ERP - News and Articles

See http://www.180systems.com/blog/labels/ERP.php for more recent articles.

Microsoft’s ERP Wave Hits Shore

March 15, 2007 written by Michael Burns of 180 Systems – When Microsoft Corp. acquired Great Plains Software Inc. in 2001 and Navision in 2002, the force about to be unleashed in the ERP marketplace was not well understood. Many people wondered what Microsoft was up to. How could they expect to be successful in the ERP space, which is so different than all their other markets?...

Microsoft Evolves its Enterprise Plans

March 17, 2007 from PC World – “When the vendor (Microsoft) first started talking about Project Green in 2003, the initiative focused on bringing the disparate products then known as Axapta, Great Plains, Navision, Solomon and CRM together into a single code base. Then in May 2005, Microsoft began to talk more about having two distinct waves of the projects. Wave one committed Microsoft to bringing out major new releases of each of its business offerings, while wave two, due to start occurring in 2008, was when the company would begin releasing elements of the converged code base.

By September 2005, Microsoft brought its back-end applications together under a single brand name "Dynamics" resulting in the rechristening of its business applications as Dynamics AX, GP, NAV, SL and CRM. At that point, the vendor announced "Dynamics" would also refer to the ongoing Project Green research and development road map, but the old name has refused to die and still persists among the company's executives, partners and customers.
Fast forward to this week's Convergence show in San Diego and the natural question is what's happening with Project Green? Is a converged product or platform still on Microsoft's agenda?

"We don't have the goal of just convergence for convergence's sake," said Satya Nadella, corporate vice president of Microsoft's Business Solutions group. "We've delivered on Wave 1 and, with each sharing of technology, we're increasing the level of convergence, but it's not a front and central goal. We now have a common portal, a common UI (user interface) and common Web services infrastructure. Perhaps the news here is that Green's done," he added…”

180 View – I (Michael Burns) was at also at Convergence – see the article above entitled “Microsoft’s ERP Wave Hits Shore”. At Convergence, I asked Satya Nadella the question about the future of Project Green. There is still some confusion about Microsoft’s enterprise plans. We were told that all the products will share the same user experience. However it’s not so clear what will happen with the four Microsoft ERP systems. What I heard is that each product will continue to evolve but they will gradually become more differentiated. Microsoft also announced that they will focus on five industries – Manufacturing, Distribution, Professional Services, Retail and Public Sector. I anticipate that each product will be mapped to one of these industries and if more than one is mapped to a particular industry, there will be other differentiators.

MS After Convergence: Shakeup in Dynamics Leadership

March 21, 2007 from eWeek – “A little more than one week after Convergence, Microsoft's big annual user conference that highlights the company's Dynamics brand of ERP and CRM software, Microsoft quietly made some changes in the Business Solutions executive lineup.

Satya Nadella, corporate vice president of Microsoft Business Solutions, and effectively the leader of the Microsoft Dynamics group that includes the company's four separate enterprise resource planning suites and customer relationship management offering, will be joining the Platform Services Division to lead a new division, the Search and Ad Platform Group. Nadella will transition from his current role in the Business Solutions group by April 19…”

180 View – I was wondering about the keynote and subsequent presentations by Satya Nadella at Convergence. He seemed extremely knowledgeable but lacked passion. Now I know why. Why he did not get the job is another matter. My guess is that he was having a hard time replacing Doug Burgum, who seemed to inspire the troops.

Giant tech, small package

April 2007 from The Financial Post – “Historically, small businesses across Canada haven't been as switched on to technology as their larger counterparts. That's partly because the investment and organization necessary to roll out a big IT project has been beyond them. That left key technologies such as enterprise resource planning (ERP) and customer-relationship management (CRM) almost exclusively in the realm of big business…”

180 View – We don’t agree with the premise that ERP is only for large companies. ERP systems provide a business solution across most if not all departments in one organization. With this definition, QuickBooks and Simply Accounting are also examples of ERP systems. Nevertheless, it has been difficult to obtain all the functionality in the higher end systems at low costs until recently. One way to lower costs is to use the ASP (Application Service Provider) or SaaS (Software as a Service) model as is described in the article with NetSuite.

Lawson and IBM Join Forces to Attack the SMB Market

February 2007 from Aberdeen Group – “On February 1, 2007 Lawson and IBM jointly announced an expanded relationship to better serve small and mid-size businesses (SMB) in North America. Under this agreement, IBM will co-develop, sell, and implement solutions specifically designed for the needs of banking and insurance companies, and for manufacturers of fashion and food and beverage products. The solutions will be based on Lawson’s S3 and M3 enterprise management applications.”

180 View – The M3 system mentioned is the former Movex product from Intentia, which was purchased by Lawson. Lawson/IBM will be competing with SAP, Oracle, Microsoft and many others including themselves as they also implement SAP and Oracle. The SMB Market has many interpretations. Our view is that Tier One products like SAP, Oracle and Lawson are targeted to companies with revenues of $200 Million and up.

Customer survey roundup no. 3

March 1, 2007 from CAmagazine written by Michael Burns – Check out the results of our 3rd customer survey of accounting and ERP systems. See how well readers like the systems they're using, and how they rate the developers and implementation partners. We also asked for some general feedback about return on investment and future plans. Unfortunately, we did not get sufficient responses to break the results out by vendor, but there should still be a lot of useful information for your review.

RightNow aims to take on SAP

February 15, 2007 from ZDNet – “Greg Gianforte, the outspoken CEO of RightNow Technologies, says the market for customer relationship management software in Europe is booming--and he predicts that some of his company's biggest wins will come at the expense of industry heavyweights SAP and the Oracle-owned Siebel.

Gianforte says chief information officers are tired of what he calls costly and time-consuming on-premise implementations. His company, he says, is picking up enterprise customers from both of his big-name rivals. "We beat SAP at Nikon, for all their campaign management. We threw Siebel out of Electronic Arts. And those are just some of the ones who are prepared for us to talk about it," Gianforte told Silicon.com.

He said many companies are unwilling to admit when they've been forced to ditch costly software rollouts: "You have to understand this is fairly embarrassing for these companies because they made big investments and couldn't get value."

Gianforte singled out market leader SAP for criticism, on the back of recent poor results. "You could drive a truck through the cracks in SAP's armor," he said, claiming he would much rather have his current problem--the recent announcement of $49 million in losses related to a change in RightNow's licensing model--than those of SAP or Siebel, which have to turn around far larger businesses…”

180 View – Although Greg Gianforte is biased, he also has a point or should we say a sharp knife for his competitors. We actually agree with Greg in that the complex/costly implementations are now history. The mid market is where lie all the new business opportunities, and mid market companies won’t put up with complex/costly implementations.

Update on Workday, the new “on-demand ERP” company

February 23, 2007 from AMR Research written by Bruce Richardson – “When Workday came out of stealth mode for its launch last November, the company had already signed its first three customers. Over the last few months, it has added eight more. The new customers include two brand names in on-demand software: salesforce.com and RightNow Technologies.

The company has grown to 90 employees, up from 40 or so when I first visited the firm’s Walnut Creek headquarters last April. Head count will likely grow to 150 or so by the end of the year. Most new hires will likely be in development and customer support. Based on our conversations, it appears that Mr. Duffield is looking to control growth and assure high customer satisfaction. When asked how many new customers he hopes to sign this year, he said 30. While that represents strong, triple-digit growth, it is more manageable than the software industry’s classic strategy of aiming primarily at sales wins, not “go lives.”

Believe it or not, it’s been nearly 20 years since Mr. Duffield and Ken Morris started PeopleSoft. When I asked what was different this time, Mr. Duffield said that the tools they are using today are superior. He also said PeopleSoft didn’t get its first customer until the company was two and a half years old, and it took a year for the first customer to go live.

Now, the new tools allow the firm to come out with major enhancements every six to 12 months. Customers are able to go live on the first modules in three months. This typically includes human capital management (HCM) and payroll. The follow-on project usually involves employee self-service applications, which take a month or so to implement.”

180 View – Mr Duffield has a lot of advantages over his competitors. He has no baggage code to update. He has the latest and greatest tools to work with. He knows the ERP business. He is well connected and well funded. His business model is now accepted as mainstream. Keep your eye on this one.

Free ERP

December 22, 2006 from E-Business News – “Sourceforge.net is a repository of free open source software, and a lot of it applies to e-business. We've compiled this list of free enterprise resource planning (ERP) products. One of them might be appropriate for your small business. Click on the product name to get more information and download links straight from Sourceforge.

Compiere: "Smart ERP+CRM solution for Small-Medium Enterprises in the global market covering all areas from order and customer/supplier management, supply chain to accounting. For $5-500M revenue companies looking for "brick and click" first tier functionality..."

180 View – There are 17 more “free” ERP systems discussed in the article. We especially liked the name of one of the systems called WyattERP. On a more serious note, the question is whether it makes sense to implement one of these systems. We believe that ERP systems are mission critical to any business and you don’t want to take any chances with relatively unknown developers or systems that may require a lot of fine-tuning to work for you. You may find that the cost of services (internal and external) makes these “free” systems more costly than the systems you can purchase/license or rent (via an Application Service Provider). However, we admit that we don’t have any personal experience with these systems, and that our fears may be exaggerated. If anyone has experience with one of these systems, we would love to hear from you. Please post a comment. Thanks

The Evolution of Enterprise Resource Planning Includes Service Industries

December 6, 2006 from Technology Evaluation Centre – “Since the late nineties, the enterprise resource planning (ERP) vendors that originally targeted the needs of manufacturing organizations have slowly extended their functionality to service the needs of non-manufacturing industries as well. By 2000, when many of the major ERP implementations for the manufacturing industry had tapered off, tier one ERP vendors such as SAP and Oracle had refocused efforts to market their integrated solutions in the greener pastures of service-oriented vertical markets, including health care, government, higher education, banking, insurance, and other service-based businesses.

Today, ERP vendors are aggressively marketing industry-specific and project-oriented functionality to service industries. Unlike best-of breed solutions, these systems provide a fully integrated mature back-office system originally developed for manufacturing industries. Consequently, this raises the question: Is ERP for services a new category? Or is it “ERP less manufacturing?”

From a vendor’s point of view, the answer to those questions varies according to which side of the ERP fence you stand on. On one hand, ERP vendors claim that ERP for services is a well-developed software category customized for the service industries they serve. On the other hand, best-of-breed vendors for service verticals (such as professional services, health care, government, and financial services) push their industry expertise and vertical solutions built from the ground up for those respective service industries. Consequently, organizations in service industries are faced with the challenge of determining which vendors best fit their functional requirements.

The main difference in functionality between best-of breed service applications and ERP for services is the back-office component. ERP for services applications provide complete functionality for both the transactional (or operational) components, and the project-oriented components of service organizations. However, best-of breed service applications typically refer only to industry-specific functionality. Some vendors may include a back-office piece, and others may only deliver vertical functionality that communicates with other ERP systems or financial packages. As a result, there are two categories of vendors for service organizations:

Best-of-breed service vendors: Vendor solutions such as Compuware’s Changepoint and OpenAir PSA focus primarily on professional services organizations, and are typically marketed to the small to medium business (SMB) market. These offerings vary in breadth and depth, and the vendors tend to target a few key vertical markets. Depending on the vendor, their business models are diverse and can deliver software as a service (SaaS) and license models to their clients.

ERP for services: These vendors are typically traditional ERP vendors that provide a fully integrated solution with complete back-office functionality. Since they provide their clients with complete operational and transactional functionality, their offerings tend to be broader in application. In addition to project-oriented functionality that vendors such as Epicor and Deltek deliver for professional services organizations, ERP for services vendors provide fully integrated operational functionality for non-project organizations, such as Lawson in the health care sector, and Unit 4 Agresso for the public sector.

180 View – We recommend that both ERP and Best-of-breed service vendors be considered in system selection projects. ERP’s advantages include integration, infrastructure/platform consistency, user interface consistency, scalable, one number to call – no finger pointing. Best of Breed’s advantages includes cost, point solution is usually less complex to implement and maintain, focus on one industry with knowledgeable resources and best practices for industry.

Who is the No. 3 enterprise software company? You may be surprised

November 21, 2006 from Baseline Magazine - “SAP and Oracle have the top two spots nailed down, but who's next? SAS Institute? CA? Sage Group? Microsoft? How about Infor Global Solutions?

If that name registered a complete blank, you would be far from alone. Infor, which is headquartered in Atlanta, claims to be the third biggest enterprise software company in the world, but it has an identity—or lack of identity—problem.

Over the past four years, the venture capital-backed private company has quietly snapped up a host of players in the enterprise software market—some with familiar names, like SSA Global, Mapics, Epiphany, Extensity, Geac, Systems Union and Formation Systems. Infor has forged a collection of primarily mid-market players into a sizable conglomerate with annual revenue of about $2.2 billion, says chief executive Jim Schaper.

180 View – We think that Infor has a lot of great products. The question is what happens to these products in the future. And just as importantly, what happens to the key developers of the software. Speaking from personal (Michael Burns) experience, software is like a baby to the people that build it. They spend countless nights working on the system, take pride when it works well and will do whatever it takes to make it better. Often in these acquisitions, the key people find themselves with a severance check or sitting in the corner with no responsibility as the new team has taken over. When this happens, the software system will not be long for this world.

SAP All-in-One vs. MS Dynamics

September 1, 2006 from webCPA – “For the giant multinationals of the world, SAP continues to be the dominant ERP player. But once you move down a notch, the picture changes dramatically. Microsoft, once content to play second fiddle to SAP's ERP core, is quietly but steadily ramping up its Dynamics series with a uniform Dynamics package offering in the works for a 2008 release.

SAP's All-in-One product has many strong points, but so does Dynamics. On the flip side, either solution has its distinct weaknesses compared to the other guy. Which path is best for your company? And what can you expect in the years ahead? Will Microsoft's lower cost and ubiquitous presence (ie. existing "beach heads") translate into market dominance, or will SAP continue its midmarket growth through focus on business values and technical finesse?”

180 View – This article contains detailed analysis by a spokesperson for SAP and Microsoft as to why their system is the best. The SAP argument essentially boils down to “because there is SAP development know-how all over”. The Microsoft argument is the “flexibility to change as your business changes”. Both arguments are interesting but not persuasive. We think that either solution could be the best depending on the circumstances.

TomorrowNow a threat to Oracle's maintenance business?

October 27, 2006 from Frank Scavo’s blog – “I conducted a phone interview last week with Andrew Nelson, founder and CEO of TomorrowNow, a third-party maintenance support provider for Oracle's PeopleSoft, J.D. Edwards, and Siebel products. I've mentioned TomorrowNow in the past, but I was interested in its business has been progressing in the year and a half since it was bought by SAP.

TomorrowNow has not yet announced its third-quarter results, but Nelson indicated a major increase in new customers: over 200 today, with 60% running PeopleSoft, 30% on JDE, and 10% with Siebel (its newest support offering). The firm plans to offer support for Baan (now Infor's ERP LN) beginning in January 2007, and has already signed up some customers for this offering. Over the past year, TomorrowNow has built out its worldwide support organization to Europe, Asia, and Australasia, in addition to its base in the U.S.

Although TomorrowNow markets its services for all users of PeopleSoft, JDE, and Siebel, in my view there are really a few key segments where the firm's offerings are most attractive. Nelson confirmed that one sweet spot is companies that are running SAP globally but still have instances of PeopleSoft, JDE, or Siebel. These firms, which may be looking to standardize on SAP, have little reason to stay on Oracle support contracts, and they welcome a lower-cost option that is backed by a major player such as SAP.

Another sweet spot is companies that have many modifications and do not intend to upgrade Oracle's Fusion product. In Nelson's view, such customers are paying maintenance fees to Oracle (at 22% of their license cost) to "prefund Fusion," even though they have no intention to upgrade to Fusion. Why shouldn't they save 50% or more on maintenance fees by going with TomorrowNow?

Furthermore, TomorrowNow actually supports the customer's modifications to source code as part of the support contract. Oracle's support agreements, in contrast, only provide support for original source code.”

180 View – This is an interesting blog that contains “independent analysis of issues and trends in enterprise applications software and the strengths, weaknesses, advantages, and disadvantages of the vendors that provide them.”

ERP Gets A Complete Makeover

July 24, 2006 from InformationWeek – “The words "enterprise resource planning" conjure up ugly images: tortuously complex business processes, missed deployment deadlines, massive cost overruns. For more than a decade, ERP has been synonymous with beastly software projects. Now the three most influential vendors--SAP, Oracle, and Microsoft--are re-architecting their applications with the promise that things will get better…

The new ERP systems will be more evolutionary than revolutionary, some analysts think. Unlike the move to client-server computing, businesses won't have to rip out their installed IT systems. SAP, Oracle, and Microsoft promise to usher customers along with incremental steps to their next-generation apps.

At the heart of all three vendors' ERP redevelopment efforts is the adoption of service-oriented architectures, Web services standards, and business process management technology. SOA and BPM, the vendors say, are critical to making their applications more modular and easier to adapt as needed--say, when two companies merge--something that's been sorely lacking in ERP software…

But while SOA and Web services are driving the vendors' ERP redevelopment efforts, they draw a yawn from some IT managers, particularly those at small companies like Tasty Baking. "It really doesn't mean anything to me right now," CIO Bayles says. "I don't have 100 applications I'm trying to integrate."

SOA is low on the IT priority list at some large companies as well. Ingersoll-Rand's Libenson calls service-oriented architecture "the buzzword of 2006," adding that his company doesn't have detailed plans for adopting Web services. He sees them mainly as a way to link ERP applications to legacy systems, adding, "My goal is to find a way to get rid of our legacy systems."

180 View – We don’t think ERP investments are made because of technology such as SOA or web services. However, if the technology can clearly demonstrate an ROI, the investment decision-makers will be listening. We think that at some point in the next couple of years, web services will allow companies to exchange electronic transactions such as Purchase Orders no matter what the system. That means that a supplier does not need to enter customer orders into their systems – now we’re talking ROI.

8th Annual Accounting and ERP survey

September 1, 2006 from CAmagazine and written by Michael Burns - It's hard to believe we are now in our eighth year for our annual accounting and ERP vendor survey. Interest continues to grow and most vendors want to be part of the survey. This year, we have new or updated responses for 50 systems as of June 2006. The systems cover the entire spectrum - from QuickBooks and Simply Accounting to mid-market systems from Sage and Microsoft to high-end products from SAP and Oracle.

Each year, we expand the survey to cover more functionality. Our objective is to include functions that differ from one product to another. This year we have added service management, commitment accounting, project accounting, back order fulfillment, forecasting, freight calculations, warehouse management functionality and backflushing.

Oracle defies the naysayers

August 15, 2006 from BusinessWeek - "In 2003, when Oracle Chief Executive Larry Ellison announced his intention to buy PeopleSoft, he was declaring war on a number of fronts. Not only did he have to contend with PeopleSoft CEO Craig Conway, who railed against the deal for more than a year, but he was also stepping up a battle with his counterparts at SAP, the largest seller of so-called software applications, which run everything from businesses' accounting to their call-center operations.

Early on, Ellison made it clear Oracle (ORCL) was buying PeopleSoft and other companies with the immediate goal of becoming the No. 2 player in applications, and ultimately capturing the top spot. "SAP is a formidable company, but we have a shot at catching them," Ellison said back in April, 2004 (see BusinessWeek.com, 4/4/05, "Larry, You Picked a Nasty Fight").

Then there was Ellison's tussle with the many naysayers-SAP (SAP) and PeopleSoft executives among them-who warned Oracle wouldn't sufficiently support PeopleSoft products and that it would stumble in an ambitious project, code-named "Fusion," to knit together a string of acquisitions, ultimately sending PeopleSoft customers into SAP's arms.

IMPRESSIVE GAINS. These days, the digestion is well under way. And according to new data from AMR Research, Oracle has done a much better job keeping acquired applications customers and winning new ones than many early critics expected.

According to the numbers, Oracle made impressive gains in one of the fastest growing categories of applications: Human capital management, or HCM, includes software for human resources departments that automates tasks like performance reviews and handles paperwork around hiring new employees. Oracle took over the top market share slot for the first time, thanks to its PeopleSoft acquisition, according to AMR. By the end of 2005, it had 25% of the market, while SAP had 23% -- though the lead will narrow in 2006, when SAP's share will rise to 24% as Oracle's holds steady, AMR says.

PeopleSoft had been the gold standard for HCM, so the gain isn't entirely surprising. But the jump was larger than if PeopleSoft and Oracle's premerger revenues were lumped together. In 2004, Oracle sold $324 million of HCM software, and PeopleSoft sold $864 million. But in 2005, the combined company sold nearly $1.4 billion in HCM software. "One plus one actually equaled two-plus," says Jim Shepherd of AMR.

LONG ROAD. When it came to customer relationship management, or CRM, the share gains weren't quite as impressive, because Oracle's acquisition of Siebel, a leader in CRM, didn't close until 2006. Still, in 2005 Oracle moved from the sixth largest seller of the software, which helps manage salespeople and call centers, to No. 3, just behind SAP and Siebel, in 2005. This year, AMR expects Oracle will rise to No. 2, with 14%, just below SAP's 17%.

Oracle still has a long road to surpass SAP in applications overall. HCM and CRM make up less than 30% of overall applications revenues marketwide. And because research firms count market share differently, not everyone grants Oracle the top spot in any category. In a statement, SAP noted that AMR takes into account services revenues, not just licenses and ongoing maintenance, which gives Oracle an edge. Further, it said, "any gains…Oracle has made in enterprise software are a temporary situation, based on their flurry of recent acquisitions designed to gain market share." The statement called further gains "unsustainable."

Still, Oracle clearly has the wind at its back. The company posted a banner fourth quarter on June 22, with applications revenue up an impressive 83%. And the stock price has been flirting with its 52-week high of $15.50, closing Aug. 14 at $15.29, up 2%. Meanwhile, SAP had a rare earnings stumble on June 13 when it said it would fall short of analysts' expectations for the second quarter. Analysts said the miss suggests Oracle could be finally eating into SAP's market share. "If that's not a momentum shift, I don't know what is," says Jesper Andersen, Oracle senior vice-president of applications strategy.

SLUGFEST AHEAD. Analysts give Oracle props for overcoming early customer fears that the company would kill PeopleSoft's superior applications. Instead, Oracle has offered lifetime support for the software customers had already bought. "That really took a card off the table the SAP guys could play against them," says Credit Suisse First Boston analyst Jason Maynard. "Oracle is demonstrating to customers this applications thing is a real and serious market for them," he says.

And, as Oracle and SAP begin to slug it out in the few remaining up-for-grabs industries, such as retail, banking, and telecommunications, strong footholds in human resources and customer care will be a big bonus. To service businesses, that software is more important than manufacturing-friendly software that manages things like when to ship how many widgets to which customers.

The challenge for Oracle will be maintaining the momentum, beyond integrating acquisitions. In core applications software, SAP has more than double Oracle's market share. And SAP is adept at execution. Without any acquisitions, it's expected to increase revenue at least 15% this year. "Next year will really be a neck-and-neck race (in these two sectors) for Oracle and SAP," Shepherd says. "While PeopleSoft really did bump them up to the top, they are by no means pulling away."

After all, that's the real battle between SAP and Oracle: Not how many customers you have, how much of their IT budget you can get. Almost every large company already has some Oracle or SAP somewhere, and these aren't systems that are easily or cheaply replaced. Ellison may yet make good on his promise to become No. 1, but expect a long bruising battle for both companies. Oracle may have acquired its way to No. 2, but it'll have to become No. 1 the old-fashioned way: closing deal after hard-fought deal. And there, SAP has historically had the edge.

180 View - We were one of the naysayers. In January 2006, we wrote "We think that Oracle has bit off more than it can chew. Creating one system for the best of Oracle, PeopleSoft and JD Edwards is going to be a huge job and you can't please everyone at the same time. There is also a lot of uncertainty right now, which is scaring potential new customers away." It looks like we underestimated Oracle.

Choosing the wrong software

August 29, 2006 from Info World - "The road to new software can follow a strange and convoluted course. I was feeling optimistic as I began a new consulting engagement for a national retailer, as part of a team developing an RFP (request for proposal) for a new HR/Payroll application. True, there were 12 divisions, and each one required a detailed process-flow-and-requirements definition. But having met with the key users in each area, I was confident we'd be able to sort everything out. In addition, we enjoyed the support of the VP in charge of HR, which helped us avoid many of the stalling tactics that typically occur during such efforts.

Months later we ended up with two three-inch binders of requirements, which we mailed out to vendors. Then we waited for their responses. Two vendors I'll call "HRC" and "Acme Software" made the cut. Several weeks later they came in to show off their performing dogs and ponies.

The IT people immediately saw the technological advantages and superior functionality of HRC's Windows-based offering. We also saw that Acme was trying to sell us a hasty retrofit of their mainframe software sitting in "a window." Unfortunately, the users we were working for thought both offerings were essentially identical. In fact, since Acme had a persuasive representative with vast experience in payroll, and as our user team had a strong payroll (vs. HR functionality) bias, the retailers were starting to lean toward Acme.

Then, Harry, our project manager (whom I knew for a fine programmer, but no politician) surprised us all with a brilliant play. For some reason, he was always at odds with Bob, the key HR staffer who was leading the evaluation. Harry and Bob always took opposite positions. Anyway, during a lunch break, I overheard Harry confiding to Bob how much he liked Acme's offering. A few minutes later, back in the conference room, the user team flipped its position and voted for HRC -- our IT team's choice!

From that point on, the evaluation moved steadily forward to select the vendor we knew would be superior. I thought we were home free. No such luck.

HRC submitted a two-page license agreement to be reviewed by the legal department and the users. By the time the negotiations were completed, the document had blossomed to 26 pages of performance guarantees, special clauses, and a dazzling array of stipulations.

Just as this process seemed to be winding down, we received word from the corporate executives that the deal was off! Too expensive, we were told; we'd have to purchase too much high-end hardware to support the system.

We were devastated. Our baby was dead. All we had to show were two three-ring binders of requirements. And I was out of a job.

As it turns out, those binders were important. Several months later the information they held was used to redefine job descriptions and create critical enhancements to the existing in-house HR software.

Ultimately, 60 developers were hired to handle that workload. Sadly, I wasn't one of them. But that's not the end of the story. Nearly three years later, after a change of CIOs, a new management team (which still had a bias for payroll functionality) took over the reins of power. And guess what? They went right out and bought Acme's HR/Payroll package."

180 View - This article is a good case study of what not to do:

1. There is something terribly wrong if you have "two three-inch binders of requirements". You're not designing a system from scratch. You should be including only what's important and what differs across systems.
2. The RFP was mailed. It should be sent electronically as a turnaround document.
3. Only 2 vendors made the cut from the RFP. You should be doing more diligence before cutting it down to only 2.
4. The 2 vendors "came in to show off their performing dogs and ponies". The vendors should be given instructions to tailor the demonstration.
5. "Just as this process seemed to be winding down, we received word from the corporate executives that the deal was off! Too expensive, we were told; we'd have to purchase too much high-end hardware to support the system." - Whatever happened to total cost of ownership? This should have been understood earlier in the process.
6. "Ultimately, 60 developers were hired to handle that workload. Sadly, I wasn't one of them." The so-called consultant had no business participating in the selection process if he also wanted to be involved in the implementation.
   

Systems Union is acquired by Infor

August 3, 2006 from Computer Business Review - "Extensity was created in March 2006 following the acquisition of Geac Computer Corp Ltd by Infor's backer Golden Gate Capital. Geac's ERP assets were consumed by Infor while its financial and business-performance software was used as the basis for the newly formed Extensity. At the time the Geac assets were split as a consequence of Infor's commitment to supplying ERP for selected verticals within the manufacturing and distribution sectors. It was felt performance-management represented a different class of application that did not have a home within Infor. The decision to bring the assets into the Infor business suggests a changing belief system, although Infor described it as an acceleration of its strategy.

Meanwhile, Extensity was in the process of acquiring Systems Union Group, a UK-based provider of financial and performance management solutions. Infor has continued with and concluded the Systems Union transaction so now it is also part of the Infor business.

"We are broadening our offering to include solutions that will enable our customers to improve performance throughout the organization," said Jim Schaper, chairman and CEO of Infor. "Companies can now choose fully integrated solutions for specific industries as well as best-in-class standalone solutions from one provider."

This trio of acquisitions means Infor will now have annual revenue of $2.1bn and approximately 70,000 customers, and will be the undisputed leader in terms of market share and revenue within the growing mid-market sector. It will also have something like 40 different applications, using different code bases and system architectures, and the cost of backing its "never sunset an application" policy.

The Atlanta, Georgia-based company has also added substantial debt to its balance sheet. The two-stage transaction was financed through a combination of cash on balance sheet and committed debt financing. The aggregate facilities are comprised of a $150m revolving credit facility, a $2.25bn term loan facility, and a $1.425bn senior subordinated bridge facility."

180 View - It's too bad that Systems Union was not able to survive on its own. Hopefully it will be one of the survivors in the Infor world of software.

SMBs offer SAP big opportunity, big challenge

June 2, 2006 from InfoWorld - "Some business application vendors see it as highly fragmented, others as inherently complex. Donna Troy sees the small and medium-size business (SMB) market simply as "a huge opportunity." Troy, senior vice president of SAP's global SMB business, is on a mission to carve out a bigger chunk of the global SMB market.

"There are more than 75 million small and medium-size companies globally," she said Thursday at the Sapphire customer event in Paris. "There's plenty of room to grow."

SAP has swung its attention to SMBs after having nearly saturated the market for large enterprises. The company hired Troy last year to craft a plan that would carve inroads into the market and try to give SAP a solid lead over rivals such as Oracle and Microsoft.

The SMB market is expected to grow faster than the large-enterprise accounts, according to IDC. But vendors must spend heavily to ensure the quality of sales and support staff in the channel. The research company highlighted SAP, Microsoft and The Sage Group as "channel friendly" vendors who've seen growing momentum among their partners.

Establishing a skilled network of channel partners weighs big in Troy's strategy. Currently, more than 1,200 companies sell SAP's Business One package for small businesses and another 800 sell its All-in-One package, a slimmed down version of the mySAP Business Suite for large enterprises.

One of her first moves was to introduce the PartnerEdge Channel Partner Program. Under the new global channel framework, the company awards resellers, ISVs (independent software vendors) and other partners points based on their performance. The points are given not only for the volume of sales but also for the ability to satisfy customers through enhanced applications and service. With the points, partners can move across three levels: associate, silver and gold. The higher the level, the greater SAP's support, which includes funding and training.

180 View - Good idea to reward partners on performance and not just sales.

ERP flavor of the week: Vanilla

May 29, 2006 from fcw.com - "The horror stories of poorly implemented enterprise resource planning systems - disrupted orders, backed-up shipments, screwed-up payrolls - are well-known. Merely mentioning the acronym "ERP" to a chief information officer can induce cold sweats, heart palpitations and other symptoms of acute discomfort.

ERP deployments are challenging, but they have also improved since the 1990s, when many of the worst disasters occurred. In recent years, a number of municipalities have adopted the systems to manage their human resources and financial functions. The experience of those cities, counties and towns constitutes a road map that can help other municipalities navigate the transition from mainframe systems to ERP. Lesson one: It will be harder than you think. Lesson two: A lot harder.

ERP survivors recommend a number of transition strategies to minimize the pain: Take your time. Do the due diligence. Evaluate potential products and partners thoroughly. Shun open-ended contracts in favor of fixed-price deals. Know what you want from an ERP. To the extent possible, keep it simple. Put the best and brightest employees on the implementation team…

"An ERP system builds in a large multitude of flexibility," said Bob Hendricks, CIO for Fresno, Calif. "With flexibility comes complexity." The appeal of ERP systems is that they break down information silos, aggregate data and put the results at the fingertips of many users. The processes of managing budgets, tracking employees, requisitioning supplies and keeping tabs on vendors become streamlined and paperless. As a result, ERP systems provide the means for radically retooling business practices. Getting organizations to understand and accept this key point is essential to a successful implementation, experts say.

"An ERP is as much a strategy as a software system," said Anthony Cresswell, director of the Center for Technology in Government, which assists with the development of information strategies that enhance public services. "It has a lot of technical capabilities to link it as an organizational change and reform strategy in the sense of re-engineering business processes and potentially changing the way the organization interacts with its shareholders and customers."…

In the interest of simplicity, experienced users also advise against giving in to employees' demands to customize software vendors' ERP modules…The city acquiesced to employees' demands for customized reports but later learned that the benefits of tweaking the software were not worth the headaches. Introducing custom code to commercial applications creates compatibility issues that can cause problems each time a system is upgraded."

180 View - Customization need not be the big problem that it used to be. Today you can make changes to screens outside of source code so that you don't need to redo them when upgrades are released. Reporting should also not be a problem using a report writing tool such as Crystal Reports. Developers may add new fields but would rarely change any existing fields. There is no reason for reports not to work when upgrades are provided as the tables and fields remain the same.

Microsoft, SAP sing a Duet

May 12, 2006 from Computer Dealer News - "Microsoft and SAP will start selling the software that bridges their key applications next month, promising customers and partners a new era of accessibility to enterprise data. However, while the companies are working together jointly selling and marketing the software, they won't say yet what the price will be.

Called Duet, it allows Microsoft Outlook to be used as a front end to peer into mySAP, the complex enterprise resource management (ERP) application that large companies and governments use to run their operations.

“There are a lot of business processes that anybody in an organization needs to participate in on a day-to-day basis,” said Elizabeth Caley, a senior product manager for Microsoft Canada. “We're trying to take those that are accomplished in SAP and make it so that an end user can do them without a lot of training and support.

Anuj Batra, SAP Canada's national lead for emerging solutions, said the advantages for users will be “superior decision-making because of better synchronization” between mySAP and Office.

One SAP-Microsoft partner already working on an early version of the software is Montreal's Nakisa Inc., whose Web-based application lets users create organization charts and diagrams from SAP data.

“For us, (Duet) is an exciting opportunity,” said John Payes, director of Nakisa's Microsoft partnership.

The first release of the software will include four “scenarios,” linking to SAP's budget monitoring aimed mainly at general users covering time management, leave management and organization management functions.

Later in the year two value packs will be available for purchase aimed at business managers covering recruitment management, travel management, analytics, purchasing management and sales activity management." For the rest of the article, click here.

180 View - I teach a course at Ryerson University that uses mySAP to demonstrate ERP concepts, and have an appreciation of the deep functionality of the system but also its complexity. It seems to me that Duet is nothing more than windows dressing, and that the vast amount of functionality within mySAP will not be accessible via Outlook.

SAP continues NetWeaver focus at Sapphire 2006

May 18, 2006 from Computerworld - "Since introducing its NetWeaver technology stack three years ago, SAP AG has been steadily promoting it as a pervasive part of its applications, despite user confusion over exactly what it is or fears that it's a proprietary technology.

As the core component to SAP's Enterprise Services Architecture (ESA), NetWeaver comprises a set of service-oriented architecture (SOA) technologies, including a portal, business warehouse and other infrastructure applications. It's meant to enable customers to create integrated workflows over various applications. Not surprisingly, at this week's Sapphire 2006 user conference here, SAP made a number of NetWeaver-related announcements.

Among its other initiatives, the company announced a $125 million fund to invest in NetWeaver technologies developed by software companies, as well as a planned rollout of business intelligence (BI) applications and its next-generation product, mySAP ERP 2005, which is heavily reliant on NetWeaver….

Just what NetWeaver is has yet to be fully defined, said Stanley Ezzell, vice president of strategic initiatives at Wellborn Cabinet Inc. The Ashland, Ala.-based based furniture maker has successfully deployed a set of ERP applications through the SAP BusinessOne program, which is tailored to medium-size businesses. Ezzell has done customizations with his R/3 application and doesn't want to lose them if he consolidates his stack on NetWeaver.

"What NetWeaver really means to the R/3 customer, I don't know," he said. Ezzell was also unclear about just what migration path he would have to take to get mySAP ERP 2005 if he wants to migrate.
"For me to go and say to my company, 'We've spent millions on this, and guess what, we'll spend more millions for that,' I might be calling looking for another job," he said. For now, he plans to hold off making any moves until he has a higher comfort level with SAP's plans.

SAP executives have made it clear they won't force any customers to NetWeaver and have stressed that it's an open, industry-standard-based architecture. For the article, click here

180 View - So you're not alone if you're not really sure what NetWeaver is all about. Most people are not all that interested in the underlying technology. They want to know what it will do for them and at what cost. The announcement of the roll out of business intelligence applications is noteworthy as more and more ERP vendors try to incorporate this technology. The BI vendors will be facing stiff competition, but will have the edge with organizations that have disparate ERP systems.

Oracle Vows Unlimited Support for Acquired Apps

May 11, 2006 from CRM Daily - "Oracle has assured its installed base that there will be no forced marches to Fusion, its next-generation set of applications. At Oracle's Collaborate 2006 user conference, the company announced that it will indefinitely support and upgrade the products it gained through its acquisitions of PeopleSoft and Siebel Systems, as well as its own line of applications.
Oracle had previously committed to support the products only through 2013. Jesper Andersen, Oracle's senior vice president of application strategy, said the move was made to ease the fears of users of the older products. "We have 30,000 customers and need to make sure we treat them well [so] they'll stay with Oracle a long time," he said." For the article, click here.

180 View - It's taken a while for Oracle to come round but it sounds like Oracle is now listening to its customers. We suspect that there is an ulterior motive too. Oracle's prospects will be reluctant to purchase any of their existing systems with an unknown future.

Infor Buys SSA Global

May 16, 2006 from AMR Research - "This is a bold but risky move by Infor. There has not been a successful consolidator vendor in the software market to date; just look at Geac and Computer Associates...

The combined companies represent $1.6B in revenue. Infor is expected to pay $19.50 a share for SSA, a 25% premium over Friday’s closing numbers. This all-cash deal is expected to close in the next 90 to 100 days, assuming the SEC doesn’t get involved. We expect the 37,000 joint customers of SSA and Infor to receive this news with very mixed emotions. Even though SSA had to incorporate several acquisitions itself, it did a better job of rolling out an architectural platform and communicating its long-term development plans than Infor did. Any new acquisition creates some disruption to the customer base. This acquisition, significant enough to dilute senior management attention, puts at risk development plans and strategies of both customer sets.

The hard work will be the rationalization of a mix of supply chain and ERP products with the combined SSA and Infor. Infor now owns the former BPCS, Baan, Prism, Protean, Infinium, BRAIN, SCT, Lilly, and MAPICS ERP products. In addition, its supply chain products include EXE, NxTrend, daly.commerce, and Mercia. Finally, add to those products an asset management product from Datastream, and you have some product lines that are complementary, but some that are competing and overlapping as well." For the rest of the article, click here.

180 View - Infor has acquired a hodge podge of systems. Although some of them are highly regarded, questions remain about their future. Unless Infor dispels the concerns, the real winners will be Infor's competitors who pick up new clients unsatisfied with the new owners.

QAD and the Future of the Other Pure Plays

May 11, 2006 from AMR Research and written by Bruce Richardson - "Believe it or not, we are rapidly approaching the three-year anniversary of PeopleSoft’s bid to buy JD Edwards, as well as Oracle’s surprise bid for PeopleSoft. All of that occurred between June 2 and 7, 2003.

But it didn’t stop there, the ERP market consolidation continued after these megadeals. A month later, SSA Global completed the acquisition of Baan, and it added Marcam a year later. It had already acquired Infinium Software (formerly Software2000) and various ERP assets from Computer Associates. Last November, Golden Gate Capital bought Geac and merged it in with Infor Global Solutions.

Geac and Infor had been active participants in the race to consolidate the ERP market, too. Past Geac ERP acquisitions included Dun & Bradstreet Software and JBA. Of the two, though, Infor (formerly Agilisys) had been far more aggressive. Its ERP stable included Infor Business Solutions (a German ERP vendor and the source of its new name), Lilly Software, and MAPICS. As you may recall, MAPICS had previously acquired Frontstep (formerly Symix) and Pivotpoint.

Let’s not leave out the recent Lawson-Intentia marriage, the CDC Software purchase of Ross Systems, or any of the past ERP buys by Microsoft, Epicor, IFS, or Sage Group. Who’s next?

This week I attended the QAD Explore 2006 conference in Denver. The highlight for me was the chance to have a series of candid conversations with Pam and Karl Lopker, the wife-and-husband team that run the company. Since Pam founded QAD in 1979, the company has grown to a $225M company, with more than 5,500 licensed sites (more than 8,000 total plants).

Given the size of its installed base and strength across six core verticals (automotive, consumer goods, electronics, food and beverage, industrial products, and life sciences), QAD makes a very attractive acquisition target. Indeed, before PeopleSoft bought JD Edwards, former PeopleSoft executives told me they had their eyes on QAD until the Lopkers put the “Not for Sale” sign up.

I asked the Lopkers about their intentions to join the growing ERP Aggregators club. While they average one acquisition or purchase each quarter, these are usually around intellectual property. They expressed no interest in buying or merging with another ERP vendor, as they don’t see the need to just get bigger.

When positioning against SSA Global, Infor, Oracle, and others, QAD has a compelling message in its core verticals: every dollar you spend with us on licenses and maintenance goes right back into improving and enhancing one ERP system. The company also pledges that it won’t be funding a move into the very low end or high end of the ERP space, nor does it have plans to move beyond the current core verticals. So far, the story appears to be resonating. Last year, 30% of revenue came from first-time customers.

If anything, the Lopkers are making bigger bets on their own products, and aggressively looking to buy, OEM, or partner to round out their products. R&D spending will be up this year to at least 16% of revenue. When asked to list his top three R&D priorities, Mr. Lopker said accelerating the development of the new eB3.0 release (QAD is moving closer to having the world-class financials it has needed), the integration of the Microsoft .NET user interface, and the continued development of the production planning products. The latter is helping to push QAD even deeper into manufacturing.

When I asked the Lopkers about their top growth priorities, they both responded with the same answer: emerging countries, especially China and India. QAD is ramping up the hiring of developers and services people in both countries. Clearly, there is a huge sales opportunity here, too, as multinationals accelerate the opening of new manufacturing sites across Asia. For the rest of the article, click here.

180 View - On the one hand, we see huge companies getting even bigger through consolidation. On the other hand, we see a relatively small company able to survive and thrive in the midst of the ERP giants. Our explanation for the success of QAD and other smaller ERP developers is as follows.

1. ERP systems are not a commodity at least with respect to operational functionality (distribution, manufacturing...). By focusing on a specific vertical, smaller ERP vendors can compete effectively partly because of functionality tailored to the needs of the vertical and party because the employees of the smaller ERP vendor are often extremely knowledgeable about the vertical.
2. Some people would prefer to be a big fish in a small pond. In other words, some companies prefer to work with smaller ERP vendors where they believe they will have a bigger influence and be able to speak directly to the owners.
3. Small companies have less resources to invest in R&D, but they also don't have the same baggage as the big vendors that need to worry about all the systems they have acquired. Smaller companies can be more nimble in adapting to new technology.
   

Rating the popular high-end, mid-market and small business accounting solutions

April 18, 2006 from ITBusiness.ca and written by Michael Burns - "For the last two years, CAmagazine has conducted a Canadian customer survey of accounting and ERP systems. The survey solicits responses on how customers rate their systems, developers and implementation partners. It also includes questions about return on investment and future plans.

There is often some confusion as to the differences between an accounting system and an enterprise resource planning (ERP) system. I define an ERP system as one that automates business processes across most, if not all, departments within a company. With that definition, even a system like QuickBooks or Simply Accounting can be considered an ERP system for a small company...

There were 264 surveys completed on a wide spectrum of systems. To compare the systems, each was categorized as either high-end, mid-market or small business. The report only included details for those systems for which at least five customer surveys were completed. This was done to improve the statistical reliability of the results. The high-end products included JD Edwards, Oracle, PeopleSoft and SAP. The mid-market was made up of ACCPAC Advantage, Great Plains, Navision, and SYSPRO. Finally, small business solutions were Adagio, MYOB, QuickBooks and Simply Accounting." For the article, click here.

Accounting System/ERP Customer Survey

April 2006 from CAmagazine written by Michael Burns - Check out the results of our 2nd customer survey of accounting and ERP systems. See how well readers like the system they're using, and how they rate the developers and implementation partners. We also asked for some general feedback about return on investment and future plans. Check it out by clicking here.

Eight Tips For Creating A Vendor Short List

February 23, 2006 from Managing Automation and based in part on an interview with Michael Burns - "Your list of requirements should match up with pre-defined critical success factors (CSF) -- those things you must do well in order to be successful as a business, adds Michael Burns, president of 180 Systems Ltd., a business consultancy in Toronto. "If a requirement can't be mapped directly to a CSF, then it's not critical."...

When creating your RFP, Burns suggests asking vendors to respond not with a yes or no but with a number between one and seven. "When they say yes, that can mean anything," Burns says. You can get more specific through a numbering system, where a "6" might indicate that a feature is available in the current release of the software, a "5" that it will be available in six months, and a "1" that it would require a major modification or workaround. Combining your weighted requirements with these weighted responses will give you a way of scoring vendors to determine which makes your short list, he says.

You might be tempted to skip the reference check process, assuming you'll get only positive responses. However, according to Burns, "forty percent of the time, the reference is not a positive one," he says. "It's amazing how little vendors know about their customers." Burns offers a checklist of questions to ask each reference and advises that you tell each one a little about yourself before asking any questions so that they have a level of comfort with you.

Don't spend time on system demonstrations until you've narrowed your list to a handful of finalists. You can even take a two-pronged approach, Burns suggests, where the first demo is done over the Internet and the second one is more in-depth. In all, you should attend no more than four demonstrations, and limit each to two to three hours, he says. Ask demo attendees to identify major strengths and weaknesses, he says." For the rest of the article, click here.

Review of Microsoft Dynamics GP (Great Plains)

March 2006 from CAmagazine and written by Michael Burns - "Microsoft Business Solutions has been reborn. The group of products has a new name – Microsoft Dynamics – along with a new logo sporting the same colours as the other Microsoft brands. The objective? To better align the products with the company’s strategy of moving toward a unified code base. All the product names have been abbreviated; for example, Great Plains has become Microsoft Dynamics GP, Navision is now Microsoft Dynamics NAV, Solomon is Microsoft Dynamics SL. But if you’re like me, you will probably continue to refer to these systems for a while by their old names.

Many people can’t tell the difference between Microsoft’s existing enterprise resource planning systems. This is not surprising, since these systems used to be in competition with each other before they were acquired. A general rule of thumb is that Microsoft Dynamics NAV and AX (Axapta) are for companies requiring a highly customizable system because of their unique requirements. GP is aimed at organizations that want “out of the box” functionality with little or no customization. Although Microsoft says SL is best suited for companies that are largely focused on professional services, a significant percentage of GP’s sales are also in that area. I think Microsoft needs to work on its product differentiation. The Microsoft Dynamics GP, NAV and SL product lines offer two editions – standard and professional. The standard edition is targeted at companies with more than $10 million in revenue; the professional edition is for those with revenue higher than $50 million. Axapta is for companies whose revenue tops $100 million...

When people think of Microsoft Dynamics GP, they usually think of a financial management system. Wrong. Microsoft Dynamics GP has a wide range of functions, including distribution, discrete manufacturing (work orders, routings, material requirements planning, job costing, field service (scheduling, preventive maintenance, invoicing, etc.), HR (including employee self-service over a browser), demand planning, contract management, grant management and project accounting. Microsoft Dynamics GP also has many well-kept secrets. Have you heard of Business Portal, Forecaster, Analytical Accounting and Collection Management?" For the rest of the article, click here.

ERP Underutilization

January 2006 from Ventana Reseach - "The Enterprise Resource Planning practice at Ventana Research believes that many companies underutilize their ERP assets. We frequently find that senior finance executives think their ERP software has failed to deliver sufficient value. This perception is not entirely misplaced, but in our judgment, companies are not achieving full benefit from these systems because they are not using them enough (if at all) to drive process improvement and business innovation. We advise finance executives to pursue a strategy of increasing the value their companies receive from this core business system. Toward that end, innovation will be the principal focus of our ERP practice in 2006." For the article, click here.

180 View - Ventana Research recommendations include Business Process Improvement (BPI) and implementation of Master Data Management (MDM). There are many companies that implemented their ERP system under duress for Y2K reasons. They did not have time to optimize business process when it was implemented, and are now ready to get it right now. BPI does not require replacement of their ERP; there are many ways to achieve BPI. MDM refers to solving the problem of different systems used to store and maintain master data such as customer or supplier information. This can be a huge problem for larger companies that use multiple ERP systems.

NetSuite gets high marks from Yankee Group Research

February 22, 2006 from the Yankee Group - In October 2005, The Yankee Group conducted a web-based end-user survey that polled 700 US-based SMBs across all industry segments. Findings included "The internet is the fastest growing and most dynamic sales channel for both SMBs and midmarket businesses. Several vendors now offer web site development solutions with integrated online selling solution development tools, such as a shopping cart, catalog management and secure online payment solutions. However, SMBs need an e-commerce solution seamlessly integrated with the front and back office to support an optimized workflow and process automation without the need to move data between different applications from several different vendors. This helps increase the productivity and overall efficiency of the workforce by reducing errors and time invested in data formatting and migration. In an integrated suite of business applications, all modules work together seamlessly to help companies keep an eye on their overall operations and business results. Online marketing tools drive the e-commerce experience, but vendors can gain an advantage by also offering search engine optimization, web analytics, pricing engine, order and inventory management and shipping. Such solutions can help SMBs improve the customer, supplier, partner and employee experience"

The report compared NetSuite, SAP Business One, Sage BusinessVision and Everest Software on coverage of front office, back office and eCommerce as well as other criteria including ease of integration and customization. "NetSuite is the only online business application that streamlines front-office, back-office and e-commerce operations for growing businesses. NetSuite automates all key business processes—including lead generation, sales orders and product shipment—across the entire company. All data is held in a single system, so users can access one realtime view of all business metrics, enabling SMBs to make better decisions faster in an increasingly competitive landscape." For the rest of the article, click here.

180 View - Although there are a limited number of SMB vendors included in the ratings and the report did not appear thorough in its analysis, we would also give high marks to NetSuite.

Google makes a play for enterprise data management

February 14, 2006 from Canadain Technology News - "BearingPoint is working with the Google Search Appliance -- which is essentially “Google.com in a box,” said Weitz -- and will be customizing it for use in specific vertical markets including pharmaceuticals, banking, brokerage, technology and aerospace. BearingPoint “would be able to build vertical and specific enterprise applications using the GSA as a platform through their APIs and XML feeds,” said Weitz.

“We can extend the Google Search Appliance into different areas where the Google search engine cannot crawl . . . such as certain databases, document management systems, etc.,” he added. The GSA would be able to work with several applications already in many enterprises, including Documentum, Oracle, PeopleSoft and SAP, he said. To the employee using the GSA, the results look similar to those they might see in an Internet search generated by Google.com." For the rest of the article, click here.

180 View - So Google could potentially be the search tool to find information in your ERP system(s). We can see the advantages of Google to access non structured data quickly, but it can't compete with a database optimized for fast retrieval of structure data and with an application that would allow you to drill down or change the information once you found it.

SYSPRO Review

January 2006 from CAmagazine and written by Michael Burns - "SYSPRO is coming on strong in Canada. They have had an office in Vancouver since 1986, with coast-to-coast representation through its reseller channel for many years, and just opened up an office in Toronto in July 2005. Sales have gone up by 35% in the past 12 months.

Another example of SYSPRO's involvement in Canada is that the Canadian Manufacturers & Exporters (CME) named SYSPRO as the first CCTP (Collaborative Community Trading Platform) certified ERP Vendor in June 2004. CME launched CCTP as an industry-wide initiative to deliver eBusiness solutions for small and mid sized manufacturers.

SYSPRO is known for its manufacturing system. SYSPRO handles both discrete and batch manufacturing. Discrete manufacturers build single items such as furniture or vehicles. Batch processing applies to products such as food, pharmaceuticals or plastics. SYSPRO is targeted to mid market manufacturers and distributors with revenues between $5 Million and $250 Million with 10 to 1,000 employees." For the rest of the article, click here.

Lawson and Intentia Merger

December 16, 2005 from InfoWorld - "Lawson Software and Intentia International will have to wait a bit longer for their planned union. The two applications vendors said this week that they are extending the deadline by three months for completing their planned merger, a deal the companies hope will give them the bulk needed to become the dominant vendor in the midmarket ERP (enterprise resource planning) software.

Lawson, with headquarters in St. Paul, Minnesota, announced in June that it would buy Intentia, based in Sweden, in an all-stock deal valued at around $480 million. Although Lawson will survive as the name of the combined company, the deal is essentially a merger of similarly sized vendors. Lawson had revenue of $335 million in its last fiscal year (ended May 31); Intentia had revenue of SEK 2,983 million ($379 million) in its most recent year (ended Dec. 31)." For the rest of the article, click here.

Geac is Acquired

November 23, 2005 from Intelligent Enterprise - "Geac, a software company based in Ontario, Canada, is being acquired by Golden Gate Capital, a San Francisco private equity group with an expanding software company portfolio. Geac’s strategy was to grow through acquisition, combining companies that had large installed bases of maintenance-paying customers with companies that showed growth potential. However, as a public company it recently has been finding it difficult to identify acquisitions that meet its minimum requirements... Golden Gate will split Geac’s software portfolio between two groups. It will combine Geac’s manufacturing and supply chain software lines, re-branding them as offerings by Infor, a Golden Gate Capital company that has grown through acquisition of discrete and process manufacturing software companies, among them Mapics Inc. and Lilly Software Associates." For the rest of the article, click here.

Hands-Free, Eyes-Free Picking (in a warehouse)

December 2005 from APICS e-News - "The growing demand for order fulfillment technologies that deliver results through increased performance, greater accuracy, and quicker return on investment has resulted in the use of voice-directed technology in distribution operations. While this technology is primarily used in warehouse picking, it is also being used in receiving, putaway, replenishment, and cycle counting.

The food and grocery industry has been leading the way in adopting voice-directed technology because the hands-free operation is suitable for picking frozen foods where gloves hamper the handling of pick slips and entry of catch weights. This technology is also being used in a variety of industries today, including manufacturing, direct-to-consumer, retail, consumer products, automotive, and pharmaceuticals.

Two key benefits of voice-directed picking technology are that warehouse personnel do not read the information on the pick slips (eyes-free) and do not manipulate a handheld device for key entry (hands-free). Instead of using visual cues, voice-directed picking relies on audio cues to let the warehouse worker know what and how many to pick. The warehouse worker wears a headset and a microphone to interact with the host computer. Picking data from the host computer is translated into spoken directions for the warehouse worker and similarly, the worker’s audio responses are translated back into data for the host computer.

The primary cost benefits of voice-directed picking are increased accuracy and productivity. The duration of the average pick can be reduced half-a-second to four seconds per pick. Typically, picking errors can be reduced by 90 percent and picking productivity can be improved by about 35 percent. Picking accuracy of more than 99 percent can be achieved using this technology.

The greatest return on investment on voice-directed picking comes from reduced picking errors. In a wholesale distribution environment, the average cost of a picking error/return ranges between $12 and $40. Let’s assume that a warehouse has 100,000 picking errors per year and the cost of a picking error is $20. In this situation, by adding voice-directed picking technology, if picking accuracy is increased from 99 percent to 99.8 percent, it would result in cost savings of $1.6 million per year. Payback for a voice-directed picking system in a distribution center can be achieved within 12 to 16 months.

Strong candidates for voice-directed technology are full-pallet, full-case, and split-case distribution environments because the warehouse personnel can benefit from a hands-free and eyes-free environment.

Two main types of architectures, speaker dependent and speaker independent, are used in leading voice technologies.

Speaker-dependent voice technology stores a template of each person’s voice, speaking the limited number of words required for the picking operation. It takes about 15 to 30 minutes to train the computer until the system understands each person’s unique pronunciation. The advantages are that the system allows any accent and language to be accurately recognized, even in noisy environments. The disadvantages are the need for retraining and logistics. It can become a tedious task to ensure that each individual gets the correct voice template (i.e., a user must always use a particular terminal).

On the other hand, speaker-independent systems do not require unique voice templates for each user. Any user can use any speech unit and there are no logistics and retraining issues at the beginning of each shift. Disadvantages of this system are that it is language specific, although it handles speech variations and accents well.

Voice-directed technology is no longer considered an emerging technology; it is a proven technology that is increasingly being implemented in distribution centers. In fact, the future of voice technology is moving toward integration of voice and RFID technologies because they are both hands-free, eyes-free technologies that are capable of complementing each other in a distribution environment. For example, an RFID reader can be implanted in a voice terminal, with the voice terminal directing the pick. Once the picked case is placed on the pallet, the RFID tag could record the case ID and quantity (i.e., voice can direct the picking activities and RFID can validate the case ID and quantity)." This article is not available on the web. You need to become an APICS member.

ERP vs Best of Breed

October 2005 from The Bottom Line and written by Michael Burns - "ERP (Enterprise Resource Planning) systems are defined as systems that can automate all business processes throughout an organization. Best of breed (BoB) systems provide solutions to a specific businesses process or requirement within an organization such as Point of Sale (POS) or Customer Relationship Management (CRM). Which one is better?

ERP vendors will tell you that the total cost of ownership is much better with ERP as you don't need to worry about integration. Integration is an on-going problem as the two systems evolve. Integration is not just about transferring transactions from one system to another. What about synchronization of master files such as customers and suppliers? Is it 2-way synchronization? Does it happen in real-time? Should only some of the data be updated by the other system? ERP also gives you one user interface to learn and one number to call if there are problems.

BoB proponents will talk about their deep functionality as well as knowledgeable people dedicated to a particular industry. BoB license costs may also be lower than the ERP equivalent. Consider a large company with a small division with limited retail requirements. Their ERP solution could very well be overkill for the retail division.

BoB may also make sense for situations when an organization has multiple ERP systems and wants one solution for a specific requirement such as CRM. A BoB CRM system may already be integrated with several ERP systems. And believe it or not, even the biggest ERP systems will have some gaps in their offering and it will be necessary to use third party or BoB solutions.

Technology is on the way that will help the BoB argument. By now you should have heard of Web Services and XML (eXtensible Markup Language). XML is a component of Web Services. XML will allow companies to share data using standards. For example, a purchase order can be issued electronically to a supplier that is using a completely different system and is able to read and process the purchase order using XML. XML should help with transactions such as Purchase Orders. However, XML may not be able to solve synchronization issues. All the major vendors are working together to define the standards for XML and Web Services, but it's likely going to be a few years before this technology is readily available.

ERP systems used to be considered a back end solution for functionality that includes financials, distribution and manufacturing. ERP systems initially did not include front end solutions such as CRM, and as a consequence we have a wide range of CRM vendors offering their BoB solution.

ERP systems are very good at generating lots of data but were not great at turning the data into information useful to make decisions. ERP was considered data rich and information poor. We also have a wide range of vendors offering their BoB Business Intelligence solutions. However, the trend today is for ERP to offer end to end solutions that include the back end, the front end and Business Intelligence.

Supply Chain Management (SCM) is an application that has been traditionally available through BoB vendors. SCM connects different organizations in the supply chain. For example retailers are connected with distributors who are connected to manufacturers who are connected with their suppliers. In recent years, ERP vendors have developed broader suites that provide integrated support across supply chain processes, such as linking inventory replenishment and transportation management.

So the battle between BoB continues on many fronts. There is no right answer as whether ERP or BoB is better. As my professor of Information Systems told me a long time ago, it depends."

Microsoft Dynamics GP (Great Plains) 9.0 Product Launch

November 16, 2005 - I attended the launch of the latest Great Plains' product (version 9.0), now known as Microsoft Dynamics GP 9.0 from Microsoft on November 16. For those of you not yet familiar with Microsoft Dynamics, Microsoft recently re-branded the Microsoft Business Solutions products to Microsoft Dynamics - which includes a logo with the Microsoft colours used in other Microsoft brands. The event was held in Toronto and attracted about 200 Microsoft business partners and industry analysts. Let there be no doubt that Microsoft is solidly behind Microsoft Dynamics GP and the its other business solutions including Navision, Solomon, Axapta and CRM. Moving forward, Microsoft is heading down a path that will lead to a convergence of its business solutions in about 3-4 years. In the meantime, Microsoft is making significant enhancements with the existing products.

Microsoft Dynamics GP is doing a lot better financially with a 21 per cent growth in licenses last quarter. Microsoft has deep pockets and will continue to invest in its business solutions including Microsoft Dynamics GP 9.0, as it sees huge potential in the future of the business. The biggest area for opportunity is primarily a blending of Microsoft Office with Microsoft Dynamics solutions. With version 9.0, Microsoft Dynamics GP now looks like Microsoft Outlook and is tightly integrated with Microsoft Office. Microsoft sees a natural progression from Microsoft Office to Microsoft Dynamics.

Other important enhancements in Microsoft Dynamics 9.0 include role-based computing, improved business intelligence and web services integration. Role based computing provides a personalized view and access to information and tasks based on an employee’s role starting with the home page (what opens when signing onto the system). Business intelligence enhancements include analysis cubes for Microsoft Excel and key performance indicators. With web services, any integration work is protected with new releases, which will support integration with web services.

Another important Microsoft Dynamics strategy is to focus on verticals. You will soon be able to find a Microsoft representative that focuses on your specific industry.

The troops are charged up, and in the minds of Microsoft management, there is no reason to lose to the competition.

For a short article from ITBusiness on the product launch, click here.

Forrester's Top ERP Vendors

November 14, 2005 from destinationCRM - "Forrester has released its latest evaluation of the top ERP vendors, examining how they address customers' desires for them to provide licenses that incorporate more flexibility and better software life cycle support. "The Forrester Wave: Enterprise Applications Software Licensing, Q4 2005" shows Oracle leads the pack in accommodating business complexity, while SAP takes the top spot when it comes to delivering simplified license metrics and flexible licensing policies...

The wave evaluates nine vendors, all of which have core ERP suites and significant market presence, and have revenues above $200 million. In its evaluation of complex offerings, Forrester assessed the maximum number of options each vendor provided in license metrics and upfront life cycle policies. Those with the most options fared best. Oracle is the winner in this other category. Epicor Software, IFS, Microsoft Business Solutions (MBS), QAD, SAP, and SSA Global are the other leaders, while Intentia and Lawson are named strong performers...

Many ERP systems were initially installed pre-Y2K and are now coming up on replacement. Enterprises have learned harsh lessons, as they have paid for maintenance of unused licenses, suffered undefined maintenance fee increases, and lost functionality credit for future releases. As companies begin their vendor selection processes, they do not want to repeat the same mistakes." For the article, click here.

Dynacom Software Review

October 2005 from CAmagazine and written by Michael Burns - "Although little known outside Quebec, Dynacom is one of the province’s leading suppliers of accounting systems, with a reported 75,000 customers. The Laval-based company has also done very well outside Canada, with 250,000 customers worldwide — mostly in the US.

Dynacom started operations 15 years ago and now has 40 people working from its head office. The system, which comes in English and French versions, is sold in retail stores throughout the US and directly or through partners elsewhere. Although initially designed for small businesses, it is now aimed at mid-sized companies as well." For the article, click here.

Microsoft merges units to tackle changing markets

September 21, 2005 from Computer Business Review - "Microsoft will consolidate its seven business units into just three to better prepare itself for its next set of corporate challenges as software-as-services take off and the line between the network and the computer continues to blur...

Microsoft will also combine the $11bn-a-year Information Worker division with the $800m Microsoft Business Solutions services division into the new Business Division. Information Worker was mainly Office sales, with some collaborative server software thrown in, while MBS was Microsoft's smaller, younger enterprise software division, comprising business intelligence, ERP and CRM suites." For the article, click here.

From our prespective, it looks like MBS just got swallowed up by a division with a completely different business model. We predict MBS will re-emerge after a difficult year as their own division again.

Annual ERP Survey

September 2005 from CAmagazine and written by Michael Burns - Our seventh annual survey of accounting and ERP systems now includes new or updated responses for 55 systems and covers the entire spectrum - from QuickBooks and Simply Accounting to mid-market systems from Sage and Microsoft and high-end products from SAP and Oracle. The accompanying article includes our methodology for classification of systems into tiers as well as ERP trends. For the article, click here.

Interview with Bill Gates on Microsoft Business Solutions

Sept 7, 2005 from InformationWeek:

Re Role based computing - "Now, some of those new so-called seats will have to be very low-cost seats, but we are trying to extend ourselves out to, say, the person with the handheld computer in the warehouse that in the past would have had a clipboard and paper. Now they're carrying a PDA-type device around with them to do the pick list or to report back that something is out of inventory. So we need to bring those in at very low cost with even greater simplicity than the other seats have been, but you want everybody to be connected up to the information that drives their job. The complexity and cost meant certain roles in the company end up not working in the software but rather working with paper, and that means you have a boundary there of information."

Re Distinguishing the product lines - "In most countries, we only have two product lines that we're really pushing super-heavily. We'll have Axapta and then, depending on the country, either Navision or Great Plains as the big push. In some vertical markets we have Solomon, but that's a very focused product line in terms of who it's appropriate for. Each of our partners decides whether they are selling to the Solomon type customers, or whether they are selling to the higher end customers where Axapta tends to come in." For the article, click here.

I don't think Bill did a very good job in distinguishing between product lines especially with respect to Great Plains and Navision. It sounds like Microsoft will recommend Great Plains or Navision based on country. This is not our experience in Canada and the US where Microsoft is pushing both Great Plains and Navision to the same company.

More news from Microsoft Business Solutions

September 7, 2005 from InformatioWeek - "Microsoft's new roles-based apps are part of a broader midmarket push being unveiled today that will include a future Windows server package, code-named Centro, that combines the Longhorn version of Window server with forthcoming versions of Exchange and SQL Server in a no-frills platform designed to be run by the IT generalists common in the companies with under 1,000 employees...

The company is rebranding its four ERP lines--Axapta, Great Plains, Navision, and Solomon--as Microsoft Dynamics. New versions of the Dynamics products will incorporate new search technology Microsoft is building, as well as integrate data analysis and report-writing functions from its SQL Server database. Microsoft will unveil new licensing and financing options for midsize companies, and new incentives for them to enroll in its Software Assurance maintenance agreement. And the company released a new lower-priced accounting package, Small Business Accounting 2006, to attack Intuit Inc.'s QuickBooks software.

Microsoft Business Solutions remains a money loser, and sales growth has been relatively modest for the past few quarters—up 5.8% last year, to $803 million in revenue, with a loss of $201 million. Microsoft officials hope the roles-based application strategy will bring some spark to the business." For the article, click here.

It seems to me that Microsoft is putting a lot of faith in the role based approach. They claim "Role-based user interfaces really make the application easier to learn." However, you can already do somethign similar by defining user-defined menus. But it should be a plus to have pricing based on role - and you thought pricing was complex now.

Exact Software Review

August 2005 from CAmagazine and written by Michael Burns - "Exact Software is a leading player in the European mid-market ERP space, and has recently been gaining momentum in North America. Exact entered the North American market with the purchase of a number of ERP systems including Macola, JobBOSS, MAX, and Alliance/MFG. Exact Software is headquartered in the Netherlands operating in over 60 countries, including Canada, with more than 180,000 customers and over 2,000 employees worldwide and approximately 450 employees across North America.

Exact Software has taken a different approach than many of its competitors with the release of their e-Synergy product a couple of years ago. e-Synergy is a Web-based system which runs on Microsoft Internet Explorer and includes Customer Relationship Management (CRM), Human Resource Management, Document/Knowledge Management, Project Management, Workflow Management, Event Management, eCommerce, and Portals. These applications are often referred to as front-office applications, while financials, distribution and production are referred to as back-office. What makes e-Synergy so interesting is that it is a powerful CRM system in its own right, and it is tightly integrated with Exact's back-office systems. The front-office and back-office systems share a single, unified database (Microsoft SQL Server), which means you don't have any integration issues, and all your information is up to the second (real-time)." For the article, click here.

Total Cost of Ownership comparison between MAS90/SalesLogix compared to NetSuite

June 1, 2005 from the Yankee Group - "For this example, we evaluated a solution that provides a broad range of functionality for the mid-market user’s front- and back-office needs. We evaluated an on-demand solution versus an on-premises licensed solution.

NetSuite offers the combined functionality of MAS90 and SalesLogix Advanced from Best Software, and it’s available as an on-demand delivered solution. Because the two solutions offer similar features and functions, we evaluated a 20-user and a 100-user solution for companies with 20 to 99 and 100 to 1,000 employees, respectively, during a 5-year modeling period.

IT systems and applications support people account for as much as 30% to 60% of the total 5-year costs. The TCO for NetSuite is about half that of Best Software. Although the 5-year software and maintenance costs for Best are lower than NetSuite, the support costs for Best (the cost for IT infrastructure and application support resources to install, integrate and update the applications) is three times the amount for NetSuite. These ongoing support costs, which account for 86% of Best’s 5-year costs, eclipse the costs of the software and maintenance...

A more detailed TCO analysis should include company growth projections and a comparison of the overall value of the on-demand solution as compared to on-premises solutions. As the number of users increases, IT infrastructure and IT support costs may not increase proportionally. Also, if the application vendor has user block pricing, where the price per user drops significantly as the number of users significantly increases, the on-premises solutions could yield a lower TCO during a 3- to 5-year period." For the article, click here.

Oracle And SAP Continue To Duke It Out

June 15, 2005 from InformationWeek - "Oracle's program will offer SAP R/3 customers up to a 100% license credit if they move to its platform. Oracle Consulting is offering a free SAP Migration Insight program, which includes a workshop about the migration process and a financing plan...

While many enterprise-resource-planning vendors struggled in 2004, SAP increased overall revenue by 17% and license revenue by 20%, not including acquisitions, according to numbers released Wednesday by AMR Research. SAP's ERP market share increased to more than 40%. The research firm says Oracle nearly doubled the size of its application business through its PeopleSoft Inc. acquisition last year but it expects SAP to finish with more than twice the revenue and market share of the combined Oracle-PeopleSoft.

Oracle claims it has had 40 customers in the last year switch from SAP to Oracle, including Group Voyagers and Usina Nova America. SAP revealed that it has lured away luggage manufacturer Samsonite. Samsonite switched vendors under Sap's Safe Passage program introduced earlier this year. The North American-centric program offers a 75% credit for PeopleSoft and J.D. Edwards licenses for switching." Click here for the article.

The Elephant Has Left The Building - (The End of ERP?)

July 1, 2005 from intelligent enterprise - "The long reign of lumbering, monolithic enterprise applications is coming to an end. What will make the new royalty--composite applications built on service-oriented architecture (SOA)--deliver the agility all businesses seek?...

In application-centric paradigms, architects and developers focus on building specific applications and factoring them into logical tiers. Usually, developers expect to create an entire application. SOA demands that developers focus on building reusable services and then assembling those services into composite applications that implement a business process. A given service may show up in any number of applications. Developers should write only as much code as is necessary to orchestrate the business process.

Our opinion is that the elephant will evolve to take advantage of new technologies and that SOA sounds good on paper/electronically, but may be more of a pipe dream than anything else. For this article, click here.

Bell Business Solutions buys ERP firm

June 8, 2005 from IT Business.ca - "Bell Canada said it has purchased Winnipeg-based CSB Systems Ltd. to increase its enterprise resource planning services expertise for small and medium-sized businesses. CSB will become part of Bell’s Business Solutions company, which was formed in April as a means to deliver services to SMB clients...

CSB specializes in services and management of ERP products such as Microsoft Navision and Syspro. Its client base is mostly manufacturing and distribution, but the company has some reach in the retail sector and municipal governments...

CSB is the third in a chain of acquisitions designed to help Bell address the SMB segment. Last year it bought Charon Systems and Nexxlink Technologies. Courteau, who was the head of Nexxlink before it was bought by Bell, said that the CSB buy will help Bell pad its ERP services portfolio. The acquisition is part of Bell Business Solutions’ “four-pillar” strategy: integrated ICT procurement, network-centric professional services, managed services and industry-specific services. CSB fits into the last category, said Courteau, and its Winnipeg presence will help Bell develop an SMB base in Western Canada. CSB also has offices in Vancouver, Toronto, Calgary, Edmonton and Portland, Ore." Click here for the article.

The Fruits of Acquisition

June 10, 2005 from E-Businesss News - "Not long ago, SSA was the company most associated with acquisitions of applications providers. During the past four years, applications provider SSA went on a major acquisitions drive, snapping up the following companies:

• April 2001 Max International
• April 2002 interBiz Product Group (from Computer Associates)
• Dec. 2002 Infinium Software
• June 2003 Ironside Technologies
• July 2003 Elevon
• July 2003 Baan
• Dec. 2003 EXE Technologies, Inc.
• June 2004 Arzoon, Inc.
• July 2004 Marcam

"SSA by default has suddenly become the leading ERP providers to manufacturers and that is just startling," says David Dobrin, president of B2B analysts. "Not long ago you didn't think of SSA or Baan as viable products, you would have guessed they'd be so risky you'd never buy them. Yet here they are with a plausible solution and reasonable functionality for customers facing a number of potentially bad choices."

In SSA's abrupt rise to the number four global position in ERP, well behind Oracle PeopleSoft and SAP (and well ahead of the rest of the field), the company has drawn curiosity, confusion and contempt in some circles. Curious as we were, we took in the company's user conference in Orlando this week, which demonstrated that SSA is onto something that is good and interesting in the minds of analysts, and better yet, good and interesting to customers at the show.

This conference really seemed to follow two tracks presented as one. One could have been called SSA's 'We have a killer business model' story of vitality, growth and success through customer acquisition. Today it is cheaper to acquire customers than to sell to them, and it is cheaper to buy technology than build it. "They are saying this is working, and so we will be around, and you can afford to buy our software," Dobrin says.

The other apparent track was the 'We will kill no product and ignore no customer' promise of a technology roadmap for the short and longer haul. And there are a lot of customers out there who were very interested in being convinced they could pay maintenance and avoid a rip-and-replace. "If you can buy five years of replacing nothing across nine plants, you'll be popular," says Jim Shepherd, EVP at AMR Research. "If SSA does a really good job serving the customers they've acquired, they'll hold onto what they have." Click here for the article.

ERP Market Leaders

May 9, 2005 from E-Business News - "Consolidation is rampant in the enterprise resource planning (ERP) industry, with SAP and Oracle having become the twin giants of the category. As an illustration of the way the market has changed, AMR Research recently pointed out that, in 1999, SAP, Oracle, People, Baan, and J.D. Edwards had 59 percent of ERP industry revenue; in 2005, the top five vendors (now including SSA, which acquired Baan, Microsoft, and Sage Group) now control nearly three-quarters of ERP revenue."

We are not sure how AMR Research did the math (number of clients, revenues, new, just license, included smaller ERP systems...). Being a market leader has huge advantages, but also has a number of disadvantages. It is possible for a new system without the baggage of existing code to be developed much more quickly that leverages more recent technology. You will find that the competitors of the Big 5 will offer niche products and services to compete with the giants. Click here for the article.

ERP Trends

2005 from WOW Idea Company - In this White Paper, there are a few interesting ideas worth considering related to legacy systems. In the past, we thought of legacy as old and unsupported systems. The author suggests that the very systems that were to replace legacy systems have become or will become legacy themselves. There will be demand to replace the legacy systems - not just the ERP systems implemented in the last 10 years, but also due to the retirements of the COBOL baby boomer gurus.

"Last August, Nathaniel Palmer noted in High-Octane Software that legacy systems have become increasingly expensive to manage and maintain – as much as 70 % of the annual IT budget in some cases. If one considers that IT budgets average over 1 percent for many corporations, and the National Association of Manufacturers pegs 2004 North American shipments in excess of $4 trillion, then IT budgets for these companies represent $40 billion, with an astounding $28 billion dedicated to management and maintenance alone. According to Frank Scavo, ERP providers are currently quoting 20% or more of license fees as a benchmark for ongoing maintenance. Who would have thought ten years ago, that ten years later a significant part of the corporate IT budget would be allocated to the management and maintenance of legacy systems versus implementing new software? AMR Research analyst Bruce Richardson goes so far as to say “I think I have found the new mainframe: It’s ERP…These applications have become so big that more and more of our IT budgets are going to their care and feeding, leaving little more for innovation.” Within some corporations, the drumbeat to either reduce this sum or to get more service and better software for the allotted expenditure is growing louder daily.

In addition to pure out-of-pocket expenditures, another maintenance issue is looming large. The baby boomer software professionals who today maintain the remaining Cobol legacy code are starting to retire, and their skill set is not being replaced. Younger professionals resist learning the older technology: It’s a dying trade and complicated to learn. Proficiency doesn’t carry an upside, since it does virtually nothing to advance their careers. When baby boomer retirement peaks in 2007 through 2010, corporations will be forced to replace any remaining COBOL-based applications.

Software vendors themselves are providing yet another good reason to fear obsolescence: Oracle and SAP are currently conditioning the market for a new ‘futuristic’ type of product. Oracle’s Project Fusion, designed to bring together the disparate elements of PeopleSoft, JD Edwards and Oracle is targeted for 2013. SAP doesn’t have a Project Fusion, but with Netweaver is focusing on large corporations and on the how to ‘connect their disparate legacy sub systems’ to its ERP product. At some point the promotions from Oracle and SAP, coupled with the recent ERP consolidations and awareness that many products recently promoted are now being ‘mothballed’ may cause companies to believe that their current ERP software is becoming ‘legacy’ and needs updating." Click here for the article.

SAP Unveils 'Mendocino' Prototype

May 20, 2005 from eWeek.com - "SAP AG gave a sneak peek of Mendocino, the product that will merge Microsoft Corp.'s Office environment with SAP's enterprise resource planning applications, at the company's Sapphire user conference here on Thursday. During his morning keynote, Shai Agassi, an SAP executive board member now in charge of the company's technology development, displayed an Outlook in-box that had been tied directly to SAP applications, including human resources, embedded analytics, supply chain monitoring and more.

The Mendocino project is "working to connect ad hoc events with the backbone of the business," Agassi said. "Outlook is the ball and chain that keeps us going all day, and SAP is behind the scenes [in Mendocino]." In the demonstration, Agassi clicked on a sample e-mail that lauded one of his employees, "Joe." To store that information in a personnel file, he clicked on a drop-down menu to add the kudos-carrying e-mail to Joe's file in the human resources system." Click here for the article.

Lawson merges with ERP rival Intentia

June 3, 2005 from Computer Business Review - "Lawson Software kept up the fierce consolidation pace in the enterprise software market after swooping for Swedish rival Intentia International in an all-stock deal worth around $480m...

Their offerings are largely complementary. Lawson products focus on financial, human resources, procurement, and retailing, while Intentia products focus on manufacturing, distribution, and maintenance applications, and there is little overlap in products, customers, or industry focus. Nor is there a geographic overlap as Lawson is strong in the US while Intentia's strength lies in Europe and Asia-Pac. The combined company is expected to derive approximately 45% of its revenues from North America, 45% from Europe, and 10% from the Asia-Pacific region. The downside of this is that it is difficult to see where the entity can reduce operational costs... The combined company will have 3,500 workers and a joint base of around 4,000 customers in 40 countries." Click here for the article.

The Post-PeopleSoft Landscape and the Future of ERP

June 1, 2005 from CIO Magazine - "The enterprise application world is now bilateral. By adding PeopleSoft, Oracle's customer base is now within hailing distance of Sap's That was the whole point of the acquisition. Oracle is now Pepsi to Sap's Coke...

The back and forth has already started. SAP recently purchased TomorrowNow, a PeopleSoft support company, and is offering a complex set of "support-then-eventually-upgrade-to-SAP" options to lure PeopleSoft users away from Oracle. Oracle returned the serve by promising to support PeopleSoft "longer than most spouses commit" to each other, as Oracle President Charles Phillips put it. Oracle promised to retain 90 percent of PeopleSoft's technical staff, to upgrade the PeopleSoft software to version 9 and then support the PeopleSoft platform until 2013. Oracle also set up a 10-city tour for its executives to meet and greet CIOs. "We can't spend $10 billion and then let customers go away," says Phillips. "We are very motivated to keep the customers happy...

What's more, Oracle and SAP aren't the only ones courting the PeopleSoft and JD Edwards CIOs. Independent support companies have popped up eager to take CIOs away from the big vendors and those big maintenance contracts. Second-tier enterprise application vendors—Microsoft, Lawson and others—have also put the hard press on CIOs. Microsoft just partnered with a company that does Web-based higher education enterprise applications, a move clearly aimed at poaching CIOs from the education market traditionally dominated by PeopleSoft. Outsourcing and services vendors have also come calling, cheerfully suggesting that, really, could there be a better time to turn over commodity business processes to a services company? "I'm surrounded by people who want my money," says Bill Means, CIO of Decorative Concepts, which runs on JD Edwards. "They're calling left and right. I got three calls today..."

But as author Matthew Symonds notes in his book Softwar: An Intimate Portrait of Larry Ellison and Oracle, revenue from PeopleSoft licenses will generate only $800 million a year for Oracle—not nearly enough to justify a $10 billion acquisition. It doesn't take a crystal ball to imagine that Oracle's sales force will soon convene (or has already) at some tropical resort to hone its pitch for Oracle as a one-stop shop, a place to get end-to-end software solutions. Eventually—much sooner than eight years from now—Oracle will ask customers to switch to Oracle enterprise applications and databases and services or it will raise maintenance prices. Or both." Click here for the article.

NetSuite Review

April 2005 from CAmagazine - "NetSuite started operations in 1998 in a small office above a hair salon and Indian restaurant outside San Francisco. But there was a big difference between this company and thousands of other startups that begin in similar circumstances. It was bankrolled by Larry Ellison, CEO of Oracle, and founded by Evan Goldberg, one of Ellison’s protégés. Right from the start, this product was designed to run over the Internet. Though originally called NetLedger, its name was changed to Oracle Small Business Suite, and more recently to NetSuite. The company generated revenue of $16.5 million US in 2003 and more than $40 million in 2004. With nearly seven million small and medium-sized businesses in the US, the pool of potential customers is deep. For a detailed analysis of NetSuite by Michael Burns, click here.

May 2, 2005 - NetSuite hosted an event at the CN Tower in Toronto to launch their NetSuite CRM+ system, which includes traditional CRM + order management, upsell/cross-sell, partner relationship management, expense reporting and template web site hosting. What was interesting about this event? First, it was extremely well done from their presentation to the reception at the top of the tower. At the presentation, I heard about NetSuite's rapid growth - 150 new customers per month, 200 employees now in Canada, plans to hire 70 tech support people in Toronto... The President of Workopolis talked about the reaons for switching from Siebel and how it went - "painless".

I think NetSuite is on to something. Traditional CRM only takes you so far - to the point when a lead becomes a customer. Traditional CRM systems don't include order processing that is normally part of the back office (accounting or ERP system), but is also critical to meauring sales effectiveness, marketing ROI, forecast accuracy, commissions and demand forecasting - all of which are critical to the front office.

Microsoft Rolls Out Business App Plan

April 7, 2005 from CRM Daily - "Microsoft's original upgrade plan, dubbed Project Green, would have been a replacement for current applications, but the company is replacing the glitz of that makeover with a more pragmatic plan, analysts say...

"Project Green shook up partners and customers pretty seriously," says Chris AlIiegro, an analyst at Directions on Microsoft. "If you had made investments in existing product lines, you were looking at potentially an uncertain future. You ask, 'Can I move to new products or am I looking at a costly data migration process?'"

Microsoft's plan now is to build common elements between applications such as developing 50 role-based templates for creating stock interfaces for specific users such as shipping clerks or procurement managers." Click here for the article.

Microsoft's Grand Plan To Go Vertical

March 28, 2005 from Microsoft Watch - "Microsoft is shifting its entire sales and marketing strategy to focus on vertical markets.
Microsoft is reorienting its own field sales force to sell vertically; encouraging its solution-provider partners to sell vertically; and putting a sizeable chunk of the company's marketing dollars behind vertical campaigns for the rest of this year.

It's hard to overstate how significant Microsoft's realignment around verticals could be. Microsoft has been an almost entirely product-focused company to date. If it is successful in going vertical, it will become a much more solution-focused one, more akin to IBM. IBM realigned its sales and software strategy vertically, starting in late 2003. Now it's Microsoft's turn to try to do the same. Approximately 40 Microsoft executives from across several of the company's seven business units have spent the last four months working out the details of Microsoft's

Microsoft's goal is to have aligned half of its existing partners vertically; to have obtained vertical field commitments and training; and be well on its way to vertical lead distribution before the end of 2005, company officials said. The company's growing emphasis on the midmarket also will have a vertical flavor. Microsoft is emphasizing to its salesforce and partners that new products aimed at companies with 50 to 250 PCs will do best if they are tailored for specific verticals.

Microsoft is readying several new midmarket products and services itself, including a new Windows Midmarket Server (MMS) SKU. The MMS product, still a year or two from delivery, will bundle together five different Microsoft server products into a single offering, much like Windows Small Business Server does. Microsoft's top four verticals -- the ones in which it feels it has existing strength -- are manufacturing, services, distribution and the public sector. The next tier: retail, health care, financial services and media/entertainment." Click here for the article.

SAP and Microsoft Ally

April 27, 2005 from E-Business News - SAP's SAPPHIRE user conference saw the enterprise applications giant trumpet news of Project Mendocino, which will let users access SAP through Microsoft Office and Outlook. Project Mendocino brings together two usually disparate worlds, those of enterprise applications and the desktop. Now that SAP and Microsoft are working together on this front, SAP users can go through Microsoft's ubiquitous productivity tools for such basic SAP tasks as travel and expense (T&E) management, budget monitoring, and time management.

As a recent AMR Research note points out, Mendocino has not yet hit more complex -- and valuable -- enterprise applications. AMR believes that "the real benefits will come" when users can access SAP customer relationship management (CRM), supply chain management (SCM), and product lifecycle management (PLM) through Microsoft tools. AMR has "one desktop for managing all customer interactions and data...collaborative forecasting and planning and trade promotion management [and] collaborative design" in mind as examples.

From another point of view, the alliance is of note because it will see SAP resell Office and Microsoft resell SAP's Business Process Platform. Overall, AMR Research sees the partnership as "a brilliant move" designed to allow SAP "to achieve parity with a 1:1 correlation between Microsoft seats and SAP seats... In terms of the ratio of seats to total head count, SAP estimates its penetration rate at about 25%. There's a lot of growth left to come without adding new customers." Click here for the article - but the entire article has been copied above.

Oracle vs. SAP

April 4, 2005 from BusinessWeek - "When Oracle Corp. announced it had acquired retail-industry software maker Retek Inc. for $650 million on Mar. 22, it brought to an end a tumultuous, three-week bidding battle with corporate software rival SAP. The operatic contest included a series of frenzied bids and counterbids and even corny gibes by Oracle Chief Executive Lawrence J. Ellison, who continually referred to SAP as "sap." Ellison snatched Retek away from SAP -- which had bid first. But when the dust cleared, the prize looked paltry. To get a foothold in the retail industry, Oracle paid nearly a 100% premium for a little-known Minneapolis company with 525 employees and revenues of just $174 million last year. What's it all about?

This is a small piece of a very big battle: Oracle vs. SAP for dominance of the $47 billion market for corporate applications software. And neither side is giving an inch. The once-fast-growing market for applications software -- which is used to manage accounting, purchasing, human resources, and customer relations -- grew just 5% last year. Both companies need to grab share to boost their revenues. SAP is the longtime leader, so in an effort to gain ground, Ellison has embarked on a risky strategy. The first step was his $10.3 billion hostile takeover of No. 2 applications player PeopleSoft Inc., which was concluded Jan. 7. Now, Ellison is making a series of smaller acquisitions, and ultimately he plans to meld four product lines into a single package called Project Fusion. "SAP is a formidable company, but we have a shot at catching them," says Ellison.

Ellison's plan marks a detour for Oracle. The company's main business is selling database software, and it clearly dominates that market. On Mar. 22 it reported that revenues in the most recent quarter jumped 18%, to $2.95 billion, mostly fueled by database sales. Earnings dropped 15%, to $540 million, because of costs related to the PeopleSoft acquisition. But with PeopleSoft and other acquisitions, Ellison is picking up a huge base of customers to which he can sell databases and additional applications. He's betting that Oracle's integrated package of databases, applications, and software that links it all together will be snapped up by corporations eager to simplify their computing systems.

By picking a fight with SAP, though, Ellison is taking on a heavyweight that's heavily favored to punch his lights out in the applications market. With 26,000 corporate customers worldwide and a broad suite of products, SAP has become the gold standard for corporate applications. Goldman, Sachs & Co. (GS ) expects that among the top four players, SAP's share of software license revenues will vault from 59% in 2003 to 70% this year. Meanwhile, the firm expects Oracle's share (with PeopleSoft included) to fall from 30% to 20%. "There will be a lot of marketing rhetoric, but at the end of the day, SAP has such momentum that Oracle won't be able to dislodge them," says Goldman analyst Richard G. Sherlund.

SAP has definitely gone on the offensive. Before the ink had dried on the PeopleSoft merger, SAP began tempting PeopleSoft customers with a 75% discount for switching over. Last year, the 33-year-old German company lured several former Oracle customers, including PepsiCo Inc. (PEP ) CEO Henning Kagermann dismisses Oracle's acquisitions as a second-rate strategy. "Oracle will pressure us only if they make better applications, and I haven't seen that so far," Kagermann says.

How the two rivals perform in the coming year will probably decide the outcome. Oracle will have its hands full integrating PeopleSoft, Retek, and any additional acquisitions. Fusion is not expected to be finished until 2008. Meanwhile, SAP is remodeling its applications and a software program called NetWeaver, which will let customers build customized programs using SAP's products. SAP is hiring 1,000 engineers in an effort to finish the project in 2007 -- a year ahead of Oracle's Fusion.

This race is on. The technical challenges are huge, and either side could stumble. But the most intense pressure is on Ellison. He has set his sights on SAP before, and not much came of it. Now he's trying again, and the stakes are higher than ever." Click here for the article - but the entire article has been copied above.

Review of Blue Link

March 2005 from CAmagazine - "It's great that a small Canadian company can successfully compete with huge multi-national software vendors. Blue Link's customers have direct contact with Blue Link developers to ensure that enhancements meet their needs. The President of Blue Link, Mark Canes, CA, told me that he will meet with at least 10 customers per month. Some of Blue Link's customers would rather be a bigger fish in a small pond than a smaller fish in the deep blue sea." Check out the article written by Michael Burns by clicking here.

Traverse case study

March 2005 from The Bottom Line - "TRAVERSE was developed by Open Systems Inc. and is targeted to small to medium-sized companies with revenues of approximately $5 - 250 million. There are about 10,000 TRAVSERSE installations worldwide with 200 in Canada." Check out the case study by Michael Burns about the implementation of Traverse by Ice River Springs, the second-largest water bottling company in Canada, by clicking here.

Surviving vendor demonstrations

April 2005 from The Bottom Line - "Have you spent way too much time sitting through vendor demonstrations? Were all the products a blur in the end? You're not alone. After having survived countless demonstrations, I have a few recommendations." Read on by clicking here.

Microsoft takes gradual approach to project green

March 11, 2005 from InfoWorld - "Microsoft initially positioned Project Green as a forthcoming new software suite that would meld all of its applications into one code base. Now, Burgum describes Project Green as a more gradual, incremental initiative that will involve shared design and some shared code among the business applications in their next major updates, but without any drastic migration for users to a wholly new platform.

Each of Microsoft's Business Solutions product lines -- Navision, Great Plains, Axapta, Solomon, and Microsoft CRM (customer relationship management) -- will receive a major update within the next year, which will bring to the applications some shared user-interface changes. A later, second wave update in each line will being back-end shared code to the lines, but customers will be able to follow a smooth upgrade path, Burgum said. To further reassure customers, he also announced an extension in Microsoft's support guarantees for its business applications, from three to five years." Click here for the article.

Oracle, Be Careful What You Wish For

January 28, 2005 from Forbes.com - "It was just Larry being Larry, really. Wednesday's declaration of "war" on SAP by Oracle's chief executive was nothing out of the ordinary for the larger-than-life Larry Ellison. But Oracle should be careful what it wishes for. Oracle must be feeling puffed up after it finally prevailed in its 18-month-long, $10 billion quest to acquire PeopleSoft. The deal undoubtedly strengthens Oracle's hand--it has doubled its applications market share--and gives it a bigger club to fight IBM and Microsoft in corporate infrastructure.

But let's not forget SAP. In 2004, corporations worldwide spent $47 billion on enterprise applications, and SAP captured 18% of that spending. A merged Oracle/PeopleSoft has a 12% share, according to AMR Research. That doesn't sound like an insurmountable gap until you consider that SAP's biggest advantage is in core enterprise-resource-planning applications, where it has a 36% market share (up from 32% in 2003), compared with Oracle/PeopleSoft's 20%. ERP accounts for the biggest slice of all application spending but was expected to grow only 3%, compounded, from 2003 to 2005, according to AMR.

"It's not smart to deliberately provoke the No. 1 vendor in the space," says AMR analyst Bruce Richardson. "SAP is going to hire 3,000 people and do it at the expense of margins." SAP said this week it would hire that many employees this year and expects to see new software-license sales grow by 10% to 12%, above earlier projections. SAP also bought a Pleasanton, Calif.-based company called TomorrowNow, which sells software maintenance and support services for PeopleSoft applications.

It's important that Oracle keeps its promise to support and develop PeopleSoft applications. To do so, Oracle said it is offering jobs to 90% of PeopleSoft's developers. That's great news if they accept, but who says they will? Remember the ugliness of the takeover battle, and that PeopleSoft employees tend to be uncommonly loyal to the company. Further, an upswing in IT spending could mean a more favorable job market elsewhere in Silicon Valley."

I agree with this article, but it misses an important factor in the battle between SAP and Oracle/PeopleSoft. Uncertainty is a deal killer. It's going to take a while before the dust settles on the PeopleSoft takeover. In the meantime, Oracle's competitors will reap the rewards.

Click here for the article.

Infor Acquires MAPICS

January 27, 2005 from E-Business News - "Infor Global Solutions has agreed to acquire fellow enterprise resource planning (ERP) vendor MAPICS for roughly $347 million. Call it both an effect and acknowledgment of what's going on in e-business at large, with Oracle-PeopleSoft still on everyone's mind. MAPICS CEO Dick Cook admitted as much in a statement, saying that, "With the industry consolidation currently taking place, it was imperative that MAPICS combine to create a larger company." That larger company could have something like 17,500 customers. MAPICS is bringing over a lot of manufacturing customers, a base that Infor prizes (indeed, that was the major driver of the Mercia Software deal earlier this year). "The name of the game right now is customers," emphasizes analyst Paul Hamerman of Forrester. "It's not surprising to see some second-tier companies get together to achieve some critical mass in the installed base." Hameran says that, in this respect, MAPICS is a new company to acquire because "They provide renewable one-term licenses; their whole revenue stream is recurring, and that's very attractive right now."

We have provided the entire article above, but just in case you still want to take a look at the source article, click here.

Ironically, we know a lot more about MAPICS than Infor Global Solutions. We also had not heard about the the Mercia Software deal and found more about this on Infor's site - "Mercia adds 115 employees and 250 customers to Infor’s 13,000 current customers and 1,800 employees. According to Infor, the acquisition of Mercia is consistent with Infor’s global strategy of assembling high quality software solutions and deep vertical expertise to build leadership positions in the manufacturing and distribution markets." All in all, we think we better start considering Infor when we assist our clients with ERP selection.

2004 Accounting System/ERP Customer Survey

January 2005 from CAmagazine - Check out the results of our customer survey of accounting and ERP systems. The idea was to see how well users like their systems, as well as their views on the developers and implementation partners. We also asked for some general feedback about return on investment and future plans. Check out the survey and the cover article written by Michael Burns by clicking here.

The biggest ERP story in 2004 - Oracle Acquires PeopleSoft

December 20, 2004 from Information Week - "Just days after Oracle's successful $10.3 billion bid to acquire PeopleSoft Inc. last week, Microsoft sent letters to PeopleSoft customers urging them to migrate their PeopleSoft applications running on Unix systems, mainframes, or AS/400s to Windows servers. Or, hey, why not consider shifting to Microsoft's own enterprise-resource-planning apps?...Nearly two-thirds of 310 PeopleSoft customers surveyed last week by InformationWeek Research say they're not at all confident that Oracle will integrate PeopleSoft's products successfully into its own. Thirty percent are somewhat confident, and only 5% are highly confident.

CEO Larry Ellison didn't help his cause when, early in the quest, he said his plan was to kill off PeopleSoft's applications and migrate customers to Oracle apps. "We remember what he was saying a year and a half ago, and it's made us very uncomfortable," says Robert Robinson, business-systems supervisor at Durr Industries Inc., a manufacturing equipment maker that uses applications from J.D. Edwards, which PeopleSoft acquired in July 2003. Ellison has backed off that stance and now says Oracle will continue enhancing current versions of PeopleSoft and JD Edwards applications and finish developing new releases of each application set, PeopleSoft Enterprise 9 and EnterpriseOne 6. Beyond that, Oracle will develop successor products using its own apps as the foundation and incorporate features from PeopleSoft's products..." Click here for the article.

There is a lot of speculation about what will happen. Our 180 degrees view is that Oracle has bit off more than it can chew. First, there is going to be a huge challenge in consolidating the operations of the two companies. It is expected that there will be lots of PeopleSoft layoffs. As well, it is expected that many key employees would rather move on than work at Oracle. They will be getting a pile of money, and will find greener pastures. Often the key employees are like mothers and fathers of a child, and when they go, the child gets into trouble.

The other major problem is that all the ERP vendors are talking about the middle market as the big opportunity - not the high end. Oracle, PeopleSoft and J.D. Edwards are all high end systems. Oracle may find a lack of new opportunities with their stable of products. Compounding this problem is that prospects will be worried about the future of PeopleSoft and J.D. Edwards. There is discussion of successor products, which also brings questions of what will happen, and the costs to convert. Microsoft was a lot smarter in acquiring Great Plains and Navision - these products are designed for the middle market. Microsoft initially talked about their successor products, but now have wisely focused on enhancing the current products. There is an old saying "Be careful what you wish for".

Epicor and Scala

December 13, 2004 from TechnologyEvaluation.com - "The (Scala) merger by all accounts 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 revenue run rate, nearly 1,500 employees, and with over 20,000 customers. The combined company hopes to expand its global presence with 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...

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 Avanté 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...

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."

Click here for the article. (Requires free registration)

NetSuite Wins Technical Excellence Award for Enterprise Software

December 22, 2004 from PC Magazine - "The philosophy is simple: Let everyone from the stockroom to the boardroom transact with a single database. NetSuite 10.0 is a remarkably easy-to-use, all-in-one solution that beautifully integrates accounting, inventory control, CRM, e-commerce site design, and order management. The kicker is, there's no software to buy or install. Everything's included for the price of a subscription to NetSuite's on-demand, Web-based, hosted applications.

Version 10.0 includes a business intelligence agent called NetSuite Upsell Manager, which recommends purchases to your site's visitors (or to your sales reps), analyzing customer data and click-through behavior to figure out the most likely add-ons. An optional analytics tool lets you track each customer's activity on your site. On the management side, NetSuite 10.0 collects detailed information on a per-employee basis, rolling the data into valuable metrics that will help businesses enhance productivity and increase sales." You will be hearing a lot more from NetSuite in 2005. For the article, click here. (Although we have included the entire article)

Finalist in Technical Excellence Award for Enterprise Software: Grand Central Communications

December 22, 2004 from PC Magazine - "As commercial globalization becomes reality, businesses need to be platform- and location-agnostic. But differing technologies, databases, legacy applications, and communication standards all pose obstacles to global integration. Grand Central Communications is one company working to bridge those gaps. Grand Central aims to extend the idea of service-oriented architecture, in which business programs are viewed as services, not discrete software components, to inter-business communication. All the services speak the same language, regardless of what's running in each company's data center. Grand Central provides connectors to a vast network of application service providers. Businesses connect to available services and pay only when projects are deployed successfully. For the article, click here. (Although we have included the entire article)

July 2, 2004 from InfoWorld. InfoWorld offers a better understanding of what Grand Central and its competitors offer, but it's more technical. Click here, for the InfoWorld article.

You should also expect to hear more about Grand Central Communications in the months and years to come. According to Grand Central, "Enterprises can easily integrate and share applications, data, and processes throughout the extended enterprise, without installing, maintaining, or supporting costly hardware or software. By offering integration as an on-demand service, Grand Central dramatically increases the success, and eliminates the risk of business integration, providing a better alternative to complicated, lengthy, and expensive traditional software deployments." Sounds good to me, although it's still early days for this technology.

First Look: Microsoft Office Small Business Accounting

November 5, 2004 from PC World - Richard Morochove writes "If you're keeping business books using Excel and Word, you'll be happy to learn there's a better way. Microsoft has announced Microsoft Office Small Business Accounting (Office SBA for short), aimed at making life easier for spreadsheet bookkeepers. Although it's still in beta, I had a chance to put the new software through its paces. I found that Office SBA plugs a yawning gap in Microsoft's product line that Intuit's QuickBooks has very successfully exploited. Office SBA is aimed at businesses that have outgrown Excel for spreadsheet-style books but aren't quite ready to move up to Microsoft's more capable Small Business Manager Accounting ($995 for a single user)..." Richard also mentiond Simply Accounting and Peachtree as competitors. "If you're happy using QuickBooks, I see no reason to switch to Office SBA. However, if you find Intuit's software counterintuitive or if you keep your current business records in assorted Word documents and Excel spreadsheets, then Office SBA could be just what you need." Click here for Richard's article.

My opinion is that Microsoft will have a very rought time competing with the existing Small Business products. Companies mostly switch systems because they have outgrown their existing system or it's no longer supported. I think Microsoft will need to look to companies without an accounting system for new customers. It will also be a while before Office SBA is as feature rich as the competitors. I don't see Microsoft dominating in this market, as they have done so well in others.

Another problem with Office SBA is that it is not likely a product that their existing Microsoft Business Solution (MBS) resellers will want to implement. MBS resellers now work with products that are more expensive and complex, offering higher margins and opportunity for more consulting fees. Office SBA may compete with the low end solutions offered by MBS resellers.

NetSuite announces major expansion in Canada

November 17, 2004 from IT Business - "A software firm founded by Larry Ellison wants to become as successful managing applications in the small and medium-sized enterprise as Oracle has become in the database market... NetSuite offers a Web-based product designed to manage customer relationship management (CRM), enterprise resource planning (ERP) and e-commerce processes on a single application. The current version, 10.0, includes a feature called Upsell Manager, which helps generate sales leads based on a customer's order history, and NetCommerce Analytics to monitor customers' activity on a firm's Web site... NeSuite will employ between 150 and 200 people in Mississauga before the end of next year...The company will be housed in a 40,000 sq.-ft. facility..." NetSuite takes an ASP (Application Service Provider) approach - you pay a monthly fee rather than buy the software. Click here for the article.

Oracle V. PeopleSoft Could Last Several More Months

November 27, 2004 from Information Week - Just in case you were wondering what is happeing between Oracle and PeopleSoft - "Although Oracle was able to grab 61% of PeopleSoft Inc.'s shares late last week, it's unlikely the database company will score any more victories in its acquisition battle before Thanksgiving, and possible that the two software companies will continue to wage war for several more months...

PeopleSoft continues to rebuff Oracle. And if, as some expect, the poison pill isn't eliminated, Oracle will have to fill seats on PeopleSoft's board with people who are more favorable to its position. Four seats are up for re-election at the next shareholders' meeting, which hasn't yet been scheduled. This year it was held on March 25. A PeopleSoft spokesman says Oracle has until Thursday to propose its line-up of directors for the shareholder vote. Control of the board would enable Oracle to eliminate the poison pill and approve the acquisition...

What Oracle really wants is to beat IBM and Microsoft in the infrastructure game, and if it has an opportunity to move PeopleSoft's customers onto its database architecture, it will gain ground. Software companies lacking an infrastructure product line to support their applications don't survive, according to Dale Kutnick, chairman and research director at Meta Group. "You can't sell someone an application package if you can't offer them security, communication, integration, and middleware, because it becomes isolated, and this is why the industry is consolidating," he says. " Click here for the article.

What's new with QuickBooks?

November 2004 from CAmagazine - "QuickBooks has been one of the leading small business accounting systems for years. Originally, it was designed for small businesses with no accounting knowledge. But as Intuit’s flagship product, it has now been updated with several new features, such as contact management, loan management, cash flow projection and a revised help function. The new version, QuickBooks 2005, shipped on September 2, 2004..." For the article written by Michael Burns, click here.

Review of the Multiview Accounting System

October 2004 from CAmagazine - "You probably haven’t heard of the Multiview Accounting System – although you will recognize many companies that use it. Multiview Incorporated is a Canadian company based in Ottawa. It employs about 60 people and has more than 600 clients worldwide – mostly in the US. Only about 10% are in Canada. Multiview should definitely should be on your radar if you’re thinking about a new accounting system"... For the article written by Michael Burns, click here.

Minotaur Case Study at Pestell Group

Mid October 2004 from the Bottom Line - "Minotaur Software Ltd. (http://www.minotaursoftware.com) has been providing configured business management and ERP solutions since 1985. Their customers represent a wide range of industries and products including food, chemical, metal, plastics, and mining. Minotaur is located in Brampton, Ontario and has about 200 customers worldwide. Pestell implemented the Minotaur financial and distribution system, and has 28 employees on the system...." For the article written by Michael Burns, click here.

SAP continued its relentless move into the small-business market

October 18, 2004 from CRN - "SAP continued its relentless move into the small-business market last week with the latest version of its business management suite. SAP Business One 2004, like its predecessor, handles functions designed to be used by nearly everyone inside an organization. This new version also inserts material resource planning (MRP) functions in the middle of end-to-end business processes. As a result, light manufacturers can base production demand on their CRM reports, service engineers can view lot batches to pinpoint problems, and salespeople can see the production status of a customer's order..." Click here for the article.

Microsoft Updates Navision

October 19, 2004 from E-Business News - "Microsoft has released the 4.0 version of Navision, the enterprise resource planning (ERP) platform for small and medium-sized businesses that it acquired in 2002. This moves comes just two weeks after Microsoft updated Solomon, another SMB application platform picked up as part of Microsoft's Great Plains acquisition. Navision, which claims 35,000 customers in 50 countries, offers several specific updates in 4.0: sharper analytics (included customizable reports for sales orders and purchase budgets as well as KPIs for financials, supply chain, and CRM), automation of some previously complicated general ledger procedures, personalized interfaces and content for employees, rule-based alerts (e.g. triggered by late deliveries from vendors), and integration with Microsoft's most recent productivity applications and business servers..." Click here for the article.

Global ERP Challenge solved by Exact Software

October 19, 2004 from E-Business News - "Until recently, Alltech's branches across the world had their own systems, with more than 30 standalone accounting tools. That changed a year and a half ago, when Alltech decided to build a single data center and server farm in Nicholasville, KY. Corporate now runs, maintains, and troubleshoots applications for Alltech globally, giving the company better IT efficiency and visibility. Regional IT managers no longer have the burden of caring for systems; rather, they work with Alltech corporate to get specific processes (like country-specific tax laws or reporting regulations) into their instance of Alltech's Macola ERP system from Exact Software..."

It's fascinating that such a large ERP project has been accomplished with what Arthur calls "absolutely a mid-market product" from Exact. But it makes sense given the company's structure, he emphasizes. "We're 63 small fishes with a big fish problem." Macola serves each small fish more quickly, cheaply, and appropriately than a truly large enterprise-level ERP product would, and still gives the corporate "big fish" control of and visibility into every individual instance..."

We recently reviewed Exact Software for an analysis of differentiators for a presentation at the Financial Technology Show. Exact software includes Macola ERP, which is a back office solution that includes financials, distribution and discrete manufacturing. The Macola system was purchased by Exact in 2001. Exact software also includes e-Synergy, which is a front office solution that is integrated with the back office, is web based ( just need a browser), and includes CRM, HRM, Document/Knowledge Management, Project Management, Work Flow, Event Management, eCommerce, and Portals. It's not surprising to hear about Alltech's success with the Macola. Click here for the article.

NetSuite Debuts Version 10.0

October 14, 2004 from CRM Daily - "NetSuite has rolled out version 10.0 of its hosted business suite -- a version that incorporates new innovations in e-commerce, analytics , and advanced upsell and cross-sell capabilities. The release is a groundbreaker for the hosted space (although groundbreaking innovations happen on a regular basis among these vendors), according to Yankee Group analyst Sheryl Kingstone. "They are the first on-demand software vendor to truly embed analytics and e-commerce functionality throughout the application," she says. For example, one new feature in 10.0 is NetCommerce Analytics which provides not only aggregate analysis on the number of page hits or most popular pages, but also the same data on a customer-by-customer basis. "It is an incredibly valuable tool for the sales force," CEO Zach Nelson tells CRM Daily. "Using the click-stream data on an individual user, a rep can see what a prospect was looking at most recently..." Canadians have not heard much about NetSuite, but that will change. They have recently setup a Canadian office and will be attending the Toronto Financial Technology Show. Click here for the article.

The ABC's of ERP

October 5, 2004 from CFO.com - "Although ERP sales, which expanded at more than a 30 percent annual rate in the late 1990s, have flattened, companies spent a robust $20.7 billion on ERP packages last year, including about $6 billion in maintenance and support fees. So if there is widespread disenchantment, it hasn't dragged down sales, although it may have helped usher in a remarkable buyer's market: testimony during the Oracle-PeopleSoft antitrust trial revealed that some customers paid only a fraction of the software's list price.

Disasters aside, most companies of a certain size — generally $100 million and above, although simplified ERP software is often pitched to much smaller companies — find ERP virtually indispensable. ERP serves as an all-important information pipeline that links finance, manufacturing, logistics, sales, and other departments, with new functions being added continuously, further extending its presence in an organization. The "resource planning" that gave it its name is now just a very small part of the capabilities it brings to an enterprise.

How to avoid an embarrassing blurb about ERP in your next annual report? First, stay focused on why you're moving to, upgrading, or otherwise changing your approach to ERP. That way, you won't be misled into thinking of it as a technology project. "The benefits come from changing your business processes, not from installing ERP," says Bill Swanton, a vice president at AMR Research in Boston. Adds Buzz Adams, president of Peak Value Consulting, a Pasadena, California, consultancy that specializes in process improvement, "The technology will work the way you implement it, so what's important is how you improve the processes — the way you do things..." Click here for the article.

Customers Should Tap VARs (Value Added Resellers)

October 6, 2004 from TechWeb - "Observing that most small and medium businesses (SMBs) need technology expertise, Gilroy said they have no CIO or IT department. "So where do they go," he asked rhetorically? "To the channel. To small business owners, I say bring your local, trusted channel partner into your business planning in a deeper way..." This is an article based on a recent keynote address at TECHXNY show, in New York City. SMBs have used VARs to implement specific systems such as an accounting system. But there is the potential for VARs to do a lot more. Some of them have the expertise and the SMB has the need. However the VARs are not independent, and potentially stand to gain from any recommendation. Click here for the article.

Annual survey of accounting and ERP systems published in the September 2004 edition of CAmagazine

This year's survey is bigger and better than ever. We have added some significant products, including SAP, that were absent in previous years. We have 57 products grouped into five tiers according to their cost and target market. For the accompanying article and survey, click here.

Coss Case Study published in the Mid September 2004 edition of The Bottom Line

COSS provides manufacturing software to small and mid-sized manufacturing companies, and is tightly integrated with ACCPAC. The system was designed for make-to-order, make-to-stock, job shop and custom manufacturers, and supports mixed mode and production manufacturing. COSS functionality includes a configurator, estimating & quoting, work order, process planning, advanced shop floor scheduling, material planning, job tracking & costing, scrap tracking, data collection & bar coding, time & attendance, resource utilization, and preventative maintenance.

Aerospace Welding uses about 90% the functionality of the COSS system with 50 employees accessing it from workstations as well as 150 employees updating the system using COSS’s barcode software. For the case study, click here.

eWholesaler Case Study published in the September 2004 edition of The Bottom Line

Magic is a Toronto-based software developer that has been in business since 1989. Magic offers business solutions specifically designed to meet the needs of Importers and Exporters with Distribution and Light Manufacturing activities. eWholesaler is their banner product and includes multi-company, multi-branch, multi-warehouse, multi-currency and landed-cost functionality. Magic has about 100 customers mostly based in Canada. Innova has implemented all of Magic’s functionality with the exception of payroll. There are 12 users of the system. For the case study, click here.

Microsoft targets ACCPAC customers again

Microsoft is at it again in its fight with ACCPAC in Canada. For the second time this year, Microsoft is offering a migration promotion to ACCPAC customers. Until March 18, 2005, Microsoft will provide a discount to those customers who switch to Microsoft Business Solution's Navision, Great Plains, or Solomon. I have been advised by Microsoft that "the promotion offers a reduced user-based price of $1,999 per user, and this price includes core accounting functionality." Microsoft is also offering 0% financing options until December 17th, 2004. Click here for information about this from Microsoft and here about this promotion from one of Microsoft’s Business Solution resellers - Axentia.

Revisiting ERP Systems: Benefit Realization

From the 37th International Conference on System Sciences in 2004 - In a paper presented by professors from Victoria and Monash University in Australia - "Many companies initially implemented their ERP systems to solve Y2K and disparate systems issues. These same companies are now looking at a how to strategically leverage their investment in these systems through the implementation “second wave” functionality...

A survey of 800 U.S. companies showed that almost half of these companies had installed an ERP system and that these systems were commanding 43% of a company’s application budget. While research into U.S. Fortune 1000 companies found that over 60% have implemented an ERP system. The market penetration of ERP systems varies considerably from industry to industry. A report by Computer Economics Inc. stated that 76% of manufacturers, 35% of insurance and health care companies, and 24% of Federal Government agencies already have an ERP system or are in the process of installing one. The global market for ERP software, which was $16.6 billion in 1998, is expected to have a compound annual growth rate of 32%, reaching more than $66 billion in sales by 2003 and is estimated to have had 300 billion dollars spent over the last decade...

The results indicate that such implementations do not live up to their expectations and do not provide the expected range of benefits. IT cost and personnel reduction were two issues that had the greatest disparity between expected and actual benefits. People-related issues dominated the barriers to attaining expected benefits with change management issues ranking very high. Software, hardware or integration issues were not ranked highly. Lack of discipline, lack of training, lack of change management and poor project teams all point to organisations who do not understand the importance of change management practices. Although respondent organisations had all been through at least two ERP implementations, change management was signalled as a major problem." For the paper, click here.

Big Solutions For Small Business

September 2, 2004 from Forbes.com - "Microsoft Business Solutions (MBS) is the second smallest, by sales, of seven operating units at the $37 billion company. But Microsoft will spend $10 billion over the next five years in the hope that the division can grow by more than a factor of ten, to $10 billion, in less than ten years. There are plenty of opportunities for the unit, but Microsoft might be hoping for too much...

The market that Microsoft is targeting is small and mid-sized businesses with up to 1,000 employees. Consider that SAP (nyse: SAP - news - people ), the largest and most successful business applications company by far, has about 30,000 customers. Microsoft says it has over 350,000 small business customers now, and there are millions more in the universe that Microsoft is targeting...

Microsoft sells four overlapping sets of business applications, and some say there is no clear distinction between them. Lynne Stockstad, general manager of marketing strategy for MBS, acknowledges that "it's a little challenging to articulate" the distinction and benefits of each product. But she says MBS has all bases covered with what it says is its "embarrassment of riches."  MBS had an ambitious plan to fix the overlaps, but it has been put on the back burner. Project Green, which consumed hundreds of software developers, was to have replaced the source code base of the four applications with a new single source code base. But earlier this summer, Microsoft's Burgum said that the company was scaling back those plans because it realized it would take too long to get the work done. Also, the company was concerned about disrupting sales momentum of existing products. Most of the Project Green developers have been redeployed to other projects."  For the article, click here.

Microsoft was described as an ERP giant-killer. But its presence in enterprise applications has fallen short, so far

September 15, 2004 from CFO.com - "As part of its seemingly endless effort to acquire PeopleSoft Inc., Oracle Corp. responded to federal antitrust charges this summer by describing Microsoft Business Solutions (MBS) as a growing threat to its own enterprise-applications business. Oracle contends that Microsoft is intent on taking its relatively new unit, built largely through acquisitions, upmarket...In making its argument that Microsoft is moving upmarket, Oracle offered the court a list of larger companies in which it claims Microsoft challenged Oracle for ERP contracts. CFO IT contacted the companies on that list. Most refused to comment, but those that did made it clear that Microsoft couldn't meet their needs."

The article shows that Microsoft is not able to compete with the likes of SAP, PeopleSoft or Oracle. As well, "the universe of small and midsize businesses adopting financial and manufacturing software around the world is huge, fragmented, and largely untapped. Burgum recently told a conference of Microsoft partners that there are at least 12,000 SMB (small and mid-sized businesses) applications vendors addressing a market predicted to reach $35 billion by 2008." Microsoft has wisely targeted SMBs - that's were the action is. In fact, what's really going on is the opposite of what Oracle contends. SAP, PeopleSoft and Oracle are going down-market and are focusing their sights on SMBs. The article also contained the following chart to give you an idea of the revenues of the big ERP players:

For the article, click here.

ERP in Small and Midsize Businesses - The 2004 Benchmark Report

August 2004 by Aberdeen Research - "This Aberdeen report benchmarks the strategies, processes, and supporting technologies used in small and midsize companies to manage their enterprises...Data was gleaned from online survey research conducted in June 2004 and a series of interviews with companies whose revenues did not exceed $500 million. Companies represented by annual revenue were subdivided into three sections: less than $100 million, which included 84% of the respondents; $100 million to $249 million (10% of respondents); and $250 million to $499 million, which included 6% of the survey’s respondents. A total of 232 people participated in Aberdeen Group’s survey."

The report is 31 pages and is a professional piece of work, but which is unfortunately not very useful. One problem is whether to trust the findings based on 232 people. Others may find the data more meaningful. Here are some excerpts of what we considered some of the more interesting findings:

"The greatest buying interest is clearly in CRM applications; 37% of survey respondents indicated that they plan to spend more on CRM applications over the next two years than they have this year, and 16% said that they plan to spend significantly more in the next two years than they have this year...

"To date, no one ERP vendor has captured the hearts and minds of companies in the small and middle market. The fragmentation that has characterized the middle market is still pervasive. Multiple vendors and applications prevail. Little concept of “suite” or integrated applications exists, leading to a haphazard environment of mix-and-match applications, some self-developed and some purchased. And once a solution is installed, the smaller business is content with it, even when not entirely confident in its ability to meet all requirements." For the article, click here.

PeopleSoft, IBM in $1B Bundling Venture

September 21, 2004 from internet.com - "In its quest to thwart Oracle's $7.7 billion hostile bid and remain a standalone company, PeopleSoft (Quote, Chart) plans to partner with IBM (Quote, Chart) for its middleware support, CEO Craig Conway said today. During a company-sponsored conference here, the executive stood defiant of his ongoing battle with Oracle.. "This [deal with IBM] is one of the most significant enterprise applications alliance in history of the two companies." Under the terms of the deal, Big Blue and PeopleSoft will together spend $1 billion during the next five years in order to bundle WebSphere middleware in every future shipment of PeopleSoft products at no additional charge to PeopleSoft customers." For the article, click here.

Oracle brings SMB suite to North America

September 27, 2004 from InfoWorld - "Oracle is finally bringing to the North American market its Oracle E-Business Suite Special Edition, a midmarket-aimed package of pre-installed, preconfigured software from its 11i suite of business applications... The E-Business Suite Special Edition will be primarily sold through Oracle's channel, with partners setting the price and handling implementation. Oracle said licenses for the suite will allow a minimum of 10 users and a maximum of 50. Oracle will offer its financials, inventory, discrete manufacturing, order management, purchasing, telesales, teleservice, field sales and daily business intelligence applications in the bundle... Oracle defines its target market for the E-Business Suite Special Edition as companies with annual revenue of up to $250 million...

The software still won't come cheap: Customers can expect to spend close to six-figure sums on licensing and at least that much on deployment services. Oracle's first U.S. Special Edition customer, lighting systems seller Amerlux LLC in Fairfield, New Jersey, will spend nearly $500,000 this year to get up and running, according to director of operations Matt Glass. The total includes licensing, services work from Oracle partner Core Services Corp., maintenance and application hosting by Oracle." Doesn't sound like Oracle will be successful with SMBs (small and mid sized businesses) with this price tag. For the article, click here.

Watch out for the Terms and Conditions of a Maintenance Contract

September 28, 2004 from NewsFactor in an article titled "The CRM Money Pit" - There is a problem with maintenance contracts not just for CRM systems. "Much trickier are the negotiations for maintenance and other fees. In general, Disbrow says, most of these agreements are cloudy and provide little information as to what constitutes the support to be provided. "Most vendors don't call them 'agreements.' They call them 'policies,'" Disbrow says, "and they are vaguely worded as to what customers get for their money." In essence, the vendor does not commit to a specific service level or entitlement to the buyer. To Disbrow, that is the most frustrating aspect of it all. "Over a five-year period, the buyer will pay more for maintenance than for a license -- yet the vendor doesn't want to commit to anything in the agreement." In a recent research note, she highlights some very expensive pitfalls for buyers to be aware of when negotiating maintenance, support and other fees:

Maintenance and support that is automatically renewed at "then-current" prices.

No cap on maintenance increases, which means the vendor can increase fees much higher than the cost-of-living increases that normally are expected.

No provisions that allow the customer to drop support for any parts of the software being licensed.

Support policies that can be changed by the software vendor and that the customer is not entitled to contest. The result is that service can be reduced substantially, and the company must purchase more-expensive levels of maintenance. Vendors across the board have cut back from 24-hour support to 8 hours a day in this fashion.

A clause that allows the buyer to drop support only at the yearly renewal, which means the buyer is stuck paying for services it may not be using if it converts to another product.

For the article, click here.

SAP Business One review published in the August 2004 edition of CAmagazine

These days the biggest accounting software battles are being waged over small and medium-sized businesses (SMB). You probably know Microsoft scooped up Great Plains and Navision, and has since become a major force in the SMB market. Best has also been on a buying spree, acquiring ACCPAC and BusinessVision. Microsoft and Best have plenty of good competitors out there, but none as fierce as the one that entered the Canadian SMB market in November 2003: namely, SAP.

SAP wants to shatter what they consider the SAP myth — i.e., that their systems are only for the largest of companies and are too complicated, too costly and take too long to implement. SAP Business One is meant for companies with revenue of $5 million to $100 million. SAP Business One is a not a light version of their existing mySAP system - it is a completely different solution based on an acquisition from an Israeli software company called TopManage Financial Solutions Ltd. in 2002. For the article, click here.

QAD Case Study published in the August 2004 edition of The Bottom Line

QAD is targeted to automotive, consumer goods, electronics, food and beverage, industrial and medical manufacturers. QAD solutions are designed for organizations spanning multiple sites, multiple currencies and multiple entities. The system is available in 26 languages and has been implemented in more than 80 countries with about 5,400 customers worldwide and about 200 in Canada.

According to Todd Eby, the Chief Financial Officer of Hood Flexible Packaging Corporation, technology is only about 15% of the solution. Look to your business processes for 35% and to your people for the other 50%. You will see in this case study that Hood made a significant investment in people and business processes to make MFG/PRO (QAD's ERP system) a successful implementation. Unfortunately the Bottom Line has not yet published the article electronically. For the case study, click here.

Cycle Counting

June 2004 from APICS - "Cycle counting is an inventory accuracy audit technique that uses inventory organization developed through ABC classification (sorting a group of items in decreasing order of annual dollar volume into three classes: A, B, and C). This ongoing effort to physically count each item in inventory enables companies to compare the resulting numbers to the balances shown on stock records, reconcile the differences, and fix the problems that caused the variances. By developing a high regard for accuracy and adopting daily cycle counting, companies can eliminate most errors in inventory records.

It is estimated that material requirements planning (MRP) systems require stock records that are accurate to within ± 0.5 percent. Thus, cycle counting’s ultimate goal is to reduce inaccuracy of stock records to that very small percentage. To achieve this goal, a company first must identify any transactions that produce mistakes and then eliminate their causes. Essentially, this is done by making procedures as simple as possible and taking appropriate remedial actions to ensure the integrity of the inventory system." For more about cycle counting,  For the article, click here.

APICS, a good source of information on production and inventory control, also included another article in the same issue related to cycle counting, but it will cost you to get it. The article added some insights to cycle counting including "My experience is that, on the majority of errors you find during a cycle count, you will never successfully find what caused them. The upside for that is that, if you find one in ten, it will have enormous impact. Because whatever system that you uncover, that one part number, you can be assured that that defect is not only affecting that one part number. Any part number is affected the same way. So when you close that door where the “cows are getting out,” not only are you keeping the one cow in that you caught out there, you’re keeping all the other cows from getting out, also. So even a one in ten success rate in a cycle count analysis has enormous positive impact...

I don’t believe it does top management any good to emotionally commit themselves to a cycle count program unless they first commit themselves to plain old-fashioned inventory accuracy. Because regardless of how much money you put into a cycle counting program, if you don’t have the fundamental disciplines in place for inventory accuracy, you’re going to spin your wheels and get nowhere. The program simply is going to continually confirm how bad you are, and you’re not ever going to get better. The thing I recommend is to make people responsible for inventory accuracy, and they don’t want to do that...

So you make everybody accountable, and it works. First there’s animosity, but then, there’s teamwork. Initially we had people fighting in the parking lot, “You’re not gonna drag me down with you because you don’t want to write scrap tickets!” And at the end of the year, here’s how it went: Any supervisor who did not hit 95 percent accuracy on all the cycle counts of everything he touched, he was put on one-year probation. And the second year, he was fired...

But there was also a carrot on the other end of this stick, because if you hit that 95 percent, you got a bonus that was a 50 percent increase on your normal budgeted raise. And if every supervisor in the place hit 95 percent, then everybody got a double raise."

Microsoft Small Business Manager - alive or dead?

We don't have any news about Microsoft Small Business Manager - that's the problem. We don't hear anything about it. Although the Small Business Manager is still promoted on Microsoft's web site, you will not see it on the Microsoft agenda of the Microsoft Worldwide Partner Conference held in Toronto in July 2004. It did not seem to get any attention either at the Microsoft customers and partners "Convergence" conference held in Orlando in March 2004.

SAP's Billion Dollar Bet

June 28, 2004 from InformationWeek - "SAP's future began on a cold February day in 2002 during the company's annual retreat at Sylt, an island in the North Sea just off the coast of Germany. There, dozens of SAP executives first saw a technology that ultimately will replace almost all the code and logic underscoring SAP's existing and extremely successful applications portfolio. The architect: Shai Agassi, a 36-year-old Israeli who's been with the company for just four years.

It's a future that looks markedly different from SAP's heritage as the company that defined the market for enterprise-resource-planning software. Though SAP is the world's third-largest software vendor, with more than 22,000 customers in 120 countries and $8.9 billion in revenue last year, the company is thinking bigger. It's remaking itself into a platform vendor that will sell everything from application servers to middleware to Web services. It will offer slivers of applications--called composite or "snap-on" apps built using services from other SAP apps--up to full-blown business-process sets such as cash management...

SAP's strategy in large part is riding on NetWeaver, the application and integration platform that's the result of a blueprint Agassi outlined on that freezing day two years ago. Unveiled in January 2003, NetWeaver now is the multipurpose engine inside most of SAP's mySAP Business Suite, which includes ERP software, supplier- and customer-relationship-management apps, and supply-chain and product-life-cycle-management software. Initially, SAP leaders thought NetWeaver, which incorporates Web services, would merely bridge SAP and non-SAP environments. But as Web services have grown in popularity, and as SAP has put its technology to the test, the vision has broadened. The technology now puts SAP "in the unique position to be the biggest player" in a new IT ecosystem, Agassi says, at the center of customers' jumbles of applications, services, business-process sets, and even other application and integration platforms, such as Microsoft's .Net and IBM's WebSphere." For more, click here.

More consolidation as Agilisys Acquires NxTrend, a supplier of enterprise solutions to the distribution industry

June 7, 2004 - "NxTrend has built a customer base of over 1900 companies with 90,000 users that span the electrical, building materials, industrial, plumbing/heating/air conditioning, paper and medical industries. The combined entity of Agilisys and NxTrend will have over 1500 employees serving 7500 customers in 31 countries and revenue approaching $300 million." For a press release, click here.

Software Licensing and Maintenance: The Model Is Broken

From AMR Research - "Application software buyers are moderately unhappy about the way that vendors charge for the use of their products, but they are furious about the cost to maintain those products and the policies that the vendors have established for enhancements and upgrades...AMR Research recently surveyed several hundred executives who buy these products and found that many of them feel mistreated and betrayed by their vendors. In fact, customers are beginning to react in ways that have important implications for the entire application market. We asked these executives what actions they intended to take in the next 12 months to respond to these issues. Some of the numbers were very surprising:

• 38% were training internal personnel to provide technical support.

• 35% would try to renegotiate their maintenance contracts.
• 22% are considering switching to a more accommodating software vendor.
• 21% intend to stop taking upgrades.
• 12% will discontinue paying maintenance.
• 11% are interested in a new software delivery model like on demand.

I think we have the beginnings of a revolt by customers of application software. In the past, buyers hardly concerned themselves with maintenance or upgrades. It should soon become a key criteria in the selection process. For the article, click here.

Microsoft Releases Great Plains 8.0

June 21, 2004 from internet.com - "Great Plains 8.0 is billed as a cross-industry financial management product for small businesses, or divisions of larger companies engaged in distribution, manufacturing and project accounting....The new version is easier to use, with a look and feel similar to Microsoft's ubiquitous Outlook e-mail and calendar software. It's also better integrated with Office software, so that, for example, a user could produce a customer letter in Microsoft Word, then import customer data to send out a mass mailing. Integration with the next release of Microsoft Business Portal 2.5 will provide Web-based access to information for non-core users... It now looks and feels and responds like an Office product, and that helps ease the learning curve for people. Great Plains 8.0 requires SQL Server."

The article on this Great Plains update is brief as are the other articles that are available online. What is noteworthy from our perspective is that Microsoft seems to be making significant investments in its existing applications, while they build their new business application that will eventually replace their existing offerings using .NET technology. We were told by Microsoft that this latest release of Great Plains is the biggest in its history. We will also see updates for the other Microsoft Business Solutions - "Solomon 6.0 is expected in July. Navision 4.0 will ship later this year, and Axapta 4.0 scheduled for some time next year." For the article, click here.

Budgeting and Planning Study

From Vantana Research - According to Vantana, spreadsheet budgeting was an important breakthrough 20 years ago, but it is now considered an obsolete process. However their research indicates that 64% of the respondents to their study still use spreadsheets. The article includes best practices for budgeting, as well as an assessment of existing budgeting processes. For the article (which is in pdf format), click here.

Product Lifecycle Management (PLM) - Another buzzword and another the "next big thing"

From Advanced Manufacturing magazine - This brief article is written by someone who says that "I feel today that PLM is  not only going to be the next big thing in manufacturing, it's already a big thing that promises to get even bigger as time goes on. For those of you who don't have a clue what PLM is, the article will help get you started. "PLM seeks to provide horizontal collaboration throughout a product's lifecycle - from concept to disposal"  For more about PLM, click here.

SYSPRO Case Study Published in the June 2004 Edition of the Bottom Line

Hayward Gordon, manufacturer of process pump, mixer, strainer and filter solutions, have specific requirements and could not find anything that met all their needs, so decided to develop their own manufacturing system. Hayward Gordon learned the hard way about the pitfalls in developing systems and pulled the plug. They then decided to purchase an out-of-the-box solution and avoid any more customization  In 1990, SYSPRO was selected because it offered an integrated solution that met most of their financial, distribution and manufacturing needs. For more about Hayward Gordon's case study, click here.

Great Plains Case Study Published in the Mid May 2004 Edition of the Bottom Line

Mascot Truck Parts rebuilds all makes of transmissions, differentials, drivelines and steering gears. Mascot has revenues over $20 Million and operates out of 4 locations with about 130 employees. In 2001, Mascot decided to replace their existing DOS accounting system that did not handle their manufacturing requirements. Like so many other companies, they used Excel to fill in the gaps. Mascot examined a number of the leading mid market manufacturing systems and selected Microsoft Business Solutions-Great Plains. The decision was partly based on Microsoft’s purchase of Great Plains 6 months earlier. For more about Mascot's case study, click here.

ERP Market Still Has Growth Potential

May 17, 2004 from CIO Today - "Growth is achievable in the largely stagnant segment, especially as consolidation increases, according to a recent IDC report entitled, "Worldwide ERP Application Market 2004-2008 Forecast...  The report lists SAP, PeopleSoft, Oracle, Microsoft and Sage as the top five ERP application vendors for 2003...The research firm projects that the ERP applications industry will generate revenues of US$26.7 billion this year, which is about $1.7 billion more than last year. IDC projects the segment to grow to $36 billion by the end of 2008."  For the article, click here.

Microsoft to Close Solomon Product Headquarters

June 3, 2004 from MicrosoftWatch - "Of the 177 Findlay employees, 108 will be laid off; 53 will be relocated to Redmond or Fargo, N.D.; and 16 will be kept on as telecommuters...Microsoft is not discontinuing the Solomon line, the spokeswoman emphasized. Indeed, the company is on tap to provide an upgrade to Solomon in July...Instead, Microsoft is planning to outsource much of the Solomon development and support to Plumbline Solutions, a Findlay-based company founded in 1980 by one of Solomon's former chairman (and company co-founder) Gary Harpst. Two other Solomon founders, Jack Ridge and Vern Strong, are also part of the Plumbline team." Naturally, many people will think this is the beginning of the end for Solomon. I would have agreed except that the Solomon team may re-assemble to carry on. "It is projected that Plumbline will employ up to 70 impacted team members." Click here for more.

SAP and PeopleSoft really target small and medium sized business

This time, expect serious competition from both of these vendors known more for their high-end ERP systems. In November 2003, SAP launched SAP Business One, a totally new system purchased from an Israeli company a number of years ago. SAP claims the system will cost on average about $75k for software and services. We recently completed a review of Business One for CAmagazine, which will appear in the August issue. While you wait for our CAmagazine article on SAP Business One, check out Information Week's article of March 16, 2004 by clicking here. SAP also offers a scaled down and preconfigured system for specific industries based on their existing system. It looks like PeopleSoft is doing something similar as far as scaled down and preconfigured for specific industries. In an article from InformationWeek on May 3, 2004, we read that "Pricing varies for the software (PeopleSoft), which will be available in the second quarter, but a suite that includes the iSeries (IBM) hardware, pre-configured processes, and licenses for 10 to 20 users is priced at about $50,000 (US)." For the PeopleSoft article, click here.

ERP budgets and upgrading

May 2004 from APICS - In a study of roughly 600 companies, "40% of survey participants said spending was basically at budget-that is plus or minus 10%. And, an amazing 3% said costs were actually from 10% to 30% under budget." Although the majority of ERP implementations are still over budget, there seems to be some hope. The article also notes that "44% of respondents said they would update their ERP solutions only if the vendor's new release provided substantial new functionality." Upgrades can be a major pain for some systems and the ease of upgrading should be considered in the selection process. Click here for more.

Macola Case Study Published in the May 2004 Edition of the Bottom Line

In 1995, Multivans was your typical manufacturer struggling with systems that were not integrated or efficient. They had an accounting system, Excel spreadsheets for manufacturing, and word processing for quotes. Multivans set out to find an integrated accounting and manufacturing system, which led them to the selection of Macola in 1996 after a long search of many systems. For a reprint, click here.

Microsoft Targets ACCPAC Customers in Special Price Promotion

Until June 18, Microsoft Canada is offering a free upgrade from ACCPAC for DOS or Windows modules to Microsoft's equivalent modules as well as concurrent user sessions at half price. Additional functionality and users can be purchased at 25% off retail pricing. This special pricing was hush hush but the word is spreading. We have been getting emails from Microsoft resellers trying to get new business. It is hard to find anything about this promotion on the internet. The only mention of it was on the web site of one of Microsoft's resellers, CSB Systems. The reason for the promotion has probably a lot to do with Best's acquisition of ACCPAC. Best is Microsoft's largest competitor in the US and, with the recent acquisition of ACCPAC, is now the biggest competitor in Canada. For the promotion from CSB Systems in pdf format, click here.

Finance Systems Back on the Menu

April 2004 from Conspectus - "In many companies, financial, accounting & reporting systems have been stretched uncomfortably close to breaking point in recent years. Cuts in corporate spending combined with increasing demand for new types of reports have pushed often-elderly applications to the limit of their functionality. But the trend towards getting more out of what is already installed – rather than looking to renew the core systems or add substantial extra features – may be on the wane. According to this year’s Conspectus research, a turnaround in the fortunes of accounting system vendors may be in sight. Organisations which had previously starved their financial systems of any investment are starting to throw at least a few well-targeted crumbs in that direction once more...

Many financial, accounting & reporting systems (39%) are actually kept going for well over a decade. Less than a third of our respondents (29%) hit that target of swapping systems within a six to 10-year timeframe, while 23% change their systems every three to five years...

Overall, companies have a fairly high opinion of the performance of their current applications. Getting on for a quarter (23%) estimate that their existing software meets between 80% and 100% of their requirements, and over half (56%) reckon to have between 60% and 80% of their needs met...

The main reasons for companies upgrading their financial systems this year are the desire to take advantage of new functionality (51%), the need to respond to changes in business processes and procedures (45%), and the wish to take advantage of new technology (41%)...

The findings show that many companies are happy with the quality and reliability of their existing software, since this achieves the highest score (3.80 out of 5.0). Companies also report their applications are now easy to use (3.07) and come with sufficient support and a good helpdesk facility (2.98). Their concerns tend to centre on the additional costs which many encounter. Our respondents are not happy about the frequency of upgrades (2.85), the cost of maintenance (2.72) and the cost and impact of any upgrades (2.47)...

It is interesting that regulatory requirements are so low on the list of concerns, as many organisations face an onslaught of new and often untested regulations including Sarbanes-Oxley compliance rules, new International Accounting Standards (IAS), Basel II and the International Financial Reporting Standard (IFRS)... Just 9% are looking for new software to handle IAS requirements, while 8% feel they need a package to handle IFRS and 6% are seeking an application to meet their obligations under Sarbanes-Oxley...

Over half (58%) of the sample plan to introduce more e-business enabled functionality into their financial systems, and a third (35%) intend to use e-business technology as their next systems development approach. So while the threat of new regulations is not doing much to stoke the fires of an accounting systems revival, the potential gains from going online are undoubtedly fanning the flames. After several years in the doldrums, not least because of the failure of the dotcom revolution, it seems that e-business may be the way forward after all." For the full article, you can register at Conspectus by clicking here.

Manufacturing System article published in the April 2004 edition of the Bottom Line

The article is an introduction to a series of case studies on manufacturing systems. There’s usually a lot more complexity in business process with manufacturers. Many manufacturers, especially the smaller ones, leave the manufacturing to manual systems, which invariably leads to Excel spreadsheets. Many small and mid-sized manufactures have a hard time in purchasing a system that will automate all of their business processes because of the high costs. We recommend that manufacturing companies looking to invest in new systems consider taking a phased approach - just buy the bare essentials from a vendor that could eventually take you where you want to go.  For more about manufacturing systems, click here.

Sixth annual survey of accounting and ERP systems to be published in the September edition of CAmagazine

We are now in the planning stages for the sixth annual survey of accounting and ERP systems. In September 2003, we had 50 products included in our survey, which included information on costs, applications, target market, install base, technology, unique features, and more than 100 detailed questions on generic, financial, distribution and manufacturing functionality. We want to make #6 even better than last year and invite any recommendations to improve it. For the 2003 accompanying article and survey, click here.

ERP springs eternal

March 19, 2004 from InfoWorld - ERP is still alive and well according to recent research. "Recently, AMR Research released ERP Application Spending Report, 2003-2004; it predicts that the number of enterprise managers planning to upgrade or buy new ERP licenses will increase slightly in 2004, the first such rise in three years." Also, ERP implementations seem to be getting better - "Sixty-five percent of respondents to the 2004 InfoWorld ERP Survey say they would be likely to choose the same vendor, while a mere 6 percent complain they're not at all satisfied (29 percent are neutral). Jim Shepherd, vice president of research at AMR Research and co-author of its recent ERP report, believes ERP's drawbacks have always been overblown and that recent product improvements have made deployment and maintenance simpler."

"On the other hand, only 23 percent of respondents say they are very satisfied with their ERP implementation, which suggests the absence of a viable alternative. Who wants to rip and replace core applications and relive the tremendous disruption and expense of another big bang? Actually, many of our readers might, if they could escape high ERP licensing fees. In answer to a question we asked out of curiosity, a stunning 53 percent of respondents say they would consider an open source alternative to their current ERP system. The catch: No such system exists." There may be a couple out there including Compiere (http://www.compiere.org) which we just heard about through the grapevine. For the article, click here.

The Battle for the Midmarket

March 16, 2004 from CFO.com - "It's no secret—to IT vendors, anyway—that the "midmarket" represents a golden opportunity to win sales as large companies rein in spending. Now, experts say, that opportunity may be even more golden as midmarket firms brace for a spending spree. Small-to-midsize businesses (SMBs), which number 5.6 million in the United States alone, accounted for 54 percent of all IT spending last year, according to technology research firm IDC, in Framingham, Massachusetts. Between October 2002 and October 2003, their spending increased 11 percent, to $86 billion, says AMI Partners Inc., a research company in New York. And 40 percent of SMBs plan to increase IT spending this year, a much higher percentage than for large companies."  For the article, click here.

Microsoft Business Solutions Roadmap 2004

Feb 16, 2004, from Directions on Microsoft (an independent research firm focused exclusively on Microsoft strategy & technology) - "Although Microsoft has made efforts to simplify branding and differentiate MBS products since acquiring Great Plains and Navision, there remains considerable functional overlap in the portfolio. The group will not do much to reduce overlap in 2004, deferring this work to a longer-term effort called Project Green. Project Green will introduce a new set of entry-level business management applications using the forthcoming Microsoft Business Framework platform and tools, which will be built atop the .NET Framework. Although Project Green will ultimately simplify the product lineup and enable Microsoft to tightly integrate MBS products with the next version of the Windows desktop (code-named Longhorn) and other Microsoft applications, it could cause concern among existing MBS customers and unsettle MBS resellers who want to see continued investment in the current products.

The challenge for MBS is to maintain its existing customer base (and revenue streams) and to continue to create opportunities for its partners, the real key to the group’s future financial success, while it builds this next generation of business software. Microsoft has said it will maintain today’s MBS product lines through 2012. Although this is undoubtedly welcome news to those using and selling MBS products today, it implies a burden of inefficiency for Microsoft. The company will continue to employ multiple groups to develop, market, and support products with similar functionality and target markets. This burden will only increase as Project Green moves from drawing board to code development. Given that one goal of Project Green is to reduce costs and streamline the MBS product lines, there is a risk that Microsoft will decrease the attention given to the current MBS products once equivalent functionality is available from the Project Green products."  Click here for the article.

More about the Acquisition of ACCPAC

January 16, 2004 from Aberdeen Research, "The tectonic plates for middle-market software have shifted yet again as the Sage Group, through its U.S. subsidiary Best Software, has acquired ACCPAC International from its parent, Computer Associates. The last major tremor was caused when Microsoft acquired Great Plains and Navision in a clear threat to the business software providers that target the vast small and middle market. These two giants are battling for midmarket dominance." Aberdeen, like us, is not sure what Best is going to do with ACCPAC - "Yet to be determined is the impact on the various product sets. Best Software has previously maintained multiple similar products; ACCPAC adds many comparable functionalities. Will Best continue its integration and transition management strategy or replace it with the already integrated ACCPAC solutions?" For the article, click here.

SAP BusinessOne

February 2004 from AccountingTechnology - "When people think of SAP, they often think of high-end software. However, with SAP’s BusinessOne, designed for small and midsized businesses, the company is out to change people’s minds"..."BusinessOne was created in 2000, and acquired from TopManage and renamed BusinessOne in 2002." For the article, click here.

TECSYS Closes Acquisition of PointForce

On December 31, TECSYS made it official. This acquisition is especially interesting for 180 Systems. We recently completed a system selection for a distribution company that had both TECSYS and PointForce as the finalists. PointForce was selected. One explanation of the acquisition is that TECSYS wanted this client so badly that they bought PointForce. In any event, both companies are strong in distribution, Canadian and worthy of your attention. For a press release, click here.

2003 - Click here.

2002 - Click here.