News & Views

February 2010 and written by Michael Burns – “Not long ago, selecting a new ERP system every 5-10 years was the norm. Organizations did this to stay competitive and because ERP systems were still relatively new. Vendors were able to attract new customers because they leaped frogged the competition with new features. But now, the more successful products have matured and much of them offer the same basic functionality. Today, organizations typically don’t select and implement a new system unless they have no choice…”

February 2010 from ProjectTimes – “Throughout my career in almost every business function in multiple industries and in working with multiple countries and cultures, I’ve seen a common misperception hundreds of times in the last several years: the thought that the newest, brand name system or the latest system functionality will “solve my pressing business issues”. Yet, I haven’t seen it “work” once.”

180 View – The article identifies 3 pitfalls:

1. Trying to solve process discipline issues with systems
2. Focusing on bells and whistles instead of core functionality
3. Focusing too much effort on system cost instead of implementation cost and risk

This article is short, to the point and a must read for anyone contemplating the implementation of any new system.

February 2010 from Focus Research – The guide gives you a limited comparison of Aplicor, Epicor Software, Exact Software, IFS, Infor ERP LN, Infor ERP Syteline, Lawson, Microsoft Dynamics ERP, NetSuite, Oracle E-Business Suite 12, PeopleSoft Enterprise, Plex Systems, QAD, Sage MAS 500, SAP Business ByDesign SAP Business-All-In-One and SYSPRO.

180 View – The guide is not nearly as thorough as what we publish in the  CAmagazine but it does contain a few products that are not included in our analysis.  Our analysis had 44 products and a lot more detail about each of them. Nevertheless, the Focus guide does provide information not available from 180 Systems, and so we have referenced it.

It is interesting and confusing that the vendors don’t always include certain products in these types of comparisons. For example, Oracle declined to participate in the CAmagazine comparison but did participate in the Focus one, except that they did not include their JD Edwards product. One interpretation is that Oracle is no longer pushing JD Edwards but we don’t believe that to be true. On the other hand, Sage included their MAS 500 product in the Focus comparison and just Accpac in the CAmagazine one. This leads to the conclusion that they are not pushing MAS 500 in Canada or Accpac in the US, which I have also heard from reliable sources. Another spin is that SAP did not include SAP Business One in the Focus study, which might indicate that they are no longer actively marketing this product. SAP’s other products are also now targeted to the same market as Business One.

February 26, 2010 from itbusiness.ca – “It seems unheard off or near impossible to implement SAP in 30 days, but SAP Canada president and channel chief believe they are heading in that direction with the help of channel partners…

Joel Martin, principal analyst for Toronto-based Business Software Strategies, believes that if SAP can execute on Fast Start and allow partners to bring templates to the mid-market, which enables low cost sales and implementation, then SAP can be successful down market.

“The thing that struck me most was if a partner can help a customer deliver SAP in 30 days. That is unheard of. That is something that is very powerful, very compelling for customers to consider SAP than before,” Martin said…”

180 View – We have also recently heard of a fast implementations from a  SAP partner that has done it. Although we don’t have any experience with such fast SAP implementations yet, it does change the playing field in software selection. SAP is clearly targeting small to medium-sized companies now with their SAP Business All-in-One system. It makes you wonder whether SAP still needs SAP Business One, which was initially targeted to the same market as All-in-One.

February 22, 2010 from Computerworld -  “Once the final tallies for 2009 are in, analyst firm Gartner Inc. expects SaaS revenue to total $7.5 billion, nearly 18% higher than it was in 2008. Gartner projects that by 2013, SaaS spending will hit $14 billion. And in an exclusive Computerworld survey of 127 IT professionals, 42% of the respondents reported using SaaS in their organizations, for everything from CRM (40%) to HR (38%), e-mail (36%) and payroll (32%).

Relatively low start-up and implementation costs are no doubt driving SaaS adoption well beyond CRM services, but there’s more to it than that, users say. Just as important is that they typically get greater software functionality and more upgrades from SaaS vendors than they could ever manage with on-premises applications…

“With SaaS, you’ve basically got to adapt to the SaaS process. It’s a way to standardize, although there still tends to be a certain amount of debate about the processes we use.”

But like other users, Proudfoot says the primary benefit of SaaS is speed. “We were up and running within days of having the software available,” he says. “Following implementation, there’s nothing to do other than pay your subscription, log on and use it. But, of course, use does require adaptation of internal processes.”

180 View – The article starts with “Businesses are taking the plunge into budget-friendly software-as-a-service offerings for everything from recruitment to central ERP.” But there was very little in the way of ERP actually discussed in this article. It’s definitely not mainstream for ERP yet although it’s headed in that direction for the same reasons it has done so well with CRM.

The article does imply that there is less flexibility in business processes with SaaS, but that may be more a function of a particular product rather than SaaS itself. There are SaaS products that offer many levels of customization from simply renaming particular fields on a screen to developing completely customized screens with built in workflow logic based on specific events.

February 2010 from Joel Martin’s blog – “…In the customer’s eyes, the ‘hero vendors’ will offer a choice of how to deploy, support and integrate a mixed ERP environment that grows (and contracts) with the needs of the business. Successful ERP SaaS solutions will allow customers and their partners to invest in standards based technologies to amplify the usage of the commodity components (e.g. extending financial data to line of business professionals) in a format that ‘makes sense’ to their users. At the same time, more complex ERP SaaS solutions will be deployed to meet the needs of select requirements (e.g. discrete operations modules for pharmaceuticals). These SaaS solutions will be sought after as both on-premises and via the cloud….”

180 View – We included this article because 1) We liked the title, 2) Joel is a good resource for anyone interested in enterprise software, 3) Joel makes some good points that SaaS does not need to be just standard/commoditized business process (the chicken) but can also be used for more complex/customized business process (the duck). We don’t think that Joel was referring to lame duck.

December 2009 from IDC sponsored by Agresso – “… A recent IDC survey shows that the negative impact of business disruptions attached to ERP modification is simply too high: a 20.9% decline in stock price, a 14.3% revenue loss due to delayed product launched, and a 16.6% decline in customer satisfaction. Reported losses from survey respondents making ERP changes range from $10 million to over $500 million…

IDC also found that tailoring or customizing a rigid ERP solution to meet a company’s requirements is fraught with peril…”

180 View – The article was based on a survey by IDC of 214 business executives mostly in the US and who worked for companies for which 85% of them had revenues greater than $100 million. The report does not reveal the ERP systems used by these companies. The report also does not explain what is meant by rigid ERP solutions. Considering the size of the companies in question, it is likely that most of the ERP systems used were high-end systems, and you can bet that the vendors of these high-end systems will sing the praises of their agile and customizable system. The problems of customization are not just attributable to the tools but also to the methodology deployed and the business case or lack of business case supporting the change.

February 3rd, 2010 from ZDNet – “The research describes five primary results:

1. ERP implementations take longer than expected
2. ERP implementations cost more than expected
3. Most ERP implementations under-deliver business value
4. Software as a service (SaaS) implementations take less time than on-premise ERP implementations, but deliver less business value
5. Companies do not effectively manage the organizational changes of ERP…

Measurable benefits. These figures are perhaps the most damning in the study. The report says a significant number of implementations surveyed did not deliver anywhere near the anticipated benefit or value…”

180 View – The ERP Report is based on research by Panorama Consulting Group. We understand that the research was based on online polling and qualitative data gathered from focus group interviews with a sample of survey respondents from December 2005 to December 2009. We also understand that the 1,600 participants represent global organizations that have completed an ERP implementation within the last four years.

The results of the survey are unfortunately not surprising especially with regard to on time and on budget. There are so many unknowns at the beginning of an ERP implementation that make scheduling and budgeting a huge challenge. We think the problem of lack of measurable benefits is less a problem with ERP than it is with misguided expectations from the beginning. The people within an organization wanting to proceed with the ERP implementation often prepare business cases which help support their recommended decision. Our perception is that there is a lack of independence and a lack of competence in preparing the business case, which rules out ever achieving the expected benefits.

180 Systems has just released the System Analysis Tool, which will select the top 10 ERP systems based on an online survey you complete that includes company size, geography, language, industry, technology and functionality (generic, financial, distribution, manufacturing and professional services). There is no charge for this tool and we will keep your information confidential.

To see the vendors that have signed up and how it works, click on the expand button for “Current Vendors” and “How it Works”.

Not all the ERP vendors have signed up yet but we expect many will soon once the word gets out about this new service. As we don’t charge the vendors anything for participation, we don’t see any reason for them not to sign up unless there is something to hide.

We would very much appreciate your feedback.

January 20, 2010 from Managing Automation – “The Sage Group plc today unveiled a major release of its Sage ERP X3 suite for mid-sized businesses that uses Web 2.0 and other new technology to give users real-time access to global data and collaborative tools in user-configurable dashboards…

Sage worked with a number of technology partners to design the X3 release. For example, the suite can be operated on Microsoft SQL Server 2008, and integrates with Microsoft Office to increase ease of use and accelerate user adoption. The system can also run on Oracle Database 11g R2. According to Sage, the X3 software can support several thousand concurrent users, process several hundred thousand transactions per hour, and synchronize data across customers’ sites.

Sage focused heavily on improving the customer experience in this release. Among the enhancements is new, multi-language Sage VisualProcesses software, which provides templates so that users can create their own customized interfaces. Users also can link to external applications and the web to access information and create financial and other reports quickly…”

180 View – X3 will be on our list of potential solutions for mid market organizations with complex and/or global requirements.

October 2009 from Conspectus – “…Nearly half of firms (47%) are not using their enterprise systems’ full capability and could increase utilization if they had more time, training and/or budget…

In summary, for organizations that have made strategic ERP investments in recent years, now is the time to work those investments even harder. With a focus on data, discipline and systems flexibility, IT leaders can squeeze far more value from their enterprise software and stop leaving as much as a third of their investment on the table.”

180 View – It does seem strange that organizations would not use more of their ERP system if only they had more time, training and/or budget. If the benefits greatly exceed the costs, why would they not make the investment? But if it’s breakeven, then one would understand the reluctance.

We think a bigger problem in not utilizing the full ERP system is that organizations are stuck with old versions and don’t know what to do. Our opinion is that replacing a system should be a last resort because of all the costs to implement a new system. We suggest documentating requirements just as if selecting a new system, letting the vendor demonstrate their ability to meet the requirements and a business case to determine whether to upgrade/improve the existing system.

From Microsoft – “Find partner-built solutions that work with Microsoft Dynamics to meet the unique needs of your business and industry. Enter a search keyword or use the Advanced Search fields to create a custom search query…”

180 View – This site is a well kept secret by Microsoft. The advanced search includes country, industry, vertical, company size and location and will return Microsoft solutions and partners. You will probably be surprised at the extent of solutions and partners amd wonder why a solution or partner shows up. As well, you may wonder what is meant by the ratings or the number of references for a solution or partner. Nevertheless it’s the best place to look for Microsoft Dynamics solutions and partners. Other choices are calling Microsoft directly or taking a look at our ERP Portal for Microsoft partners.

November 23, 2009 from InfoWorld – …“With ERP, you can’t do a one-size-fits-all,” Read says. “The corporate office of a $10 billion organization just has different needs than the local operations in Australia. And if you try to deploy [SAP or Oracle] everywhere, you’re effectively going to be deploying an enterprise solution in a midmarket company, and the costs are going to explode.

Could there be a resurgence in “best of breed” app strategies for vertical-specific business areas — whether that’s on-premise or in the cloud — without all the integration headaches of yore? AMR Research Chief Research Officer Bruce Richardson thinks so. “The Burger King approach — ‘have it your way’ with SaaS, on-premise, BPO,” Richardson says, “is going to force vendors like SAP, Oracle, and Infor to get very aggressive in offering other deployment models…

Industry consultant Reed sums it up this way: “‘Empower me. Give me the tools to create differentiating processes that allow me to define myself from my competitors. And make sure that it’s easier for me to do, so I don’t have to hire 100 programmers. Give me the building blocks to put that together quickly, so that it’s just humming in the background, and leave me free to focus on what makes us better than other companies.’ That’s what customers are expecting now and really want.”

180 View – Large organizations often want their subsidiaries to adopt the same system in all the local countries. There are advantages including visibility of information such as inventory across the organization and all the subsidiaries. Other advantages would include intercompany transactions, consolidation, reporting and the forecasting process. As well, if the organizations are similar, it should be possible to leverage existing business processes and templates. But there can also be problems in forcing one of the high end ERP systems on a subsidiary, which may experience increased costs, complexity and delays. Once again, a business case is recommended to determine the best course of action.

January 14, 2010 from InformationWeek – “SAP has stepped back from its plan to move all customers to Enterprise Support contracts priced at 22% per year. Instead it will adopt a two-tiered system that reintroduces a Standard Support option set at 18%…”

180 View – In the past, most organizations did not worry too much about the annual support fee or only considered it in the final contract negotiations. Today, it has become an important consideration as buyers have become more sophisticated and ERP systems have matured. Buyers don’t want to go through another ERP implementation in their lifetime and the Net Present Value of the maintenance costs should be considered over a long period of time.