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Tuesday, August 17, 2010

Intuitive Manufacturing Systems Shows Maturity in Adolescent Age Part Four: Challenges and User RecommendationsIntuitive Manufacturing Systems Shows M

Intuitive Manufacturing Systems Shows Maturity in Adolescent Age Part Four: Challenges and User Recommendations
P.J. Jakovljevic

Challenges

On April 1, Intuitive Manufacturing Systems (www.intuitivemfg.com), a privately held company offering enterprise resource planning (ERP) solutions for small and mid-size manufacturers, announced its ten-year anniversary.In 1994, the founders of another ERP vendor, PRO:MAN, sold all interest in the company and started a new one: Intuitive. Since then, Intuitive has been offering enterprise software for small and midsize discrete manufacturers around the world with the flagship product, Intuitive ERP, which was designed from the ground up with 100 percent pure Microsoft technology, with well-established manufacturing practices in mind. The relative young age of the company has provided an organization and a development environment free from the burdens of supporting unwieldy sets of legacy systems and technologies; however, the company is still founded on the solid foundation of many of its staff's thirty years or so of experience in manufacturing systems. This article continues a discussion of the market impact.

While the initiatives covered in detail earlier on will, in our mind, help Intuitive create increased demand and acceptance of its offering in the target market, Intuitive will, nevertheless have to address many challenges in order to continue to thrive in this cutthroat competitive environment.

First one is the mere fact that the vendor is halfway within its product rewrite feat, which somewhat impedes the vendor's .NET awareness campaign to the prospective and current users' community. Namely, at this stage, the vendor can mainly target the IT managers by professing the many tangible benefits of .NET, such as ".NET-based systems will be easier to install and administer, and therefore cheaper to own over the long haul"; ."NET-based systems will be easier to secure against hackers, and will be less buggy and better behaved (e.g., without "Blue screen" mystery crashes)"; and "owners of .NET based systems will find it easier to connect their .NET systems to their trading partners' systems, wireless devices, such as, .NET makes it easier to conduct e-commerce, and to leverage information available on the Internet".

Nevertheless, as long as the "old" software is meeting business needs, new technology is not the change driver, which makes building replacement products on a new framework a higher risk strategy. Product functionality still quite matters and, while it is important for enterprise applications providers to implement the latest computer science "quantum leap", there is no guaranteed correlation between first-to-market and the ultimate success in the market. In fact, based on many experiences, one could even argue that the correlation might be inverse.

Still, while the evolution strategy might be safer in the short run for both the customers and the vendor, minimizing both investment and disruption, the evolutionary strategy has limits in how much can be accomplished. The existing product becomes a limit on the amount of innovation that proves practical. There are no definitely right and wrong answers at this stage, and every vendor has to conduct its own soul-searching and justification exercise for the direction it chooses. In the Intuitive's case, had it stayed within its legacy technology and just worked on functionally improving the product, it will have likely not have been able to release as much new functionality as it has in the 7.0 product release. That might become even clearer over the next twelve months or so as the vendor has been very carefully redesigning each section of the product as it moves to .NET, and the new planning, sales, and customer relationship management (CRM) portions of the product are notably more functional than they have been before. The vendor claims to be selling and winning lately mainly based on functionality, and not necessarily on technology. Perhaps ironically, that functionality would likely not have been there if the vendor had not moved to the.NET Framework.

There is always the aspect of the future of enterprise applications, where Intuitive ERP and peer products are going to have to interact with people and, more importantly, with other enterprise software much better than anyone ever considered possible just a few years ago. Users will eventually need to be able to run their applications on devices like a smart phone, or to be able to process transactions automatically with their trading partners. Setup and infrastructure-heavy electronic data interchange (EDI) is eventually going to be replaced by secure transactions between systems that no longer need that "money drain" in the middle. As we move closer to these realities, technology architectures are going to make a huge difference in whether one is able to provide these new capabilities or not, and how quickly, easily, and therefore inexpensively one can do so.

Still, Intuitive will have to carefully introduce the remaining pure .NET software components into Intuitive ERP through the normal sequence of upgrade releases, whereby the current customer base would gradually migrate to .NET as the Intuitive ERP product will gradually be transformed to pure .NET. The transformation, which entails converting or rewriting every single line of software code and modifying the Intuitive ERP architectural design to leverage the many touted benefits of the .NET platform will not likely be painless for the install base, but they do not necessarily have to be quite painful either.

Upgrade challenges generally consist of two major things: database changes and modifications that the customer has meanwhile made that need to be upgraded to the new release level. Had Intuitive made significant enhancements to the sales modules in the older release on a legacy architecture, for example, , it would have had the same upgrade issues as with the 7.0 release anyway. However, since the vendor was able to do so much more with the new architecture, it will have eliminated the need for modifications in a lot of areas that its customers had modified in the past. And for those who still need to modify something, the new environment is quite faster (and therefore likely cheaper) to code, which should mitigate the upgrade. Additionally, the vendor has always, and continues to provide its customers with basically all of the source code. For those who want to, they have the tools available to them (and Intuitive will gladly train them) to control and perform any modifications on their own, without necessarily relying on the vendor if they do not want to be dependent.

Converting a software product to be fully .NET-based is a big effort, and any software vendor should not simply convert lines of code from their old language to a new .NET language, and recompile those lines using a .NET compiler. A wise conversion should also include substantial product redesign to take advantage of the many new features of the .NET platform, satisfy new Internet connectivity requirements, and better position the product to adapt to even more advanced technology that will appear in the long term.

For the above reasons, Intuitive might still have limited success convincing prospective and existing customers to go for the version 7.0, until the entire product is 100% rewritten in .NET. One could think of only a few compelling functional enhancements at this stage that would justify users opting for the product at this stage. In other words, "if it ain't broke, don't fix it" mindset might likely work against Intuitive at this stage. As a matter of fact, ironically, the product currently does not have the same look and feel, given that the .NET parts indeed feature the touted snazzy XP features, whereas the rest of COM-based chunks of functionality (e.g., purchasing, manufacturing, etc.) still exhibit the "boxy" Windows 98 metaphor.

Indeed, .NET technology makes it easier for developers to produce rich, vividly colorful UIs, since .NET makes it easy to use the new richer-detailed 48 x 48-pixel icons, color gradients that fade from one color to another, and rich and finely detailed graphs and charts. Also, .NET software is inherently speedier, especially when accessing Microsoft SQL Server databases, but it is not very likely that these will be compelling reasons for ordinary, non IT-oriented users to embark on painstaking migration path. Therefore, prospects may rather wait for the completely rewritten version 8 or later.

Intuitive will have to direct the prospects from only looking at the major new features of the 7.0 release and ignoring the hundreds of small enhancements they have also been made. As mentioned earlier, the vendor took all of the feedback for enhancement requests from all of the years of user group meetings, e-mails, phone calls, etc., which it has diligently logged and tracked, and consequently included a vast majority of those in the design of the 7.0 release. For instance, there have been 267 enhancement requests in the Sales Order Form alone, whereby Intuitive accepted 243 of those in the new 7.0 Sales Order Form. In general, there are very few users who span an entire ERP product. So, either a particular user's area of the product is new in the 7.0 release, or it is the same as it has always been. The fact that one half of the product has a new look and feel while the other half has the metaphor, at least at the user level, should not be a major impediment. The above combination of both functional and technological enhancements might be the order winner.

This is Part Four of a four-part note.

Part One presented the company.

Parts Two and Three discussed the market impact.

Competition

The competition is also flying from many directions: the mid-market peers, the tier one vendors storming down the market, and even from its quintessential technological partner, Microsoft, with its well-publicized intrusion into the enterprise applications market (see Microsoft Keeps on Rounding up Its Business Solutions). Therefore, much scarcer financial resources, still developing global channel and brand recognition, and formidable competition within the market will be the challenges for the company to fend. The trouble might not only be in terms of market share, but also in terms of diluting the .NET message, given that an army of these, more visible vendors have been swearing by .NET lately.

Indeed, it might be quite difficult for Intuitive to explain that it is more down the .NET track than its originator Microsft's business solutions are currently. Most new versions of software coming from Microsoft Business Solutions (MBS) and other vendors are getting the .NET compliance label applied to them, whether they are truly based on .NET technology or not. The fact is, as soon as a software product is enhanced to consume or emit XML or to run on SQL Server or Internet Information Server (IIS), it will be called a .NET product. The ironic thing is that as soon as Microsoft sales people start talking about their enterprise applications' future roadmap and timetables, it becomes evident that they are still years away from their .NET-based versions. But, the critical thing for the likes of Intuitive is to not trying to sell on technology, but to rather remain focused on selling and winning on product capabilities.

Yet, not many users are savvy enough to realize that the systems that have added Microsoft code around an old technology core have to deal with translation between the old and new layers, data typing, formatting, interface, and performance issues, version compatibility dilemmas, and other subtle problems. Even if some prospects might take it at a face value, they might still find a comfort in opting for a better-known solution, particularly of renowned vendors that have embarked on major projects to converge disparate functionality within several acquired product lines into a new generation of business applications. While these undertakings are still largely a lengthy work-in-progress, the promise is within unified modern architectures that should allow resellers to sell extensions to the applications, while preserving the migration path for the foundation accounting and back-office components. A recent example would be Microsoft Business Network (MBN), a web-based communications network that allows transactions to be exchanged between trading partners via XML or EDI, tied directly into MBS' ERP applications of Microsoft Office applications.

Moreover, although Intuitive has a notable worldwide presence, it has no local market leadership in almost any individual country nor in certain vertical segments owing to the fierce channel competition from more aggressive, better-known, and wealthier competitors like MBS, SYSPRO, MAPICS, Sage/Best Software, Exact Software, Epicor, and Scala to name some.

Despite being a young company, Intuitive ERP is installed at nearly 900 sites in the US, Canada, China, Mexico, UK, Australia, Thailand, South Africa, and in other countries around the world, and although it has customers in industries as diverse as aerospace, bicycle parts, circuit boards, software duplication, boat docks, and furniture, these geographic and industrial diversities will have mainly been achieved in a more opportunistic manner during the ERP halcyon days rather than with a premeditated market targeting and product development.

The product is well suited for general MTS/MTO/ATO jobbing manufacturing environments, with almost no support for complex/engineer-to-order (ETO) nor for lean/flow repetitive manufacturing. Given the fact that some of its competitors offer a sharp vertical focus even to the precision of six-digit Standard Industrial Classification (SIC) codes within an industry (such as, MBS Navision and Epicor), Intuitive's above-mentioned simplicity tune may soon be emulated and lose its differentiation value. The company should, therefore, try to leverage the impending .NET rewrite (and its promise of faster software development) to interest its resellers in industry specialization and provision of vertical extensions, or should internally vertically incline its product offering and develop industry templates, wizards and implementation methodologies to further decrease the time and expense of implementation projects.

Thus, while the across-the-board functionality of Intuitive's ERP is broad and well balanced between manufacturing and financials, so far it has not been the strongest in the market in terms of a vertical focus until now. Verticalization has become a big part of this whole .NET push as well. When the vendor decided to embark on the .NET platform move a few years ago that it would not attempt any critical vertical market penetration until it could provide the functionality for that vertical in the .NET managed code. It is therefore the fact that the vendor has just recently begun to espouse its vertical strategy, claiming to have come a long way in a short amount of time. It has identified several markets to focus on, such as recreational vehicles and custom trailers (this vertical is complete and the marketing push is underway including a couple of direct marketing campaigns and webcasts already), automotive (the vendor has hired a product manager who was a product manager for the vertical at some prominent Intutive's competitors; the design documents are completed and development is underway), and medical instruments (the design specifications have also been completed, and the vertical is expected to be rolling out in next few months).

The next vertical Intuitive plans to tackle is the boat manufacturing vertical, and the ongoing implementation at a boat manufacturer that will be used as a test bed for the vertical solution set. The vendor also has partners who are very close to rolling out their solutions in the garment industry and the shoe manufacturing industry. Thus, the vendor is, albeit belatedly, taking the need to have a vertical focus very seriously and is right now spending a significant amount of resources on maturing its offering and market focus on these select vertical markets. One should wait and see how fruitful winning a new business will be the potential combination of a vertical focus and the cutting edge technology.

Moreover, except for some individual above-mentioned features, Intuitive ERP modules do not offer distinguishing (if any) intrinsic ERP functionality (although there have been a number of readily available interfaces to third-party specialist products, such as ForecastPro) even within the "native" discrete manufacturing areas (such as complex project management and accounting, fixed assets, cost allocation, hazardous materials reporting, forecasting, distribution requirements planning [DRP]/warehouse management, sales and purchase contracts, product lifecycle management [PLM], plant maintenance).

Also, while company supports well multisite financial consolidation, it is not quite the case with native multisite advanced planning and scheduling (APS) and supply-chain optimization. In fact, the Dynamic MRP, and ATP/CTP capabilities are limited to a single site, while the recent partnership announcement with Webplan should cater to more complex multisite planning. Given the nascence of the relationship, it might not be realistic to expect a bulletproof OEM integration as in case with other well-established partnerships for additional functionality, despite Intuitive's demonstrated ability to form OEM relationships, seamlessly integrate them, and effectively provide those capabilities within its product offering.

The above functional shortcomings may result in missed opportunities for enterprises that may think in a more long-term manner rather than thinking about achieving short-term but limited benefits. They therefore may immediately want some significant intricate functionality outside of the basic manufacturing and accounting functionality, from a sole source.



SOURCE:
http://www.technologyevaluation.com/research/articles/intuitive-manufacturing-systems-shows-maturity-in-adolescent-age-part-four-challenges-and-user-recommendations-17358/

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