- There are plenty of firms that perform Oracle advisement, but the advice ends up being rigged due to financial incentives.
- Large companies use advisement to provide advice that leads to other business.
A large number of consulting companies provide advice and perform anything from software selection assistance to supporting various analytical initiatives. However, none of the larger, and very few of the others actually see themselves in the decision support business as a business. In this article, we will describe why this is such a problem.
The Financial Incentives at Oracle Consulting Firms
In order to attain and retain a leadership position at an Oracle consulting firm one must bring in roughly $2 million in revenues per year. There is no way to attain this quote by performing smaller projects, of which software selection and analytical initiatives would be examples. To attain this yearly quota, one needs to sell implementations. Decision support projects tend to smaller, shorter, and offer less stable consulting revenue. For a company with a significant overhead (offices, support staff, large senior member compensation) smaller projects of this nature are not sustaining.
Secondly, one of the best ways to sell implementations is to position oneself as a “trusted advisor” and then sell out the client’s interests by directing them to implement the most possible software. This means acting to promote Oracle software, regardless of the fit with the client requirements, the cost, the maturity of the application, and another other factor related to things that make software a good match for a particular client.
The Implication of How Incentives are Structured
This means that Oracle consulting companies are unreliable for providing software selection support as they have a massive financial bias. Oracle consulting companies will claim major domain expertise as a reason for using them in an advisement capacity, but even the deepest domain expertise cannot overcome financial bias, and in truth, the decisions are normally filtered through the senior management of the consulting company, with little freedom given to the more junior members of the organization who possess most of the domain expertise.
An Oracle consulting company may take the advisement or selection project, but only as a means to gain more future work. When they report back to their other senior members, success is measured by how much further business is obtained (at KPMG the catchphrase is “penetrate and radiate.”) The concept of providing objective analysis, and then rolling off of the project is only measured as a failure.
Having discussed this topic with several experienced consultants, we were told that recommending solutions on the basis of financial bias is “the way that it is.” And that further, it is a good thing, because the benefits flow to the consulting firm with the strongest relationship. The trick is not to tell the client that you are doing it. And this is considered perfectly normal in the Oracle consulting field.
There is no feasible way for senior members of Oracle consulting firms to attain or maintain their positions without putting their financial incentives ahead of their clients. None of the major Oracle consulting firms and very few of the smaller Oracle consulting firms have a model that allows for anything but grabbing implementation business by any means possible. And one of the best means is to pretend to provide decision support.
Financial Bias Disclosure
Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.
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Software Selection Book
Enterprise Software Selection: How to Pinpoint the Perfect Software Solution Using Multiple Information Sources
Mastering Software Selection
Software selection is a form of forecasting, just as any another purchase decision is a forecast of how successfully the purchased item will meet expectations. Forecasting is necessary because it is not feasible to implement each application under consideration before it is purchased to see how it works in the business.
The Importance of Software Selection
What You Can Expect from the Book
Essential reading for success in your next software selection and implementation. Software selection is the most important tasks in a software implementation project, as it is your best (if not only) opportunity to make sure that the right software the software that matches the business requirements is being implemented. Choosing the software that is the best fit clears the way for a successful implementation, yet software selection is often fraught with issues, and many companies do not end up with the best software for their needs. However, the process can be greatly simplified by addressing the information sources that influence software selection.
This book is a how-to guide for improving the software selection process and is formulated around the idea that much like purchasing decisions for consumer products the end user and those with the domain expertise must be included. In addition to providing hints for refining the software selection process, this book delves into the often-overlooked topic of how consulting and IT analyst firms influence the purchasing decision and gives the reader an insider’s understanding of the enterprise software market. By reading this book you will:
- Learn how to apply a scientific approach to the software selection process.
- Interpret vendor-supplied information to your best advantage.
- Understand what motivates a software vendor.
- Learn how the institutional structure and biases of consulting firms affect the advice they give you, and understand how to interpret information from consulting companies correctly.
- Make vendor demos work to your benefit.
- Know the right questions to ask on topics such as integration with existing software, cloud versus on-premise vendors, and client references.
- Differentiate what is important to know about software for improved “implement-ability” versus what the vendor thinks is important for improved “sell-ability.”
- Better manage your software selection projects to ensure smoother implementations.
- Chapter 1: Introduction to Software Selection
- Chapter 2: Understanding the Enterprise Software Market
- Chapter 3: Software Sell-ability versus Implement-ability
- Chapter 4: How to Use Consulting Advice on Software Selection
- Chapter 5: How to Use the Reports of Analyst Firms Like Gartner
- Chapter 6: How to Use Information Provided by Vendors
- Chapter 7: How to Manage the Software Selection Process
- Chapter 8: Conclusion
- Appendix a: How to Use Independent Consultants for Software Selection