7/17/23- Jim Keller Recipe🧾,♻️ERP Change, Ellison+Jobs,🎧Ransomware 😬
Buying a rope🪢 and a saddle doesn’t make us a cowboy🤠
Welcome back. In a busy world we can be distracted with the trivial many things or we can focus on The Vital Few.
Something that I am thinking about
What it is like to change an ERP, CRM or other Enterprise wide system-
I have been responsible for at least 2 ERP system switches [maybe 3] over 25 years working as a Controller or Chief Financial Officer for businesses. In summary, I would never want to be responsible for another switch again. If an ultra wealthy CEO/Board asked me to assist with an ERP switch, my fees would be significant/excessive [bordering on obscene highway robbery.]
Why? Because the systems are mission critical to the Enterprise. The company workforce of 300, 800, 4000+ people use the software every minute to perform and complete their jobs. Backlog, billing, time keeping, payroll, payable, receivables, cash management, human resources, lead tracking, project accounting, job costing, inventory, equipment, the list goes on. All those 4000+ humans need to be dragged kicking and screaming to be retrained on the new system.
Each position/job role needs to be analyzed and documented regarding how it interacts with the old system, and every active process within the old system needs to be understood within the context of the new system. There are two gigantic questions-
Can everything in the old be performed in the new?
Is it performed in the same way or does the new system require a new process?
Fun fact- Larry Elliston, founder of Oracle, was frequently telling new customers, not to bring their old processes to ORCL, instead learn ORCL’s new better process. Customizing a new system to your old process is very expensive. Try telling that to a payroll or payable employee.😫
The old system historical information needs to be mapped and migrated to the new system. The new system needs to be reintegrated with all of the company-wide information systems that connect to the old system. All of this needs to be tested, debugged and confirmed to be working with extremely high confidence. It would be an understatement to say that the existing old system is sticky. (Think cement.)
A number of the companies that I follow and invest in provide sticky software solutions. GOOG, MSFT, AWS, SNOW, CRWD, CRM, ORCL, NET, ROP, MDB, CNSWF
How long does it take to change an ERP, CRM or other Enterprise wide system?🗓️ It takes longer than an outside spectator might think. I might ballpark it at 2 years, minimum. From a CFO perspective here are a set of things that influence the timeline- researching alternative systems, interviewing alternatives, due diligence on 1 or 2 finalists, contract and commitment to the winner, pre launch work, launch work “go live”, post launch “putting fires out”, integration, 1 year after work, etc. All of this work accomplished while bringing excellence to the day job of the CFO, transition team, et al.
The perspective from software engineers on this ERP switch topic would be very valuable. They perform much of the heavy lifting on migration and integration. Months and months of work. I also relied on them significantly on the backend database system design, hardware requirements, security and web integration.
Software lock-in🔐 is a real thing. Choose wisely.
Investing, Companies, Market Past/Future
(I invest in Companies, not in stocks.)
Interesting companies that hosted earnings results or information sessions since my last edition that I reviewed-
Housing & Banking - JPM 0.00%↑ , WFC 0.00%↑ , C 0.00%↑
Great charts below from JP Morgan as of 6/30/2023 (Real GDP and Fed funds rate expectations)
Podcasts
This 35 minute podcast episode sparked my attention- 🎧Utilizing Tech- Building Resilient Infrastructure at the Edge .
»3 out of every 4 businesses over the next two years will experience a ransomware attack 🤺⚔️ and
»»»»»1 out of 10 of those will be effective, will get inside😨😱 🐛🐜🪲 🤒🤢🤧 , and
»»»»»»»»»»»» if it gets inside the average time to recover is on the order of a few weeks⌚⌛😵💀☠️
From Stephen Foskett of Gestalt IT and Brian Chambers, Chief Architect at Chick-fil-A🐔🥪, and writer of
. I have worked at organizations with dispersed geographic locations/offices and loads of devices at each location, this topic always frightens me enough to think I am going to wet my pants.The average ransomware attacker demands $1.5 million in 2023. However, over 80% of people who pay a ransom will be attacked again. 😨 [source]
Show guest Craig Nunes-
The seed🌱 I would plant with every one of those folks is- put at the Apex security, because if not this year sometime in your future, your organization is going to feel an attack. The more you have built these layers of security from the server and storage on up, the safer your organization is going to be. The more likely you’re going to be able to navigate through that. Even if you have all those things in place think about the recovery. Think about the steps, practice the steps, rehearse it with the team so when that time comes you can recover your site infrastructure in just a few minutes.
[The above has been lightly edited for clarity.]
Some of the companies that I follow in this cyber security space are CRWD 0.00%↑ , NET 0.00%↑ , MSFT 0.00%↑ , GOOG 0.00%↑ .
Videos
5 Minute video below, Larry Ellison, founder ORCL 0.00%↑ , tells the story about one of the many hikes 🚶he enjoyed with his good friend for 30 years, Steve Jobs.
While on the walk, Ellison shares a plan to help Jobs regain control of Apple and make lots of money🤑💰in the process. But, Jobs declines AND creates an intimate touching moment🫂 with friend Ellison [watch it]. Jobs then proceeded to create the most valuable company on earth 🌎🚀 AAPL 0.00%↑ .
Books and Articles since my last edition
(Books are like loading software on your brain. I am usually reading 2 at a time, and if I get bored of a book I quit and move on.)
Daemon by Daniel Suarez Science Fiction, Technology. It has almost 45K ratings on Goodreads, and I have heard a few famous people from the technology world recommend it over the years. It was really good, but it is book 1 of 2. So, expect to have to read 2 books to reach the end of the story.👍
Lights Out: Pride, Delusion, and the Fall of General Electric by Thomas Gryta Nonfiction, business book. Follows GE from about 2000 to 2017 when CEO Jeff Immelt was the leader. Immelt's GE tenure was widely viewed as an unmitigated disaster for shareholders🤦🏻. I put this on my reading list as Charlie Munger recommended it sometime in the last 12 months. Munger was right.🙏 In this book you learn a lot about how NOT to behave. GE 0.00%↑
The problem was not that former CEO Jeff Immelt did not listen; the problem was that he did not want to hear any bad news.😡🤬👺👹 That led to what Thomas Gryta, Joann S. Lublin and David Benoit, writing in the Wall Street Journal (WSJ), dubbed the “Success Theater” at GE.
Success Theater. 😂🤣😂 I love it. Have any of you encountered Success Theater? Tell us about it in the comments below.
Here is a link to many of the books I have read and my 1-5 star rating- Goodreads Books Read
Wild Card🃏
The difference between working from a Recipe vs. Understanding
Jim Keller, master of semiconductor hardware/software and all around philosopher, explains-
Imagine you are going to make a loaf of bread🍞. The recipe says get some flour, add some water💦, add some yeast, mix it up, let it rise, put it in a pan, put it in the oven♨️. It is a recipe.
Understanding bread. You are going to understand biology🧬, supply chains⛓️, grain grinders🌾, yeast, physics,⚛️thermodynamics. There is so many levels of understanding.
When people build and design things they are frequently executing some stack of recipes📃📃📃. And, the problem with that is that all of the recipes have limited scope.
If you have a really good recipe book for making bread, it won’t tell you anything about making an omelet. But if you have a deep understanding of cooking, then bread🍞🥐, omelet🍳, sandwich🥪🍝🍾…. there is a different way of viewing everything. And most people, when you get to be an expert at something, you are hoping to achieve a deeper understanding of something, not just a large set of recipes to go execute.
[..]And, executing recipes is unbelievably efficient, … if it is what you want to do. If it is not what you want to do, then you are really stuck. ¯\_(ツ)_/¯
The entire Jim Keller clip can be viewed here.
A recipe is a wonderful hack/shortcut for a task, and if the recipe is carefully followed it ensures the desired result. But a recipe is not understanding. Like watching Cobra Kai on Netflix doesn’t make you a blackbelt🥋, and buying a rope and a saddle doesn’t make you a cowboy🤠.
The difference between a recipe and understanding reminds me of the story of the impatient disillusioned student that is talking with their Accomplished teacher.
Student- I am getting better each week. How long will it take for me to become an expert now?
Teacher- It will take about 10 years.
Student- Ten years, WHAT😫? Maybe if I work harder, or slept less, or had other people do more routine tasks for me. Could this help me become an expert faster?
Teacher- No, if you try to take the easy way, it will take you 20 years.
If you are hoping to better master something just keep chipping away at it day after day. Also, one thing our disillusioned student above did well was to find a teacher 👩🏽🏫(either from the eminent living or an eminent dead teacher [books📖].)
In the 1.3 minute video below, our little Expert chef Remy does not need a recipe. (Courtesy Disney Ratatouille 😍)
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Disclaimer: All of my posts are for informational purposes only. I might own some of the companies discussed in these posts. This is NOT a recommendation to buy or sell securities discussed. Please do your own work before investing your money.
I have definitely experienced Success Theater on many of the group projects or sports teams I have been on. It is almost impossible to improve as a team if you do not target your weaknesses and only focus on your strengths. Much like a CEO, if the coach of a team does not want to talk about the team's failures, then you are doomed to continue to fail.
Oooo, huge fan of Daemon. I have read it twice which is rare for me with fiction books. Freedom TM is a good completion of the story, too.