Who's Who? Sorting Out the e-Logistics Players Part 3: New Solutions 0 comments

The fundamental promise of e-commerce is to empower the customer. In transportation, logistics and other "behind the scenes" aspects of e-commerce, new services and capabilities are beginning to fulfill this promise, not just for Fortune 500 companies but for small and medium firms and for those with specialized requirements as well. These solutions range from "e-gistics" auctions and marketplaces, through software and support tools available over the Internet, including a whole new category of Internet Logistics Operators.

This article outlines some of the latest developments in this fast-moving field, and provides background and context to help companies better understand the alternatives available to them today and identify which approaches provide them the greatest value.

Armed with just a mouse and a web browser, both businesses and consumers can now access an almost unlimited choice of products and services, compare prices and features on a real time basis, and execute transactions nearly instantaneously. In many industries, this increased competition has helped squeeze out inefficiencies, lowered prices, and in effect leveled the playing field for the "little guys" - medium and small businesses and individual consumers - who did not previously have the time or resources to manually access the full potential of the marketplace. Now they can use the Internet to more effectively "pick and choose" what best meets their needs.

Sure, you've sold it, but now you have to ship and deliver it. What services and methodologies are available to help shippers meet these e-commerce challenges?

Fortune 500 corporations have long employed a variety of approaches to help them gain a competitive advantage in managing their supply chains and satisfying customer needs. But many of the "traditional" approaches are expensive and simply out of reach for most companies. What's new is that e-commerce is bringing transportation and logistics services and capabilities that are available to everyone - big and small - and are thus helping to fulfill the real promise of e-commerce.

Transactional Approaches:

As in most other segments of the economy, in transportation and logistics numerous start-up companies have emerged to improve the process of bringing buyers and sellers together to execute individual transactions. Compared to the contractual solutions covered in Part Two, these involve no long-term commitments and are both low cost and widely available for companies of any shape and size to use.

While some of these marketplace services are owned or backed by transportation carriers, the expectation is that they do not actually transport any products themselves. Rather they are intermediaries and information sources that help improve the competitiveness of the market. Many also provide supporting services and software tools that help users better manage their transportation and logistics activities - as a substitute to some extent for the more comprehensive IT systems discussed in Part Two.

The transactional support available through "e-gistics" intermediaries falls into three primary types:

• Freight exchanges and auctions. Historically if you needed to ship product from your New Jersey location to a new customer in Oregon, you had to identify carriers that serve that market, contact them each by phone to outline your needs, wait for price and service quotations, check their references, and then select one of them to handle your shipment - a time consuming, often manual process. Many individual carriers have established their own websites, of course, but accessing them one at a time is a time consuming process and does nothing to increase the competitiveness of the overall marketplace. Using transportation.com, GoCargo.com or many others you can now enter your requirements on-line and then receive price quotations from a number of participating carriers simultaneously, make your selection, and issue the purchase order, all on a quick and easy electronic basis.
  
  
• Transportation and logistics marketplaces and aggregators. These approaches to e-commerce provide improvements in transportation and logistics by offering easy access, all in one place, for viewing and using pre-determined rates from a variety of carriers. Rather than using a real-time approach to decide which carrier will get which shipment and at which price, and all varying from day to day, services such as National Transportation Exchange and freightquote.com facilitate comparison shopping and the ongoing selection and use of carriers at pre-set prices.
  
  
• Process improvement technology providers. In some cases, versions of the e-commerce information technology systems and tools traditionally used by Fortune 500 companies are being developed for use by smaller and more specialized companies. New entrants such as Arzoon and Celarix are building "virtual shipping departments" through the Internet, with "best practices" processes and capabilities made available right on the computer desktops of customers. These new offerings can help companies with a wide range of day-to-day "best practices" activities and decision-making to improve the transportation and logistics process, and in many cases include the auctions or marketplace functions outlined above.

Given the highly fragmented nature of the transportation marketplace, these "market making" and process improvement mechanisms offer significant potential for increasing efficiency and reducing costs. By accessing a wider range of carriers and involving a broader set of customers, and then establishing pricing on a more competitive basis - they may ultimately perhaps fulfill the e-commerce promise of empowering the customer.

In order to be successful, however, they will need to attract a high volume of carriers and shippers, so that they provide a competitive marketplace that really results in lower pricing and has broad geographic coverage. In addition, since these services do not handle the actual freight or take responsibility for the shipment, separate follow ups are needed with each carrier covering the myriad of issues associated with billing, insurance, damage, shipment status visibility, proof of delivery, and others. In addition, they do not handle the other services that a shipper may need to be fully successful - such as warehousing space and inventory management, and specialized order fulfillment activities.

Internet Logistics Operators (ILOs) - a new category of services:

In contrast to the intermediaries that facilitate improvements in transportation and logistics processes, a new category is emerging that directly offers a broad range of services transportation and logistics services. These Internet Logistics Operators (ILOs), as they are beginning to be called, provide one-stop shopping for customers who want the promise of e-commerce - in a simple and comprehensive way and dealing directly with a single provider that takes responsibility for meeting their shipping, warehousing and fulfillment needs.

Internet Logistics Operators provide a unique combination: a physical network of appropriate carriers and distribution centers to move and handle shipments, personnel and expertise to optimize the process and achieve high service levels and efficient operations, and the software and other tools to handle the real-time flow of information on the status of orders and shipments - all behind the scenes and transparent to the user.

• Less-Than-truckLoad (LTL) shipments for smaller and medium sized shippers: These shippers face dual challenges of finding ways to reduce their transportation costs in order to stay competitive, and finding providers of warehousing, order fulfillment and other activities on an as-needed basis for particular situations that they may face. To meet these needs, freightPro.com has recently been launched, offering an innovative, flexible, and low-cost solution. By creating a network of carriers to move shipments across the country and a set of local providers to handle pick-up, delivery and warehousing services in each metropolitan area, freightPro.com has created a virtual "core carrier" program - available on a transaction-by-transaction basis, with no assets or long-term contracting requirements.
  
  By using software tools and industry expertise to consolidate shipments from different customers and move them efficiently from origin to destination, freightPro.com can typically obtain savings of 15-20% for its customers, while taking full responsibility at every stage in the process. When warehousing or other services are needed - for seasonal or one-time promotional situations for example - freightPro.com can use its network to seamlessly provide these added services as well.
  
  
• Time-critical fulfillment and specialized services: Increasingly, companies need to respond faster and faster to changes in their own operations, developments at their customers, and changes in the overall supply chain. When spare parts are needed to prevent a manufacturing plant from shutting down, for example, overnight air and other "regular" services simply are not adequate. To meet these needs, Sameday.com has recently been launched, offering a unique set of high value, high-speed fulfillment, and related services. Using a network of distribution centers carefully positioned to deal with the traffic congestion in metropolitan areas today, and backed by sophisticated software to monitor and manage the flow of information and inventory between suppliers and their customers, Sameday.com is providing significant value in fulfillment, inventory management, returns and repairs processing, and related functions.
  
  Companies in high tech industries such as computers, electronics, aerospace, and telecommunications, as well as major brick-and-mortar retailers of consumer products and related merchandise, stand to benefit especially from these services. With flexible warehouse configurations, high service standards, and a strong backbone of information technology, Sameday.com can address the requirements for the fast-moving, high value, or fragile component of transportation and logistics that just about every shipper faces today.

In both of these situations, the "e-gistics" companies themselves are the providers that take direct responsibility for shipping product and managing inventory, rather than acting simply as intermediaries. In addition to offering their services to Fortune 500 and other large companies, they are bringing to smaller shippers and special situations the pricing and capabilities previously available only to the big boys - and doing it in a way that is flexible and low cost for the customer.

There is a wide range of new "e-gistics" players emerging to address today's transportation and logistics challenges, and different solutions will be appropriate for different kinds of situations. Sure, you've sold it, but now you have to ship and deliver it. The new "e-gistics" services that best fulfill the promise of e-commerce will be those that both directly provide transportation and logistics services - and responsibility - and do it in a low cost, flexible, "virtual" way matched to the individual transactions that you face every day.

Will Adonix Provide A Warmer Home To CIMPRO? 0 comments

In the year marked by depressing news coming from almost all corners of the world economy and particularly from the tech sector, which has also resulted in a recent flurry of acquisitions (often for ridiculously low prices), it may be refreshing to hear an upbeat strategy, including the Xmas-shopping-like acquisition, coming from still a relatively less known, but certainly up-and-coming vendor.

On December 19, Adonix (www.adonix.com), a privately held French enterprise applications provider for mid-sized mixed-mode manufacturing and distribution companies, announced that it has acquired CIMPRO, a Tarrytown, NY subsidiary of MAI Systems Corporation (NASDAQ: NOW), a provider of business solutions primarily to the hospitality industry. Adonix will reportedly assume all CIMPRO employees, net assets, technology (including flagship CIMPRO V process ERP product), and contractual rights to all 250 customers and business partners. The vendor believes the combination of its X3 flagship ERP solution (primarily for discrete manufacturers) and CIMPRO V will bring to the legacy replacement market a powerful offering tailored for specific process industries such as the chemical, pharmaceutical and food & beverage sectors. CIMPRO, standing for Computer Integrated Manufacturing for Process, is specifically designed to address the needs of these process industries.

In the short term, Adonix plans to utilize the CIMPRO formula management engine and combine it with the rest of Adonix X3 and release it as an Adonix CIMPRO process manufacturing solution, with the availability envisioned for the end of Q2 2003. The vendor believes this will overcome some of the challenges that have long limited the marketability of the previous CIMPRO products. Long-term, however, the vendor intends to integrate CIMPRO V into the existing Adonix X3 framework, albeit with no firm timeframe yet. In the meantime, Adonix assures those CIMPRO customers who would like to just make the technical leap from the antiquated CIMPRO Classic to CIMPRO V version will still have the option to do so. The vendor is also reportedly enhancing the Adonix CIMPRO maintenance contract to assist those who would like to make the leap from older CIMPRO systems to a newer option.

The CIMPRO purchase closely follows Adonix' purchase of Groupe ABEL in September (see Adonix Grows Roots Against The Odds ), the most recent in a series of acquisitions that began seven years ago. Adonix has since acquired four more software vendors for their assets and expertise and has melded the best of their capabilities into an integrated enterprise software framework for mid-market companies.

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Adonix recognizes that mid-market companies require fully integrated enterprise-wide software solutions that provide both breadth and depth of functionality on a modern technical platform and at an affordable price. Thus, to complement its initial solution, which focused mainly on finance/accounting and distribution for the lower-end of the mid-market, Adonix has acquired a number of companies during the last few years. In 1998, it acquired the software company GSI Transcomm, a US provider of distribution and financial applications called TOLAS, which had offices both in Pittsburgh and Tarrytown.

Adonix started rewriting its solution in 1997 after the first major acquisition (Prodstar, a French manufacturing ERP provider) and released the first version of Adonix X3 in late 1999. Known as a product development company, Adonix has recently kept on delivering within the X3 versions 1.3 and 1.34 the integrated CRM modules and native Web extensions. With this acquisition and the ones that preceded it � i.e., Prodstar, TOLAS, Geode CLE128 (warehouse management system) and ABEL (fixed assets management product) -- Adonix might be positioned as an attractive alternative for mid-sized companies.

On the same day, Adonix announced that it has made significant enhancements to Adonix X3 that bolster its warehouse management system (WMS) and data collection capabilities. Adonix X3's new WMS features include:

* Directed Put-away to appropriate storage locations by radio-frequency (RF) scanning according to factors such as item velocity, weight, dimensions and consolidation rules

* Palletized Picking and Consolidated Shipping, including RF verification and capture of pallet and shipment identifications

* Pick Planning and Scheduling, including directed picking for single shipments or groups of shipments, based on warehouse location

* Warehouse Labor Tracking to provide labor efficiency and utilization reporting to management

This comes at the heels of Adonix' recent rollout of a new data collection module intended to help warehouse and shop floor operations by communicating with manufacturing, distribution and accounting functions. Adonix Data Collection gathers data directly from automated input devices across operational areas, verifies its accuracy, and passes data to Adonix X3 for immediate update. It also controls all prompts on collection devices, manages the entire network of devices, and ensures that data is saved during system downtime. Moreover, in addition to providing traditional extended-ERP functionality within the X3 software, integrated data collection, barcode label management, and full implementation services, Adonix also provides data collection equipment manufactured by leading hardware vendors including Intermec.

Three-tiered Implementation Program:Last but not least, also on November 19, Adonix unveiled a new three-tiered implementation program aimed at helping mid-sized companies fully equip their business with ERP software in a timeframe that reportedly exceeds the industry benchmarks. Depending on the size and the structure of the organization, and on its internal resources, Adonix touts it can implement an ERP program in as little as two to three months. Possibly emulating the familiar mass customization terminology of recently quite successful coffee franchises (e.g., Starbucks), Adonix now offers three distinct implementation flavors that vary in services based on the resources available and the desired timeframe. These three models include:

* Adonix eXpresso is for small-to-midsize clients with up to 25 concurrent users that require standard functionality and a fast implementation timeframe. Implementations can be completed in as little as two to three months.

* Adonix Cappuccino is for companies with 25 to 75 concurrent users that require mostly standard ERP functionality but some additional flexibility in varying the software parameters. Cappuccino implementations can be completed in as little as four to six months.

* Adonix Latte is designed for larger midsized clients with more than 75 concurrent users that have more sophisticated functional and technical requirements and whose implementation requires a significant amount of project management. Implementations in this group typically take more than six months.

Adonix X3 can either be implemented as a company-wide business management system or incrementally to support specific business processes or time-phased implementations. While the system provides a variety of parameters that can be set to adapt implementations to the needs of the business without programming changes, best-practice templates are also available to promote rapid, timely implementations.

Will Adonix Provide A Warmer Home To CIMPRO? Part Three: Challenges and User Recommendations 0 comments

In the year marked by depressing news coming from almost all corners of the world economy and particularly from the tech sector, which has also resulted in a recent flurry of acquisitions (often for ridiculously low prices), it may be refreshing to hear an upbeat strategy, including the Xmas-shopping-like acquisition, coming from still a relatively less known, but certainly up-and-coming vendor.

On December 19, Adonix (www.adonix.com), a privately held French enterprise applications provider for mid-sized mixed-mode manufacturing and distribution companies, announced that it has acquired CIMPRO, a Tarrytown, NY subsidiary of MAI Systems Corporation (NASDAQ: NOW), a provider of business solutions primarily to the hospitality industry. Adonix will reportedly assume all CIMPRO employees, net assets, technology (including flagship CIMPRO V process ERP product), and contractual rights to all 250 customers and business partners. The vendor believes the combination of its X3 flagship ERP solution (primarily for discrete manufacturers) and CIMPRO V will bring to the legacy replacement market a powerful offering tailored for specific process industries such as the chemical, pharmaceutical and food & beverage sectors. CIMPRO, standing for Computer Integrated Manufacturing for Process, is specifically designed to address the needs of these process industries.

However, it remains dubious how this acquisition can, at least in a short term, mitigate the fact that CIMPRO exhibits inferior product technology and multi-national capabilities, and that it supports only English. Adonix will also have to demonstrate substantial progress in developing an indirect channel to supplement CIMPRO's meager direct sales and product implementation force, since, without it, its growth and international expansion will be hampered.

Moreover, limited financial resources to adequately fund multiple key strategic initiatives including multiple products' assimilation, brand marketing, undeveloped global channel and brand recognition, and formidable competition within the market of Adonix' future expansion focus (particularly the North American market) are the challenges the company has yet to overcome. The above feat would likely give pause to much more resourceful vendors than Adonix with its estimated ~$80 million in revenues (including the recent acquisitions). Internationalization requires significant investment, and Adonix, with its limited R&D funding compared to the bigger players it will likely compete against, still has a burden of beefing up its channel, possibly with some high-profile partnerships to further back up the above-cited notable momentum.

The company has another predicament to solve in the growing conglomeration of Adonix legacy applications now nearing 7,000 customers, many of whom need to upgrade mainframe applications to newer architectures. Although one may expect a substantial recurring revenue stream or a new license opportunity from this large installed base from, e.g., former Prodstar and ABEL products and older versions of Adonix, and while Adonix is targeting these as well, it is dubious whether the new X3 product can meet the demands of larger corporations among this install base that continue to rely on the legacy applications.

The company will thus have to walk on the tightrope of the obscure balance between functional depth and ease of use. And, its focus on mid-market might not fly with these companies, where it will have to overcome the market perception of a "small unknown ERP vendor". Incidentally, the company has to be careful not to spread its development resources too thin trying to maintain its multiple platform product configurations, which roster will be even more increased with CIMPRO's esoteric technology set. On the one hand, multi-platform support creates additional opportunity (and R&D liability), but, on the other hand, the trend for the company's target market is towards the Microsoft technology.

Also, the company must continue to augment a base of reference accounts from the ~ 650 companies that have purchased X3 so far. A couple dozen sites in the US might still be insufficient to boost brand recognition and make a serious go of the North American market, despite this acquisition given CIMPRO's subdued profile of late. However, because CIMPRO customer retention will be important to also fund the new integrated product's development, Adonix must continue to devote some resources to existing legacy CIMPRO instances' enhancements. To maintain a minimal level of sales, we believe that Adonix will have to urgently rejuvenate (i.e., Web enable at least) CIMPRO's product technology and graphical user interface (GUI) because these have been its competitive liability and the primary weakness. The dilution of R&D resources between the old CIMPRO and the new integrated X3 product, together with product-absorption issues and infrastructure ramp-up, will inevitably delay initial delivery of X3 next-generation integrated product for at least 12-18 months.

While the products are definitely likely to converge down the track, the short-term strategy will only likely be to align the sales strategy of both companies. In the short term, Adonix plans to utilize the CIMPRO formula management engine and combine it with the rest of Adonix X3 and release it as an Adonix CIMPRO process manufacturing solution, with expected availability by the end of Q2 2003). This should overcome some of the challenges mentioned earlier as far as multi-country capabilities, etc. that limited the marketability of the previous CIMPRO package. Still, the job of gaining traction will by no means be easy for the merged companies, while the competition will not ease any time soon. This acquisition and the Agilisys' acquisition of BRAIN (see How Much Wisdom Will BRAIN Bring To Agilisys?) may indicate a trend of the discrete and process ERP markets convergence, but the merger approaches seem to be quite opposite.

While Adonix' prospects of delivering a unified all-rounder ERP product will bring benefits in the long run, the devil lies in the price to achieve the synergy � a likely new process manufacturing customers' reluctance to buy CIMPRO until new proven generally available (GA) product, and the existing customers' disconcert. Conversely, Agilisys and BRAIN will likely assume �business as usual' given minimal integration intentions and any ramifications for customers.

Therefore, Adonix will also have to vigorously deliver an assuring message to the current customers about the support, enhancement, and migration plans for its respective products. Not to mention the need to quickly articulate the future integrated product blueprint, and the impending effort of cross-training of combined direct sales and VARs. Long-term, Adonix will of course be integrating CIMPRO V functionality into the existing Adonix X3 framework, but the firm timeframe is yet to be outlined. The ever-important technological migration path for CIMPRO users will have to be announced too, much beyond typical data conversion tools, and a consequent virtual reimplementation if they upgrade to the new product. A mitigating factor in this regard should be Adonix' product openness, and its previous expertise in assimilating products with disparate technologies.

On the other hand, CIMPRO's need to partner with many providers in the past for lack of its own sophisticated consumer packaged goods (CPG) order management functionality, and more complex financials, will have contributed with some experience in product interfacing. CIMPRO's simple, focused functionality has also helped to make it easy and inexpensive to implement, as long as there are few to no modifications, which could be enshrouded within Adonix above-mentioned implementation �coffee-like' flavors. Finally, Adonix' expertise in CPG and retail segments should not make its channel's cross-training into process manufacturing an insurmountable feat.

As a summary, the caveats notwithstanding, the merger looks indisputably like a positive move for both companies and their customers. Adonix extends its foothold in the process manufacturing and it obtains a functional product that it might embed into its own suite and possibly even cross-sell to some existing customers. CIMPRO finds a committed partner and a solid upbeat management team, more certain R&D budgets, and many added functional capabilities from the Adonix side. Both companies needed increased visibility and clout. CIMPRO users should benefit from Adonix' financial stability, which may in turn have done the acquisition at a good time, as to be ready with a compelling product portfolio when the market eventually recovers.

Combined respective customers, particularly CIMPRO ones, should consider this event as a move toward quite a more viable position for their IT investment, given Adonix' previous acquisitions' experiences, its stability, and sustained support for the ongoing development of its products, likely by deepening its ability to provide both discrete and process manufacturing functional capabilities bundled with logistics execution. Thus, users contemplating these needs should keep an eye on CIMPRO's future within Adonix.

Adonix' target market, general multi-site and multi-national distribution and manufacturing companies either independent businesses or large autonomous units of global giants with $20 to $300 million-a-year revenue range and up to 100 concurrent users per site, should consider the company's value proposition, bearing in mind other competitive products. Adonix often comes ahead of larger global players in terms of functional fit, pricing, and understanding of the local requirements in the distribution area. Like enterprises in France or Southern Europe (especially Spain, Italy and Portugal) should short-list X3. However, customers outside Adonix' successful geographies may want to do their due diligence and check Adonix' regional support before moving forward.

Prospective customers in Adonix' core industry verticals -- the discrete and process industries with standard manufacturing and extensive distribution requirements such as CPG, wholesale, retail, chemicals, industrial & commercial machinery, electronic & electric supplies, furniture, and rubber & plastics, should look favorably on the acquisition in the long term. CIMPRO is a functionally strong product for process manufacturing-focused, mid-market enterprises or individual sites of larger enterprises in North America, with up to $50 million in revenues. CIMPRO supports batch-oriented manufactures particularly well with features such as flexible packaging, formula scaling, formula management and hazardous materials reporting. However, CIMPRO is less capable in a true continuous-flow environment and is best suited for individual rather than multi-site environments with interdependencies.

There will be a few rough spots on the path until the unified international solution, though. Although the products are complementary to each other, the integration work ahead will involve some areas of overlap in light of basic back-office functional areas (e.g., cost accounting), which will have to be handled carefully. Users should not expect a unified global suite of applications to be available before second half of 2004 (with 70% probability), and should challenge the company to commit to more certain product development and migration strategy roadmap. Consequently, until the merger is consummated, users evaluating the above individual products should keep themselves informed, and consider generally available (GA) functionality only. Somewhat assuring should be the fact that Adonix will grant to those CIMPRO customers who would like to just make the technical leap from CIMPRO Classic to CIMPRO V that they will still have the option to do so. Adonix is also enhancing the Adonix CIMPRO maintenance contract to assist those customers who would like to make the leap from older CIMPRO systems to a more modern future product, and users are encouraged to enquire about its content.

Users should ask the following questions when evaluating the Adonix-CIMPRO combined offering:

* Are there any price advantages offered to existing clients who elect to purchase/migrate to the future integrated products?

* What technology will be used to integrate the applications?

* Will (and when) the applications share a common server platform and user interface?

Existing users of earlier Adonix product releases should position X3 central to their collaborative B2B and B2C e-Business strategies although being informed about competitive products cannot hurt. They should also question the company's future product development strategy, product migration path (upgrade licensing arrangements and ongoing service & support, and/or ramifications for not opting for X3). Existing CIMPRO customers looking to expand well beyond its process manufacturing modules should place X3 on their short list. Existing CIMPRO users that have been delivered to in partnerships with other products (e.g., Great Plains) should urgently clarify their support status and the long-term product development and migration strategy with the new management.

Microsoft Convergence 2003 portrayed an Enterprise Solutions crossroad! 0 comments

On March 19, 2003, Microsoft (NASDAQ: MSFT) conveyed more than 3000 of its business partners, hot prospects and best customers to its seventh annual event in Orlando, Florida. This year the conference focused on the convergence of Microsoft business solutions and the launch of both Microsoft CRM application and Microsoft Business Portal. Both products leverage the Microsoft .NET Framework and extensively integrate with Microsoft Business Solutions-Great Plains and Microsoft Business Solutions-Solomon business applications. Microsoft is aiming at a true single-source for business information and processes. The emphasis at Microsoft Business Solutions conference was to demonstrate lower cost of ownership through ease of integration and use. Microsoft integration's masterpiece was clearly Microsoft Outlook.

Founded in 1975, Microsoft is the world leader in software for personal and business computing. Microsoft Business Solutions offers a wide range of integrated, end-to-end business applications and services designed to help primarily small and midmarket companies with their financial management, analytics, human resources management, supply chain management, e-commerce, manufacturing and customer relationship management business processes.

The recently introduced Microsoft CRM product, which was largely demonstrated during the Convergence 2003 show, is expected to be available before the end of the year in other parts of the world besides the USA and Canada.

Product Definition & Market Impact:The introduction of Microsoft CRM fully supports the Microsoft vision to create an interconnected workplace, connecting employees to information, businesses to customers, and the front office systems to the back office solutions. The roadmap to this initiative was instigated by Microsoft purchasing Great Plains in December 2000. That turned out to be a good move to get penetration into the medium-size market and over time, it helped Microsoft put together all the pieces, CRM, ERP and supply chain management. In May 2001 Navision was also added to Microsoft fleet of business solutions.

The small and the medium-sized market is what represent the biggest growth potential in the coming years and Microsoft is directly aiming at this potential. Microsoft has no plan of moving upward and going head-to-head with strategic partners and market leaders such as SAP or Siebel, reports Holly Holt, senior product manager of CRM at Microsoft.

Microsoft CRM is built on .NET technologies using Visual Studio .NET and is fully integrated and accessible through Outlook or Internet Explorer browser. Microsoft's objective was intended to leverage the widespread usage of Microsoft Outlook in the business environment and make the usage of MS CRM accessible to this community with minimum training. There are a number of easy customizable forms and settings, and they are carried forward during upgrades. For more complex customizations the use of Microsoft Software development kit (SDK) is required.

A Very .NET Architecture:During the Convergence 2003 event, Microsoft invited two of its customers to demonstrate the success of MS CRM implementations. Both customers d relied on beta versions to fulfill their implementations. Among the two case scenarios one could be considered as a small project covering ten users. The second project could be seen as a medium sized venture covering over 80 users. Prior to their implementations both customers were running Microsoft SQL servers. During the implementation, the medium sized company faced the challenge of integrating one of its existing applications to MS CRM. The connection was achieved through an Application Programming Interface (API) developed internally using .NET technology. The challenge for small and mid-sized companies to implement CRM is the requirement for a relatively easy integration. Microsoft claims that there is a tight integration between MS CRM, MS office and all the other Microsoft Business Solutions.


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The core CRM application offers two distinct modules Sales and Customer Service. This is Microsoft's first-generation product with vanilla features; it's nevertheless an attractive combination considering the total integration with MS Outlook and MS office. .NET is Microsoft's platform for XML Web services, which allow applications to communicate and share data over web, regardless of operating system or programming language. While .NET technology is now being adopted by many SMB players and end-users for its capabilities to quickly and easily integrate applications and Web services, others standardize on J2EE; some vendors support both platforms. The real question is: Web services or not?

Although achieving ROI is still being considered as number one priority within enterprise-sized CRM projects, in the mid-sized market the emphasis is on integration. To that end it is not yet clear how easy MS CRM would integrate through the Biz Talk Server with many Third Party applications and namely with a myriad of legacy systems and other packaged back office applications. Microsoft's small number of real case scenarios still needs to grow to allow us to get a better grasp of the issue.

As it stands today MS CRM application provides two main modules that can be purchased separately, Sales and Customer Service. There are also two flavors, the Professional and the Standard. The Professional version includes all Microsoft CRM Sales Standard features plus other features such as Quotas, Product Catalog and Specialty Workflow.

Microsoft is also working on releasing a version with mobility capabilities and soon will deliver an import/export tool for customers that are looking to migrate from Act or Goldmine to MS CRM. Microsoft and Surebridge have partnered to offer an ASP version of MS CRM. Customers can opt to host their CRM application along with their mail server at Surebridge premises for an extra fee per month.

Surebridge headquartered in Lexington, Massachusetts, is a provider of outsourced enterprise application solutions for middle market companies, delivers brand name application choice and strategy, implementation, and outsourcing services.

Microsoft's core CRM Functionality strategy can be translated as a real first innovation that would set a precedent within the CRM arena. Microsoft has already set the ground for .NET technology to be viewed as a technology standard and is now counting on its core CRM application to be considered by the industry as a standard to build upon.

Microsoft's approach is to partner with nearly 150 independent software vendors (ISV) by empowering them in using the MS CRM core functionalities in order to extend its capabilities. Customers with specific needs can access the many different ISV's to find solutions that would best fit their projects. This flexibility is permitted by the extensibility and programming capabilities of Microsoft CRM to develop different vertical skins and technical integration capabilities.

There are many MS CRM flavors available already such as computer telephony integration, campaign management, PRM (Partners Relationship Management) and so on. Each ISV could then be seen as new CRM player adding to an already large number of CRM providers. MS CRM is distributed through a large number of authorized resellers, more than 1000 right now. So the question that first comes to one's mind is to wonder how the customer will navigate through that plethora of ISVs and resellers that Microsoft is partnering with.

The issue is how could the Microsoft traditional business model be implemented in a more complex and sophisticated field as CRM. It is paramount to the end-user to have a one-stop-shopping experience where he can find a solution that fits its requirements and a reseller that understands what CRM is all about. If Microsoft fails to create the standard, once again we will witness growing stack of unsatisfied customers and CRM failures in the SMB market.

Baan Seeking A New Foster Home -- A D�j� vu Or Not Quite? Part Three: Market Impact and User Recommendations 0 comments

The UK-based global automation and controls group Invensys plc. (London Stock Exchange: ISYS) has announced that Baan is finally and definitely for sale. This is a part of its parent's major divestiture move (i.e., over two thirds of its current business) and as Invensys recoils to its bare fundamentals. (For details of the announcements see Part One of this note).

What has then gone wrong between Baan and Invensys? While the justification of Invensys' narrower focus cannot be flatly dismissed, it can nonetheless be a virtue made of (dire financial) necessity. Invensys, with its ambitious 'Sensor to Boardroom' product strategy, seemed once determined to provide manufacturers a solution that would satisfy all their needs, from shop floor measuring devices to cyberspace collaboration, since Baan would offer enterprise-level applications, whereas Invensys would offer MES and plant automation components.

The possibility of integrating and providing all elements of a complete manufacturing solution must have been tempting, and was possibly lucrative, but every effort should have been made in order to avoid the kind of poor piled-up products execution which partly led to Baan's demise in the first place. While we approved of Invensys' move to provide manufacturers a solution that may satisfy all their needs, creating functional connections between front office, ERP and plant automation applications was a colossal task. Baan's service and support viability was also uncertain in the interim owing to the exodus of Baan staff and questionable Invensys' core competency in extended ERP applications.

The need for cross training of the sales force in functionally disparate applications should not be neglected either. Also, it turned out that there might have been a cultural gap between many Invensys divisions manufacturing physical products versus Baan as a software division, which had a different business model, uncertain return on investment (ROI) and long and grueling sales cycles. Furthermore, Baan's focus on discrete manufacturing has not been a close fit with Invensys' plant automation products that have been geared mostly to process industries. To that end, Invensys has had a nightmarish job of trying to rationalize Baan and its process ERP counterparts, Protean and PRISM, development � strategy abandonment has been a catchphrase of late.

As a result, recently, after a lengthy and painstaking soul-searching exercise, Invensys created a new group within its Production Management Division called Invensys Production Solutions (IPS) (www.invensysproductionsolutions.com). The group will include the PRISM and Protean process ERP products plus the resources of Invensys Validation Services group (www.vtc-usa.com), a Montreal, Canada-based provider of regulatory compliance, validation, and consulting services encompassing the entire validation project life cycle and a range of validation services for the regulated supply chain.

In the past three years, Invensys process solutions' customers have also experienced the displeasure of witnessing several radical changes of strategy, causing some of them to begin to seriously doubt the vendor will ever deliver their market-specific product capabilities. In July 1999, Invensys bought the outstanding shares of then struggling Marcam Solutions, and folded it initially into its Wonderware factory automation division. Further, as mmentioned earlier, in August 2000 Invensys acquired then also languishing Baan Co. and made it a part of the former ISS division.

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

Finally, given Invensys has recently yet again put all its assets/investments under the magnifying glass, it has now allocated the PRISM and Protean products into their own profit-based division, called Invensys Production Solutions. Given the Baan product line focuses on the discrete and hybrid (with only simple process requirements) manufacturing sectors, this move should enable both organizations to fully leverage their strengths in their respective industry sectors. Under the new setup within Invensys PMD, well over 80% of revenues will now likely come from process industries, since, in conjunction with solutions provided by sister Invensys companies such as Wonderware and Avantis, Invensys Production Solutions also provides a broad set of capabilities for the process sector. Thus, Baan will have then been singled out as the discrete manufacturing �black sheep' in the family, causing Invensys to review the carrying value of its investment in Baan, and to move it into its "window shop" Development division.

Still, one should note that Invensys has not deteriorated Baan's business; quite the contrary, it has kept some prominent Baan veteran staffers in charge, who did a notable work to keep the company afloat, possibly better than many would have expected three years ago. Invensys claims that some sort of strategic relationship will remain (i.e., Invesys is still an iBaan user after all) and joint Invensys/Baan technology will still reportedly be honored after the sell, such as Baan's OpenWorldX platform that Wonderware uses as well. While Invensys does not plan to integrate iBaan ERP functions with PRISM and Protean, it does plan to leverage Baan's collaborative SCM or CRM software, using Baan OpenWorldX enterprise management level integration framework, which, together with the ArhestrA framework at the plant automation level and Production Engine (PE) framework at the production management level, still represents a part-and-parcel of the Invensys Real Time Enterprise (RTE) framework (formerly referred to as the "sensor to boardroom" strategy).

Now that the Invensys/Baan relationship has not worked out, who would be the likely suitors? It is nonetheless a difficult and ungrateful job to speculate who would be the most likely buyer willing to inherit Baan's dowry, although the vendor has significantly restructured and become a much leaner and efficient business under Invensys; it was able to leverage offshore development resources in India, and move forward with its next-generation technology, which is still purportedly on track with its release schedule later this year. Thus, while the savvy buyer will obtain much improved technology and large customer base in need for new products, the overriding problem has been the lingering negative sentiment around the company, as viability of the vendor is of utmost importance in the enterprise applications space.

We could hereby think of all the usual and some unusual suspects, from direct competitors (i.e., SSA GT has long been trumpeting its wish to grow through acquisitions backed up with a huge pile of venture capital cash infusion), via complementary software providers or consulting/system integrating firms, to a venture-funded group like Golden Gate Capital or Bain Capital taking Baan private. However, as much will depend on price, geographic coverage aspirations, functional fit and so on, many acquisition inclined companies like Microsoft, IBM, PeopleSoft, Computer Associates, Geac Computer, and even the former owner Jan Baan (i.e., Vanenburg) may get a sudden shopping urge, since one can be sure the price tag will not be nearly high by the standards of a couple of years ago (i.e., ~$800 million that Invensys paid at the time). Look for the outcome to happen soon though (maybe even during the editorial cycle of this article). It would have been a skittish business practice to announce the intention and to further disconcert existing users and stall prospective ones, if the sale process was not well under way and with a number of viable prospective buyers.

Although it would be a likely better outcome for Baan and its customers to become a stand-alone vendor through an acquisition by an investment firm or a system integrator (since these buyers would not have to rationalize Baan's technology and functional overlap with another vendor's application stack), it might be more likely (i.e., 55% vs. 45%) that Baan will be acquired by another like vendor. But, even that should not be necessarily bad, particularly if the vendor in case could use Baan technology straight away; also, merely maintaining existing Baan install base, even with a limited number of new accounts has lately been a proven tenet of success for a number of vendors (see Resurrection, Vitality And Perseverance Of Former ERP 'Goners').

One should note that Baan was by no means the only major ERP vendor to succumb to market forces in 2000, given Gores Technology Group (GTG) acquired at a similar time former Systems Software Associates, Inc. (SSA), also once a high-flying ERP vendor (for more information, see ERP Belle �poque Officially Ended With the Demise of Baan and SSA). It would even be spooky to see Baan acquired by its former �brother in arms', although SSA GT's current bullish posture might bode well for Baan's future, regardless who the buyer happens to be.

What the Buyer Will Get:However, Baan's suitor will still have work cut out for itself to regain the former Baan glory, since Baan, still has a lot of housekeeping to do given it admits that nearly 70% of its customers are still on Baan IV, owing to the unfortunate fact that the former Baan Co.'s business was hit with troubles exactly when it finally seemed to have delivered its most stable and mature product although technologically outdated, Baan IVc. BAAN IV is still a traditional monolithic third- and fourth-generation procedural language (3GL/4GL)-based product, with an internally developed proprietary toolset (i.e., Baan Tools) that requires significant domain expertise to be productive. Like most contemporary ERP products, BAAN IV's Internet-enablement had to be developed outside its native toolset and represents a minute portion of the total functionality of the product. In addition, the number of integration points, i.e., published application programming interfaces (APIs) in BAAN IV is still low, even if one counts Baan IV step-sibling products acquired in the 1990s.

With BAAN V (now renamed into iBaan Enterprise 5.0), which was released in late 1998, Baan begun the evolution of its ERP product to a component-based architecture, and with workflow being native to the product. All functionality in the product was also Internet-enabled via a separate Java-based user interface. The new product release, which features much more advanced architecture, still may lack a number of pre-defined industry templates, which were available in Baan IV though. Also, while architecturally Baan has made some notable moves, scalability lags its larger-user competitors. Therefore, the bifurcated releases of the core ERP products, Baan IVc and iBaan 5.0 — with diverse vertical solution extensions, while necessary at this stage to keep old customers aboard, will eventually have to be merged into one code set for development and support. To that end, the Gemini product release is to provide a smooth simultaneous migration for customers of Baan IV and iBaan ERP, given this is an issue that Baan was very aware of and was specifically addressing. Otherwise, valuable R&D and service & support resources will continue to be diluted indefinitely by the requirement to maintain multiple code bases.

Moreover, the protracted difficult period has taken its toll in slower core ERP product enhancements; as a result, many competitors seem to have caught up or even leapfrogged Baan's competitive differentiators of the past. A case in point would be the Baan Dynamic Enterprise Modeler � Strategy Execution (DEM SE) concept, which attempted to remove some of the system configuration complexity by enabling users to graphically model (using flowcharts) and navigate enterprise business processes, organizations and events, and then automatically configures the product, have been emulated by many competitors meanwhile. Rather than using traditional menus, DEM would allow users to use graphical flow charts to navigate and interact with BAAN IV functions, while portions of the product could be reconfigured in operation without affecting all end users. However, the granularity of assembly within DEM was limited only to what has been defined at the screen level along with its associated business logic. Also, while DEM has the appearance of workflow in BAAN IV, there is no workflow engine to drive decision and routing processes.

Further, the lack of native HR/Payroll functionality means that Baan will not attract customers that prefer a truly enterprise-wide �one-stop-shop' solution, which is often the preference of the mid-market. Also, while general financial functionality in BAAN IV caters for multinational/complex organization support, it has never been the main reason for adopting the Baan product. Some partnership-based endeavors might have strengthened financial consolidation and reporting, but not transaction accounting, as activity-based costing (ABC) and drill-down analysis remain very basic in Baan IV. As for iBaan, there have been some enhancements in the areas such as multicurrency, albeit only as an incremental improvement. Baan's ability to support local requirements is still a moving target and is still reliant on partners and customers' input to ensure compliance with fiscal and statutory reporting. Many of these shortcomings could be mitigated within the future owner's product portfolio, though.
While uncertainty is not pleasant, existing Baan users are by no means in a situation prior to 2000. As for existing users and those currently going through implementation project work, business as usual would be the best course of action. Baan is now a solid Web services-compliant product and a valuable property, and regardless of who acquires it, it will likely be taken seriously, at least for significant maintenance revenue if not for an ample cross-sell and up-sell opportunity within the existing install base.

Given Baan existing install base's diversity, different strokes may still be applicable for different folks, and given some time bracket before the acquisition happens, the decision does not necessarily have to be made in a hurry. Baan IV users, which constitute the vast majority, have the least reasons to worry about their ongoing support, and they have the most reasons to wait for the certain sale to happen, and to go from there. Users that are on older versions than Baan IV (i.e., �green-screen' based Triton product) may benefit from upgrading to Baan IVc as to increase their chance of protected support in the future. Baan IV Process, Baan Dimensions and Baan Cable & Wire customers are likely in the least favorable situation, and they might want to look for other alternatives, although the migration opportunity might present itself within the future buyer's offering. Current iBaan 5 customers and Baan IV customers anticipating an upgrade to iBaan 5 may want to postpone their major plans until the new owner articulates its product strategy for Baan. Users of iBaan CRM, iBaan SCM and iBaan PLM should assume the same approach, given that the new owner may decide to spin off some of these divisions, in case of product overlap.

It is the waiting game, given Baan's future will still depend on who acquires it, and what products are to be retained, what are to be divested or phased out over time. Until the new product strategy is crystal clear and publicly committed to by the new owner, we advise potential users to warily evaluate the product even within its ETO discrete manufacturing sweet spot. (Of course, learning about new features and attractive pricing would be beneficial, at least for information and for leverage with other vendors.) We suggest evaluating the bells-and-whistles, price, reference sites within your industry, and corporate viability of other vendors as well, before making a selection.

While no current Baan users, particularly those in the middle of implementations, can be completely at ease, we believe that their endeavors will not be seriously jeopardized, if at all. They may want to consider the prerogative to change the source code and secure a team of skilled resources just in case. Furthermore, for existing Baan clients, we suggest keeping in close touch with current Baan executives and keeping your eye on the potential extended-ERP solutions with a proven quick ROI like the Measure Up ones. Understand what functionality you're interested in to solve which problem, and investigate what the company can offer. Identify the requirements and related costs to upgrade your systems to support the added functionality. If you are interested, perhaps your existing relationship could be leveraged to dramatically reduce the cost of the suite. Consider negotiating a pilot or trial period at no cost to you. Also, use the opportunity of Baan's promotion to negotiate a lower price with competitors. An upfront implementation guarantee by Baan and a list of recent customers can alleviate some potential anxieties.

Scala and Microsoft Become (Not So) Strange CRM Bedfellows Part Three: Challenges and User Recommendations 0 comments

During these days of frenetic mergers and acquisitions in the enterprise applications arena, there still seems to be a place for some co-opetitive alliances too. Namely, at the end of July, Scala Business Solutions (ASE: SCALA), an Amsterdam, the Netherlands-based provider of collaborative enterprise software for mid-size enterprises and subsidiaries of global corporations, announced it has signed a letter of intent with Microsoft Corporation (NASDAQ: MSFT), the largest software provider in the world, to extend Microsoft Business Solutions CRM (Microsoft CRM) software and integrate it with its iScala Collaborative ERP system. The agreement is expected to be final in September. Part one of this note detailed the agreement, which is a major part of Microsoft's foray into the CRM arena, and began a discussion of the market impact. Part two continued the market impact.

However, by the description of Scala and Microsoft's offering in Part two, it should be more than obvious that the two supposed partners' product portfolios also compete in many other enterprise applications areas within the mid-market, which is likely to affect the true partnership in the long term. Although Microsoft should hereby get a shot in the arm for its launch of an international version of Microsoft CRM by the end of 2003, whether Microsoft will include Scala's envisioned enhancements within its own offering remains dubious. In fact, Microsoft might wish it knew the answer to this tricky question itself at this stage. Microsoft's approach has been to partner with over 100 ISVs by encouraging them to use the Microsoft CRM platform in order to extend its capabilities, hence allowing customers with specific needs to access the plethora of different ISVs to find solutions that would best fit their projects.

There are many Microsoft CRM flavors already available via these ISVs, such as computer telephony integration (CTI), data cleansing, campaign management, partner relationship management (PRM) and so on. Each ISV could then be seen as a new CRM player adding to an already large number of CRM providers. Microsoft CRM is also distributed through a large number of authorized resellers (VARs), more than 1,300 right now. The question that comes to one's mind is to wonder how the customer will navigate through that proliferation of solutions from ISVs and VARs that Microsoft is partnering with. Consequently, Microsoft often ends up competing against its own prior release or an offering from one of its ISVs or VARs. Even worse, upgrading to one version of a product can require cascading upgrades to other products and platforms to synchronize versions that work together�in other words, a daunting product retrofit.

Another issue is how can the Microsoft traditional volume-based business model be implemented in a more complex and sophisticated field such as CRM, which requires rather high value-adding sales and support models. It is paramount to the end-user to have a one-stop-shopping experience where he/she can find a solution that fits the requirements and a reseller that understands what CRM is all about. If Microsoft fails to create the standard offering, once again we will witness a growing stack of unsatisfied customers and CRM failures in the small-to-medium enterprise (SME) market. Thus, Scala will have to quickly master a number of business issues intrinsic to CRM, such as change management, and identification and automation of best business processes, which go far beyond a mere product functionality delivery.

That could even be an opportunity for Scala to seize since, in addition to the steep learning curves for some traditional accounting MBS VARs to now master CRM sales, support and implementation, some Microsoft VARs might find it difficult to justify selling a Microsoft CRM product at a low price with minimal consulting and integration scope (due to fairly simple initial functionality), when they would prefer to sell more substantial and complex products. Scala, conversely, should be able to offer quite a value-added "dough" incentive for its partners, given a number of vertical industries they could tackle.

Competition From SAP:For that reason, in the immediate future, both vendors will likely join forces to stave off the common fierce competition coming from both the multiplicity of the Tier 2 and 3 peers and the Tier 1 vendors storming down the market. Likely the biggest challenge, however, lies in the concurrency of iScala with the SAP Business One offering for SMEs, the result of SAP's move in 2002 when it acquired TopManage (see SAP Tries Another, Bifurcated Tack At A Small Guy and Software Giants Make Courting A Small Guy Their 'Business One' Priority).

SAP Business One is targeted at companies with less than 250 employees, and includes financials, sales, procurement, banking, inventory management, costing, multi-national, and some basic SFA functionality. It also includes the impressive "drag and relate" functionality available in the SAP Enterprise Portal aimed at alleviating the proverbial SAP R/3 ERP product's complexity and functionality that has become a liability rather than an advantage in targeting (and appalling as well) SMEs. Given the opportunity to offer its own product, SAP is likely to become hostile rather than agreeable to Scala's "symbiotic" (like the Plover bird cleaning a crocodile's teeth) relationship in penetrating and servicing SAP's global customers' remote divisions in the past.

Scala has indeed made a notable dent within SAP's install base, particularly in emerging countries, with its positioning as the "low-end" subsidiary system, providing localized functionality readily integrated with a corporate SAP implementation. The addition of CRM functionality should help it defend against a likely fierce intrusion by SAP's Business One, at least within the sites that prefer a more autonomous approach to a CRM deployment strategy, rather than to wait endlessly for a centralized CRM system rollout, typical to SAP.
Challenges to Scala:Still, as for Scala, room for functional enhancements beyond ERP and product delivery work-in-progress remains, since this alliance only solves its CRM part of the puzzle. Namely, despite the elaborately thought out transition between the products (the upgrade path from Scala 5.1 to iScala 2.1 is reportedly no more complex than that between service releases of Scala 5.1), Scala does not intend to immediately withdraw Scala 5.1, as there are still existing customers who are in the middle of a roll out of the product and as not all languages have been implemented in the initial release of iScala 2.1. Further, the company has to build the hospitality and pharmaceutical functionality into a forthcoming new release of iScala 2.2. Outside of its product's globalization advantage (which is not a small thing though), its "genuine collaboration" message lacks much of the differentiation traits given that many other Microsoft-centric vendors like Ramco Systems, SYSPRO, Intuitive, Epicor, and Made2Manage to name but a few, offer like value proposition of web service-based collaboration and visibility across the entire supply chain.

On the other hand, Scala is becoming a more visible contender in the mid-market, which may result with even the unwanted attention of predatory competitors. At the same time, Scala has to address the remaining gaps within an expanded footprint and vertical focus, which makes it possible to be both an acquirer and prey in the not so distant future. One can never discount the potential that Microsoft might simply acquire the partner-competitor, if necessary to remove a recurring headache.

Despite impressive growth and cash flow in last few years, Scala has been unfortunate to post somewhat disappointing performance in Q1 2003, possibly at an unwanted time, resulting with a restructuring program that, inter alia, included rationalization of the company's R&D base with the closure of some satellite R&D facilities and the transfer of expertise to the company's cost-effective center of technical R&D excellence in Moscow, and headcount reduction of approximately 10 percent from the previous employee level of 650, including consolidation of a number of senior management positions. Possibly more disconcerting could be the fact that long-standing customer interest in the new functionality of iScala 2.2 has resulted in over-commitment to customer-related developments. As a result, the commercial release has been delayed to September 2003 instead of the previously indicated Q2 2003. This delay has had a vicious circle-like adverse impact on new license sales, as customers wait for new functionality. Again, all these events have been taking place at possibly the worst time for the vendor.

Still, one should note that Scala's current offering is also partly the result of tough strategic decisions in the past, which the vendor has managed to resiliently overcome. First of all, in 1998 Scala decided to discontinue support for UNIX, and to focus solely on Microsoft technology. Although regarded by some as a risky and dubious decision at the time, it has proven beneficial and giving Scala the best of both worlds�the expertise to cater to global upper mid-market companies owing to its strong multinational and financial consolidation functional features, and the low total cost of ownership (TCO) attractive to its target market, for focusing increasingly on the proven Microsoft platform.

By leveraging the capabilities of the Microsoft platform only, Scala seems to be also in a better position to be responsive to delivering new functional features that its customers may demand. Additionally, owing to the proverbial dot-com bubble burst, in 2001 the company had to give up on once high-flying prospects of its separate e-commerce application division, called iScala. Nevertheless, the iScala e-business functionality has come in handy, as the iScala platform is an extension of the company's back-office capability, thereby rounding out a next-generation solution set in which there is much tighter integration of collaborative e-commerce applications with ERP functionality.

Thus, one could expect Microsoft or Sage to settle the score with the currently vulnerable opponent or partner Scala, whose global product capabilities they could not beat anytime soon otherwise, possibly through a not necessarily hostile takeover bid. Yet, that might not be likely to happen just now, given these titans' excruciating efforts to streamline their current disparate product lines into a single code offering, or somewhere near it. In any case, the Microsoft CRM agreement at this stage should help Scala maximize the potential for mining its existing customer base, but it could also be an opportunity for Scala to capture the mid-market ahead of Microsoft's launch and the activities of other Microsoft VARs outside North America, were it to offer iScala CRM as a standalone product to Microsoft customers. Thus, whether this is a temporary stint, a true long-term alliance, or just a prelude to nuptials down the track, Microsoft should turn out as a beneficiary in every way.

Existing Scala users and prospective mid-market user enterprises planning to adopt an extended ERP system should closely follow the touted CRM addition to Scala's footprint. Small and medium size businesses using Scala back office applications and smaller organizations using Microsoft desktop and office applications that have simple CRM product needs (simple sales and marketing activities like opportunity management and forecasting, and basic customer service activities) should evaluate the above iScala CRM functional enhancements as a way to add value to their existing applications although bearing in mind that other vendors currently offer mature products.

Scala customers (particularly in China, Central and Eastern Europe, the Nordic region, and Russia) should watch for basic CRM features with VAT and multinational additions. Scala customers with more advanced CRM needs and an industry-specific focus should not benefit much from this early and likely immature version. Bear in mind that the first release of iScala CRM will not provide tight call-center integration, campaign management, customer portals, offline support for mobile users (customer service and marketing employees), or permit significant application customization, and it should not be short-listed by larger or more complex enterprises, with support for e-mail applications other than Outlook, and with multiple-platform and strong scalability requirements. The product will not be of much use to companies that must manage customer relationships through diverse lines of business (LOBs) with diverse processes at this stage either.

Moreover, the enterprises that have integration needs outside of the Microsoft environment (i.e., database, OS platform, middleware), have complex sales and call-center service business practices, or need advanced CRM functions such as product configuration, content management, personalization, and relationship optimization, will have to look at more sophisticated offerings, some of which will become resellers of Microsoft CRM as well. Bear in mind that Microsoft could end the CRM partnership with Scala after it launches the next generation of possibly unified Microsoft Business Solution suites. Enterprises could then face migration challenges, and should insist on contractual assurances now to prevent or mitigate these.

Outside CRM, Scala's target market, general multi-site and multinational enterprises with up to $1 billion in revenues and their divisions with up to 250 concurrent users per site, should consider the company's value proposition, and we generally recommend including Scala in the long list of vendors considered for an enterprise application selection by the upper-end of mid-market companies that are a mixture of regional business, divisions, and semi-autonomous operations, each with its own autonomous requirements and business processes. These companies generally are rapidly growing and agile, but have a limited regional IT budget and staff, and less intricate discrete or batch process manufacturing, CRM, and B2B e-commerce collaboration requirements.

Technologically, the product may be the most suitable as a solution for global mid-size enterprises, dispersed worldwide (especially within non English speaking regions), with strong requirements on distributed infrastructure, security, and with private trade exchange (PTX) or collaborative role-based portal solutions strategy and delivery. The industries that would most likely benefit from using its products are those from Scala's proven core target sectors—including telecommunications, hospitality, pharmaceutical, and food and beverage.

Scala 5.1 users should position iScala 2.1 central to their collaborative B2B and B2C e-business strategies although being informed about competitive products cannot hurt. They should also question the company's future two-pronged product strategy, the timeline for the products' language and other capabilities convergence, product migration path (upgrade licensing arrangements and ongoing service and support, or ramifications for not opting for iScala). Non-Scala users may as well benefit from evaluating iScala collaborative platform for their collaborative needs.

Maintenance Software—Plan Ahead to Maximize CMMS Vendor Web Site Visits 0 comments

For those looking for a computer maintenance management system (CMMS) vendor, the Web is often the first place to start. There are a number of web site features one should examine in order to maximize web site visits.

The more you feel warm and fuzzy about a company through its web site, the more likely you're going to explore it further. Unfortunately, not all computer maintenance management system (CMMS) vendor web sites are the same. The first potential turn-off is home page response times. If it takes longer than a few seconds to get something on screen, users get anxious. That's why most sites bring up at least a title, framework, and some basic text followed by the progressive filling of empty spaces with buttons, graphics, and further text. The entire process should take only under a minute. Once the entire screen has materialized, users can explore the numerous links. Some sites will show sub-categories as you move the cursor over the main headings.

One interesting feature that has become quite popular on CMMS web sites is a ticker-tape window that provides eye-catching news, such as a recent strategic alliance, record earnings for the quarter or a new customer. By double-clicking, you can get more details on any of these items. Some web sites have click-boxes that provide full audio or video clips from a user conference or speech from a key executive. At the bottom of the opening screen, almost all web sites provide contact information and a link to the web master's email address. Here's what else to look for.

Many sites provide a roadmap or index that shows the web site hierarchy. It's a sophisticated version of a table of contents, which is accessible from any screen on the web site. By clicking the headings and subheadings on the map, you're catapulted to that particular section of text.

About the company
The section describing information about the company will often present history, philosophy, policies, values, strategy, a general description etc.. If the CMMS vendor is a multinational, then multiple locations are provided, including contact information. In some cases, each country operates its own linked site. Any resellers or distributors should also be listed. Public companies often provide their annual reports.

Products and services:

CMMS vendors use different approaches to present their products and services on the Internet. Some use screen shots to illustrate different features and functions, while others use text only. Many vendors offer users the option to download an electronic brochure or video clip that provides greater detail. Larger CMMS vendors offer specific information for a given vertical market, such as utilities, oil and gas or mining.

Help desk
The electronic help desk gives users the ability to inquire about specific problems, without queuing on the telephone. Usually a response is received within twenty-four hours.

Software updates
Every software company should provide information about known bugs in each version of its software. Some CMMS vendors reduce their distribution costs by encouraging users to download developed fixes, while others prefer handling the process themselves.

Discussion database
Discussion databases are handy and allows users and CMMS vendors to share tips about getting the most out of a CMMS application and traps that should be avoided. Tips and traps can be general or product-specific. Some vendors supplement this section with an "ask the experts" service that uses external expertise.

Vendor demo
For a company that's shopping around for a new CMMS, the Internet is a logical starting point. Many of the vendors provide download capability for demo software. Some may have a simulated interactive demo built right into the web site, while others prefer to have an electronic order form and ship a demo CD by mail or courier.

Maintenance knowledge base
One of the potentially more useful sections deals with providing information about general maintenance management practices. For example, information about reliability-centered maintenance, how can predictive maintenance save money and what are the advantages and disadvantages of centralized warehousing? In some cases, CMMS vendors produce "white papers," which are pronouncements about new technology that's being considered or new techniques for getting the most out of your CMMS.

User forums
This is similar to a help desk, except that it's primarily interaction between users. Some CMMS vendors have helped establish a separate site for their user group. Users typically talk about the best use of software, suggestions on what external software tools may be useful to supplement the CMMS, as well as workarounds, in terms of known software shortcomings. CMMS vendors can also monitor the web site for market research. For example, it can determine what improvements should be made to the software and the services provided by the company?

Current events
Keeping users informed is one key function of the internet site. This means news of upcoming software versions, the company, new customers, better ways to use the software, events like training sessions or conferences and people making news.

Success stories
One of the most powerful selling tools for any software vendor is publishing an unbiased, unsolicited testimonial from a pleased customer. This carries a lot of weight for potential buyers, especially if it's presented in a format that's clearly not biased, such as a user forum. If there are short quotes like excerpts used in movie ads, then let the buyer beware. Following a testimonial or implementation description, you want to find customers willing to include their name, address and phone number published on the web site. This creates high credibility.

Strategic relationships
Strategic alliances and partners include software vendors that have built an interface to the CMMS software, or that are jointly marketing products. Examples include vendors of condition-monitoring equipment, radio frequency (RF) data-collection devices, and document management software. Usually, the CMMS vendor provides basic information about the partners and their products, as well as a "hot link" to its web site.

Employees
Be wary of a CMMS vendor that doesn't value its employees enough to devote space to them on the web site. The vendor should be proud to provide a thumbnail sketch of each key manager in the company, including contact information, a general description of the company's philosophy, and track record regarding employment.

Service bureau
Some companies are developing a means by which users can access a CMMS application and database involving the use of a browser on the Internet or via an intranet. This means user workstations don't require the CMMS software to run on their hard drive or local network server. However, Internet users complain of slow response times, especially experienced during peak periods.

Marketing Automation: Coming of Age Slowly 0 comments

The debate about the future of the marketing automation and management market, as a stand-alone sub segment of the entire customer relationship management (CRM) market, continues, partly owing to mixed signals coming from relevant point solutions providers. On one hand, recent demise, and buyout of Xchange by Amdocs (see Xchange Adds To The List Of CRM Point Solutions' Casualties) was the last in the array of less-fortunate point players. At the time prior to Xchange's assets auction, allegedly over twenty companies expressed interest in buying Xchange's assets, and in maintaining its products and supporting its customers, including much better-performing direct competitors Chordiant Software, DoubleClick, SAS, and especially Unica Corporation. While the upbeat marketing management software vendor Unica (www.unicacorp.com) was initially marked as a very likely buyer of Xchange, the vendor, however, slightly surprisingly elected not to make a bid for the Xchange's assets. Rather, Unica has since announced a migration plan from Xchange's solutions to its Affinium platform, given it has already migrated approximately 15 percent of Xchange's customer base to Affinium, and the vendor touts that regardless of which company has taken ultimate ownership of Xchange's remaining assets, converting to Affinium will be the most attractive solution for Xchange customers.

The CRM market as well as its marketing automation sub-segment remains both the land of opportunity albeit with many sinister patches of quicksand traps for those with small footprint breadth in the field. While the biggest or the richest packaged suite CRM or enterprise resource planning (ERP) providers have been able to hang onto flat new sales, possibly modest declines, or in more rare cases possibly modest growth, only a lucky and more probably the most apt few with a true differentiation in a selected number of markets have even bucked the trend and have shown some enviable growth.

Every business cycle begins with the attraction of the customer through sales and marketing. This hopefully results in an order management and fulfillment process and ends with a customer service, which can involve anything from field installations through to enquiry and complaint management. All of these steps have to be executed well without exception, since otherwise, the customer will end up on a competitor's list of customers. The "64,000-dollar" question is how all business processes work together. In the electronic world, the degree of flexibility and efficiency of collaborative processes relating to the customer life cycle, product life cycle, and service life cycle, to name but a few, will be a big determinant of losers and winners. To that end, there seems to be a dichotomy between the marketing automation promise of benefits enterprise-wide and the way it has often been misused.
The importance of finding and keeping customers has only increased lately amid diminishing new sales opportunities. The appeal of marketing automation has come from its ability to tailor marketing campaigns and to track their effectiveness and control marketing costs and to perform better-targeted, finer-grained, multi-stage and multi-channel campaigns. These applications thus aim at helping organizations segment their customer bases, identify specific customer needs that are not that obvious to a naked eye, and build promotions and personalized campaigns designed to meet those needs and thereby create additional revenue.

This is all done by analyzing large volumes of scattered data, and then by identifying patterns or trends that would not otherwise be apparent (particularly if one is to notice an opportunity from a non-event, such as a customer has not used the ATM in the last month). With this information in hand, enterprises can create custom campaigns and track their effectiveness, and they can also leverage it to drive other processes, such as real time, customer service interactions or cross-sell opportunities (for example, customer service agents recommend products ad hoc upon customer needs over the phone, or real time offers and promotions personalized to customers navigating a web site).

In a nutshell, marketing automation software should be able to capture, blend, mine, and analyze large amounts of customer data from multiple sources, including online registries or directories, customer databases, flat files, billing systems, and external customer lists. That data is then used to target a consistent message across multiple channels to specific segmented (profiled) customer sets. Theoretically, these applications may justify the ROI rationale through

* A more effective customer acquisition, owing to extremely focused campaigns that are personalized and tailored to specific customer segments

* Increased customer retention, owing to improved value for existing customers by continually presenting personalized product and service marketing messages to more profitable customers, and through effective cross-selling opportunities that leverages purchasing histories and increases the likelihood of repeat business

* Improved marketing strategies in almost real time, via the ability to examine many indicators such as customer response rates, conversion rates, web site metrics, abandon rates and general demographic data to continually fine-tune customer segments and profiles, and discontinue marketing approaches that are futile if not even counterproductive

* Cost reduction, via the ability to evaluate the effectiveness of campaigns and to identify successful strategies, to readdress ineffective campaigns and to manage the costs of all campaigns within the organization

The marketing automation market has been fragmented since its advent, and one could discern three major sub-categories of solutions:

1) marketing operations,

2) marketing analytics, and

3) campaign management solutions. Marketing operations software aims at managing and tracking the costs, resources and goals of multiple marketing programs, and campaigns across multiple lines of business (LOBs). Marketing analytics solutions, as the name suggests, were designed to capture customer data from various channels and data sources, and to analyze (i.e., "slice and dice") that data in different angles for customer segmentation, profiling and personalization purposes. Finally, campaign management software attempts to design, schedule, execute,and measure the effectiveness of multichannel (including direct mail, telemarketing, customer service centers, computer-telephony-interaction (CTI), the web pages, e-mail, etc.) marketing campaigns that leverage the input from marketing analytics.

The other way to segment these applications would be to discern whether they are designed to primarily improve the use of marketing resources or to improve the value proposition to customers, or both. The focus of the first is on designing and creating a marketing strategy, determining the best allocation of marketing budgets, managing marketing staff skills, and effectively tracking and supporting marketing processes. On the other hand, the latter applications define and communicate the value proposition of the organization to the customer, ensuring the profitable creation, development and maintenance of the customer relationship. All three previously identified categories of applications would contribute to both purposes, particularly marketing analytics, although marketing operations will seemingly be more associated with the use of marketing resources, and campaign management would conversely be aligned with customer relationship optimization.

However, despite cited benefits of the applications, many marketing automation specialists have, for various reasons, been a far cry from success or, at least, not had an easy time. Most of pure-play providers have been either acquired or gone bust during the past few years including Xchange, Prime Response, BroadBase, Protagona, and MarketFirst, and those that remain independent (such as Aprimo, SAS, NCR Teradata, Blue Martini Software, DoubleClick, and Unica) are apparently creating broader marketing suites to cover all the above-mentioned bases.

One reason for this is the ability of large packaged ERP or CRM suite providers to slow or even stall enterprise applications buying decisions even well before their serious market entry. As a result, the niche vendors have to battle to maintain their market dominance despite strong solutions. Meanwhile the large vendors are still developing astute solutions and market credibility, and attempting to sell these based primarily on the integration of their limited functionality with the rest of their suites and a promise of deeper and complete functionality some time in the future. This category would include the likes Siebel Systems, Chordiant Software, Pivotal, E.piphany, Kana, Onyx, Amdocs, PeopleSoft, SAP, and Oracle.

Incidentally, Applix, with its recent exit from the CRM market (see Will A Big Fish's Splash Cause Minnows' Flush Out Of The CRM Pond?), may exemplify the dark side of the CRM medal nowadays, as droves of smaller pure-play CRM vendors have been hard pressed to survive owing to the combined effect of CRM users' disenchantment with the products' hardly ever materialized benefits, compounded with the tight IT budgets due to the delay of the worldwide economic recovery and with Microsoft's entry into already crowded place. Although many mid-market pure-CRM solutions have been maturing and improving, they must continue to facilitate integration with back-end systems, given the increasing awareness of this need for full-fledged benefits of CRM. Further, they must also provide the differentiation through verifiable ROI metrics, and indispensable features and functions germane to selected industry verticals.

Larger CRM vendors have, on their side, been weathering the storm by relying on cross-selling broader CRM application suites to their existing and potential customers, involving also components such as sales force automation (SFA), employee relationship management (ERM) or call centers. Marketing automation point solution providers have also fallen prey to pessimistic investors and diminishing global corporations' appetites for technology. They have taken the impact of the slowdown because of a more budding market yet to create the market awareness of its true value proposition, and because of the slower adoption of information technology (IT) in marketing departments (such as a cultural resistance to software automation, which is perceived as restrictive to the art of marketing, with an oversight that automation might actually eliminate the low-value activity to release more time for true creative work).

The fact is that most CRM deployments so far have focused on operational aspects like automating tasks in processing interactions with customers, whether that is registering a complaint in call center, closing a sale, or responding to a customer or prospect's query. The irony is that these transactions are often left to languish in multiple database islands dispersed around the organization, and not used to refine marketing campaigns or to improve customer service. Marketing is possibly the only remaining major business function yet to revise its core processes so it can take advantage of IT that can cut time, costs, and improve the quality of its operations.

Moreover, unlike SFA or customer service, marketing has an effect on customers throughout the entire relationship tenure, since, for example focus groups, marketing campaigns, sales collaterals, and even aftermarket activities (such as warranty registration and service calls) present opportunities for companies to ascertain and control how their products are perceived in the market. With information being disseminated and gathered from many diverse sources, a unified marketing platform could be an instrumental to improve enterprises' demand and revenue management strategies.

Yet, these applications are often perceived either as luxury (a "nice to have" but not show-stopping) applications in these days of anyone hardly having any customers at all, or, in cases of customers valuing the proposition, they might be much more inclined to obtain it only as a part of a broader CRM suite (if not even from an ERP provider) rather than as a point solution. Thus, the need for providing a full, comprehensive CRM suite rather than an individual solution or a bundle of point solutions for each distinct CRM area remains firm, and will urge further CRM (and overall enterprise applications for that matter) market consolidation.

The gravity of these narrow product footprint vendors' predicament might be well illustrated by the Applix' exit, given the vendor had a solid CRM product breadth and technology foundation, a good implementation track record with nearly 1,000 satisfied customers, and some notable endorsements from ERP vendors that have been remiss in delivering their own CRM (i.e., SSA GT and Geac Computers Corporation). Many pure-play CRM players that cannot even come close to the above traits should do their own math and analyze the justification of their independent existence within the CRM battleground.

Not surprisingly, marketing automation-only providers have long been falling away to the extent of only a few possibly also endangered remaining providers like Unica, Aprimo, MarketSwitch, and MarketSoft. PeopleSoft's acquisition of Annuncio (see PeopleSoft Annuncio-es Continuation Of Its Shopping Spree), Kana and Broadbase merger (see The Mid-Market Is Consolidating, Lo And Behold), Pivotal's recent acquisition of MarketFirst, DoubleClick's acquisition of Protagona, S1 Corporation's acquisition of Point Information Systems, Vignette Corporation's acquisition of DataSage, SAS' acquisition of Intrinsic and Verbind, and Chordiant's acquisition of Prime Response all should indicate diminishing life expectancy of independent CRM point solutions providers.

The good news nevertheless is that there are huge untapped opportunities for business improvement, given marketing has a unique vantage point in any enterprise to understand the customer needs, buying behavior, and value perception. Increasingly, marketing automation solutions are being adopted by large enterprises with multilevel, multi-LOB marketing departments. Those organizations need to coordinate their marketing programs and campaigns and are creating increased demand for holistic marketing-automation suites that include marketing operations, analytics and management functionality. Thus, we expect to see more marketing-automation suites that offer marketing analytics and campaign management in a single product offering. However, the large packaged enterprise suite vendors still have it as a mere afterthought to the product blueprint rather than a strategic enhancement to their product offering.

Prospective marketing automation customers should start by scrutinizing closely their major motivators for marketing automation and to determine whether they align with the overall CRM and corporate strategies. To select the right solution, one must first identify the marketing automation priorities and match them to a specific solution that best covers the requirements. Some marketing automation and management solutions still focus on marketing operations, analytics, or on campaign management, and only a few cover reasonably well all of these.

While evaluating the marketing-automation product options, in addition to criteria that are common to any enterprise application selection, the following few pertinent tough questions should be asked:

* Can the evaluated products run our own models and proprietary algorithms?

* Can they integrate with our back-office data sources to drive effective marketing campaigns?

* Can they integrate and interface with other systems we might be using for data analytics, data-warehousing, content-management, and personalization?

* Do they offer an embedded e-mail server as part of the package, or are they compatible with commonly accepted e-mail servers like Microsoft Exchange or IBM Lotus Domino?

* Does the vendor have implementation experience in our industry, and does it provide an industry-specific data model and templates?

* Can the product help us manage and coordinate multiple marketing campaigns across the multiple LOBs?

* Does the solution support most common channels of data capture and customer communication?