail. Market-based economies don't outcompete centrally planned ones because they're more efficient. They're actually inefficient, encouraging redundant effort (we call it "competition"). What makes market-based economies superior to centrally planned ones is their ability to recognize and fine-tune the satisfaction of demand.
So although an ERP (enterprise resource planning) vendor's information economy central planners can recognize and satisfy the big-ticket items such as supply-chain management and financial reporting, your IS organization is more likely to recognize and satisfy requirements closer to home, such as your real estate management department's need for an investment management system. It doesn't stop there.
Your IS organization also consists of central planners. They're unlikely to recognize and satisfy your marketing department's need for a system to schedule use of your company's trade-show booths. That's why we have personal databases, electronic spreadsheets, and Jane, who's "good with this stuff."