6 ms·

Why not build their own internal system? They'll end up hiring SAP devs anyway, why not make use of the existing talent?

formercoder 6y ago
I’m sure many, many PowerPoint slides were developed in order to make that decision.
etaioinshrdlu 6y ago
This is a great and confusing question, because of all large companies Google seems most inclined to want to own their whole software stack. Plus, they have an army of engineers who surely think finance software can't be too complicated! So what gives? How could Google end up in this position?
- lokedhs 6y ago
  They may have tried already. It turns out that financial software is really complicated. The basic functionality is never too complicated, but most of these systems are edge cases that needs to be treated specially. Also, a lot of behaviour has legal implications, so it would take a long time to develop software to compete with something like SAP. Unless Google wants to get into the ERP software business, spending years developing such a system is a waste of money. Also, they'd need to maintain it for a very long time, and we all know what Google feels about keeping software maintained for long periods of time.
analog31 6y ago
Too easy for someone to use it to cook the books? Maybe it looks better in an audit if they can point to an external source for their accounting software.
- tablespoon 6y ago
  > Too easy for someone to use it to cook the books? Maybe it looks better in an audit if they can point to an external source for their accounting software. I think that is probably a big concern. I read a comment once by someone who said they worked in some kind of company that did financial audits, and it said that as soon as they got a whiff of some homegrown accounting system, the audits got way more expensive, because then they'd have to do a technical audit of the system in addition to the bean counter's audit. If the company ran SAP or some other common ERP system, they didn't have to do that, because it was battle-tested and assumed to be correct.
  - throwaway13337 6y ago
    This is it right here. The magic of these horrible ERP systems is that auditors like them because they've dealt with them before. I've had a similar conversation about such with the owner of a company who wanted to go public on the horizon. Switching to SAP or Oracle is for this reason and this reason alone. It's such a shame that they are so awful and yet this somewhat tiny thing is the deciding factor. I'm sure many companies have fucked up their entire internal systems and, potentially, lost out on moving forward simply because they went with these beasts. Tech turnover has got to be huge when you move to something like this. It's probably not worth it in the end, really. Let the auditors bitch.
    - heymijo 6y ago
      Does SAP use its own system?
      - analog31 6y ago
        Excel. ;-)
      - thatsnotmepls 6y ago
        It does.
      - vishnugupta 6y ago
        It’s turtles all the way down.
  - Naga 6y ago
    I'm an external auditor, this is definitely true. Large ERPs have special audits done over their technical systems that we can rely on and not really think too much about whether the system works or not, since another auditor has already signed off that it does.
  - JaggerFoo 6y ago
    I could make any adjustment I want to posted GL transactions using SQL and knowledge of the chart of accounts and subledgers. No one would know unless it is a transaction picked for audit. This is true at least for Oracle ERP - there is no database row-level security for posted GL transactions. So auditors belief that an Oracle ERP system gives them confidence in a company audit is misguided. Cheers
theta_d 6y ago
Would you want to move off the cool project you've been working on to build an HR system? Besides, buying SAP is Opex. Google wants its engineers working on Capex projects.
- JohnJamesRambo 6y ago
  What cool projects are at Google?
  - viraptor 6y ago
    Most of the projects related to running their infrastructure will be quite interesting by default because of their scale.
_rpd 6y ago
I worked on a decision like this once. It eventually came down to the financial auditors preferring SAP’s reports. Roll-your-own isn’t going to fly with anyone.
- throwawayboise 6y ago
  This is very true. Same reason almost all small businesses use Quickbooks -- because their accountants prefer it.
SmellTheGlove 6y ago
It's massively reinventing the wheel. ERPs do a lot of important things, and where it matters, they do it in a very compliant way. The other piece is the opportunity cost. Ideally, your expensive engineers are working on products and other high leverage work. Even if you want to build it, you have to find engineers that are interested in doing that when it's not the product.
UncleMeat 6y ago
It is a pain in the ass, nobody really wants to work on it, it creates a maintenance risk, and Googlers are paid super high salaries. Google has a NIH problem in many spaces, but the decision to scrap the ancient internal system and go with Workday (despite Workday being a nightmare) was clearly the right one.
perardi 6y ago
Good ol’ core competency theory? https://en.wikipedia.org/wiki/Core_competency https://en.wikipedia.org/wiki/Core_competency Google’s mission is…well, that depends on how cynical you are. But, whether it’s organizing the world’s information or spying on us with ads, it sure isn’t “develop boring payroll software, and maintain that awful boring software forever”. Also, without knowing the exact nitty gritty of what this particular bit of payroll software does: does it manage international employees? Because just doing US compliance would be bad enough, dealing with regulations for N countries sounds like eating a bucket of bees.
- smt88 6y ago
  Google, like its users, has no concept of their core competency. The only reasons I assume they'd skip building their own ERP are that it's a boring product and, if they tried to sell it, they'd actually have to support it.
  - antonvs 6y ago
    Unless you squint hard enough count their cloud services, Google has zero demonstrated competency building enterprise apps. Their core competency may be a mystery, but we can rule out some things, and this is one.
    - sofixa 6y ago
      G Suite or whatever it's called today isn't "enterprise apps"? And their GCP is still third in the running and bigger than Oracle's and IBM's clouds, so that's gotta count for something.
      - antonvs 6y ago
        "Enterprise app" was perhaps too general. Neither of those examples remotely resemble an ERP application. Google has literally zero experience in that area, and if they tried to do it from scratch, it would take many years. Probably not less than ten years before they'd have a chance of competing with the established players. Even if they wholesale hired a team from a major player, it would still take years to reimplement the functionality and get it to a marketable state. There's no "minimum viable product" that could succeed in that space - a system has to be able to take care of an entire enterprise's operational needs, or it's not in the running.
spoonjim 6y ago
ERP software is built by some of the lousiest software engineers to hold the title. Why would Google waste their talent on this market?
- foepys 6y ago
  Bold statement. ERP is a billlion dollar market. If everybody in this space is so "lousy", why not disrupt it and bless everybody with your skills?
Klwohu 6y ago
Joking, right? Google's average tenure is like 18 months, it's doubtful that anybody even understands 90% of their products any more.
sachinag 6y ago
There is a famous story that the engineers wanted to way back when and Eric Schmidt managed to get them to stop by saying "Oracle is auditable" and all the engineers were like "ugh, government regulations" and that was that
karmasimida 6y ago
Because it is not going to be as profitable? They are making more money by allocating the same resources to ads related project, so why bother anyway.
hindsightbias 6y ago
They’ve had 16 years with the smartest people in the room to reinvent the wheel and they’ve got... nothing. The SAP SMEs I know have decades of implementation and training and are on a first name basis with Dietmar. I’m not sure if it’s him, but one of the founders still teaches the advanced SAP architecture courses. You go to Germany and spend 3 months in class with him. In the meantime, Larry and Sergey are doing what? At least the other Larry is being constructive and working on his next yacht.
Andrew_nenakhov 6y ago
It might get cancelled in 18 months. Even Google should know not to depend on Google for any business critical tasks.
jankyxenon 6y ago
Build an internal finance system? Engineering is not the primary activity there - modeling business process, regulations, accounting principles, compliance and legal considerations is the hard part. That takes a whole lot more expertise than repurposing an engineering team. How much expertise does an engineering team have in corporate finance? Imagine writing turbotax from scratch. Now imagine writing it for businesses. Now imagine coding all the tax law correctly.
kram8 6y ago
Even Microsoft runs SAP Finance and Microsoft has a lot of ERP/Finance knowledge in house. I guess building a system that supports the scale and specific accounting standards all over the world is a non trivial task. I work in Enterprise Software and I have experienced multiple times that tech companies first tried to build an administrative back office system and came back to the market two years later as the underestimated the complexity.
- ksec 6y ago
  >Even Microsoft runs SAP Finance and Microsoft has a lot of ERP/Finance knowledge in house. So Microsoft dont Dogfood their own Dynamics 365? No wonder why SAP is winning. >administrative back office system and came back to the market two years later as the underestimated the complexity. I have lots of first hand experience with it. As a matter of fact I have never seen any modern ERP replacement that works better than the old one. Because the people who do the design input tell software developers how the ERP should work dont have much experience with the actual task. They are mostly manager who thinks they know something but they dont. ERP / CRM to this day is still an unsolved problem for SME. Large Cooperate Enterprise seems to have adopted to SAP already so the skill is now officially "portable" and part of Resume Driven culture.
  - arethuza 6y ago
    Last time I checked (6+ years ago) even the top of the range Microsoft ERP products (which called Dynamics AX at the time) was actually pretty limited compared to SAP - in particular it's payroll module only seemed to handle the US.
  - takinola 6y ago
    It's less about confidence in the product and more about having a product that is the right fit for you. Companies like Microsoft are at the very high end of requirements and complexity. Dynamics is more targeted at small to the low end of large enterprise companies.
foobaw 6y ago
Google could probably do it if they REALLY wanted to. But to handle all the small nuances and complexities is not trivial. An example - larger companies will never use Expensify because of a lot of features that it lacks compared to Concur.
bartimus 6y ago
Because it's less about engineering and more about knowing all the laws and regulations. You'd either need developers with both expertise or have these people working together finding a workable software interpretation of all those legal documents.
Havoc 6y ago
Software people building finance stuff works about as well as finance people building software. Which is to say not at all

formercoder 6y ago

I’m sure many, many PowerPoint slides were developed in order to make that decision.

etaioinshrdlu 6y ago

This is a great and confusing question, because of all large companies Google seems most inclined to want to own their whole software stack. Plus, they have an army of engineers who surely think finance software can't be too complicated! So what gives? How could Google end up in this position?

lokedhs 6y ago
They may have tried already. It turns out that financial software is really complicated. The basic functionality is never too complicated, but most of these systems are edge cases that needs to be treated specially. Also, a lot of behaviour has legal implications, so it would take a long time to develop software to compete with something like SAP. Unless Google wants to get into the ERP software business, spending years developing such a system is a waste of money. Also, they'd need to maintain it for a very long time, and we all know what Google feels about keeping software maintained for long periods of time.

analog31 6y ago

Too easy for someone to use it to cook the books? Maybe it looks better in an audit if they can point to an external source for their accounting software.

tablespoon 6y ago
> Too easy for someone to use it to cook the books? Maybe it looks better in an audit if they can point to an external source for their accounting software. I think that is probably a big concern. I read a comment once by someone who said they worked in some kind of company that did financial audits, and it said that as soon as they got a whiff of some homegrown accounting system, the audits got way more expensive, because then they'd have to do a technical audit of the system in addition to the bean counter's audit. If the company ran SAP or some other common ERP system, they didn't have to do that, because it was battle-tested and assumed to be correct.
- throwaway13337 6y ago
  This is it right here. The magic of these horrible ERP systems is that auditors like them because they've dealt with them before. I've had a similar conversation about such with the owner of a company who wanted to go public on the horizon. Switching to SAP or Oracle is for this reason and this reason alone. It's such a shame that they are so awful and yet this somewhat tiny thing is the deciding factor. I'm sure many companies have fucked up their entire internal systems and, potentially, lost out on moving forward simply because they went with these beasts. Tech turnover has got to be huge when you move to something like this. It's probably not worth it in the end, really. Let the auditors bitch.
  - heymijo 6y ago
    Does SAP use its own system?
    - analog31 6y ago
      Excel. ;-)
    - thatsnotmepls 6y ago
      It does.
    - vishnugupta 6y ago
      It’s turtles all the way down.
- Naga 6y ago
  I'm an external auditor, this is definitely true. Large ERPs have special audits done over their technical systems that we can rely on and not really think too much about whether the system works or not, since another auditor has already signed off that it does.
- JaggerFoo 6y ago
  I could make any adjustment I want to posted GL transactions using SQL and knowledge of the chart of accounts and subledgers. No one would know unless it is a transaction picked for audit. This is true at least for Oracle ERP - there is no database row-level security for posted GL transactions. So auditors belief that an Oracle ERP system gives them confidence in a company audit is misguided. Cheers

theta_d 6y ago

Would you want to move off the cool project you've been working on to build an HR system? Besides, buying SAP is Opex. Google wants its engineers working on Capex projects.

JohnJamesRambo 6y ago
What cool projects are at Google?
- viraptor 6y ago
  Most of the projects related to running their infrastructure will be quite interesting by default because of their scale.

_rpd 6y ago

I worked on a decision like this once. It eventually came down to the financial auditors preferring SAP’s reports. Roll-your-own isn’t going to fly with anyone.

throwawayboise 6y ago
This is very true. Same reason almost all small businesses use Quickbooks -- because their accountants prefer it.

SmellTheGlove 6y ago

It's massively reinventing the wheel. ERPs do a lot of important things, and where it matters, they do it in a very compliant way. The other piece is the opportunity cost. Ideally, your expensive engineers are working on products and other high leverage work. Even if you want to build it, you have to find engineers that are interested in doing that when it's not the product.

UncleMeat 6y ago

It is a pain in the ass, nobody really wants to work on it, it creates a maintenance risk, and Googlers are paid super high salaries. Google has a NIH problem in many spaces, but the decision to scrap the ancient internal system and go with Workday (despite Workday being a nightmare) was clearly the right one.

perardi 6y ago

Good ol’ core competency theory? https://en.wikipedia.org/wiki/Core_competency https://en.wikipedia.org/wiki/Core_competency Google’s mission is…well, that depends on how cynical you are. But, whether it’s organizing the world’s information or spying on us with ads, it sure isn’t “develop boring payroll software, and maintain that awful boring software forever”. Also, without knowing the exact nitty gritty of what this particular bit of payroll software does: does it manage international employees? Because just doing US compliance would be bad enough, dealing with regulations for N countries sounds like eating a bucket of bees.

smt88 6y ago
Google, like its users, has no concept of their core competency. The only reasons I assume they'd skip building their own ERP are that it's a boring product and, if they tried to sell it, they'd actually have to support it.
- antonvs 6y ago
  Unless you squint hard enough count their cloud services, Google has zero demonstrated competency building enterprise apps. Their core competency may be a mystery, but we can rule out some things, and this is one.
  - sofixa 6y ago
    G Suite or whatever it's called today isn't "enterprise apps"? And their GCP is still third in the running and bigger than Oracle's and IBM's clouds, so that's gotta count for something.
    - antonvs 6y ago
      "Enterprise app" was perhaps too general. Neither of those examples remotely resemble an ERP application. Google has literally zero experience in that area, and if they tried to do it from scratch, it would take many years. Probably not less than ten years before they'd have a chance of competing with the established players. Even if they wholesale hired a team from a major player, it would still take years to reimplement the functionality and get it to a marketable state. There's no "minimum viable product" that could succeed in that space - a system has to be able to take care of an entire enterprise's operational needs, or it's not in the running.

spoonjim 6y ago

ERP software is built by some of the lousiest software engineers to hold the title. Why would Google waste their talent on this market?

foepys 6y ago
Bold statement. ERP is a billlion dollar market. If everybody in this space is so "lousy", why not disrupt it and bless everybody with your skills?

Klwohu 6y ago

Joking, right? Google's average tenure is like 18 months, it's doubtful that anybody even understands 90% of their products any more.

sachinag 6y ago

There is a famous story that the engineers wanted to way back when and Eric Schmidt managed to get them to stop by saying "Oracle is auditable" and all the engineers were like "ugh, government regulations" and that was that

karmasimida 6y ago

Because it is not going to be as profitable? They are making more money by allocating the same resources to ads related project, so why bother anyway.

hindsightbias 6y ago

They’ve had 16 years with the smartest people in the room to reinvent the wheel and they’ve got... nothing. The SAP SMEs I know have decades of implementation and training and are on a first name basis with Dietmar. I’m not sure if it’s him, but one of the founders still teaches the advanced SAP architecture courses. You go to Germany and spend 3 months in class with him. In the meantime, Larry and Sergey are doing what? At least the other Larry is being constructive and working on his next yacht.

Andrew_nenakhov 6y ago

It might get cancelled in 18 months. Even Google should know not to depend on Google for any business critical tasks.

jankyxenon 6y ago

Build an internal finance system? Engineering is not the primary activity there - modeling business process, regulations, accounting principles, compliance and legal considerations is the hard part. That takes a whole lot more expertise than repurposing an engineering team. How much expertise does an engineering team have in corporate finance? Imagine writing turbotax from scratch. Now imagine writing it for businesses. Now imagine coding all the tax law correctly.

kram8 6y ago

Even Microsoft runs SAP Finance and Microsoft has a lot of ERP/Finance knowledge in house. I guess building a system that supports the scale and specific accounting standards all over the world is a non trivial task. I work in Enterprise Software and I have experienced multiple times that tech companies first tried to build an administrative back office system and came back to the market two years later as the underestimated the complexity.

ksec 6y ago
>Even Microsoft runs SAP Finance and Microsoft has a lot of ERP/Finance knowledge in house. So Microsoft dont Dogfood their own Dynamics 365? No wonder why SAP is winning. >administrative back office system and came back to the market two years later as the underestimated the complexity. I have lots of first hand experience with it. As a matter of fact I have never seen any modern ERP replacement that works better than the old one. Because the people who do the design input tell software developers how the ERP should work dont have much experience with the actual task. They are mostly manager who thinks they know something but they dont. ERP / CRM to this day is still an unsolved problem for SME. Large Cooperate Enterprise seems to have adopted to SAP already so the skill is now officially "portable" and part of Resume Driven culture.
- arethuza 6y ago
  Last time I checked (6+ years ago) even the top of the range Microsoft ERP products (which called Dynamics AX at the time) was actually pretty limited compared to SAP - in particular it's payroll module only seemed to handle the US.
- takinola 6y ago
  It's less about confidence in the product and more about having a product that is the right fit for you. Companies like Microsoft are at the very high end of requirements and complexity. Dynamics is more targeted at small to the low end of large enterprise companies.

foobaw 6y ago

Google could probably do it if they REALLY wanted to. But to handle all the small nuances and complexities is not trivial. An example - larger companies will never use Expensify because of a lot of features that it lacks compared to Concur.

bartimus 6y ago

Because it's less about engineering and more about knowing all the laws and regulations. You'd either need developers with both expertise or have these people working together finding a workable software interpretation of all those legal documents.

Havoc 6y ago

Software people building finance stuff works about as well as finance people building software. Which is to say not at all