Leveraging Technology to Maintain a Competitive Edge During Tough Economic Times--A Panel Discussion Analyzed Part Four: RFID Software Issues

Leveraging Technology to Maintain a Competitive Edge During Tough Economic Times--A Panel Discussion Analyzed Part Four: RFID Software Issues
P.J. Jakovljevic

Introduction

At the IFS Executive Forum, which took place on March 29 and 30 in Orlando, Florida (US), leading research analysts and industry experts discussed how companies can still leverage technology to maintain their competitive edge, even during tough economic times. The event was held in conjunction with IFS World Conference 2004, and it included six panel discussions, with each panel including top executives, analysts, and journalists. Some of the renowned panelists were Geoff Dodge, vice president, Business Week; Dave Caruso, senior vice president, AMR Research; Barry Wilderman, vice president, Meta Group; Leo Quinn, vice president of operations, Global Manufacturing Solutions, Rockwell Automation; Dave Brousell, editor-in-chief, Managing Automation; David Berger, Western Management Consultants; and Josh Greenbaum, principal, Enterprise Applications Consulting. Breakout sessions explored such topics as turning global competitive threats into opportunities, increasing the bottom line through operational efficiency, complying with the Sarbanes-Oxley Act of 2002, and using enterprise software to prepare for future challenges.

Technology Evaluation Centers (TEC) was represented at the executive panel titled "The Future of Enterprise Software and How It Impacts Your Profitability", which was aimed at helping companies find out where enterprise software is going in the next five years, and how it can make or break their profitability and market share. The panel, which was moderated by Josh Greenbaum, included the following participants: Barry Wilderman; Peggy Smedley, president and editorial director; Start Magazine; Dave Turbide, an independent consultant and renowned columnist for magazines such as The Manufacturing Systems; and Predrag Jakovljevic, research director, TEC. In preparation for the event, we polled the thoughts and opinions of our experts and contributors: Olin Thompson, Jim Brown, Joseph Strub, Kevin Ramesan, and Lou Talarico, given they were unable to attend the event in person.

Below are the questions and consolidated thoughts and answers that transpired from the panel discussion. We also took the liberty to expand with a few pertinent questions and thoughts that were not discussed at the panel per se (due to the time limit), but transpired from many other interactions and presentations at the conference. Also, some pertinent articles published previously on our site, which may shed more light at the respective topic are mentioned as further recommended readings.

The questions are

Q1. What is the one piece of new software or technology that will be a must-have in the next five years? (see Part One)

Q2. Some pundits say the future of enterprise software lies in service-oriented architectures and component applications. True? False? (see Part One)

Q3. How does the development of new business processes and business process modeling fit in? (see Part Two)

Q4. What are applications hosting and other service models? (see Part Three)

Q5. Radio frequency identification (RFID) is on everyone's mind these days. Let's discuss the software issues around RFID and what kind of software solutions will be taking advantage of RFID. (see Part Four)

Q6. Technology aside for a moment, what can we say about its impact on profitability? (see Part Five)

Q7. With all this new technology, the question is what happens to existing applications and technology. Nobody wants to start over, but how much will existing IT systems have to change? (see Part Five)

Q8. Will the newest and greatest only come from packaged software? What about custom development? What is the build versus buy equation look like in the near future? (see Part Six)

Q9. How will the latest improvements in software flexibility and agility play in the single-vendor versus multi-vendor solution equation at multi-division corporations? (see Part Six)

This is Part Four of a multipart trend note.

Each of the parts covers questions and answers addressed by the panel.

Questions and Answers (continued)

Q5. RFID is on everyone's mind these days. Let's discuss the software issues around RFID and what kind of software solutions will be taking advantage of RFID.

A5: Well, we will have all likely heard of some concrete examples (or imagined ideas) of expensive (and thus highly pilfered) retail items (such as razors, prescription drugs, apparel, and DVDs) packaged with pin-sized chips and tiny antennae that send retailers and manufacturers information about their use, and even about those who buy (or attempt to steal) them. Or the stories of grocery clerks immediately knowing when perishable items on the shelf have expired and replacing them before the items are purchased. We've also have heard of a consumer ordering the latest "hot item" and tracking it in the real time through the entire supply chain right up to the time when it is ready to be picked up. How about the idea of tracking employees and their labor with an RFID chip embedded in their ID badges to automatically record their transactions and even control their authorizations for a given area to detect security issues?

These futuristic-sounding scenarios (though not necessarily of the future, given such technology was employed decades ago, but only where its price was justified, like in the defense industry or to track the movements of precious pets) are being touted as the applications of an automatic identification and data capture technology named radio frequency identification (RFID). RFID uses low-powered radio transmitters to read data stored in smart tags embedded with minuscule chips and antennae. The tags are attached to packaged goods that can communicate with electronic reading devices and deliver a message to a computer that alerts retailers, suppliers, and manufacturers when a product's state has changed and requires action.

While the potential of RFID technology is indisputable (for example, unlike bar-codes, RFID requires no direct contact or line-of-sight scanning, and it provides streams of data that can be differentiated and interpreted before being passed to an enterprise application), much more is required in moving RFID from a lab to a live environment. RFID has the potential of a new technology inflection point and it can be a missing piece in the long-lasting puzzle of squeezing excess inventory out of supply chains. It will be only this piece, however, when (and if) it reaches a critical mass of adoption and maturity over the next several years. Nowadays, the market is still in a "chicken-and-egg" conundrum—until more companies commit to RFID, the cost of tags and other infrastructure will remain prohibitively high for mass deployment. A few years ago, typical smart-label tags were between $1$2 (USD) each, while today we may be looking at production volumes in millions, costing 3040 cents (USD). This is further projected into billions of tags on individual items in the future causing the cost to ideally fall to five cents (USD) or so. Eventually, in the long term, the price might fall to a penny or less, with new technology and even greater volumes. Still, while the tag price might seem as a major barrier now, it will likely become a minor issue down the track, when many companies start grappling with RFID deployments in earnest.

Over that time, many companies will begin to deliver and potentially receive a higher proportion of goods with RFID tags and, thus, they will have a better understanding of the technology and its potential in broader business improvements per se rather than only due to the mandated Wal-Mart, (US) Department of Defense (DoD) or Target compliance. Namely, as the world's largest retailer, with over 5,000 outlets worldwide, Wal-Mart currently uses traditional bar-coding and UPCs (unique product codes) to identify items and cases or pallets of goods as they move through the supply-chain and out to the stores. By 2005, Wal-Mart has envisioned to have live implementations of RFID tagging using new EPCs (electronic product codes, which can carry more useful data than UPCs), with a mandate to the Top 100 suppliers to provide RFID tags on cases and pallets at distribution centers, followed by item-level tagging at a much later date. EPCs on tags should be easier and quicker to read than barcodes, since there is supposedly no need to unpack pallets to check contents, as RFID readers do not, unlike bar-code scanners, require line-of-sight, which should all result in less labor, fewer errors, and better management of inventory.

However, companies implementing RFID should expect increased labor in the first year or so, because vendors have yet to perfect solutions for automating tagging and embedding RFID in packaging material. Also, the current state of RFID technologies would also revolve around label creation and production, plastic chip development, intelligent shelving and packaging, to name but a few. Furthermore, to gain benefits such as product tracking, supply chains should logically begin RFID implementation at the manufacturing level, rather than at the distribution center, which is one step closer to a retailer in the supply chain. Still, "source tagging" cases at the manufacturer is too disruptive for most companies to implement.

Challenges

Nonetheless, with many software and hardware giants putting their weight behind RFID, the technology has the potential of becoming mainstream. Numerous manufacturers have indeed justified and implemented RFID based on their own internal needs. However, to that end, enterprises will have to build an RFID infrastructure that can be used across their businesses where there are still many issues that need to be addressed by vendors. These issues include creating reasonably lower tag prices; adopting pervasive (if not unified) EPC standards; building the capability to manage in a mixed environment of bar codes and RFID tags; and optimizing business practices benefit from an identification technology that does not require line-of-sight, while dealing with materials and environments that will interfere with RFID signals (such as metal and liquid products, cold storage).

Although many vendors have demonstrated success in reading multiple tags in close proximity (so-called "stacking"), the misread rate or "collision" of tags is still a potential problem in real world situations. So too is interference—from metal racks, liquid items, door-frames, fork-lift trucks, and so on—all which require the careful positioning and failsafe testing of tags and readers alike, especially while read-ranges of high-frequency tags remain quite short.

Similarly, available frequencies vary across the globe, and RFID requires an international agreement or standards on wavelengths and signal strengths. Then, there is the well-debated "privacy" issue, which has been exploited by the press and a number of, rightfully or not, concerned consumer organizations. In theory, these issues have already penetrated our lives—whether it be the data from loyalty and frequent flyer cards; "EZ highway" toll passes; credit and debit cards; cell phone cards and bills, and the numerous, and easily obtainable customer databases and lists. These technologies have already created a data collection infrastructure which could be used to pry personal data. In this context, RFID would be yet another low-level data collection means, and possibly less powerful than some of the above-mentioned technologies already tacitly in use. Indeed, considering the huge deluge of data which could be produced from RFID at the item level, it would take an inordinate amount of effort to collect, store, filter, and then act on that data, not to mention the cost of the infrastructure to support that effort. It is thus a small wonder to see hardware, database, middleware or server platform providers salivating at an opportunity that will require a highly scalable infrastructure. Still, at least two US states are drafting regulation that would demand the RFID tags be destroyed once the customer leaves the shop.

Logically, RFID deployment will be a cry far from a minor development project that can be completed in a few months or weeks. It will take months and years to asses how RFID will affect the manufacturing and shipping operations and IT systems and to bring software up to a pilot stage. After that, it will take years of fine-tuning and IT system development to fully realize the gains in operational efficiency that the technology promises. Given the expected huge price tag owing to complex infrastructure and integration undertaking, high professional services spent on getting distribution centers operational, and due to a short supply of experienced RFID experts, companies should start now consider how (if at all) to reap benefits well beyond just complying with mandates for the likes of Wal-Mart.



SOURCE:
http://www.technologyevaluation.com/research/articles/leveraging-technology-to-maintain-a-competitive-edge-during-tough-economic-times-a-panel-discussion-analyzed-part-four-rfid-software-issues-17292/

SoftBrands to Institute Fourth Shift for SAP Business One Manufacturing Work-Plan Part Three: Market Impact

SoftBrands to Institute Fourth Shift for SAP Business One Manufacturing Work-Plan Part Three: Market Impact
P.J. Jakovljevic - May 10, 2004

Market Impact

At the National Manufacturing Week (NMW) event, held February 23-26, 2004 in Chicago, Illinois (US), SAP AG (NYSE: SAP), the leading provider of enterprise applications, announced the availability of new industry-specific solutions for small and midsize manufacturing companies, with the aim of extending its leadership as a provider of solutions for an even broader range of companies from small enterprises via the mid-market to the world's industry leaders.

Part One and Part Two of this note details the announcements.

The fact that the lower-end of the enterprise applications market is the next frontier and a promised land for all small, medium, and large enterprise vendors alike, has long not been news. During economic slowdowns, the larger corporations will likely curb their IT spending to a degree, whereas their smaller counterparts will all but completely recoil from any spending. However, with a recovery in the offing, one should expect a built-up need for enterprise systems from these companies that will have weathered the storm and that now need to bolster their competitiveness and agility in the market. Still, the willingness of smaller enterprises, which as a rule lag behind their larger brethren in technology innovation, to go for more sophisticated technology that is beyond the rapidly outmoded two-tier client/server architectures in the best case scenario, or, in the worse case scenario, beyond the all-too-common dispersed islands of information on Microsoft Excel or other spreadsheets, Access-based reports and queries, or managers' notepads and "post-it" notes, does not guarantee any vendor an easy ride. For a detailed discussion see Cookie-Cutter Solutions Won't Cut It with the Mid-Market.

This is Part Three of a five-part note.

Parts One and Two presented the event summary.

Part Four will continue to discuss the market impact.

Part Five will cover challenges and make user recommendations.

SAP's Answer for SMBs

For that reason, SAP has responded by acquiring a more suitable, genuine product for the segment, while it is not unlikely to see the other ERP giants follow suit in the future. This latest SAP announcements should be regarded as sensible moves, although somewhat belated. Nonetheless, these moves should confirm SAP's commitment to smaller customers through the unrelenting focus and repeated attempts of delivering better-attuned offerings. A less known fact might be that almost two-third of all SAP's installations are enterprises with less than $500 million (USD) in revenues. Given SAP's predictions of a healthy revenue streams from all the sectors including SAP's sweet spot of large corporations, we tend to believe that SAP SMB drive is a well thought-out, proactive drive into a new market rather than a knee-jerk reaction to a slumping stronghold market. Over last year or so, SAP has not only formed a division dedicated to SMB, but has also created the analyst relationship and public relations team that focuses only on informing the industry influencers about SAP's relevant initiatives in the segment. During the same time period, the marketing budget for the segment has increased tremendously, which also vouches for a long-term endeavor.

Also, having resorted to an acquisition, which has not been a common SAP practice in the past, may mean the admission of failing to first successfully capture the global SMB market , SAP will have "killed two birds with one stone" with SAP Business One. First, an acquisition typically shortens the time-to-market, as proven by a number of functional scope enhancements in a short time frame, and second, SAP will have tackled the small business market with a product designed specifically for that market instead of repeating its previous attempts of fitting a "square peg into a round hole," with functionally-depleted versions of mySAP Business Suite or by even using the older R/3 suite or their pre-configured templates.

Furthermore, SAP Business One provides a simple product that can be more easily sold and supported by SAP's channel partners, particularly by being technologically advanced from the ground up and unburdened by the need for migration paths from its former incarnations. Before SAP Business One, there had hardly been a differentiating product among the likes of Microsoft Business Solutions (MBS) Great Plains, MBS Navision, Best Software's MAS 200 or Exact Macola, to name a few. While the advantage of these products is their longevity in the market and large install bases, the liability are their numerous little idiosyncrasies, which make it more difficult to bring the technology forward for these vendors, users and resellers alike. Further, SAP channel partners will also benefit from touting SAP's leadership position, brand recognition, and viability, albeit this will become more handy when competing with other mid-market incumbents other than MBS and Sage/Best, whose viability and recognition remain spotless.

However, where SAP will challenge or at least make things more interesting for these SMB juggernauts is their vulnerability in terms of integrating disparate product lines (i.e., general ledgers) on disparate technologies. Neither of these solutions is functionally complete enough at this stage, and the customized code for extension is often not owned by the vendor but rather by the partner, which SAP tends to avoid with the more complete, from the ground up designed SAP Business One solution. Microsoft will additionally have to deal with users' wariness of the technology lock-up bundled with ongoing security issues and unresolved licensing and upgrades issues, which may eventually decide to diversify their product portfolios.

Further, as a new paradigm shift, SAP Business One software features natively the SAP Enterprise Portal's drag and relate capabilities obtained in its acquisition of TopTier in 2001 (see SAP Acquires TopTier To Further Broaden Its Horizons). A user is, for example, able to add a data field to an invoice, and then drag and drop the newly created data field into another part of the system, which should be able to produce new reports based on the data field. Another example would be selecting an available item from the inventory list, and then dragging and dropping, for example, its description field to the "Accounts Payable Invoices" function within the "Purchase" module. The resulting new pop-up window will list every invoice from every supplier of the item so far. These examples of instant analysis and reporting, easy access to real time business data and proactive business management are a quantum leap compared to the above traditional accounting solutions that have been written for accountants by accountants, and where other "non-bean-counting" staff members have a hard time discerning useful information without a serious training and familiarity with pesky reporting facilities, or, worse, needing to export inordinate amounts of data to Excel, and trying to make sense out of tweaking it.

The product also features embedded business process management or improvement (BPM/BPI) integration to mySAP Business Suite products (e.g. BI, Portals, Exchange Integration), and an SDK facilitating integration of third party software and services with SAP Business One, since it utilizes SAP Business One business logic and has the ability to read and write to and from each object in the system, and a simpler development and maintenance of integrated processes. It also provides analytical tools to gain insight into an organization's operations, online alerts for collaborative event tracking and problem solving (via a "management by exception" approach that relies on predefined business rules, and which monitors data for certain conditions, such as, a minimal allowed profit margin for a sales quote), and customizable reports that give companies the information they need in a format that allows them to brand their business. These reports solve the drag and relate queries' shortcomings of not being able to be saved and reused later, instead serving as a good starting point for more detailed reports.

Therefore, the solution is not a reconfigured or "watered-down" version of its larger sibling mySAP Business Suite, but rather it is based on TopManage, a product developed and marketed by the former Israeli software company TopManage Financial Solutions LTD, which SAP acquired in March 2002 and integrated into its business unit for the SMB market. At the time of its acquisition in 2002, TopManage had nearly 800 customers in Europe, and it offered financials, distribution, and CRM functionality and supported English, Spanish, and Hebrew versions, along with the updated pertinent figures for the SAP Business One successor that were mentioned earlier. The still newcomer product in the US has for some time been successfully sold in the lower-end of the European market, since it provides small and medium businesses with an integrated family of enterprise applications tailored to the specific needs of sales-driven companies, while the manufacturing prospects will be addressed through the SoftBrands' alliance. For details on this alliance, see Part One of this note.

Focus on US Market

All the above facts might lead to an enthusiastic and stronger channel that eventually will provide SAP with a product to sell to divisions of large global companies with mySAP Business Suite used at the corporate level, by reducing the potential of eroding divisional account control to another more nimble, more vertical or plant-level focused ERP vendor's offering. The fact is that a high percentage of SAP's customers outside the US are small and mid-market companies. One can wonder why that is still not the case in the US. In addition to SAP's US-based competitors' good job with propaganda (mainly by exploiting some well-publicized SAP implementations' flops in the US), a major reason is still the nascent indirect channel. Having currently only about 100 certified partners for the entire US market sounds rather nascent compared to the several thousands that Microsoft or Best Software cite, or several hundreds touted by Lilly Software, SYSPRO, or Intuitive Manufacturing Systems.

So far the direct sales approach has often proven inappropriate for the market segment. It is much a different case when a local partner, well versed with the issues and fears of the customer (and who can even strike a cultural rapport with them, being a native of the region) represents SAP, particularly if the partner specializes in the customer's industry. The fact that SAP has had a strong channel-driven SMB business in the rest of the world may prove the point, given its better success therein. Therefore, increasing indirect channels bundled with vertical industry and geographic coverage specialization, either in original or a "private label" form, remains a necessary step for positioning SAP as a relevant provider of solutions to this increasingly important market segment.

SAP seems to have grasped that the key to success in the SMB market is brand awareness, since SMBs are looking for support from incumbent vendors with intimate knowledge of their vertical and business processes; ample local resources; and the commitment to support them both off and on site to achieve value over a long-term relationship. SAP realizes it will likely never match the channel size of established players such as MBS and Sage/Best Software that already have large channels (over 6,000 and 20,000 respectively) starting with CPAs and independent resellers and independent software vendors (ISVs). Thus, SAP does not seem inclined to recruit en masse the formalized small local resellers and value-added resellers (VARs) that have so far dominated the low-end application market.

Therefore, we expect that SAP will make other channel deals in the future either with other very large companies like American Express, IBM, and HP that are already serving small businesses and are looking for additional products and services to sell, or by cherry-picking certain group of disgruntled, neglected or simply disconcerted resellers of MBS, Best or Epicor, particularly after recent Microsoft's restructuring of its global partner channel, which still leaves many answers in the air. In turn, this smaller but high-quality, high-touch SAP reseller channel will be developed by SAP global development support, product training and marketing and sales support, including pre-sales support and lead generation, whereby SAP will provide:

1) qualification guidelines, including partner sales capability and industry knowledge assessment,

2) an SMB partner portal to provide a single point of access to information, and

3) an investment in partners and customers to ensure a highly valuable partnership and best-of-class solutions for their businesses, such as SDK, training, and various levels of marketing and "other" support subject to the partner's size and degree of involvement in the program. To enroll, resellers have to invest a $10,000 (USD) fee and submit customer preferences, along with a credible marketing and business plan. They must also have sales representatives that have to pass a certification test after a week or so of training.

Some of the nearly one hundred partners trained in selling SAP Business One (while SAP expects that number to exceed 200 by the end of 2005) covering all of the metropolitan areas in the US, which we have had a chance to talk to, have only praises about their treatment and commitment by SAP so far. The theme that SAP has not been insisting on the number of software boxes they can move, but is genuinely interested in having successful partners and delighted customers, seems to be recurring. Although the lower number of partners means "fewer feet on the street" compared to MBS and Best, it at least provides for more intimate relationship between SAP and a controllable number of partners. Namely, partners' solutions have been leveraged and managed through SAP Global Solutions Network, so that partners do not have to reinvent the wheel, and even unnecessarily compete in same industries. Not to mention the ability to manage the code centrally, instead of current anarchy of solutions, customizations and extensions amongst thousands of MBS' partners.

Moreover, SAP's global presence and technical capabilities indicate that the company can adapt its product to meet the local requirements of many countries. As the enterprise applications market leader, SAP also has strong credibility. To be fair, SAP Business One is not a cheap product based on the recommended price list of $3,750 (USD) license fee per user for a minimum three users and 17 percent for annual service and maintenance. Thus, one cannot accuse SAP for giving the software away just to enter the fray. However, SAP does not charge a per-module license fee. In addition, given that sales to additional users has a sliding scale of discounts and that the product has built-in CRM and analytic capabilities, bundled with short implementation times and adequately low costs (which may still sound strange when someone thinks of SAP), the total price becomes quite competitive when compared to buying a concoction of separately priced modules from the other SMB vendors.


SOURCE:
http://www.technologyevaluation.com/research/articles/softbrands-to-institute-fourth-shift-for-sap-business-one-manufacturing-work-plan-part-three-market-impact-17271/

QAD Pulling Through, Patiently But Passionately Part Two: Company Background

QAD Pulling Through, Patiently But Passionately Part Two: Company Background
P.J. Jakovljevic - September 19, 2003

Market Impact

On August 20, QAD Inc. (NASDAQ: QADI), a global provider of collaborative enterprise applications for manufacturing and distributing organizations, reported upbeat financial results for the fiscal 2004 second quarter and six-month period ended July 31, 2003. The improved financial performance has not come without astute moves with regard to product functionality enhancements. These moves include:

* A partnership with Johnson Controls (NYSE:JCI) to develop a next-generation Just-In-Time (JIT) Sequencing software module for MFG/PRO

* Announcement of Kanban Visualization, which enhances QAD's existing Supply Visualization (SV) solution

* More than two dozen important new functions and enhancements to MFG/PRO eB2, specifically designed in collaboration with QAD's manufacturing customers to help address their specific needs

* Announcement of healthy sales momentum in Asia, with the MFG/PRO suite becoming a platform of choice for automotive manufacturers in China to automate business operations and collaborate with partners worldwide

The "fortune favors the bold" and "patience is a virtue" adages would be applicable to QAD's endeavor of finally getting far beyond its most trying days. "Patience" would stand for the reason of QAD staying true (and being finally vindicated) even during its most difficult times in the last few years (see Figure 2), to what had made it successful in the first placesolving manufacturers' real-world problems.


Figure 2.


This is Part Two of a five-part note.

Part One detailed the above moves.

Parts Three and Four will discuss the market impact.

Part Five will cover challenges and

Part Six will make user recommendations.

QAD Background

QAD (supposedly standing for "quality, applications, delivery"), headquartered in Carpinteria, CA, has evolved into a global provider of e-business enabled ERP and supply chain management (SCM) software and services to multinational companies of all sizes, with a special focus on the mid-market. The company was founded in 1979 when its founder Pamela Meyer Lopker was offered a contract to write manufacturing software for a sandal-making company in California, run at that time by Carl Lopker, who subsequently became the current QAD CEO and Pamela's husband.

After its initial success with its first project, QAD began customizing its product for other local California companies and working exclusively with HP computers. QAD grew steadily throughout the 1980s and 1990s, expanding internationally and making its product compatible with more operating systems. In 1995, QAD became one of the first ISO 9002 certified ERP vendors, while in 1996, it became part owner of Integral Datentechnik AG, a German data management system maker. In the same year, QAD commercially released its flagship ERP application named MFG/PRO (alluding the product for "manufacturing professionals"), which was devised to control all main business functions, from inventory management and planning to purchasing and finance for highly regulated industries, like food and beverage, and medical devices.

Indeed, QAD's sole ERP product MFG/PRO has since become one of the most functional and, at the same time, one of the easiest to install and maintain manufacturing-oriented products in the market, with a low total cost of ownership (TCO). The vendor offers a shop floor level solution (i.e., a very complete solution for inventory management, repetitive manufacturing, capacity planning, scheduling, and distribution) typically associated with fast implementation and reasonably appetizing price tags suitable for multi-national mid-market enterprises and their autonomous divisions that do not require a global unified finance and human resource (HR) management strategy.

Consequently, its large manufacturing client base remains satisfied and committed, as shown in typical follow up sales and project scope expansion to other functional modules and to other sites, after the initial MFG/PRO implementation. Thus, QAD's mind share within the automotive, medical equipment, and industrial and electronics discrete manufacturing segments remains strong. The above facts have therefore positioned QAD as a notable player in the upper middle of the discrete manufacturing market. It is a direct competitor for the likes of J.D. Edwards (now part of PeopleSoft), Oracle, SAP, SSA GT/Baan, IFS, Intentia, MAPICS, Epicor and so on, and it belongs to the top ten global manufacturing-oriented ERP vendors. QAD went public in 1987 and currently trades on NASDAQ.

Responding to Competition

However, the entrepreneurial spirit and enthusiasm of its founders/owners and an early-mover advantage could not entirely and indefinitely make up for its finite resources. As a result, during mid and late 90s, many above-mentioned and high-flying ERP competitors outpaced QAD both in the scope of the ERP (and beyond) functionality and market share-wise. Consequently, the lack of strong integrated global corporate financial and HR/payroll modules prevented QAD from securing many mega-enterprise deals. The difficulties were aggravated when the core ERP market became more than saturated towards the end of the 1999s, causing QAD to venture outside its manufacturing ERP stronghold.

To that end, and to again possibly leapfrog the competition, QAD embarked a few years ago on reinventing itself by delivering applications that would optimize complex order fulfillment processes across multiple enterprises/divisions. To that end, in 1998, the company formed an R&D site in Ireland to help develop QAD eQ (formerly On/Q), its collaborative applications suite that creates private trading exchanges (PTX) and enables intelligent order management via the Internet, with a business-to-business (B2B) application framework to help users manage and coordinate relationships with suppliers and customers. The initial eQ module, then referred to as Advanced Planning and Scheduling (APS), was released in 1998 in a reseller agreement with Adexa, while another eQ module, Collaborative Order Management, was natively released in 1999.

Another major product enhancement feat at the time was the QAD/Connects architecture, which was both an open architecture concept and a set of the following connectivity tools: 1) Q/LinQ (recently renamed into Q/Link), which provides a standard framework for data import/export between MFG/PRO and eQ components and other ERP systems, 2) an EDI Commerce tool with support for XML, and 3) Network User Interface (NetUI) for the Java platform. The last piece of the QAD product suite at the time was Qwizard software, which was intended to reduce MFG/PRO implementation and rollout training to employees. It still includes a business modeler tool, customizable implementation tools, interactive learning tools, and tools to design and customize the visual interface of MFG/PRO software, and is part and parcel of QAD's Q-Advantage implementation methodology.

Resultant Challenges

Nevertheless, delivery of the above products has taken its toll on QAD's performance during the last few years. In addition to venturing into a new territory for QAD (outside of traditional ERP), the dual product delivery had for some time confused/detracted customers, sales force personnel, and partners, all of which were not clear about whether and when to deploy MFG/PRO and/or eQ. Also, during the time of dot-com exuberance, with almost everyone offering some kind of "e" (business/commerce) value proposition, it was very difficult for QAD to prove its differentiating points, which had all led to customers' lukewarm reception, during a time when the vendor needed a higher (rather than dwindling) top line to compensate for its hefty R&D investments of over $30 million per year.

The technological foundation disparity of the products has also taken its toll by possibly doubling the development expenses and in delivering products integration. Namely, MFG/PRO is written in Progress Software's proprietary 4GL (4th generation language) development tool, which made QAD dependent and vulnerable owing to the poor performance of Progress Software at the time. Progress also appeared to have all but given up in the race for a respectable share of the database market and its 4GL toolset had struggled ever since to win notable market share among developers.



SOURCE:
http://www.technologyevaluation.com/research/articles/qad-pulling-through-patiently-but-passionately-part-two-company-background-17062/

Epicor's Mid-Market Pitch Becomes Higher For (One) Scala Part Two: How Scala Complements Epicor

Epicor's Mid-Market Pitch Becomes Higher For (One) Scala Part Two: How Scala Complements Epicor
P.J. Jakovljevic

How Scala Complements Epicor

Epicor Software Corporation (NASDAQ: EPIC) and Scala Business Solutions (formerly Euronext: A.SCALA, delisted in July 2004), an Amsterdam, the Netherlands-based provider of collaborative enterprise software for mid-size enterprises and subsidiaries of global corporations have completed a merger that began in late 2003. The merger creates the largest independent global mid-market provider of collaborative ERP, customer relationship management (CRM), and supply chain management (SCM) applications based on Microsoft's .NET platform and Web services, with approximately $250 million (USD) annual revenues, nearly 1,500 employees and with over 20,000 customers. The combined company has an expanded global presence with operations and customers in 143 countries, including worldwide coverage of sales, consulting and support for mid-market and large multinationals as well as local enterprises, offering a broad suite of integrated solutions.

Given Epicor's ordeal of the past and the fact that divesting two lateral products in 2001 greatly helped it achieve some much needed stability nowadays (see Latest Development on Epicor's Trying The Divestiture Tack), one could wonder about the wisdom of the renewed Epicor's appetite for acquisitions. After all, the acquisition of former Dataworks had left Platinum (subsequently Epicor) with multiple unrelated ERP products and the inherited daunting task of rationalizing its product development strategy, and, who on earth with a sound mind would like to revisit that experience? Well, concurrently with achieving a turnaround both in terms of its financial performance and of its strategy clarity, Epicor has also for over two years reverted to its, this time possibly more selective, and thus successful acquisition streak starting with the Clarus e-procurement acquisition at the end of 2002, and former ROI Systems and TDC Solutions acquisitions mid-2003 (for more information, see Epicor Picks Clarus' Bargain At The Software Flea Market and Epicor Conducts Its Own ROI Acquisition Rationale).

Moreover, one should note that Epicor has since its progenitor's inception twenty years ago been competing primarily in the true mid-market, which it defines as enterprises with revenues between $50 million and up to $1 billion (USD), and to that end, the vendor has competed mainly with the Vantage (for new business opportunities), Manage 2000, and Avant products in the manufacturing arena, and with the Epicor Enterprise suite (formerly e by Epicor) and the Clientele standalone CRM product for certain service industries. Increasingly, since customers in this mid-market segment are looking for Microsoft SQL Server-based solutions, the Vantage manufacturing product (and its "smaller sibling" Vista, as an introductory-level product) have turned out as better positioned to address this requirement, although both major manufacturing product lines include the broad range of modules for the upper echelon of midsize manufacturing enterprises.

This is Part Two of a five-part note.

Part One detailed the event.

Part Three will discuss the market impact.

Part Four will present merger synergies and challenges.

Part Five will address more challenges and make user recommendations.

Scala Products

Therefore, Scala should complement and further bolster Epicor's offering in many regards, but possibly the royal one would be its ability to firmly position Epicor as a standardized tier 2 or divisional solution for Global 1000 companies. This is owing to Scala's unrivaled global product capabilities amongst peer vendors, which will be explained in more detail later in the text. Otherwise, at first glance the merger looks like a positive move for both companies and their customers, since Epicor obtains a foothold in some complementary geographic regions, and in certain discrete manufacturing and service industries where it has not really penetrated in the past (e.g., industrial machining, pharmaceuticals, light engineering, hospitality, retail, not-for-profit [NFP] organizations, etc.) by acquiring a reasonably run vendor without much excessive baggage.

It is interesting to note that during Epicor's trying years at the turn of the century Scala had performed much better. For example, although the market turbulence during these few years had also taken its toll in Scala's restructuring and cost-containment exercise, still, with revenue of approximately EUR 74 million in 2002, which was a slight 4 percent growth over 2001, Scala then remained a prominent mid-market enterprise applications provider. Although its license revenue declined by 7 percent in 2002, the maintenance revenue increased by 23 percent, given that more than 90 percent of existing customers continued to pay for maintenance. This was, in part, due to an aggressive development program, which saw the release of iScala 2.1 in mid-2002 (see Scala Shows Far More Than a Bit of a Backbone) and a newer version iScala 2.2 in 2003. From 2001 to the end of 2002, the company also doubled its research and development (R&D) headcount to over 200 (out of a 700 total employee headcount at the time), plus 50 development contractors, and geared up its in-house training center, the Scala University in Budapest, Hungary to train and certify its growing ranks of 140 resellers that accounted for 23 percent of its business in 2002.

But, despite impressive growth and cash flow during these years, Scala unfortunately posted a quite disappointing performance in early 2003, possibly at an unwanted time, resulting with a restructuring program that included rationalization of the company's bloated R&D base with the closure of some satellite R&D facilities and the transfer of expertise to the company's cost-effective center of technical R&D excellence in Moscow, Russia, and headcount reduction of approximately 30 percent from the previous employee level, including consolidation of a number of senior management positions.

Possibly more disconcerting was the fact that long-standing customer interest in the new functionality of Web services-enabled iScala 2.2 release then resulted in overcommitment to customer-related developments (whereas the iScala 2.1 release was mainly focused on improvements in the underlying technology platform). As a result, the commercial release had to be delayed to September 2003 instead of previously indicated mid-2003. This delay created a vicious circle-like adverse impact on new license sales, as customers had to wait for new functionality. Even as all these events took place at possibly the worst time for Scala,,Epicor, who struggled at the turn of the century, had ironically meanwhile quite straightened its ship to even appear attractive as a savior to former Scala board in 2003.

Also, these rationalization measures and the eventual release of the product have reverted to increased revenues and a positive operating income afterwards. Namely, by the end of 2003, Scala's results were again exceeding expectations owing to a new product released in September, iScala 2.2 Collaborative ERP, which was hailed as the biggest release of new functionality in more than 10 years, and which has several modular or individual enhancements of interest to manufacturers, including service management, CRM, SCM, asset management, contract management, resource management, business intelligence (BI), workflow management, user interface (UI) customization, and connectivity.

The company has since reportedly seen strong customer demand for the new iScala version, reflected in its healthy sales pipeline, especially in markets where Scala traditionally performs well, including Scandinavia, Eastern Europe, Russia, and China. Nearly 60 percent of Scala's top customers, including both global and local enterprises, have supposedly been actively involved as early adopters since 2002, with many of them already running the new version live. As an example, Tetra Pak is one of Scala's longest-standing customers, with Scala solutions implemented in nearly fifty countries, against SAP at the corporate level.

iScala 2.2

The iScala 2.2 Collaborative ERP system includes

* iScala Core Business Processes, which is a set of business processes that includes multicurrency and multi-legislative financial functionality, asset management, and a set of packaged integration solutions (eXtensible markup language [XML]-electronic data interchange [EDI], financials, and master data integration) which helps customers to improve the business efficiency of their core processes.

* iScala CRM, which is powered by Microsoft CRM (for more information, see Scala and Microsoft Become (Not So) Strange CRM Bedfellows), accessible from both Microsoft Outlook and the Web, and integrates with iScala ERP and other business systems.

* iScala SCM, which is packaged to address typical business needs, starting with logistics (purchase and inventory management), warehouse management (including quality control), manufacturing (planning, configuration, shop floor control), tools (such as lead time management, available to promise [ATP] and drop shipment), and integration solutions.

* iScala Contract Management, Project Management, Service Management, which is a set of business processes that has been significantly improved and extended in the new version of iScala to help customers automate their pertinent business processes.

* iScala Human Resource Management, which includes the global version of the iScala Payroll module that customers can use to improve their personnel management in almost any country, regardless of how complex the legislation requirements.

* iScala Business Intelligence (BI) Server, which provides a broad set of BI and analytics tools to give users access to information they need when they need it to make the right decisions quickly. Designed to make operational and management reporting easier, the product enables users to relatively quickly perform drill-down enquiries and comparative analysis to find out exactly how the business is doing and where improvements are needed.

* iScala Developer, which is an entire development solution for creating vertical and unique company-specific processes inside and outside the iScala system.

Thereafter, in May, Scala announced that the first service release (SR1) of the latest version of the iScala Collaborative ERP system is now available for all existing and potential customers worldwide. iScala 2.2 SR1 includes a wide range of new and enhanced business functionality, such as better connectivity with other best-of-breed warehouse and manufacturing systems, improved features in the supply chain and service management processes as well as availability in two additional languages—Korean and traditional Chinese.

The company has also enhanced its iScala CRM offering to give customers better visibility into the sales pipeline and across sales activities, to improve the quality of leads and closure rates and be able to fully integrate with Microsoft Outlook and other Microsoft Office programs. iScala CRM now comes with standard reports that are reasonably fast and easy to run and with a familiar interface, similar to Outlook, which will possibly help a company extend its applications to more users. For example, a user can create a sales proposal from a Microsoft Word template, use pricing data from their iScala ERP system, and save all versions of that proposal within iScala CRM, keeping track of all the changes in the sales cycle until the sale is closed.

Last but not least, the addition of a brand new iScala Manager Software Developer Kit should interest Scala's indirect channel, who will now be able to add further value by designing new b



SOURCE:
http://www.technologyevaluation.com/research/articles/epicor-s-mid-market-pitch-becomes-higher-for-one-scala-part-two-how-scala-complements-epicor-17667/

Recommendations for Users of Acquired Enterprise Resource Planning Systems

The added value of both SSA Global and Infor is that existing users of relatively small and dubious enterprise resource planning (ERP) providers should now gain the benefits of synergistic software developments from other ERP siblings.

This is Part Six of the six-part series The Enterprise Applications "Arms Race" To Be Number Three.

This article is part of a comparative analysis of SSA Global and Infor, two contenders in the fierce ongoing competition to be number three (after SAP and Oracle) in the world of ERP vendors (see The Enterprise Applications "Arms Race" To Be Number Three for background information and a discussion of vendor similarities). The other leading contender is Lawson Software. For a detailed discussion of Lawson, see 'New' Lawson Software's Transatlantic Extended Enterprise Resource Planning Intentions.

Both SSA Global and Infor have also been building ecosystems of extended ERP consisting of complementary products that they can peddle (up-sell or cross-sell) to their installed base (and even to new customers in a stand-alone manner), to keep clients on maintenance and sustain them as a source of revenue for many years.

Essentially, the ERP suppliers that were acquired could not afford the software investment necessary to continue building a globally competitive solution. In addition, the development of modules and components which run across all solutions dramatically improves the financial viability of each code base, in an economy-of-scale manner, compared to their individual pre-acquisition viability. However, integrating a multiplicity of ERP components, which were written with different data semantics, domain expertise, and development philosophies, remains challenging and usually more painstaking than expected. Thus, it is logical to expect that some less globally promising solutions, such as Infor Swan (former Infor COM purchased this small product in the UK, and subsequently sold very few of these systems) or Geac's Management Data, Ratioplan, and Streamline, and possibly Datastream's MP2, will not have a simple and quick upgrade path within Infor's upcoming integration and development platform (although all Infor products should in principle benefit from this strategy).

Incidentally, Infor's technology framework initiative Corestone was depicted in detail in Enterprise Resource Planning: Bridging the Gap between Product Vision and Execution; it suffices to recap by saying that Corestone includes a drive towards a common user interface (UI), coding, navigation method, and messaging standards, in addition to database independence and the adoption of dominant information technology (IT) standards (including in particular Java 2 Enterprise Edition [J2EE] and Microsoft's .NET platform). Needless to say, this is a major initiative, whereby Infor plans to exploit both platforms and to offer the same business functionality on each. The Corestone initiative aims to cover a multitude of development subjects: security, authentication, service-oriented architecture (SOA), application integration standards, Java and Microsoft .NET development standards, and so on. Internally, Corestone takes form in several ways: a strategic direction in the form of specifications (the Security Model being an example); strategic development components (the Bedrock Server for Java or common UI for Microsoft .NET being examples); and overall corporate standards (for example, the use of POJO's [Plain Old Java Objects] rather than Enterprise Java Beans [EJBs]).

The vendor expects the first Corestone release to include a browser-based UI and data dictionary, followed by a master data management (MDM) application; by the end of 2006, all planned functionality should be available. As for how it will play out, while SyteLine has long been ported onto .NET (see Frontstep Ups the .NET Ante), the VISUAL Quality Management module will be ported onto the platform, and then made generally available where required. Similarly, the SupplyWeb supply chain visibility and supplier relationship management (SRM) system will run with all ERP systems, whereas the Java-based Infor Varial financials solution will also become the financial management system (FMS) component for all products over a three- to four-year time frame.

SSA Global Added Value

Coming back to similarities between Infor and SSA Global, Infor's offering is in tune with the SSA FM (SSA Financial Management) 2.0 product stemming from the Masterpiece product used by nearly two thousand customers around the world, and which is becoming available to most SSA Global ERP products. The scope of SSA FM 2.0 covers both core and extended financial management; core financial management consists of the general ledger (GL), accounts payable (AP), accounts receivable (AR), fixed assets, purchasing, inventory control, fund accounting, job costing, labor distribution, and draft services modules, which have meanwhile been augmented by numerous customer-driven enhancements. The core financials element can also be augmented by integrations with a number of SSA Global strategic solutions, to provide a range of extended financial management capabilities, such as role-based portals, corporate performance management (CPM), supplier collaboration, and workflow, at no additional charge.

SSA Global recognizes the need to go beyond the transactional support of back-office accounting procedures and the need to provide chief financial officers (CFOs) and other financial executives with "best practice" support for strategic financial decision making, whereby a broader range of ancillary financial functionality is needed to facilitate enterprise financial management:

* integration of planning and forecasting data, so that planners can allocate resources to support business strategies, operational plans, and customer demand, and so that executives can allocate resources to ensure operational plans are met.
* configurable key performance indicators (KPIs), to measure how well operational activities meet strategic goals; performance measurement and analysis tools need to be available for evaluating these KPIs relative to strategic objectives and operational goals.
* the ability to share data and analyze results, so that CFOs can interpret data and make strategic decisions based on the data.
* the ability to communicate strategic objectives to employees and stockholders so that employees know what the strategy is and how to put it into action.

Further along the line of similarities, given that the user productivity bundled with analytic reporting is the main pillar of all next-generation product architecture forays (see Portals: Necessary But Not Self-sufficient), the Java graphical user interface (GUI) from the Infor COM solution is being leveraged for Infor XPPS too, and this will likely become the GUI for all Infor products. On the SSA Global side, since 2002 business planning and control system (BPCS) users have seen the BPCS Enable thin-client UI, whereas since mid-2004, the vendor has offered a thin-client Web-based UI for SSA Baan IV customers (SSA Baan IV was originally released in 1995). This UI has since become universal for all SSA Baan ERP versions and for SSA ERPLN, and should enable customers to upgrade to future releases more easily. Continuing the SSA Global model of supporting customers for life, SSA Baan IV customers can continue to leverage the Web interface even when they choose not to upgrade to newer releases. The Web UI affects the technology layers of the product but not the application logic, and Baan IV customers more easily do not need to reinstall or maintain the Web application at any user location, or to deploy additional hardware. On the IBM iSeries side, the vendor now has a new iSeries Web UI; this Web-based thin client UI for the iSeries-based ERP products is based on InAbler technology from former Infinium, and is available for SSA ERPLX, SSA PRISM, and SSA Infinium.



SOURCE:
http://www.technologyevaluation.com/research/articles/recommendations-for-users-of-acquired-enterprise-resource-planning-systems-18522/

The Name and Ownership Change Roulette Wheel for Marcam Stops at SSA Global Part One: Event Summary

The Name and Ownership Change Roulette Wheel for Marcam Stops at SSA Global Part One: Event Summary
P.J. Jakovljevic

Event Summary

SSA Global, a Chicago, IL-based extended enterprise solutions and services provider for process manufacturing, discrete manufacturing, consumer, services, and public companies worldwide, which has for the last few years become an insatiable enterprise applications market consolidator, seems to have many more aces up its sleeve. Namely, the vendor, which was once an object case of a poorly managed enterprise resource planning (ERP) company during the late 1990s (see Another One Bites the Dust—SSA Gored to Death), has, in a comeback fashion, since late 2001 experienced a dozen or so of consecutive quarters of growth and profitability that is possibly unique in the industry today. The company has done it while concurrently orchestrating several successful acquisitions including former EXE Technologies, Inc. (see SSA GT to EXE-cute (Yet) Another Acquisition), Baan, Elevon, and Ironside Technologies (see Baan And SSA GT Merge To Form a Mid-Market Empire With An ''Iron Side''), Infinium Software (see Is SSA GT Betting Infini(um)tely On Acquisitions?), interBiz, the former e-Business division of Computer Associates (see CA Unloads interBiz Collection Into SSA GT's Sanctuary), and ICL Max International (see SSA Acquires MAX Hoping To Leap From Its MIN). As a result, the vendor now has 121 locations worldwide and its product offerings are used by more than 13,000 customers, some of which represent market-leading companies, in over 90 countries.

Based on SSA Global's temporary acquisition hiatus of several months following the EXE acquisition in the second half of 2003, some might have prematurely concluded that the vendor's focus is now on the digestion of this spate of additions to the family. Indeed, prior to its most renewed acquisitions' streak in 2004, SSA Global had done notable work in making sense out of its slew of earlier acquisitions, which analysis will be the topic of another forthcoming article. However, with its recent acquisition of Arzoon (see SSA Global Forms a Strategic Unit with an Extended-ERP Savvy), the vendor has gotten back on the acquisition trail.

Most recently, at the beginning of July, SSA Global announced it has acquired Marcam, a provider of specialized, operational-level ERP solutions for process manufacturers, from Invensys plc, the global automation and controls group with headquarters in the UK, from which SSA Global also bought Baan about a year ago. However, while the price tag for Baan was known at the time—~$135 million (USD)—, financial terms of the Marcam agreement were not disclosed. SSA Global believes that Marcam's proven process manufacturing solutions further strengthen its expertise in the food and beverage, pharmaceutical, and chemical industries, which it has had within some of its products like BPCS (its own original product), PRMS (coming from former interBiz and originally from Pansophic), and Infinium, all of which are to be rolled into the upcoming next-generation SSA LX product line. The combination of Marcam, whose enterprise solutions streamline plant- and process-oriented supply chain operations, and SSA Global will supposedly deliver process manufacturing customers greater operational visibility and the ability to optimize financial operations, inventory management, order management, purchasing, and additional critical business processes.

On the other hand, Marcam customers might benefit from the same quality service and support current SSA Global customers are reportedly experiencing through "a customer influenced product roadmap, incremental systems modernization, and continued industry focus". SSA Global believes that its product convergence strategy will provide a way forward for the PRISM and Protean customers, coupled with a commitment to support all existing versions. The vendor pledges to also offer Marcam customers its extended enterprise solutions that can address their immediate critical business challenges.

This is Part One of a six-part note.

Parts Two and Three will discuss the marketing by Invensys.

Part Four will detail what SSA Global gets.

Part Five will cover the merger impact and challenges.

Part Six will discuss competition and make vendor and user recommendations.

Market Impact

A surprise or not, and quite resembling its former sibling Baan (i.e., under Invensys), with which it is now again being reunited but this time under SSA Global, Marcam and its enduringly anxious users must feel a deep sigh of relief and a hope that its long and winding journey, which has been much tainted with protracted viability and ongoing product development issues ever since the late 1990s, is finally reaching its more desired destination. This indeed seems to be possibly the best closure for Marcam in light of Invensys' poor (albeit recently improving) financial state, its muddled strategy with several enterprise and plant automation applications it used to own, and given the new owners' intentions of taking good care of the solid acquired product, which also likely came at a steep discounted price tag, given SSA Global's penchant for obtaining companies at a high acquired market share per paid price ratio.

At least based on the experiences of formerly also disconcerted interBiz or Baan users, Marcam should certainly feel more at home and within a proper family amid the SSA Global's ERP portfolio than as part of Wonderware/Invensys.

What Happened With Invensys

In our note from 2003, we analyzed deeply what had likely gone wrong between Baan and Invensys (see Baan Seeking a New Foster Home—A Dj vu Or Not Quite?). Although Marcam will have meanwhile been given a few more chances by Invensys, many similarities with the Baan failure have continued with Marcam too.

In a nutshell, Invensys, with its ambitious 'Sensor to Boardroom' product strategy, seemed once determined to provide manufacturers a solution that would satisfy all their needs, from shop floor measuring devices and process control to cyberspace supply chain collaboration, since Baan and Marcam would offer enterprise-level applications (in discrete and process manufacturing arenas respectively), whereas Invensys would offer manufacturing executions systems (MES) and plant automation components. MES, as per the Manufacturing Enterprise Systems Association (MESA International) definition, is essentially any system that uses current and accurate data, triggers, and reports on plant activities as events occur. From electronic production management systems to shop-floor data capture, MES functions manage operations from point of order release into manufacturing to point of product delivery into finished goods.

The possibility of integrating and providing all elements of a complete manufacturing solution, at least from a same source if not exactly as a single computing platform, must have been tempting, and was possibly lucrative, but every effort should have been made in order to avoid the kind of poor piled-up products' execution, which partly led to Baan's and Marcam's pre-Invensys demise in the first place. While we in principle approved of Invensys' move to provide manufacturers a solution that may satisfy most of their needs, creating functional connections between front office, ERP and plant automation applications was indisputably warned as a colossal task.

What Invensys did not realize at the time was the fact that while prospective customers could hardly object to a broad and integrated suite, they were unwilling to simply "rip and replace" the systems they already had in place, and which were working well. Hence, the devised Baan-Marcam-Wonderware-etc. manufacturing suite strategy virtually failed and Baan was divested, as mentioned earlier, in June 2003.

Invensys' Continued Efforts with Marcam in 2003

Yet, over a year ago, after a lengthy and painstaking soul-searching exercise and immediately before the Baan sale, Invensys created a new group within its Production Management Division (PMD) called Invensys Production Solutions (IPS) , which included the PRISM and Protean process ERP products plus the resources of Invensys Validation Services group (www.vtc-usa.com), a Montreal, Canada-based provider of regulatory compliance, validation, and consulting services encompassing the entire validation project life cycle and a range of validation services for the regulated supply chain (see Invensys Production Solutions—Can Historic Strengths And The 'Protean Boost' Overcome Its Liabilities?).

While the newly formed unit at the time should have had some strength, since the PRISM and Protean products contain functionality that at least still can challenge the leading products in the process manufacturing arena, it also had many inherited liabilities that had to be addressed, in a great part because existing users of its above solutions have suffered from frequent product strategy changes as a result of vacillations by the Invensys parent company.

Namely, to refresh our memory, in the past several years, Invensys process solutions' customers have experienced the displeasure of witnessing several radical changes of strategy, causing some of them to begin to seriously doubt the vendor will ever deliver their market-specific product capabilities. In July 1999, Invensys bought the outstanding shares of then struggling Marcam Solutions, and folded it initially into its Wonderware factory automation division. Further, in August 2000 Invensys acquired then also languishing Baan Co. (see Baan Yet Another ERP Vendor to Find a Sanctuary Under Invensys' Wing) and made it a part of the former Invensys Software Systems (ISS) division.

The initial strategy for the products, which was announced after the Baan acquisition, was to release a unified Baan product that would combine functionality for discrete and process manufacturing (see Process ERP Market Loses PRISM and Protean). After hearing existing customers' less-than-pleased feedback and after another reconsideration of its past investments, Invensys then modified that strategy to one of creating the Baan Process division (see Invensys Announces New Division—Baan Process), which included five process ERP products coming to Invensys through Marcam and Baan acquisitions: Baan IV Process, Baan Dimensions, PRISM, Protean, and Baan Cable & Wire. The announcement was a departure from rewriting all the products into one core erstwhile iBaan ERP product—the unit was not going to provide an integrated solution any longer, but would rather




SOURCE:
http://www.technologyevaluation.com/research/articles/the-name-and-ownership-change-roulette-wheel-for-marcam-stops-at-ssa-global-part-one-event-summary-17555/

Can Webplan Reconcile Planning and Execution? Part One: Event Summary

Can Webplan Reconcile Planning and Execution? Part One: Event Summary
P.J. Jakovljevic

Event Summary

The past two years or so have been an interesting if not a tumultuous period for the Ottawa, Canada-based, privately-held Webplan Corporation (www.webplan.com), which felt compelled to further refine its original supply chain planning (SCP) and business-to-business (B2B) collaboration value proposition. The vendor, which started in 1984 providing fast-acting manufacturing resource planning (MRP) applications to midsized companies, was formerly called Enterprise Planning Systems and prior to that, Advanced Planning Systems. In 1998, Webplan not only changed its name, but started to reposition its product offerings towards a broader, collaborative SCP suite. In the most recent soul-searching exercise, during which it replaced and reshuffled much of its former leadership, the vendor has refocused on highly actionable response management software (formerly referred to as operational performance management [OPM], a subset of broader corporate performance management [CPM] software, which is about communication and delivering actionable intelligence at the right time) for manufacturers and distributors, what it believes will be a growth market.

Thus, at the end of 2003, Webplan announced that changes made to its business direction in 2003—including a drive toward delivering value to manufacturing customers through response management software—has gained acceptance with both its manufacturing customers and strategic partners, laying the foundation for growth in 2004 and beyond. Despite the fact that many manufacturers have invested in enterprise resource planning (ERP) systems and many also have supply chain management (SCM) systems, most continue to use inopportune batch reports and pesky spreadsheets to manage their operations performance. These have proven to be inefficient and error-prone methods of supporting decision-making, and result in a reliance on "educated guesswork" rather than on accurate dynamic analysis in order to align decisions with strategic objectives. For that reason, Webplan software intends to do for manufacturing or operational decision-making what some business intelligence (BI) applications have already done for financial decision-making. (See Financial Reporting, Planning, and Budgeting as Necessary Pieces of EPM).

As stated previously, Webplan has made key management additions to strengthen its team. In 2003, Douglas Colbeth, former Spyglass CEO, joined Webplan as president and CEO, in addition to his role as chair of the board. Webplan also added sales and marketing expertise to build on its technology leadership, since a manufacturing industry veteran, Bob Dolan, was appointed vice president of North American sales, while Randy Littleson, joined Webplan as the vice president of marketing.

Today, a few dozen of the leading Fortune 500 manufacturing companies reportedly use Webplan software at over 200 of their manufacturing sites and is used by about 50,000 users (total), to make crucial manufacturing decisions. In 2003, Webplan indeed added market-leading manufacturing companies across several key verticals to its customer list. These included Coty Inc., a global manufacturer and marketer of personal fragrances, cosmetics, and skin treatments; and Thomas Built Buses, a manufacturer of commercial transit buses, school buses, and specialty vehicles. The Asia Pacific region has especially shown major growth potential for Webplan, as a large number of electronics and other discrete manufacturers in the region have found a need for its software.

This is Part One of a four-part note.

Parts Two and Three will discuss the market impact.

Part Four will cover challenges and make user recommendations.

Asia Pacific Expansion

As global manufacturers expand operations in the Asia Pacific region, there is an increasing reliance on outsourcing, and companies are looking to the likes of Webplan to deal with the continuous changes in supply and demand, along with challenges in supplier collaboration across regions. Casio Computer Company, Ltd., Japan, a producer of highly sophisticated consumer electronics, corporate system equipment, as well as electronic components; Giant Manufacturing Company Ltd., Taiwan, the largest bicycle producer in the world; and The Hana Group, one of South East Asia's leading independent electronic manufacturing service (EMS) providers are among recent high-profile additions.

Accordingly, on March 23, Webplan announced a strengthened and expanded commitment in Hong Kong and Tokyo, to support the recent growth of its Asian Pacific customer base and to build on this momentum through direct efforts and by expanding its partner network. Partnerships with leading technology, integration, and application providers, including Atos Origin, Hewlett-Packard (HP) Japan Ltd., Intel K.K., ITRI (Industrial Technology Research Institute), Kawatetsu Systems, Inc., Microsoft Co., Ltd, NTT DATA Corporation, Oki Electric Industry Co., Ltd., and Unitopia should continue to advance Webplan's position in the region.

In the Asia Pacific region, the vendor sells almost exclusively through its partners, and most of its implementations are also done by partners, while Webplan typically mentors the customer or the partner before or during the implementation. The largest partner in the region is Atos Origin, with offices in Singapore, Bangkok, Taipei, Shanghai, and Hong Kong; Singapore and Bangkok are the most active offices. ITRI in Taiwan is another important partner, while in Japan, until recently, Oki has been the only active implementation partner. However, Intel and Microsoft Japan as well as HP Japan are proving to be great technology partners and are actively promoting Webplan's product.

Also, on April 26, Webplan announced that Kawatetsu Systems has been signed as a value added reseller (VAR) in Japan. Kawatetsu Systems is a spin-off from JFE Steel, one of the largest steel companies in the world. With nearly 1,400 employees and fiscal 2002 revenues of nearly $3.4 billion (USD), Katwatetsu Systems has a strong reputation for reliable service and support in business application development, implementation and integration, and its System Integration Division specializes in manufacturing, logistics, and planning system development and integration. The firm has formed a dedicated team to market, sell, service, and support RapidResponse, and, as an authorized support partner, it will provide implementation services as well as maintenance and support to customers.

Western Expansion

As for Europe, Webplan is still present only through the installations at certain high-profile customer sites, including Agilent, Cannondale, General Domestic Appliances, Raytheon, Sumitomo Electrical Systems, and Smiths Industries Aerospace.

Webplan has also expanded its distribution model to include both direct and indirect sales on a global basis. Particularly notable was the December's announcement that Webplan has joined the Cognos Partner Program (CPP) as a Strategic Technology Partner. The two companies will integrate Webplan's response management with complementary Cognos' business intelligence (BI) products, Cognos ReportNet and Cognos PowerPlay for enhanced operations visibility and analysis, and with Cognos Metrics Manager to ensure operations decision-making alignment with corporate objectives. Both vendors believe the end result will be a more rapid and measurable return on investment (ROI) for manufacturers.

Webplan has also developed (or has been negotiating) and strengthened strategic partnerships with other renowned technology organizations including Intel, RedPrairie Corporation (a referral partner that also does account planning, pursuing joint pipeline accounts, and exploring ways to embed the Webplan technology into its supply chain execution [SCE] solution), Intuitive Manufacturing Systems (a mid-market ERP vendor looking to embed Webplan's multisite planning technology and currently negotiating a Webplan original equipment manufacturer [OEM] agreement), TDCI (a referral partner, with a captive install base of the MACPAC ERP system users with the rights to support them, and which intends to become a Webplan VAR to extend its capabilities), and Agile Software (there is already an established marketing agreement, while actively engaged in exploring an integrated solution). These partners are seen to strengthen Webplan's value proposition in areas of product functionality, performance, integration, scalability, and sales.

The vendor intends to leverage a manufacturer's investment in most important enterprise solutions (e.g., BI, ERP, product lifecycle management [PLM], manufacturing executions system [MES], enterprise application integration [EAI], warehouse management system [WMS], etc.) offered by the above application vendors, to provide advanced real time analytics and enhanced decision support capabilities across the organization. Webplan thus believes its above alliances with application partners, systems integrators, and technology providers should make it easier for large and mid-size manufacturers across industries to implement and use Webplan within the framework of their existing enterprise applications' investment and within a short time to benefit with a measurable ROI.

Webplan RapidResponse 7.3

As for the product's functional offering, at the end of March, Webplan announced the release of the Webplan RapidResponse 7.3 product, which it believes stands alone in providing the breakthrough solution manufacturers need to master the reality gap, and enable the "as planned" world to meet the reality of the "as it is" or the "as executed" world where constant changes occur in supply and demand. According to Webplan's officials, current practices for manufacturers are still to use people such as, planners, schedulers, managers, etc.; paper including, e-mails, faxes, and even letters; and tools, for example, re-run plans, ad hoc reports, disjointed spreadsheets, etc. to fill that reality gap. These minimally automated and under-optimized approaches make it extremely difficult to keep supply and demand aligned, or to fully understand the ramifications before decisions are made.

Conversely, Webplan believes the introduction of RapidResponse finally addresses the need manufacturers have for real time insight and visibility to effectively manage "at the moment" (including, "as changes occur"), by delivering innovative technology that enables manufacturers to anticipate potential problems, instantly review multiple action alternatives, and align operations to rapidly and effectively master the above-described unavoidable reality gap instead of coming to a halt every time they need to make changes in operations and output. By instantly viewing changes in the supply chain, proposing and sharing action alternatives throughout and beyond the enterprise, and ranking and scoring multiple "what-if" scenarios, manufacturers should be able to make informed, best-practice decisions and manage momentarily the issues, such as inventory excess, product cost variance, and the performance of contract manufacturers and suppliers. Also, the product's architecture connects directly to front- and back-end systems, supports a continuous flow of information across multiple sites, and intends to optimize the value of existing infrastructure.

As to deliver the above touted solutions, RapidResponse leverages the following three key novel technologies that enable manufacturers to abridge the dreaded inevitable reality gap and respond swiftly to today's problems in an informed manner:

1. Active Spreadsheets provide Web-based global access to live data feeds from ERP, SCP, PLM, WMS, TMS (transportation management system) and other enterprise applications. With embedded AlwaysOn Analytics, manufacturers can analyze data based on near real time information and manufacturing algorithms (including calculating the impact of a demand change on supply requirements) found in a broad number of ERP systems such as SAP, Oracle, and many others. Doing so aligns action teams around a consistent, continuously updated view of the impact that changes in supply and demand will have on their operations in a familiar, intuitive spreadsheet view.

2. Resolution Engine gives manufacturers rapid, iterative modeling capabilities that enable action team members throughout and beyond the enterprise to propose, detail or merge views, and share action alternatives to drive effective resolution to continually changing situations.

3. Live Scorecard enables manufacturers to compare alternative "what-if" action plans based on real time information. By scoring proposed action plans against predetermined real world corporate performance metrics and key performance indicators (KPIs), Live Scorecard aims at ensuring that any chosen course of action conforms to both day-to-day and long-term business objectives and best practices.

Webplan RapidPesponse 7.3 is a further evolution of former Webplan Manufacturing Insight 2.0, which was built in 2003 within a collaborative framework as a personalized, role-based supply chain visibility and analysis solution that would provide real time alignment of supply and demand across the extended supply chain. Several enhancements were at the forefront of Release 2.0, included quick launch and new personalization capabilities, as well as web-based administration to manage users and groups, and support expanding Webplan user communities. Further, the release of Webplan Manufacturing Insight 1.0 took place mid-2002, and the product was, even back then, based on a modular architecture, while its inherent scalability meant that any company, regardless of size or level of supply chain sophistication, could benefit from the solutions' capabilities.

To make the purchase of its solutions affordable for a broad range of customers, Webplan has since been offering attractive investment options, such as "rent-to-purchase", to suit varying budgets. Designed with mid-tier companies in mind, the rental model should ease the burden on capital budgets and reduce financial risk. At the end of the contract term, the rental agreement converts to a perpetual software license, while flexible terms also give customers the opportunity to opt out anytime during the contract.



SOURCE:
http://www.technologyevaluation.com/research/articles/can-webplan-reconcile-planning-and-execution-part-one-event-summary-17366/

Enterprise Applications--The Genesis and Future, Revisited Part Four: Another Step in ERP Evolution

Enterprise Applications—The Genesis and Future, Revisited
Part Four: Another Step in ERP Evolution

P.J. Jakovljevic - April 3, 2004

Another Step in the ERP Evolution

Hence, enterprise resource planning (ERP) has entered another step in its evolution. While ERP packages traditionally excelled at combining financial control with multi-plant manufacturing and distribution coordination, they generally lacked extended planning and flexible execution functionalities beyond the four walls of the enterprise that can enable one business process today but change rapidly to handle tomorrow's new models. They were also often found lacking when it comes to delivering special financial features such as robust budgeting or international consolidation, summarized data for analysis and trending, as well as in handling real-time, physical events that occur on the factory floor, as opposed to the transaction-oriented bookkeeping functions (see Financial Reporting, Planning, and Budgeting As Necessary Pieces of EPM).

Therefore, there has been the imperative for the new generation of enterprise applications to be more customer-focused and to extend beyond the enterprise through e-commerce interaction and collaboration with business partners. The key to the Internet-driven, dynamic trade environment is agility, which is where traditional ERP packages have stumbled in the past. Thus, early ERP adopters discovered to their dismay that implementing these systems was only the first step toward creating a competitive information technology infrastructure. They and new users alike are now looking for significantly more comprehensive functionality—from advanced planning and scheduling (APS) (see Glossary*) and manufacturing execution systems (MES), to sales force automation (SFA) and even broader CRM;, to business intelligence (BI) and business-to-consumers (B2C); and business-to-business (B2B) e-business tools to name only some —and demanding that they be integrated into their ERP backbone (see Can ERP Meet Your eBusiness Needs?).

Users' visions of ERP are evolving from tactical to strategic, and users are no longer willing to choose between integration and function, since the "one-stop-shop" offering should mean that the releases are synchronized and the integration is maintained amongst all the components. ERP users who have gone live in the past several years have been making purchases of extended-ERP products (bolt-ons) to provide tangible return on investment (ROI) for their multi-million dollar investment. Recently, the enterprises have begun to analyze the viability of IT investments in a quantified manner, instead of doing only feasibility studies, which would consider only whether implementation of a system is possible but not whether it makes viable business sense. For more information, see Justification of ERP Investments; Part 1: Quantifiable Benefits from an ERP System.

Therefore, in response to the above-mentioned inadequacies of ERP software, a new breed of the above-mentioned specialized software has long emerged, named collectively as "ERP extension" software. These components can either be installed standalone or bolted onto existing ERP instances. They can usually be implemented relatively quickly and at a relatively low price, with much more immediate and quantifiable cost savings to the user. Accordingly, during the last several years, the functional perimeter of ERP systems has begun an expansion into these adjacent markets, as most ERP vendors have been busy developing, acquiring, or bundling new functionality so that their packages go beyond the traditional realms of finance; materials planning and management; and HR/payroll management.

As a result, many pundits have also jumped at the opportunity to name this new evolutionary phase by inventing names and acronyms like extended-ERP, ERP II, enterprise business applications (EBA), enterprise commerce management (ECM), comprehensive enterprise applications (CEA) and so on. More important than this contest for creating the catchiest buzzword, possibly in the unofficially accepted ideal form of TLA (three letter acronym), is the fact that most of these notions signify the evolution or enhancement of ERP, rather than its replacement or obsolescence.

Namely, we believe that, within recent years, ERP has been redefined as a platform for enabling collaborative e-business globally. Originally focused on automating internal processes of an enterprise, extended ERP systems increasingly include customer and supplier-centric processes as well. The conclusive evidence of this redefinition is the move of all major traditional ERP players into CRM, e-commerce, and SCM applications, which is the best illustrated by SAP's SCM revenue exceeding the former leaders i2 Technologies, Ariba, and Manugistics.

This is Part Four of a six-part note.

Parts One, Two, and Three covered developments from the 1960s through the 2000s.

Parts Five will continue to discuss ERP evolution. Part Six will look at the future.

*There is a Glossary for the terms italicized throughout this article.

Capacity Planning

The reason for ERP vendors tackling SCM first might be the fact that, to circumvent MRP II's capacity planning limitations, planners have long turned to various ways of off-line (at first, given today's increasing use of memory resident, real-time systems) capacity planning: either manually, with the help of spreadsheet programs, or with the help of relatively new APS systems. APS systems were originally designed as bolt-ons with the idea of plugging into an ERP system's database to download information and then create a feasible schedule within identified constraints, such as finite capacity. The new schedule can then be uploaded into the ERP system thereby replacing the original MRP results. These APS systems typically offer simulation ("what if") capabilities that allow the planner to analyze the results of an action before committing to that action through the ERP system. Some of these systems go even one step further by offering optimization capabilities. They automatically create multiple simulations and recommend changes in the supply chain within the existing constraints. For more information, see Advanced Planning and Scheduling: A Critical Part of Customer Fulfillment.

Further, APS is a subset of supply chain planning (SCP) applications that are designed to provide forward-looking options for future time horizons, by sitting on top of a current transactional system (most often ERP) to provide planning, "what-if" scenario analysis capabilities and real-time demand commitments. SCP typically deals with activities such as developing demand forecasts, establishing relations with suppliers, planning and scheduling manufacturing operations, and developing metrics to ensure efficient and cost-effective operations. It also includes the determination of marketing channels; promotions; respective quantities and timing; inventory and replenishment policies; and production policies. Thus, the typical SCP modules would include network planning; capacity planning; demand planning; manufacturing planning and scheduling; and distribution and deployment planning.

Global Supply Chain Management

On the other hand, while most traditional ERP software enables the integration and management of critical data within enterprises, companies have increasingly recognized the need to deploy more advanced software systems that manage the global supply chain by enhancing the flow of information to and from customers, suppliers, and other business partners outside the enterprise. More recently, the availability and use of the Web has created a demand for software that operates across the Internet and intranets. This global logistics concept merged the above described constraint-based optimization solutions called APS and specialized warehouse and transportation management software (WMS/TMS), resulting in more encompassing SCM, which should include all the processes from the initial raw materials to the ultimate consumption of the finished product linking across supplier-user companies (see The Essential Supply Chain).

APICS Dictionary, the 10th Edition defines SCM as

"The design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally."

In other words, at a high level, the SCM software scope could be segmented into supply chain planning (SCP) and supply chain execution (SCE), while strategic sourcing, procurement, spend management, supplier relationship management (SRM), and product lifecycle management (PLM) components are still considered the extension of the SCM rather than its constituents. Execution functions manage effective procurement and supply of goods and services across a supply chain to ensure completion of the plans, including creating purchase orders, taking customer orders, updating inventory, managing movement of products in the warehouse, and delivering goods to the customer. Hence, SCE includes light/assembly manufacturing, warehouse, and transportation execution systems, and systems providing visibility across the supply chain, given more comprehensive SCE suites have lately evolved consolidating execution components, such as WMSs, TMSs, distributed order management systems, and supply chain inventory visibility (SCIV), to provide a more unified solution to manage the outbound logistics process.

Still, there are two important business problems associated with today's manufacturing planning, materials planning and supply chain environments:

1. SCP applications need to address the lack of accurate logistics costs and service information that would enable more optimized decisions across the entire supply chain. SCP typically generates weekly or daily plans (in a better case scenario), but without adequately addressing the issues that arise almost every instant in dynamic logistics environments. Thus, plans are often invalid as soon as they have been made, while a mere re-planning does not answer the question what went wrong in the first place (i.e., there is no facility to learn from prior plans' inadequacy).

2. SCE applications need to further address the lack of real-time inventory visibility and event management feedback information needed for SCP to respond to frequent supply chain changes when building and executing manufacturing and materials plans.

The demand for near real-time supply chain collaboration will, in turn, place an increasing emphasis on any company's ability to immediately commit itself to promising orders' delivery dates on a global basis and to consistently meet those commitments ever after. This ATP/capable-to-promise (CTP) aptitude will be made more complex as companies rely on an increasing number of business partners and suppliers to procure raw materials, assemble, and deliver finished goods. SCE is therefore gaining increasing awareness among companies that realize that planning can do only so much without the ability to make the right and timely decisions and execute on the shop floor, in the warehouses or within the entire distribution chain.

However, it would be too nave to dismiss the need for proper planning, because regardless of how responsive a SCE system may be, waiting for chaos to happen and only then trying to act, would be equally disastrous as it has been with compiling nearly ideal plans (through cumbersome algorithms) and never doing anything about executing them or obtaining feedback about their outcomes. As supply chains become more dynamic and operate in near real-time, the lines between planning and execution continue to blur, which bodes well for their functional convergence. Thus, some SCE vendors have started to move beyond pure execution to offer some planning and optimization capabilities, often with the "adaptive" moniker. Companies need real-time information from execution systems to develop and adjust optimal plans, while the execution side should benefit from more realistic plans for some readiness sake, rather than to merely react after the fact in a firefighting fashion. We believe that planning and execution will become much less inseparable in the long term (see SCP and SCE Need to Collaborate for Better Fulfillment).

In any case, the major ERP players already have offerings or at least sound strategies addressing this important need, but, for the reasons of addressing the proverbial ERP/MRP II capacity drawback, they have so far made the biggest dent on the SCP/APS areas, with a raft of ERP vendor long espousing their native solutions (for only some examples, see SAP APO: Will It Fill the Gap?, Oracle APS Makes Its Debut, and Mid-Market ERP Vendors Doing CRM & SCM In A DIY Fashion).

Likely Vendor Strategies

The SCP and APS scenarios of ERP leaders upstaging the pure-play specialists will likely be repeated in many other related markets, where the specialists still seem to be holding out, such as PLM, SCE/WMS, enterprise asset management (EAM)/computerized maintenance management systems (CMMS), or SRM. As usual, the ERP vendors will bet on leveraging existing customers who will have deeply invested in them, and have even reorganized operations around their ERP systems. The promise of these new extended-ERP products from ERP vendors is the link to financial and manufacturing systems (albeit mostly the vendors' own, which is logical at this stage) and links to supplier or customer data in case of their native SRM/CRM systems.

However, the pure-play vendors' "Holy Grail" has become working with information from heterogeneous sources, an order "du jour" within many large organizations, which often have more than one ERP system and/or various legacy systems. This is analogous to the enterprise applications integration (EAI) market, since in larger corporations, customers still may prefer integration vendors with renowned product strength, vertical expertise, financial viability and savvy in extensible\markup language (XML)-based B2B integration, multiplatform integration and workflow management.

Often, best-of-breed specialist offers functionality or capability that mainstream ERP vendors cannot match for some time giving these specialists some breathing space for this ongoing one-upmanship game. After all, the innovativeness of these providers has kept ERP vendors on their toes, forcing them to provide better integration to these add-on applications and/or to develop them internally. For some snapshots of the showdown between ERP and pure players in certain enterprise application markets, see ERP and WMS Co-Existence: When System Worlds Collide, The Different Evolutionary Stages of ERP and PLM and SCE Leaders Partner To See Beyond Their Portfolios.

Finally, in certain areas one can still see a clearer demarcation line between ERP intruders and best-of-breed incumbents. For example, in the PLM market, it would be that PLM solutions are oriented around creative product innovation processes as opposed to the transaction-oriented world in which ERP packages operate best, since the processes such as cost reporting; procurement; sourcing and contract management; resource planning; and monitoring are best accomplished with control-oriented software, like ERP suites built out from financial and analytics modules. However, the ERP suites do not yet fully accommodate collaboration as well as stand-alone PLM packages designed for that purpose. To remain competitive, however, stand-alone vendors would do well to focus on easy integration with ERP suites. For more information, see Can ERP Speak PLM?

The current PLM leaders' superiority, like in the case of the SCM and CRM markets, will diminish as the ERP vendors continue to improve their extended-ERP functionality, collaborative capabilities and accessibility and add universal interfaces, including the new Web Service standards to facilitate access and integration of data outside their own environment. Thus, the PLM and other pure-play vendors alike need to establish as strong a hold on the market as possible before the enterprise vendors catch up, despite some of these applications' proven staying power within IT departments. Especially if the remaining tier 2 and 3 point solution vendors, cannot gain significant traction and distinctive differentiation, they could find themselves in a position of needing to be either being acquired or joining forces with a complementary functional or platform technology vendor (IBM, Oracle, Microsoft, Computer Associates, etc.) via alliance or acquisition.


SOURCE:
http://www.technologyevaluation.com/research/articles/enterprise-applications-the-genesis-and-future-revisited-part-four-another-step-in-erp-evolution-17231/