Critical success factors for ERP implementations

2009 from International Journal of Operations and Production Management – “This paper explores the Critical Success Factors (CSFs) of Enterprise Resource Planning (ERP) system implementation at Small and Medium sized Enterprises (SMEs)…

Operational process discipline. The concept of process discipline has been formalized by Collins and Schmenner (1993) and Collins et al. (1998). In our study, companies were asked about documentation and consistency in executing operational processes (i.e. information flows) prior to the implementation. Companies having greater consistency prior to implementation appeared to achieve more successful implementations regardless of the level of documentation. The two unsuccessful cases had good documentation, but low discipline in adhering to standards set in documents. For example, Company 4 cited ISO audits that revealed non-conformance in sales and engineering. Company 3’s poor record led to problems such as excess procurement to buffer for inaccurate inventory data; as the Accounting Manager indicated, “We were a custom job shop with “craftsmen‟ who would each do things a little differently. The BOMs [bills of materials] were “loose‟ and standard routings were non-existent… it was very dysfunctional.” Consequently, both companies had difficulty adhering to processes that were newly developed by the ERP.

Overall, it seems that having inconsistent operational processes conflicts with the procedural rigidity of ERPs. Where such inconsistency exists, it may be necessary to carry out some process benchmarking and improvement prior to enforcing standardized procedures brought in by the ERP. This finding looks consistent with Schniederjans and Kim‟s (2003) conclusion (from a large company survey) that best implementations involve reengineering processes before rather than after the ERP introduction. Ross and Vitale (2000) similarly stated that ERP implementations posed challenges as they “... were instilling discipline into relatively undisciplined organizations.” (p. 240).

Thus, it appears that operational process discipline should be identified as a major CSF for ERP introduction at SMEs, especially given their frequently informal type of environment..."

180 View – Thanks go to Bluelink for alerting us to this article. For a quick summary of the CSF’s by Bluelink, click here.

I have only copied the first CSF above as it discusses a number of very interesting points. There is an assumption that ERP systems impose standardization. I disagree in that ERP systems have flexibility to accommodate different business processes. However, the implementation team may decide for different reasons that standardization is a good idea.

It seems that undisciplined organizations run into problems with standardization of business processes. This can also happen for many reasons. It may because there are different business units that do things differently to maximize their profitability and don’t want corporate to impose standards.

Another point raised is “that best implementations involve reengineering processes before rather than after the ERP introduction”. I disagree. Reengineering should take place during the implementation. Why not leverage existing business processes embedded in an ERP system than try to reinvent processes or create processes that are too expensive to implement.

In any event, the red flag needs to go up early for an implementation where there is a lack of standardization. When there are strategic reasons for non-standardization, the implementation should accommodate it. When the reasons for non-standardization have more to do with personal preferences or power, the implementation team needs to have the full backing of senior management to enforce standardization.

Magic Quadrant for Midmarket and Tier 2-Oriented ERP for Product-Centric Companies

June 4, 2009 from Gartner via Epicor – “Despite the mergers and acquisitions, there are many ERP offerings for midmarket companies and firms deploying Tier 2 ERP systems. This Magic Quadrant evaluates products that have a global presence and are specifically tailored for product-centric midmarket companies with roughly 100 to 1,000 employees…”

180 View – The Gartner Magic Quadrant has been around for many years and I suspect was and still is a big factor in which systems have been selected especially by larger organizations. There is a lot of useful information in the article. You will also find Gartner acts as a judge in assessing strengths and weaknesses of the various systems including getting feedback from “reference” clients. However, we question whether the feedback from clients can be relied upon. Gartner would need a large sample of clients to draw any conclusions. I did a scan through the report looking for information on how many customers were interviewed and how the customers were obtained – I did not find anything.

The report also discusses a number of trends including packaging of industry-specific functionality, technology modernization using service-oriented architecture (SOA) and the need for global deployments. I agree with the first one about industry-specific functionality. Some vendors have done this by partnering with industry specific developers. The vendor provides tools and marketing, the industry specific developers provide the extensions to the system. I have also heard vendors touting SOA as the road to salvation. Any problem with integrating multiple systems can be handled using SOA… The cynics out there including myself are not swept away by technology hype. Global deployments can be a problem with respect to language, taxation and statutory requirements. However, I don’t agree that the vendor needs a presence in countries all over the world. The preferred approach is to Train the Trainer and let internal resources roll out the system. With the use of low cost communications and remote access over the internet, a physical presence is not always required.

Also take a look at more criticism of Gartner's report by The Enterprise System Spectator by clicking here.

Epicor ERP project sparks customer lawsuit

May 18, 2009 from ComputerWorld – "...Epicor's representatives were given the Requirements list prior to entering any contract negotiations, and Epicor represented its product would be able to perform all of Ferazzoli's requirements," the complaint states...

In June 2007, Epicor officials visited Ferazzoli's headquarters to learn about the business and demonstrate its software. The officials made further assurances that Epicor's technology would be satisfactory, according to the complaint...”

180 View – There are many reasons for failed implementations, and we can’t speculate what happened here. However, we think the problem is not likely the software but more likely the selection and implementation process. In the article, a suggestion is made - "You want to make sure that all demos, marketing materials, and assurances are put into the (contract) document." We partly agree with this recommendation. But demo’s and assurances are too vague. Better would be to include specific requirements from an RFP to which the vendor responded.

CRM On The Cheap: 5 Strategies That Backfire

April 27, 2009 from ComputerWorld - “Your company knows that it wants a serious CRM system. But the CFO, nervous about the costs, starts to suggest strategies that could keep things under control. Meanwhile, you know the implementation team has some ideas that go in a completely different direction. How can you manage executive expectations that may be based on misinformation? This two-part article will cover common traps that you should avoid, followed by advice on the best ways to save some real money.…”

180 View – The article makes some good points that apply not just to CRM. For example – “The complete-system launch, sometimes called a Big Bang project, just doesn't work very well for software. The warning signs of Big-Bang thinking include: Infrequent project milestones; large, complex, monolithic project deliverables; little consideration of political or change-management issues; fake, vague, or overstated requirements, particularly for scope of system integration or historical data; scope creep. Better to deliver incrementally, deploying something of value to the business at least once a quarter.” We believe that during the design phase, you should consider the big picture/bang, but build and roll it out in manageable phases.

Duffield Takes On Oracle, SAP

April 29, 2009 from Forbes – “…Duffield is royalty in the software industry. He founded PeopleSoft, which became the second-biggest applications company in the world, with $2.7 billion in sales, before it was swallowed by Oracle after a long, nasty takeover battle. Now Duffield at it again, trying to take on Oracle and SAP…

Workday is thriving despite curbed technology spending. The firm more than doubled revenues last year, to over $50 million, and is on track to reach profitability within the next 18 months…”

180 View – There is something to be said for starting all over again without any baggage.

Insights from Lawson CUE 2009

April 23, 2009 from The Enterprise System Spectator – “Lawson invited me to attend its annual conference in San Diego this week. I last attended Lawson's CUE in 2005, so this was a good opportunity to catch up on the latest with this vendor of enterprise software…

Here are some of the points that to me were most meaningful, from discussions with Lawson executives and customers as well as from dialog in the analyst meetings. I'll try to comment beyond what is in the announcements and press releases…”

180 View – We think it’s useful to know what is happening at the conferences held by the technology vendors, and appreciate Frank Scavo’s writing about it. I am hearing more about Lawson lately and one can see from this write up that they continue to invest in their systems and should be considered in certain industries such as the fashion industry and equipment manufacturers.

SMB ERP Projects: Don't Forget the ROI

April 1, 2009 from Computerworld – “The average SMB ERP implementation takes 10 months, though the installation work continues long after the go-live date hits, according to recent Aberdeen Group survey data of 920 SMBs. The financial costs can be just as significant: SMBs with less than $50 million in annual revenue will typically pay nearly $300,000 for ERP software and services, while larger businesses (revenues between $100 million to $250 million) will spend $1.4 million, the survey data states.

"Given this level of investment, one would think ROI would be top of mind for most companies,"

180 View – Not surprisingly, we read a lot about ROI (or lack of it) these days. We agree with the article that organizations should determine the ROI of an IT investment. But if ROI was the sole criteria, the investment would usually not happen assuming unbiased building of the business case. But there are other compelling reasons for the IT investment involving intangible benefits and risk mitigation.

The biggest problem with ROI and business case is the underlying assumptions. Be skeptical of the assumptions if the person responsible for the business case will gain by the IT investment. Make sure that the assumptions really make sense and have some supporting documentation.

Recession is ideal time to invest in technology

February 20 from the Financial Post – “With client and customer demands waning for small businesses as the economy lumbers along, this may be the moment to put down time to good use…

We just had our biggest year ever," says Mr. Stroink about sales at his Halifax-based retail business, The Trail Shop, which sells hiking and outdoor gear. Mr. Stroink attributes his recent success, achieved as Canada's economy began descending into a nosedive, to a new information technology system he implemented in his store that simplifies everything from inventory tracking to point-of-sale figures. He purchased the system from SAP Canada, a company that is currently touting IT solutions for small businesses to help them with efficiencies that could translate into cost savings…”

180 View – The natural tendency for most organizations is to put IT investment on hold in the face of economic uncertainty. It’s just about impossible to show an ROI on ERP investments without making unsupported assumptions. But some organizations have no choice as their systems are no longer supported or the system can’t support new acquisitions or business models. Other organizations are recession proof. And other organizations see every problem as an opportunity…

On-demand ERP draws mixed reaction

March 11, 2009 from InfoWorld – “While it has tested the waters of on-demand software with its CRM Online application, Microsoft still has no plans to do the same for its Dynamics ERP (enterprise resource planning) product lines, according to a top company executive.

"We don't see people saying, 'Hey, I wish you had hosted ERP, give me that, or I wish you only had hosted CRM,'" said Kirill Tatarinov, corporate vice president of business solutions, during a question-and-answer session Tuesday at the Convergence conference in New Orleans….”

180 View – We wonder whether the problem with Microsoft and other vendors in not moving faster to on-demand software is more caused by the software itself. The article later points out that “Dynamics CRM 4.0 has a multitenant architecture, allowing a single server to run multiple instances of the application.” If Microsoft ERP systems also had a multitenant architecture, it’s likely they would offer it. The on-demand model makes a good business case for companies that don’t have the resources or infrastructure to support on-premise software.

Compiere Cloud Edition: The Next Disruptive Breakthrough for ERP?

March 13, 2009 from AMR Research – “…Mr. Klaiss briefed us on a new product he was planning to launch in early March, Compiere Cloud Edition. His plan was to be the first vendor to offer an ERP and CRM suite running on Amazon’s Elastic Compute Cloud (EC2)…

What I found most appealing about the Compiere-Amazon pairing is how the two are completely changing the cost structure of deploying ERP. You can subscribe to Compiere Cloud Edition for $795 per month and “rent” Amazon capacity for as little as $2,000 per year. That translates into about $10,000 for 10 users and $80,000 for 100 users. For cost-conscious CIOs, this is worth considering. Some of these cost advantages are because Compiere is built with open source technology, allowing companies to own the source code, eliminating the dependence on a vendor, if needed…”

180 View – Disruptive technology is a good thing as it leads to better prices and/or improved products/services. However most organizations are risk adverse when it comes to ERP systems. Potential disruption (not the intended meaning in the article) to business is the last thing they want.

Tipping Point Reached For Cloud Computing?

January 30, 2009 from ZDNet – “…He says that mainstream adoption within small and medium-sized businesses is “accelerating” – and that 20 percent of enterprise IT workloads will be run “in the cloud” by 2013. This will lower operating costs, reduce IT staffs and cut down on carbon footprints, he says... By the end of 2010, in fact, he expects 70% of companies will have deployed at least one application in the service “cloud”...

180 View – It’s hard to find good stats on SaaS. The survey in this article is based on a survey of 150 chief financial officers with budget authority. So it’s not based on actual SaaS but planned adoption. It’s also based on a small number of companies. Nevertheless we agree that SaaS has become mainstream. There are currently few options for ERP SaaS but that will inevitably change as companies seek ways to reduce costs. The article ends with “70 percent of SAP’s installations of its R/3 set of business applications predate 1998.” Pre 1998 there were not that many ERP systems available and SAP was extremely successful in attracting companies especially those with Y2K fears. But it’s still surprising that 70% predate 1998.

Could the recession be good for enterprise software?

February 19, 2009 from InfoWorld – “The recession has companies worldwide scrambling to rein in technology costs with desperate vendors responding in turn, offering deep license discounts, providing low-cost financing and proclaiming ever more shrilly that their products in fact save customers money…”

180 View – It’s going to be a tough sell for companies to invest in technology if they have just been forced to lay off part of their work force. However, there are companies that will want to scale back their on-going IT costs. They may be able to do this by renegotiating terms with their vendor and in optimizing certain inefficient business processes. Another possibility is replacing a costly system. Costs of the existing system could be high based on annual maintenance fees calculated on the original license fee. Costs could also be high for the internal and external costs to support the system. And costs could be high if substantial work is required for upgrades. But be careful with replacement strategy as the internal costs to implement a new system can be very high too.

Competition Intensifies For The SMB ERP Customer

August 13, 2007 from Forrester – “Despite their challenges, SMBs (small and medium-size business) continue to look to packaged applications to tackle myriad complex business requirements. Recent Forrester surveys reveal that SMBs are:

• Justifying new or additional application investment. Based on Forrester Business Technographics® data, 83% of SMBs believe that application software improves the efficiency of core operations and business processes, and 80% of SMBs believe that software improves workforce productivity. Additionally, 75% believe that software improves the quality of products and services.
• Driving software investments with business needs. SMBs mostly rely on peers and not vendor hype for purchasing information, with industry-specific case studies and word-of-mouth success influencing shortlists. By a large margin, software that supports an industry-specific process leads application purchases for first-time purchase, major upgrades, and minor upgrades. In addition, SMBs want to make the most of existing investments. Sixty-three percent of surveyed users prioritize improving integration between applications as the top initiative for 2007. Specifically, customers could care less about service-oriented architecture (SOA) and middleware, but want the tangible benefits of integration, interoperability, and standards.
• Maintaining a “wait-and-see” approach to software-as-a-service (SaaS). SMBs continue to prefer on-premise delivery versus SaaS; fully 60% of SMBs are not at all interested in SaaS due to concerns about integration, security, total cost, performance, and lack of customization. Although these concerns represent largely unsubstantiated perceptions, most SMBs remain comfortable adopting a “wait-and-see” approach…”

180 View – Although the article is dated, it does contain useful insights and is worth a quick read.

Providing Assistance to Businesses in All Sectors to Invest in Computers

January 27, 2009 from the Government of Canada – “Budget 2009 proposes a temporary 100-per-cent CCA rate for computer hardware and systems software acquired after January 27, 2009 and before February 1, 2011. In addition, the rule that restricts CCA deductions to one-half of the CCA write-off otherwise available in the first year will not apply to these computers.
This temporary measure will allow taxpayers to fully expense their investment in computers in one year. The measure will provide stimulus by assisting businesses to increase or accelerate investment in computers. It will also contribute to boosting Canada's productivity through the faster adoption of newer technology. Businesses in all sectors of the economy, including the service sector, will benefit from this incentive..."

180 View – Great idea but it has limited value as it refers just to computer hardware and systems software. Computer hardware is typically a small portion of any new system implementation. Systems software, according to Canada Revenue Agency “refers to the general operating system that enables application programs to be run and directs and coordinates the different operations of the computer, including all of the input and output between the keyboard, the CRT screen, the printer, the disk drives and other peripheral equipment.” In other words, it does not include ERP or accounting software.

IFRS Conversions - What CFOs Need to Know and Do

2008 from Canadian Institute of Chartered Accountants – “…Converting to IFRS will not merely be a technical accounting exercise, but more a widespread change management exercise that will impact many areas of the business. Any business function required to prepare financial information, or impacted by financial information, has the potential for change. Companies should expect changes to earnings and financial position. The possible implications for key business areas along with some examples are given below:
1. IT and Data Systems (IT) - Capability of system to produce dual financial statements (Canadian GAAP and IFRS) during the transition years, while maintaining system security and reliability…”

180 View – Accountants never seem to run out of work. They had a field day with Y2K, then SOX and now with IFRS. Despite all the courses and articles on IFRS, there is still a lot of confusion. One area that has come up a number of times with our clients has been with handling the transition year. The article states that “The main options available to converters involve either dual GAAP accounting throughout the transition period or some form of restatement from Canadian GAAP to IFRS at each reporting date.” The first option should require the ability to post transactions to multiple ledgers – one for GAAP and the other for IFRS. The second option should be easier to implement by simply just booking any IFRS adjustments to take a set of books from GAAP to IFRS.

Cloud computing

March 2009 from CAmagazine and written by Fred Blauer – “…The traditional software model involves developing source code (program instructions) that is protected by a legal patent (intellectual property) so that no one can use, copy or modify it without purchasing or licensing it from the author. Now there is a shift from proprietary software to open software (which allows you to freely use, copy and modify) and standardized software (which runs on any platform)…”

180 View – There are many open source success stories such as Linux and MySQL, but is it appropriate to run a business? There are a few ERP open source solutions such as xTuple. There are also a number of vertical (industry specific solutions) such as OSCAR-McMaster: An Electronic Medical Record (EMR) system. Although we have concerns about open source to run a business, it's clearly gaining traction. As Fred says in his article, "As new systems mature, this (open source) will become a viable alternative to proprietary software solutions for the business mainstream."

Can Dynamics Gain from Economic Pain?

November 13, 2008 from Microsoft Watch – “That's the question to ask about Microsoft's 0 percent financing option for its Dynamics CRM and ERP products.

Microsoft announced the limited-time promotion today, Nov. 13—and what timing! Yesterday, IDC cut 2009 U.S. IT spending growth projections to 0.9 percent from 4.2 percent. Go on, blame the economy.

Microsoft will offer financing for just about anything, including hardware and services, as long as at least one product is from the Dynamics family. Purchases must be between $20,000 and $1 million, which, like Dynamics products, makes the financing offer most appropriate for small and midsize businesses…”

180 View – Turning a problem into an opportunity is good business.

Oracle turns tables on SAP in ERP battle

November 18, 2008 from itWorldCanada – “(In 2006), the clear victor of the "battle of the architectures," as Forrester termed it, was SAP: It had a larger market presence in applications than Oracle did, plus faster growth. SAP had been able to capitalize on Oracle uncertainty, and it was able to articulate a clearer vision for enterprise applications, the Forrester analysts wrote.

Much has changed since then. Now, as 2008 comes to a close, Forrester analysts John Rymer, Paul Hamerman and Ray Wang have done another comprehensive analysis of the fierce competitors' application strategies. The report, "Which Has The Better Apps Strategy: Oracle Or SAP?", compares the merits of Oracle's next-generation applications play-Fusion Applications-with SAP's inclusive strategy that seeks to minimize disruptions to large organizations.

This time around, Forrester's nod goes to Oracle…”

180 View – The Forrester opinion is based on technology from Oracle that ‘it now seems like will arrive in 2010, according to Oracle's most recent promises.” It is premature to select a winner based on futures. As well, both Oracle and SAP have stiff competition for new sales, and it’s no longer a battle just between Oracle and SAP.

Salesforce.com and Google execs blast Oracle, SAP, Microsoft

November 7, 2008 from ComputerWorld – “…But Benioff wasn't finished, and a few minutes later hit out again at his former boss Ellison, saying that the SaaS approach can't be compared with "mature, dying models like Oracle and SAP, which is maybe already dead."

Girouard also had choice words for traditional enterprise software vendors, saying that they haven't learned from the successes of Web-based software for consumers and are thus failing to meet the expectations of those same consumers when they go to work.

"There's an amazing disconnect between the innovation and user experiences delivered in the consumer world and the stagnant, unenlightened world of enterprise computing that puts the user experience far in the background and focuses on business process," he said...”

180 View – Today, most enterprise applications like ERP are not web-based and not delivered as SaaS (Software as a Service). But that is changing fast. In a few years, we expect that 50% of enterprise applications will be web-based and available as SaaS.

Preparing for ERP with Best Practices

November 7, 2008 from IndustryWeek – The article is for manufacturers but also applies to other industries - “Manufacturers can prepare for ERP adoption by benchmarking the organization against peers and then removing all non-value-adding activities from the supply chain.

Enterprise resource planning (ERP) is not a magic bullet. ERP systems have become more affordable, effective and -- to a significant degree -- essential, but manufacturers need to pause before joining the headlong rush toward implementation. Companies that do not ready themselves before implementing ERP find it nearly impossible to fully utilize their new systems, and risk upsetting their organizational culture with chaotic implementation phases. However, manufacturers can prepare for ERP adoption with straightforward activities that do not require outside consultation, require no investment other than time and can typically be achieved within three months...”

“Additionally, we will see how manufacturers, regardless of their specialty, can prepare for ERP adoption by benchmarking the organization against peers and then removing all non-value-adding activities from the supply chain…”

180 View – The author makes good points about ERP not being a magic bullet and the usefulness of benchmarking. However, we don’t agree that an organization can remove all non-value added activities in advance of the implementation and without the help of consultants. First many of the non value added activities can’t be removed because of limitations in the existing system. Second, why not take advantage of the vendor’s experience and avoid re-inventing the wheel.

Oracle sees progress on Fusion apps

September 2008 from ComputerWorld – “Observers say Oracle is finally making substantial progress on its next-generation Fusion Applications suite, more than three-and-a-half years after the project was first announced…

Oracle has said Fusion Applications will blend together the best features from its various product lines, which include PeopleSoft, J.D. Edwards, Siebel and E-Business Suite…”

180 View – This article is a few months old so we did some digging to find more recent information on Oracle Fusion. We had trouble finding anything more recent except "Oracle Fusion Applications: Is 2010 Delivery Too Little, Too Late, or Smart Strategy?” published on October 3, 2008 by CIO Magazine that included “Jim Shepherd, senior vice president of research at AMR Research, says Oracle realized that there was no overwhelming demand in the market for a next-generation ERP system, and "most of the acquired PeopleSoft and J.D. Edwards customers were much more interested in enhancements for their existing software than they were in migrating to a new product." In turn, Oracle has lowered the priority of delivering Fusion Apps to the market.” We agree with Jim Shepherd’s comments but a next-generation system will also allow Oracle to compete with other vendors who have built or are in the process of building these next generation systems that include easier to use systems, collaboration, Web-based (just need a browser) and offered not just on a licence basis but also by application service provider — the pay-as-you-play model, where you don’t need to invest in the infrastructure.

Implementation is all about people

October 2008 from CAmagazine – “It should be no surprise that all projects depend on people not only outside, but also inside, the organization. Nevertheless, many organizations think they just need to find a system with a good fit, and they are off to the races. Unfortunately they stumble out of the starting block and sometimes never finish. What they really need is the right people at the right time…” This article also discusses responsibilities of the steering committee, project manager and subject matter experts as well as how much effort is required.

Workday: The Next Software Power?

August 19, 2008 from BusinessWeek – “Ever since veteran software entrepreneur Dave Duffield launched his new startup, Workday, a year and a half ago, people have wondered if it could become the next Salesforce.com (CRM). Marc Benioff, Salesforce.com's chief executive, had shaken up the customer-relationship management software world and created a company with a market cap of $8 billion with an online service that replaces expensive and complex traditional software packages. Could Duffield and Workday do the same? Just now, there's growing evidence they can...”

180 View – We think that it’s early days for Workday that will eventually challenge other products more than Salesforce including NetSuite and SAP Business ByDesign. Salesforce is primarily CRM and WorkDay includes accounting and HR. What’s interesting is that there is a lot of investment in the next generation of ERP, CRM, HR… systems using SaaS (Software as a Service).

Epicor 9: The Accomplishment That Eluded Microsoft and Oracle

September 2008 – “Once upon a time, Microsoft embarked on Project Green, an ambitious undertaking designed to take the best of its four ERP systems and converge them into a single code base, albeit a fifth product.

Meanwhile, in a parallel universe, Oracle set off on Project Fusion. This was to be the lunar landing of convergence, melding the best of Oracle, PeopleSoft, and J.D. Edwards into the Apollo of enterprise applications.

Today, Project Green lives on as a set of design principles for future application development. The dream of one product is long past the REM stage.

Project Fusion has become the service-oriented architecture (SOA) framework for connecting the original Fusion ERP components with the subsequent acquisitions (such as Agile, BEA, Demantra, G-Log, Hyperion, Retek, Siebel, and the rest). Given that it’s likely that Oracle has other application purchases in mind, it might have been unrealistic to expect the company to ever deliver one master software suite…”

180 View – Congratulations to Epicor for doing what eluded Microsoft and Oracle. We anticipate that Epicor 9 will appeal more to new customers than existing ones. When merging/fusing different products, the developer’s goal is to take the “best” features from each system. But “best” is a subjective term. Existing customers may rely on functionality that is not considered “best”. As well, existing customers may have customized their system and these customizations may have to be redone.

Enterprise software survey 2008

September 2008 from CAmagazine – “Believe it or not, we’re now in our 10th year for our annual CAmagazine software vendor survey. As always, we have added new functionality and new systems. This year we have 54 systems, 17 more than last year…”

Finance Accounting Solutions Comparison Guide

2008 from TechRepublic – You can access TechRepublic’s “Finance/Accounting Solutions Comparison Guide for Small to Midsize Companies”

180 View – The guide contains information on Epicor, Exact, Infor, Lawson, Microsoft, NetSuite, Oracle-JD Edwards, Oracle-PeopleSoft, QAD, Sage and SAP. We think the guide is not nearly as comprehensive as the CAmagazine survey but it does include vendors that were not included in the CAmagazine survey.

Time to Put Your G/L on a Diet?

August 27, 2008 from BusinessFinance – “Companies historically have dumped anything they needed to report on into the general ledger and added it to the chart of accounts. As a result, the G/L functioned as both a data warehouse and the financial book of record, a situation that ISA Consulting describes as "the fat G/L."

180 View – The remedy according to the article is “I would want to take to my general ledger only the bare minimum necessary to do my filings -- legal entity and natural account. I'm oversimplifying, because most organizations report by segment, but in essence that's what you need.”

But today you can have your cake and eat it too. There are analysis codes, reporting structures and subledgers that can give you the reporting you need without a fat G/L.

SAP Imposes Single-Tier ERP Support Program

July 16, 2008 from eWeek – “SAP is taking a one-size-fits-all approach to product maintenance, in which customers of all sizes will be switched to an Enterprise Support program regardless of their size or IT budgets.

SAP will start transitioning current customers into Enterprise Support this month at no additional cost, but it will start phasing in pricing for this level of service at the rate of 8 percent per year over the next four years starting in 2009, until it reaches the standard cost of 22 percent of product license fees…

SAP contends that the cost of Enterprise Support is below the average maintenance fees charged by other software companies. Cordrey said that the phased-in price increases will help make Enterprise Support affordable for customers of all sizes.

Enterprise support provides a 24/7 service-level agreement, continuous quality checks, produce support advisories, and advanced support for implementing ERP application enhancements and support packages.”

180 View – We anticipate a backlash on 22% product maintenance from SAP customers. We think that maintenance fees will become one of the more important criteria in selecting a new system. Organizations in the selection process should be evaluating NPV (Net Present Value) over 5 years to make a cost comparison between systems. But make sure that vendors have disclosed all maintenance and support fees, which are sometime charged separately.

What is your ERP solution NOT doing for your organization?

2008 White Paper from Exact Software – “Most organizations have already implemented Enterprise Resource Planning (ERP) to streamline manufacturing, distribution, and financial processes. However, existing ERP technology has left them frustrated in their efforts to extend the same level of efficiency throughout the entire organization. Valuable information about customers, employees, vendor relationships, andmore is typically locked within silos—fromindividual databases to file cabinets to employees’ desktops. Moreover, traditional ERP systems don’t encompass interactions with outside parties such as customers, suppliers, and business partners. While ERP does a fine job of tracking manufacturing, distribution and accounting processes, businesses need to understand the context behind these transactions to truly maximize efficiency and effectiveness…”

180 View – Although the Exact White Paper does indirectly promote their system, it also contains useful information about ERP trends.

IFRS - Time to get moving

June 2008 from CAmagazine – “According to a recent CICA survey the vast majority of Canadian publicly accountable enterprises are closer to the starting gate than to the finish line when it comes to preparing for the transition to international financial reporting standards (IFRS).

The survey was conducted in March with 550 senior Canadian executives who are chartered accountants, almost 300 of whom must report using IFRS by 2011. Only 8% of those executives indicate they have begun the conversion process; while 72% have not yet reached the stage of assessing the impact of IFRS on their operations…”

180 View – Every problem for someone is an opportunity for someone else. You can bet that the consultants, auditors and ERP software vendors will reap IFRS benefits other than the benefits intended.

Microsoft Ships New Release Of Its Dynamics AX Applications

June 4, 2008 from ChannelWeb – “Microsoft has begun shipping Microsoft Dynamics AX 2009, a new release of the vendor's ERP application suite with new globalization functionality and tools for tailoring the applications' interface for specific user roles.

Microsoft previewed Dynamics AX 2009 at the vendor's Convergence conference in March. Dynamics AX is geared toward upper mid-market customers that have operations in multiple locations, particularly those in manufacturing, retail, distribution and professional services...

The software also uses business intelligence technologies to provide users with key performance indicators based on their roles. And Dynamics AX 2009 more closely resembles the familiar Microsoft Office...

Also offered in Dynamics AX 2009 is a new compliance center that provides a single view of internal controls, KPIs and other information needed to comply with company policies, local legislation in 36 countries and such regulations as Sarbanes-Oxley. The system also incorporates Microsoft's Windows Workflow Foundation technology for documenting workflows -- expense report management, for example -- and creating an audit trail. The software also provides more support for companies that operate multiple sites within a single country and across multiple countries."

180 View – We think that existing users will be eager to upgrade, and the new version will give SAP and Oracle a run for their money in the upper end of the mid market.

NetSuite Eyes Midsize Manufacturers

June 12, 2008 from eWeek – “Called NetSuite for Manufacturers, the package is part of NetSuite’s effort to compete with SAP for small and midsize companies in vertical markets.

The time is right for NetSuite to release this package, said Mini Peiris, NetSuite’s vice president of product marketing, because SAP doesn’t have a manufacturing suite that is scaled for the budgets of most midsize manufacturers.”

180 View – NetSuite is on a roll. We have not seen their manufacturing suite yet, but anticipate that it will appeal to light manufacturers. Sounds like another good move by NetSuite.

You’re Not Tiger Woods!

March 26, 2008 from AMR Research – “What do software and golf have in common? A lot, actually…Companies can buy all the enterprise software they want, but unless their companies are performing well to begin with, as Tiger Woods is, that software isn’t going to help a whole lot. To most companies, these investments are a cost without an ROI...”

180 View – The article does make a few good points as to why ERP systems fail to deliver ROI and is interesting. However, it’s not clear whether the conclusions drawn can be generalized based on the surveys conducted. Were the surveys for organizations spending millions of dollars or done 5 years ago or for companies with complex processes not found in a typical survey?

Another problem is the suggestion to improve the operational efficiency of the business processes before purchasing new software otherwise you will just have an automated mess. The implication is that organizations should re-engineer their business processes before implementing a new system. This is bad advice for most companies. You could develop the best processes and find that the costs of their implementation would be prohibitively expensive. Why not leverage the business processes already implemented by the ERP vendors than start from scratch? Why re-invent the wheel every time? There could be a few unique processes that make an organization successful, which may require some new processes, but there is a lot of similarity between companies in the basics.

BlackBerry gets new CRM goodies thanks to RIM-SAP alliance

May 5, 2008 from IT Business.ca – “SAP and Research in Motion have teamed up to bring SAP's back-end business applications, beginning with CRM, to BlackBerry devices… SAP's CRM is the first application that will run natively on the BlackBerry, but eventually the companies plan to build mobile versions of SAP's applications -- including ERP (enterprise resource planning) and supply chain -- for BlackBerry devices, said Bill McDermott, president and CEO of SAP Americas, Asia Pacific and Japan.”

180 View – ERP in the palm of your hand with access anywhere anytime sounds good to us. The only concern is ERP will need to be dummied down to make it easy.

Five things to know before committing to SAP

May 8, 2008 from itWorld Canada – “Installing SAP applications is not easy. Employees who are capable of deploying and maintaining SAP software are in extremely valuable and practically form a whole profession by themselves.

SAP, which built its reputation with ERP software, is rarely chosen by enterprises for one-off applications, AMR Research analyst Jim Shepherd notes in a report this month titled "The five SAP strategies that you need to understand." "For huge organizations, this is typically a multiyear, multimillion-dollar effort to transform the business," he writes. Unfortunately, executives often pay little attention to SAP installations after they are deployed, he adds. That's a big mistake. Let's take a look at the five SAP strategies Shepherd details in his report, and how they affect your technology decisions…”

180 View – Despite bad press, SAP keeps on truckin. The thing is they had the vision and ability in early ERP days to build systems that would work across large organizations with complex business and infrastructure. Decision makers are risk adverse and think that if it works for the best companies (as the SAP ad says), then it will work for me. Another compelling reason to go to SAP is that the most well known and trusted consulting and accounting firms were on board and would help with the implementation.

SAP won the first ERP War fought over automating business across departments, Client/Server technology, and support for multiple databases and operating systems. We are now in the midst of the second ERP War being fought in the trenches of ease of use, web based architecture, SaaS, embedded BI and CRM, customization outside of source code and integration tools.

Integration Woes

April 2008 from CAmagazine and written by Michael Burns – “Integration still is the No. 1 problem facing many organizations that require more than one internal system…”

Five misconceptions about ERP

April 2008 from Manufacturing Automation and written by Michael Burns – “There are so many misconceptions about ERP, it’s a wonder that the acronym has not been replaced. Are you guilty of harbouring one of those misconceptions?”

Leading waste hauler sues SAP claiming ERP rollout a 'complete failure'

March 27, 2008 from ITBusiness.ca – “The trash disposal giant, Waste Management is suing SAP over an ERP implementation it dubs "a complete failure." In its court complaint, Waste Management said senior SAP executives, including SAP Americas' president and CEO, Bill McDermott, participated in the "rigged and manipulated" demos.”

180 View – It’s hard to believe that SAP would intentionally rig or manipulate a demo. A canned demo is apparent if you are asking questions. The demonstrator will be unable to show anything other than what was planned. It’s also unlikely that SAP would have answered specific functionality questions dishonestly. That would be a big problem in court. It would also be a big problem during the selection process if the truth was uncovered as the decision is largely based on trust. But perhaps the requirements were not well defined. And perhaps SAP was not forced to be specific in responding to requirements. A “Yes” can mean many things including out of the box functionality, third party, customization or workaround.

It’s not to say that the vendors are always blameless. We have recently heard a number of horror stories of failed implementations. In these cases, the problem lay with the Value Added Reseller who promised the world and failed to deliver. One question raised by these failures is to what extent the developer should be responsible for the failures of their Value Added Resellers. Many of the developers have certification processes, but it’s no guaranty. We would like to hear your thoughts on this.

SAP and Oracle: Who’s Ready for Small and Medium-Sized Businesses?

June 2007 from Nucleus Research – “Who’s’ delivering the greatest value to the SMB market? An in-depth analysis of 56 customers showed significant differences between the value delivered by SMBs by Oracle and SAP today…”

180 View – If you read the article you will find that 44% of the Oracle respondents would recommend Oracle to their peers. If you think that’s bad, only 10% of SAP customers would recommend SAP. Is SAP getting a bad rap? Perhaps based on a limited survey base or because SAP’s midmarket systems were not included. I (Michael Burns) have used SAP at Ryerson University to demonstrate ERP concepts. I think SAP would overpower most SMB’s. SAP does offer All-in-One, which is preconfigured for a specific industry and would reduce the setup hit. Also SAP has two SMB solutions – SAP Business One and ByDesign.

Managing change the right way

April 2008 from CAmagazine and written by Michael Burns – “Many will tell you change management is critical to the success of any project and especially to the implementation of a new system. In fact, you can find consulting firms that specialize just in change management. But in my view, change management sometimes gets blown out of proportion based on false assumptions about employees…”

Microsoft Convergence

March 24, 2008 based on an interview of Joel Martin, Microsoft ERP Product Manager – a recent Microsoft recruit who was previously an analyst with IDC Canada. Microsoft should be commended on hiring Joel who brings deep knowledge of enterprise software based on his IDC experience. Joel spoke to me about Microsoft’s annual conference for Dynamics partners and customers, Convergence 2008, which was held in Orlando from March 11-14. The conference continues to grow with a record-breaking 9,600 attendees this year.

Scheduled for release in June 2008, Microsoft Dynamics AX 2009 was a hot topic at Convergence 2008. In the new version, Microsoft has added functionality and improved user productivity through new role-tailored interfaces and integration with other Microsoft technologies. The improvements in the user experience brings Dynamics AX 2009 in line with the user interface of the other Dynamics applications. When asked about target markets, Joel described AX as Microsoft’s system for the upper end of the mid market, mid-size and enterprise customers in manufacturing, distribution, professional services, and retail. These organizations typically have multiple sites and are present in more than one country.

Another announcement at Convergence 2008 was that Microsoft will offer a set of migration tools developed to help companies that have outgrown their small business accounting software, such as Intuit’s Quickbooks, and move to Microsoft Dynamics GP within a fixed price and fixed scope.

Joel also confirmed that ‘Project Green’ has now concluded. Going forward, rather than a ‘net new’ product, Microsoft is focusing on incremental advancements on all four Dynamics ERP platforms. One example is the company’s ongoing delivery of role-tailored user interfaces across all application releases.

Using SYSPRO with Microsoft Office

March 25, 2008 based on a demonstration – SYSPRO recently released SYSPRO Office Integration (SOI), which allows anyone in an organization, regardless of whether SYSPRO is installed on their workstation, to access information directly from the SYSPRO database within a Microsoft Office product such as Word or Excel. Once the information has been displayed, it can be inserted directly into the current document either as simple text or as a table. What’s good about this is that it respects the security of the system so that employees can only access what they would be able to access were they within the SYSPRO system. What’s also good about it is that it’s free. Another plus is that SOI uses web services to communicate between Office and SYSPRO’s database, which means that you can work with an Office product at home using an Internet connection and still have access to the SYSPRO data. Even Microsoft, a competitor, thought SOI was good and included it in a presentation made at Microsoft’s recent partner conference. See http://www.microsoft.com/presspass/events/devcon/docs/ODC2008EvidenceDeck.ppt

Midmarket Companies Should Clarify Requirements for Process and Information Support to Avoid ERP System Selection Errors

January 2008 from Gartner Research and available from Epicor - Key Findings of this research include:

• "Midmarket companies are not small and simple. They have some specific and individual strategic processes
• Because of the limitation in IT resources, mid market companies are willing to accept “good enough” functional for their nonstrategic processes"

Gartner recommends that midmarket companies consider the scale of operation and strategic importance in the selection process and not to select systems that are overkill.

180 View – We agree that midmarket companies need to prioritize their requirements but have trouble with using scale and strategic as criteria. Although a midmarket company may not have many transactions related to some processes (IE low scale), the automation of these processes could provide huge benefits. Same goes for strategic – a process may not be strategic, but improving its business process may also provide huge benefits. We think taking a business case approach is the way to prioritize. A critical requirement is one which will allow a company to be significantly more effective (allow the company to achieve its Critical Success Factors – those things it must do well in order to be successful) or significantly more efficient (do more with less resources). As well, we think the same advice goes for large/enterprise organizations to prioritize based on business case.

180 Systems launches three new web sites

ERP Portal

The objective for this site is to provide an unbiased portal to ERP (Enterprise Resource Planning) systems, ERP Value Added Resellers (VAR's) and relevant ERP articles.

CPM/BI Portal

The objective for this site is to provide an unbiased portal to CPM (Corporate Performance Management) and BI (Business Intelligence) systems, CPM/BI Value Added Resellers (VAR's) and relevant CPM/BI articles.

BPI Portal

The objective for this site is to provide an unbiased portal to BPI (Business Process Improvement) systems and relevant articles. BPI is about efficiency and effectiveness as well as about GRC (Governance Risk and Compliance).

Ballmer outlines Microsoft's enterprise ambitions

March 12, 2008 from Computerworld – “CEO Steve Ballmer used his opening keynote at Microsoft Corp.'s Convergence user conference here not only to preview a number of updates to the company's Dynamics line of business software, but also to make a firm declaration of Microsoft's enterprise market plans.

"I still get asked, is Microsoft a serious player in business applications? ... This is mission-critical for us," Ballmer asserted. "The biggest decision I made -- unless we close this Yahoo deal -- was pushing into the business applications area," he said at another point…

One product, Microsoft's Dynamics AX 2009, is set for release in the first half of this year. New features include integration with Microsoft's unified communications platform; a "one-stop shop" for data related to compliance issues; an integrated workflow framework; and broader localization and globalization capabilities, such as support for multiple languages and time zones.”

180 View – It appears that Microsoft AX is getting most of the attention so far at the conference. AX is positioned at the high end of Microsoft ERP systems and now competes head on with SAP and Oracle.

Canadian enterprises go vertical with ERP

March 11 from ComputerWorld Canada – “Canadian customers gathered at Microsoft’s Dynamics-based Convergence conference in Orlando, Florida Tuesday to discuss their recent implementations of Dynamics NAV-based products, which executives said highlighted the popularity of vertical-specific ERP and updating old technology…”

180 View – Initially we did not think that Microsoft would succeed in the ERP marketplace because Microsoft can’t be all things to all people/industries with one system and keep it relatively simple to use. However Microsoft’s strategy to extend the core product to specific industries using their business partners will go a long way to make Microsoft leader of the ERP pack at least for mid market organizations.

Microsoft Dynamics: management changes spell lack of direction

January 17, 2008 from the Enterprise System Spectator – “Jeff Raikes, head of Microsoft's Business Division (which includes its enterprise applications group), is leaving Microsoft. Once again, the future of the Dynamics products (Axapta, Great Plains, Solomon, and Navision) is clouded by leadership issues.

Raikes joined Microsoft in 1981 and has been one of the most influential leaders at the software giant, after Bill Gates and Steve Ballmer. However, enterprise applications have never been his forte. His main responsibility was Microsoft's Office products. The Dynamics products were added to his portfolio in 2005 in a reorganization that pushed aside Doug Burgum, former CEO of Great Plains. Burgum later left Microsoft in 2006.

The current head of the Dynamics group, Kirill Tatarinov, has only been in the job for about seven months. He will now have a new boss in the person of Stephen Elop, who is a Microsoft outsider: he was the former CEO of Macromedia/Adobe and most recently at Juniper Networks.
The main problem I see in the leadership changes at Dynamics is that none of the players since Doug Burgum have any experience whatsoever in enterprise applications. As I've said in the past, selling shrink-wrapped software--whether it be Microsoft's or Adobe's--is a far cry from selling enterprise applications that require months of presales team effort.

It's a shame, because Dynamics is a good set of products. They just need the right people in the lead at Microsoft..."

180 View – We have also seen some very good senior people leave Microsoft. At the end of the day, it’s people that make a product successful. If the mothers and fathers who built the company/system leave, their baby is more likely to have problems of one sort or another.

Top 10 implementation mistakes

January 2008 from CAmagazine and written by Michael Burns – If you read last month’s article (see “Top 10 software selection mistakes,” www.camagazine.com/softwareselection), you will know the software purchase process is riddled with pitfalls. But don’t expect implementation to be any easier. The article discussed the 10 top implementation slip ups you can make.

Oracle's earnings soar

December 20, 2007 from ComputerWorld – “Robust software sales pushed Oracle Corp.'s second-quarter net income up 35% compared with the same period last year, to $1.3 billion (U.S.), or 25 cents per share, the company said Wednesday. Total revenue grew by 28% to $5.3 billion, Oracle said…

CEO Larry Ellison added that Oracle is finding new business by targeting vertical industries that may not be using packaged software like the kind Oracle sells. "Some of these verticals are almost green fields in terms of modern software," he said. The company's president, Charles Phillips, echoed Ellison. "We think we're very early on in this strategy," he said. "We're still selling in the verticals who are building applications. We're trying to convince them to buy packaged applications."

180 View – Good move by Oracle in targeting the verticals. But how do you take an already complex software system, add more functionality and create something that will not be too onerous to implement? As well, verticals require more than just software; the implementation team also requires industry expertise.

Top 10 software selection mistakes

December 2007 from CAmagazine and written by Michael Burns – “For many companies, replacing a system is like going to the dentist: necessary, but potentially painful. Often, you can stave off the need for replacement with preventive action such as upgrades. But if the system is no longer supported, or if there has been a change in the business that renders it inadequate, you have no choice but to go to market. And when you do, it’s easy to make big mistakes. Here are the biggest ones…”

Software Evaluation and Software Selection

December 17 from TEC – “It is daunting for corporate IT buyers to discern the true capabilities, strengths, and weaknesses of a given enterprise application suite. Buyers’ project teams are inundated with marketing information from vendors struggling to differentiate themselves. Functional cross-over and software integration have caused product overlap and a lot of confusion in the market. Mergers and acquisitions are also creating problems, as companies cannibalize the competition to gain access to a client base or functionality, which may result in solution overlap or forced migration. As a result, organizations are surrounded by ambiguity when making their implementation decisions.

Evaluating and selecting enterprise software is a complex process characterized by both striking potential and dramatic risks. Executed properly, this process and its outcomes can deliver exceptional benefits. If executed poorly, however, the results can range from disappointing to devastating. Organizations that select the wrong hardware, middleware, or software will learn the hard way that the money they’ve lost is a result of inadequate vendor information and evaluation processes. Such losses are increasingly apparent within price-sensitive, small and medium enterprises, which require accurate IT information to be collected quickly and cost-effectively during the software evaluation process. Vendor’s hype, consultants’ conflicts of interest, user doubt, tediously long selection processes, and unclear decision rationale are some of the unfortunate watchwords for most selection processes.”

180 View – The article is clearly self serving to TEC in that they offer a potential solution to avoid the problems that they describe in the article. “TEC’s evaluation centers (online decision support tool) support the analysis and comparison of thousands of criteria on hundreds of vendor solutions that have been vetted by TEC’s analysts, using industry standards and benchmarks. Because vendors respond to TEC’s RFIs without a project in mind, the responses are more typical of their capabilities.” TEC also lets users “prioritize their needs in a manner that gives greater priority to criteria that are considered more important.”

You should know that TEC is in some ways a competitor of 180 Systems. We have not spoken to any of their customers about the usefulness of their services or used it ourselves. Our first impressions are that we find it hard to believe that they have vetted thousands of criteria on hundreds of vendors. Second we don’t think that the vendor’s responses will be more typical of their capabilities because they are responding to TEC's RFI. Rather, we think the vendor will be more forthright when respondong directly to a customer RFP if the questions are specific. The vendor must be honest or trust will be lost, and the decision in the end is mostly about trust. We also note that their priority system is at a very high level – for example financial systems rather than at a more detailed level, which we believe could lead to misleading results. Nevertheless, we recognize that TEC may have a useful role to play in a selection project even if it means that a potential client would use their services rather than the services of 180 Systems.

Lately we have been thinking that we should also provide a similar service to TEC based on our extensive knowledge base. We would like to hear from our readers about their experience with TEC and whether we should offer something similar.

SAP Buys Business Objects for $6.78 Billion

October 8, 2007 from PC World – “The acquisition is intended partly to help SAP reach an ambitious goal of doubling its customer base to 100,000 by 2010. Schwarz said about 40 percent of Business Objects' customers are using SAP today. Business Objects has roughly 45,000 customers, suggesting SAP will gain about 27,000 new customers through the deal.

SAP has made some progress with its own business intelligence software, including an analytics engine called BI Accelerator. But Business Objects excels in ease of use and user interface technologies, which will become increasingly important to BI in the future, IDC's Lykkegaard said.

"Business intelligence in the future will increasingly become a user interface for applications," he said. "You'll do your analysis from the BI interface and then dive directly into the transactional data you want to examine."

180 View – For those of you who don’t know Business Objects, you do probably know Crystal Reports, which was acquired by Business Objects in 2003. We think it’s going to be a hard swallow by SAP in that Business Objects has multiple products that overlap not only themselves but also with SAP’s existing business intelligence tools. Also difficult will be supporting all the competing ERP vendors that rely on Crystal reports.

Caveat Emptor: The Impact of Vendor Consolidation on Business (Corporate) Performance Management Buyers

October 17, 2007 from Business Intelligence Network – “In the enterprise market, end users now have fewer choices. If you wish to purchase from your preferred database or ERP vendor, Oracle, SAP, Microsoft, Infor and mid-market focused Exact Software each have a value proposition and products worthy of consideration. The companies recently acquired by these vendors will each attempt to maintain their “open” status regarding connectivity to other transactional systems, but depending on the company, that may get more difficult over time. If you wish to buy your performance management and business intelligence applications from a source database independent vendor, Cognos, SAS, and Clarity Systems are the leaders left standing – for now. In addition, for mid-market to small businesses, there are still plenty of choices. Less well known, but still enterprise-strength KCI has successful clients in the upper end of mid-market to enterprise level. Budgeting upstart Adaptive Planning has stirred up the mid-market with their easy-to-use, hosted planning application, and have started to move up to larger enterprise clients. Centage, Prophix, Alight Planning, Host Analytics and Satori Group are all slugging it out in the mid-market and SMB category.”

180 View – The article refers to Business Performance Management, but we think it’s more often called Corporate Performance Management (CPM). CPM typically consists of strategic planning, scorecarding, budgeting and forecasting, consolidation and business intelligence functionality. It’s a logical progression for ERP vendors to extend ERP to include CPM. It’s happened with the Tier One ERP systems with SAP’s purchase of OutlookSoft and Business Objects, and with Oracle’s purchase of Hyperion. And it’s also happening with mid market ERP systems with Exact’s purchase of Longview. The trend will clearly continue.

Global ERP: You can get there from here, but should you?

October 15, 2007 from Computerworld – “One of the biggest pieces of the change management puzzle is gaining buy-in from local business leaders accustomed to suites tailor-made to support their unique business processes, says Forrester analyst Paul Hamerman. “There’s often reluctance among business units to give up the systems they use,” he says."

180 View – The same problem exists for small companies with different operating groups, each with their own system. Good luck trying to convince these operating groups that standardization is the way to go. They won’t care if the corporate CFO is able to generate financial statements in fewer days. They won’t care if the IT group can save money. They only care about their business and for what they are accountable.

Nine things you need to know about SaaS

October 15, 2007 from Computerworld – “It's an alternative to in-house operations and outsourcing that IT shops can and should use to deliver services and improve their infrastructure in a cost-effective way. SaaS can offer high-quality services at a lower cost than other alternatives, and it's particularly good for supporting mobile and geographically disbursed populations, whether they are sales staffers, telecommuters, customers or business partners worldwide. And in its latest iteration, says West, the technology is offered by leading SaaS vendors as complete platforms unifying normally stovepiped sets of services, supporting underlying data capture and analysis.”

180 View – It seems to us that only a small percentage of enterprise systems are available from SaaS vendors today. An educated guess would be about 5%. But that number seems to be rising every day. In a few years, we predict the number to be over 50%.

Enterprise software survey 2007

September 2007 from CAmagazine and written by Michael Burns – “Our annual CAmagazine software survey is back and this year it’s bigger than ever. We combined all our surveys — accounting/ERP, customer relationship management, business intelligence/corporate performance management and professional services automation — into this issue…”

What's happening with Accpac?

September 20, 2007 based on an interview with Laurie Schultz, SVP and GM and Scott Zandbergen, VP – Accpac used to dominate the mid market accounting system market in Canada. Market share has been lost to competitors but Sage is now fighting back. Expect to see marketing campaigns with the themes of “customer for life”, “suites” and “simplification”. The customer for life idea is that organizations that outgrow Simply Accounting will want to move to Accpac. Merging ERP and CRM is the thinking behind suites. We have also noted a growing trend towards end to end systems where the back office (ERP or Accounting) is tightly integrated with the front office (CRM). Simplification will occur not only in ease of use in the application but also in the selling of the system making it easier to purchase. We think competition is good for all of us, so we look forward to hearing more from Accpac.

Startup software maker Netbooks takes on Intuit

September 5, 2007 from Yahoo News – “Privately held NetBooks Inc started selling a line of computer programs designed to help run small businesses on Wednesday, taking on QuickBooks provider Intuit Inc and NetSuite Inc, which has filed to go public. Netbooks' software is accessed via Web browsers and hosted on servers maintained by the company, which is based in Rohnert Park, California. It also said it raised $6.9 million in capital from CMEA Ventures, Integral Capital and other advisors. NetBooks provides accounting software along with programs for managing sales and marketing, inventory, purchasing, shipping and manufacturing. The company was founded by Ridgely Evers, who helped lead development of Intuit's QuickBooks accounting software.”

180 View – We have not seen this system yet, but it could fill a void. QuickBooks and Simply Accounting were not developed for web access. NetSuite was developed for web access but now targets mid market companies.

All Eyes on NetSuite: IPO and iPhone’s First On-Demand Business App

July 13, 2007 from AMR Research and written by Bruce Richardson – “NetSuite issued a press release on July 2 announcing it had filed a Form S-1 registration statement as a precursor to its initial public offering (IPO) expected late summer… Coincidentally, on the same day NetSuite unveiled its SuitePhone. Effective immediately, all NetSuite software is now accessible on Apple’s new iPhone as well as all Mac products…”

Bruce’s comments on the IPO and first impression of the new SuitePhone include:

• Oracle’s Larry Ellison controls nearly 75% of NetSuite
• NetSuite has accumulated a deficit of $193 million since it started 9 years ago
• The company on a nice ramp to break through the $100M sales barrier by the end of this year.
• Last quarter, NetSuite spent 54% of revenue on sales and marketing and 18% on product development. For the same period last year, it invested 75% in sales and marketing and 24% in development.
• Following Google: NetSuite to sell shares through an auction.
• Bruce predicts that the iPhone will drive demand for mobile business applications

180 View - Bruce's “First Thing Monday”article arrives by email and we are unable to provide you with a direct link. We suggest you subscribe to "First Thing Monday", a free newsletter from AMR.

Sentai

June 15, 2007 based on a 180 Systems interview with Sentai – Things are generally improving in the ERP marketplace, but according to Sentai, they are on a roll. I asked why. The biggest change was a rewrite to their user interface. Rather than the old character based/Windows screen scraper look, they now have a thin client that looks like Windows and runs under both Windows and Linux now and possibly other operating systems later. Thin client means that only the user interface commands move from workstation to server, which dramatically improves remote performance.

Sentai has also embedded Cognos reporting, OLAP (On line Analytical Processing using PowerPlay) and portal services into their system. This overcomes the traditional problem facing many ERP systems in being data rich and information poor. They have also embedded many of the key elements of CRM in their system, which overcomes the problem of working with third party systems that are not integrated.

Sentai focuses on distribution companies. They claim that they can beat the competition on handling distributors with large volumes of data – not because of the underlying database but because of their thin client and their handling of mass price and cost changes and ability to automate vendor price uploads. Sentai will also appeal to distributors that are dragged into supporting EDI as they make it affordable with a small upfront charge for each trading partner and a small fee for each transaction. Sentai also includes their own integrated eCommerce and warehouse management systems.

Sentai is doing well in Edmonton, Florida and Cuba. We predict that Sentai will expand their geography as the word gets out about their capabilities.

40 Fastest-Growing Software Companies

June 11, 2007 from DevSource – “The biggest public software companies are increasingly relying on acquisitions for growth, as they pick off weaker competitors or startup companies that have decided not to go it alone.

Most software companies that grew more than 20% last year were helped by an acquisition, a Baseline survey shows. The acquisition trend is putting more control, and power, in the hands of a few relatively well-known companies.

For instance, Oracle has spent well in excess of $20 billion making acquisitions over the last few years, from its $11.1 billion buyout of PeopleSoft to its $6.1 billion pickup of customer relationship management giant Siebel Systems. Oracle has continued its acquisition binge this year, buying Hyperion, a maker of business intelligence software, for more than $3 billion in April...

From a profit perspective, too, the industry looks healthy. Aggregate profit at the 49 biggest software companies last year was $22.4 billion, for a profit margin of 20%. But the profitability was concentrated in the three biggest companies, Microsoft, Oracle and SAP.

Microsoft alone which has typically emphasized organic growth over acquisitions accounted for 40% of the revenue and 56% of the profits among the companies we considered…

Baseline's ranking of the 40 fastest growing software companies—those with sales of at least $150 million in 2005 — is intended to provide a health check on the enterprise software industry. What you won't find: companies that aren't purely in software such as IBM or Sun. Or for that matter, Google is not included because it derives most of its revenue from consumer services.”

180 View – Take a look at the list of the fastest growing companies. Many of them you will not recognize. The software business can be extremely lucrative not just for the huge firms like Microsoft, SAP and Oracle, but also for the smaller ones that pick a niche and run with it.

Infor Moves Into Government With Hansen Acquisition

May 16, 2007 from AMR Research – “Given Infor’s current size and desire to grow, it was only a matter of time until it looked to nonmanufacturing industries. For its first several years, Infor targeted the manufacturing and distribution industries, buying software companies with a strong presence in the industry: Geac, Lilly, and Mapics. It then turned to distribution industries with the daly.commerce, NxTrend, and Aperum acquisitions. The company supplemented all these purchases with additional supply chain functionality, such as demand planning from Mercia. Then came the acquisition of SSA, which doubled Infor’s size.

The most recent acquisitions have been for products and customer bases that are strong within the service industry segments: enterprise asset management (EAM) vendor Datastream, financials and performance management provider Extensity, and workforce management application vendor Workbrain. With Hansen, Infor gets an extensive set of public entity operations capabilities for managing building permits, business licenses, parks and recreation, water distribution, and sewerage.”

180 View - When we seek solutions from Infor for our manufacturing clients, it’s difficult to know which one is the best suited. At least when it comes to public sector operations, it won’t be confusing which of Infor’s products to consider.

NetSuite's kung fu fighting talk

June 20, 2007 from mycustomer.com – “Last year NetSuite upped its marketing ante with a witty mickey take of Star Wars – featuring the evil Darth New Kid who bore an uncanny resemblance to rival Marc Benioff of Salesforce.com. This week’s launch of NetSuite 2007 in London saw another entertainment theme in play, this time the 1970s US TV series Kung Fu…

This was the first time that a NetSuite release had premiered outside of the US. The new version has three main planks: Easy ERP, Global CRM and SuiteAnalytics. "Easy ERP is something of an oxymoron,” said Zach Nelson. “We’ve introduced Netsuite assistants for set up, data import, matrix items, forms, e-commerce set up and e-commerce content.”

"To date there has been no real global control over CRM. What multinationals need is to manage subsidiaries of firms in a single instance of NetSuite. You can have hierarchical view of the organisation in real time. We also have a single data model so we have single data warehouse sitting under NetSuite and added more and more layers of BI functionality to the products. Our first dashboard had pre-canned KPIs. In 2004 we let third party BI tools link to it. In 2005, we added on-demand dashboard alerts. Now we’re announcing ability to embed any formula you like into the applications so that you can do excel–like calculations."

180 View – At the launch, Zach apparently took on some of his rivals with “SAP is characterised by lot of power and not so much ease,” and “On the other hand, Salesforce.com is ease without power.” And “The Sage business model is to buy lots of products, then live on the maintenance revenue from them.” As we didn’t attend the launch, we don’t know exactly what was said but you can bet Zach either had great things to say or did not say anything at all about Oracle considering Larry Ellison is the CEO of Oracle and a majority owner of NetSuite.

Exact Software

May 18, 2007 - based on an interview conducted by Michael Burns of 180 Systems – In the recent past, Exact Software focused their marketing efforts on Globe Enterprise (ERP) and e-Synergy (CRM). Their other products including Macola and JobBOSS were not getting much attention. Now Macola is being promoted and enhanced as the solution for discrete manufacturing companies; JobBoss as the solution for Tool & Die and Job Shops and Globe Enterprise for project centric companies.

Exact Software like some of the other ERP vendors has realized that Business Intelligence has become a major requirement for customers. Business Intelligence means turning data into information useful to make decisions. There is a spectrum of tools but top of the list are dashboards and Online Analytical Processing (OLAP). Exact Software now includes some OLAP features out of the box. Power users can get more functionality with additional investment. Another trend is opening up ERP functionality over the internet through portals. Exact Software has built many portals for their clients including employee self service, requisitioning and compliance tools and it’s available at a compelling $100 per user

Infor's ambitions

May 11, 2007 from ITBusiness.ca – “Infor Global Solutions was only founded about five years ago by a group of investors from Golden Gate Capital, but it has used that time to purchase close to 20 smaller companies. This includes the takeover last August of SSA Global, which owned the Baan product line, for US$1.4 billion, and more recently Toronto's Workbrain, a human capital management company, for about US$227 million. Infor now claims more than 70,000 customers, 8,100 employees and US$2.1 billion in annual revenues, putting it in third place in the overall business applications market...

Instead, Infor is developing what Frichol called Open SOA, a services-oriented architecture that will provide interoperability between Infor's products and those of other vendors…”

“Customers don't want to hear there's a migration strategy, a convergence strategy or those types of things. They want to continue with their product line essentially unchanged,” Frichol said. “We are not attempting to smash the products together into a single solution set.”

180 View – Infor also includes Visual Manufacturing, Syteline, Mapics, Systems Union, GEAC and many other systems. Infor speaks of continuing to invest in these systems and building links between the systems so that they can work together and complement each other. However, there is a lot of overlap between systems, and Infor will need to better explain their product roadmap.

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.

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.

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.

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.

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.

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."

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.

Standardization of infrastructure and business process

March 13, 2006 from BPM Today - "Anderson explains that back in 2004 the pressure was on to get economies of scale, and to drive efficiencies and new business opportunities -- which meant real-time information and automation. But that in turn required visibility and standardization -- bringing data together and making it accessible. And to do that, a well-managed and cohesive I.T. and network infrastructure was needed.

"We didn't have that," he says. "From PCs to the ERP system, we needed to do some serious work to get the infrastructure sorted out, settled and stable. So that's what we concentrated on first."...

Attention turned to the business systems themselves -- at the time, a mix of systems across its sites, including BPCS, MTMS, Syspro, and Compass. "They're all great systems, but the company had given the local businesses autonomy, so there was no consistency in set-up or business processes, and a high degree of bespoke software. It had all been done to provide the businesses with what they believed they needed at the time, but it meant the organization as a whole didn't have the visibility it needed. "Also, if we stayed with it, we would be forced to follow expensive upgrade paths that would involve considerable rework simply to replicate existing functionality. We would have spent over £1 million (US$1.7 million) over two years just to stand still." Clearly, not good news, and there was another classic issue. "People were using departmental spreadsheets and workarounds. They were doing a great job, but it's a lot of effort to get information that's out of date."

The bottom line: "We had to standardize: We wanted to maximize consistency and minimize support costs," says Anderson. "We looked at our existing spread of ERP systems and they're all mid-tier applications, and we're a mid tier company, but although they were all doing an OK job, none would do everything we wanted off the shelf."

So he looked at the big guns. "We had the perception that the likes of Oracle and SAP would be too expensive. But we established very quickly that there's a lot more to be had out of a Tier One application suite." He also found that price and the software vendors' focus were not as he'd thought and eventually selected Oracle."

180 View - It's the classic Best of Breed vs ERP debate. In the case of the article being discussed, it sounde like the business processes were similar enough to have 1 system do it all. Although the article says the company being discussed is a "mid tier company", a little research showed that the "APi Group employs over 5,000 people and performs annual revenues in excess of $900 million."