Computer Shopping

So, Tell Me a Little Bit About Yourself

2009-09-10T00:59:00.001-07:00

If you know nothing about a company, you should be able to figure out the bare essentials by visiting its About Us page, right?

Turns out this is only true sometimes.

When visiting the Digg website, for example. The first line on Digg’s About page is this: “Digg is a place for people to discover and share content from anywhere on the web.”

Neat, huh? One click and sixteen words after visiting the site, you know, in a nutshell, what they do. Read another fifty or so words and you’ll find out that content is displayed and ranked based on votes from users. Go further and you’ll find out how that works. The information is there, and it’s not hard to find.

Enterprise software vendors, by contrast, don’t always provide such clear information so concisely. To show you what I mean, I looked at the About Us pages of the ten vendors listed in The New and the Noteworthy: 2008 Vendor Wrap-up, published late last year on this blog.

I wasn’t looking for anything spectacular. I only wanted to know, as quickly as possible, what each company does, whom they do it for, and what, if anything, sets them apart. Here’s what I found:
The Top 3: Flexi, Oco, and Saba

Of the ten pages I looked at, Flexi, Oco, and Saba provided the best examples of what an About Us page should be.

Flexi’s About Us page was almost exactly what I wanted to see. In a mere 136 words, I learned that Flexi develops two accounting products for the banking, insurance, and financial services industries. Further I learned that Flexi focuses exclusively on accounting, which supports their claim of deep industry expertise. Additional information was available from a clear set of links at the top of the page, so if I had approached the site as a reporter, investor, or job-seeker, I’d have known where to go.

Bonus points for linking from the About Us page to the overview pages for each of their products.

Oco also provides a concise description of their company. 211 words in, I learned that Oco provides on-demand reporting and analytics for any kind of business data; that the industries they serve include retail, manufacturing, consumer packaged goods, and private equity firms; and that Oco’s solutions are fixed-time and fixed-cost.

While Oco gets bonus points for differentiating their solution in clear language, I did find it odd that the term “business intelligence” only appears at the end of the description. Still, it’s a solid overview, and I wanted to learn more.

Saba was originally destined for the middle of the pack, but a second look convinced me otherwise. It turns out that their About Us page tells me what they do—provide human capital management (HCM)—software, lists key customers, and lets me know that their software is available “both on-premise and on demand,” which is a pretty good start. Again, the description is short enough to be readable, and informative enough that I can decide whether I want to follow the links to more information. The only downside is that the main description begins only after a huge plug for their corporate brochure, which I wasn’t interested enough to download. Oh well.
The Middle of the Road: Global, IFS, PTC, Targit

The companies I thought provided fair to middling About Us pages all tended to have the same problem. While most of the information was there, it usually wasn’t presented as well as it could have been.

For example, Global Shop Solutions starts off well, making it clear that they are the “largest privately held ERP software company in the United States.” Unfortunately, you have to read quite a bit more before you find out about the size and industry of the typical Global customer. Generally speaking, I found the information I was looking for, but I had to hunt around for it since nothing on the page indicated what was important.

IFS is another example of good information with lackluster presentation. Oddly, the IFS About Us page has two short descriptions of the company, but only one (the less visible one) actually tells you what kind of software they make (ERP and MRO). To their credit, they do immediately differentiate themselves, citing a commitment to using open standards. Good to know. The frustrating thing here was that The About Us page links to a page titled “IFS in Brief,” which actually has more and better information, and would have made a better About Us page to begin with.

PTC’s About Us page isn’t exactly packed with information, and most of the links to additional information are only available from the site’s main menu. However PTC gets big points for doing two things. First, the description is very concise, letting you know that the company makes product lifecycle management (PLM) and enterprise content management (ECM) software. Second, and most important, each of those terms is linked to a page that describes exactly what PLM and ECM are. In an industry drowning in three-letter acronyms (TLAs), it’s refreshing to see a company stop and offer some helpful information for newbies like me. Thanks, PTC.

Lastly, there’s Target Business Intelligence. On the plus side, it’s immediately clear that the company makes BI software. Unfortunately, their About Us page doesn’t do much to expand on that. Instead, it talks about the company’s size, number of customers, partnership agreements, philosophy, and corporate culture. This is all good information, but it’s not as useful as it could be if I had a clear picture of the company’s products and target markets to begin with. On the other hand, one very nice thing about Targit’s About Us page is that it links directly to an online product demo and some videos, which are always useful.
The Bottom 3: Callidus, Ramco, and Visibility

Let’s start with Callidus. Their About Us pages actually do provide the type of information I was looking for. They made the bottom three because their presentation makes that information so difficult to find, that the overall experience is frustrating. To get a comprehensive one-pager about the company, you have to go the main About Us page, then follow the “Why Callidus Software?” link. Then you have to find and click the “Corporate Backgrounder” link, which takes you, finally, to a useful page (which, IMO should be the main about us page).

The real bummer is that Callidus does some nice things on this page. For example, like PTC, Callidus links to definitions of the types of software they make—sales performance management (SPM) and enterprise incentive management (EIM). They also provide concise descriptions of all of their products, provide some details about the underlying technology, and list some of the business problems that their software helps solve. Shame that it takes them so long to get there.

Then there’s Ramco and Visibility. Both of these companies have apparently decided to let visitors guess what they do. Neither About Us page provides a clear or concise description of the company or its products, opting instead for vague marketing-speak.

For example, the Visibility About Us page begins “Visibility Corporation provides business and technical solutions that help organizations achieve optimal results from their business information systems.” OK, but what is a “business and technical solution?” Do any companies make similar solutions that help organizations achieve sub-optimal results?

Visibility also assures us that “Optimizing productivity and recognizing an immediate return on investment are common business drivers for the organizations we serve.” Again, do any of their competitors serve companies who want to reduce productivity, or see ROI later, rather than sooner?

About the only useful piece of information on this page is that “Visibility provides solutions that range from easy-to-deploy, high impact reporting and analytic solutions to comprehensive integrated enterprise applications, to applications built to address your specific business needs,” which I guess means that they offer solutions ranging from small and off-the-shelf to large and custom.

To be fair, the Visibility home page makes it immediately clear that the company makes enterprise resource planning (ERP) and business intelligence (BI) solutions. Why they don’t reiterate it in their company profile is a bit of a mystery.

Ramco is in pretty much the same boat, claiming to provide, “flexible enterprise applications that can be delivered quickly and cost-effectively into complex environments.” But what vendor would claim the opposite?

The description goes on to say that Ramco “…also gives companies the agility they need to stay competitive by enabling fast, flexible deployment and change on demand of business applications. Ramco VirtualWorks ensures maximum flexibility to execute a business process strategy - so when business needs change systems change automatically.”

Sounds challenging. Um… what is VirtualWorks again?

You won’t find out on this page. Nor will you find out on their home page, which at least lists their target markets. So if you want any real information, it’s off to their network of drop-down menus in the hopes that you can identify what you want to know.
So Why is This Important, Anyway?

The reason I’m going on about this is that a company’s About Us page is important. And while it needs to address myriad audiences—journalists, investors, students, job-seekers—its most important purpose is to provide clear information (like what the company actually does) to potential customers.

Put another way, if I’m tasked with purchasing a new software system, I need to evaluate many competing software solutions. Chances are, I don’t have as much time as I need, so when I visit a company’s website, I’m going to make some immediate decisions based on

* Whether the company provides the kind of software I’m looking for
* Whether the company serves other customers in my industry
* Whether the company serves businesses of the same size as mine
* Whether the company does one or more of these things in a way that’s demonstrably better than its competitors

That’s the information I need right away, and if I don’t get it, or don’t understand it, I’ll probably look elsewhere.

I’m not saying that all companies can be as concise as Digg (who does one thing, does it well, and does it for free), but there’s no reason that every company can’t tell me, in 50 words or less, enough about what they do to keep me interested.

Clear information, well presented, makes me feel like the company behind it values my time and respects my intelligence, and that engenders the kind of goodwill that’s very much to the company’s benefit when I get serious about making my selection.

Of course none of this speaks to the quality of software offered by any of these companies. All of them were singled out by TEC analysts as deserving some special mention, and no doubt they can all be proud of their products. My point is that in many cases, the blog post that praised these companies offered better descriptions of their products and services than the companies’ own websites. Go figure.

Oracle Claims The Worst Is Over And Turns To KISS For A Boost

2009-09-10T00:58:00.000-07:00

In June Oracle Corporation (NASDAQ: ORCL), the largest database provider and one of the largest providers of software applications for e-business, unveiled a new suite of online services aimed at capturing the small business market. It also announced changes to appeal to its larger customers, as well as its quarterly financial results.

The question is "where can any one gain the competitive advantage and differentiation if all the peers are using the same business processes?" Therefore, as other established players will have made every effort to deliver integrated hybrid bundles of best-of-breed point solutions, it is unlikely that the high-end market is going to buy Oracle's integrated solution mantra - flexibility and differentiation are still the words more valued in this environment. The fact remains that most of Oracle's potential large customers already possess heterogeneous solutions for their overall business requirement; most of them also have significant man-hours invested in legacy code are not willing to throw away. Even in the unlikely scenario of these customers deciding to replace existing components with Oracle's, Oracle would face a challenge of integrating with other vendors' software.

Oracle, however, has been a pragmatic company, and it will likely modify its strategy and try another tack, although not necessarily publicly acknowledging it. Departing from the controversial processor power unit pricing or from its initial insistence on hosting servers for its customers are good examples of the company listening to the market buzz. It would not be a surprise to see Oracle modify its adamant stance of 'no modifications', at least in the high end of the market. Just do not expect Oracle to port its applications to other database platforms.

The fact that Oracle's database still maintains the lion share amongst the SAP or Siebel customer base despite these vendors announcing IBM DB2 as their primary database may indicate the strength of the product. It is not completely inconceivable to see some Oracle-technology 'religious' users opting for going for Oracle Applications due to their seamless integration to the database and due to a strong development environment, on condition that Oracle commits to delivering the needed product enhancements within a reasonable period of time. Some components of the Oracle 11i suite may already provide a good fit for some industries without the need for any modifications, as illustrated in the above customer case studies. However, Oracle will have to maintain much closer ties with its customers and to listen to their voices, which has not been the case yet despite encouraging steps to bridge the gap with the independent Oracle Applications User Group (OAUG) (for more information, see Oracle (Finally) Learning and Applying Its Own CRM).

On the other hand, Oracle's 'one-stop' shop mantra should be a compelling message for the lower-end of the market. We were made aware of Oracle's success within the mid-market with its Fast Forward Flows programs. The fact that first-time Oracle users experienced smooth 11i implementations may be encouraging for other prospects, too. Smaller and fledgling enterprises often have undeveloped or sub-optimally developed processes and, therefore, they might benefit from leveraging Oracle's experiences in refining these and might find the Oracle Small Business Suite attractive. One should expect more fine-tuning iterations of this strategy in the future though, since the magic formula of the applications hosting success (in terms of pricing, service level agreements (SLA), etc.) has not yet been discovered. But, the move is strategically wise - it is better to fight Microsoft's bCentral offering on its ground before it comes to the enterprise market with its recent acquisition of Great Plains (see Microsoft And Great Plains - A Friendship That Turned Into A Marriage). The move is also a counteractive measure to SAP's and PeopleSoft's apparent onslaught on the lower-end of the market (see SAP Claims Big Gains In The Low-End Battleground and PeopleSoft Joins The Hunt For SMEs).

As a summary, increased competitive pressure on many fronts, and lingering mixed perceptions about the 11i Applications suite, leaves Oracle at a crossroads for sustaining the momentum it had the last year. Should 11i.4 demonstrate maturity and should Oracle start orchestrating its product releases in smaller, more manageable chunks and improve relationships with OAUG, system integrators and consulting partners, Oracle's prospects will continue to be rosy, although probably less glowing than a year ago. Oracle product strategy, marketing and execution will have to be clear and spot on though. To that end, look for Oracle's more aggressive 'the turnkey e-business' message (and a tacit soul-searching continuation) for some time to come.

AT&T WorldNet Attempts a Unified "Buddy-List" But the Chance for Success is Slim

2009-09-10T00:57:00.000-07:00

AT&T WorldNet Attempts a Unified "Buddy-List" But the Chance for Success is Slim

Two weeks ago Microsoft withdrew from the concept of an integrated Instant Messaging (IM) system due to roadblocks from AOL/Netscape's Instant Messenger. Simply put, as soon as Microsoft enhanced the MSN IM system to enable communications with AOL's IM system, AOL's code was changed repeatedly to prevent communication between the two systems. The IM market is known for being predatory in nature, as each system attempts to cannibalize the market as a whole.

The proprietary IM systems draw attention to the vendors website for the purposes of direct e-commerce sales, which are particularly hot during the holiday season. AT&T has partnered with Tribal Voice, a leader in IM innovation, to create a unified IM system. The product is freely downloadable today but will be blocked by both MSN and AOL within the course of the next 7 days (probability 90%), rendering the IM system useless for the purposes of communication with either AOL or MSN. AT&T's IM system will continue to function normally with AT&T WorldNet subscribers.

Xchange Adds To The List Of CRM Point Solutions' Casualties

2009-09-10T00:56:00.000-07:00

According to many recent reports in the press, it appears that Xchange, Inc. , once one of the leading marketing automation and analytics providers, has very recently closed down its operations. Xchange was founded by Andy Frawley in 1994 as Exchange Applications Inc. The news possibly comes as not a big surprise to informed market observers and/or to many of the company's customers, as it had at least for over a year been in a very difficult financial situation, and, consequently, it had frantically explored possible survival options like finding a buyer after a major restructuring in 2002 and/or seeking a deal to return to a privately-held status. However, having not succeeded at either, and when the cash was completely burned up, the vendor had no choice but to abruptly seize its operations after the bank foreclosure.

The company had hemorrhaged money for several years, and its stock was de-listed from NASDAQ last year. During the past two months, it has further shed 75 employees, albeit at its prime, it employed 450. Its assets, including a notable customer base in Financial Services and Insurance (e.g., Citigroup, Citibank, Allstate, JP Morgan Chase, Fidelity, etc.), Retail (e.g., Bose, Gateway, Circuit City, Staples, etc.), and Telecommunications sectors (e.g., Sprint, Verizon, etc.), were auctioned off on March 11. The auction was reportedly held at the law offices of Reimer and Braunstein LLP in Boston and included everything from customer contracts and patents to computers, equipment, and office furniture, according to reports.

Initially, allegedly over 20 companies expressed interest in buying Xchange's assets, and in maintaining its products and supporting its customers, including direct competitors Chordiant Software, DoubleClick, SAS and Unica. While marketing management software vendor Unica was initially marked as a very likely buyer of the company, the vendor, however, announced on March 10 that it had elected not to make a bid for the Xchange's assets. Rather, Unica has announced a migration plan from Xchange's solutions to its Affinium platform. The vendor has reportedly decided not to participate in the auction, because Xchange's main assets — the software developers — were likely no longer with it. Also, Unica has already migrated approximately 15% of Xchange's customer base to Affinium, and the vendor touts that regardless of which company takes ultimate ownership of Xchange's remaining assets, converting to Affinium will be the most attractive solution for Xchange customers.

Consequently, given Unica's and DoubleClick's absence from the bidding, the winning bidder was Amdocs (NASDAQ: DOX), a provider of billing systems, customer care and support for the communications industry. Amdocs, which was not initially expected to be a strong bidder, reportedly outbid SAS to win the Xchange's remains for slightly more than $5 million. Although not a stranger to CRM products acquisitions given its earlier acquisition of the former leading CRM product Clarify in 2001 for $200 million (see Clarity of Vision: Clarify Sold to Amdocs by Nortel ), its latest acquisition of Xchange has raised many eyebrows. Amdocs does not have a blissful track record with the former purchase so far. To be fair, Amdocs has not exactly left the ClarifyCRM product in the dust, given the release of ClarifyCRM 11 in September 2002, which featured thin client support, a process manager module, and an XML-based integration gateway.

On the other hand, even during 2002, while battling to secure new finances, Xchange surprisingly managed to build a strong real-time engine to deliver targeted promotions based capability to detect important customer events and behaviors from transactional data throughout multiple marketing channels within an enterprise. Even as late as January 9, 2003 the company announced the release of its Xchange 9 browser-based suite that enables marketers to automatically trigger an appropriate communication to the customer immediately after they exhibit a behavior representing a cross-sell, up-sell, or retention opportunity, and that thereby answers the question when' to initiate a marketing interaction. Further, the Xchange 9 EDM (Event Driven Marketing) Option allows users the ability to observe data from multiple sources within the enterprise, look for changes to the state' of the customer, and action the direct marketing via the Xchange 9 platform, which is in contrast to leveraging historical information using traditional data mining tools or writing complex SQL-based queries to produce new predictive models long after the marketing opportunity has past.

In addition to full integration with EDM, Xchange 9 included the following new capabilities compared to Xchange 8:

* Single Sign-On

* Request Runner Utility the ability to run campaigns on demand using a simple command line utility

* Browser-based Format Viewer

* Support for Web Services Standards (i.e., SOAP and WDSL), and

* Offer Disposition Tracking the ability to better gauge effectiveness of real time campaigns

One may sound too wise after the event, but the writing on the wall had long been visible for Xchange, and for many like marketing campaign management specialists. The CRM market remains both the land of opportunity but with many treacherous patches of quicksand for those that are not certain about their footprint breadth in the field. It has been a no brainer' the fact that the 2000s have been adverse years in the entire enterprise applications market. Following the whopping growth rates of the late 1990s, and the spending surge on sexy e-Business-related technology in 2000, hard times worldwide and in almost all sectors have since subsequently morphed into harrowing times for all enterprise systems providers alike. While the biggest and/or the richest have been able to hang onto flat new sales, possibly modest declines, or in other cases possibly modest growth, only a lucky and/or the most apt few with a true differentiation in a selected number of markets (e.g., supply chain execution (SCE)) have even bucked the trend and have shown some enviable growth.

It might be interesting to analyze the recent years of enterprise resource planning (ERP) and customer relationship management (CRM) markets to discern how fortunes may often fluctuate and go in different directions. The term ERP, if not necessarily coming back into fashion, certainly is no longer a bad, pass' term of a few years ago, when almost all vendors were distancing themselves from the association (like from a plague) because ERP was then perceived as off-putting (i.e., intra-enterprise vs. entire supply chain and collaboration focus). At the same time, anything associated with customer or front-office interaction was all the rage, attracting both venture capitalists to pour their capital into new startup companies with brave ideas, while the customers were (over)buying these applications owing to then buoyant economy and the apparent need to better manage seemingly mushrooming customer bases.

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 campaigns. Having also gathered a number of high-profile early adopter customers worldwide, and enticed by then large market capitalizations, Xchange had followed suit and had gone public (NASDAQ: EXAP), and little did it know then about the upcoming dot-com implosion and economic downturn.

Recently however, while not exactly in its prime, ERP bears its ripe middle age well, while CRM vendors are largely finding other creative ways to describe their purpose (e.g., "a leading extended e-Business solutions provider"). Having experienced a rude awakening from an extreme and often unjustifiable enamor with dot-com's non-viable business models, and owing to a backpedaled growth of yesterday's hot items like CRM, supply chain management (SCM) or e-procurement, many experts have suddenly again had an epiphany about the importance of solid back office transactional systems. Namely, there is a renewed recognition that ERP is imperative to managing and controlling internal materials movements and processes, and it forms the foundation for collaboration, e-Business, CRM, SCM and so forth.

Some pundits have even reverted to predicting moderate growth for the ERP market despite unfavorable economic conditions. Therefore, while the traditional introspective mind-set of ERP becomes history, its functionality remains critical. The 'new economy' will not have caused the obsolescence of general ledger and accounts payable & receivable for example. Quite the contrary, it will have only emphasized their importance.

Destiny or not, the near-death experiences of many ERP players, which will almost all have meanwhile found another proprietor, had marked the end of an era when robust, inward-oriented enterprise transaction-crunching product suites were a guarantee of success. Today's enterprise applications are required as a matter of course to address more than the processes taking place within the walls of an enterprise.

While Web-enablement and collaborative e-business will continue to be a major direction, easier enterprise applications integration/interconnectivity, more flexible pricing, embracement of plug-and-play' applications that support commonly accepted standards (reflecting a reduced need to heavily customize multi-vendor solutions), and embedding analytical applications, knowledge management (KM), and business process management (BPM) are some of the best prospects among the ongoing wave of enterprise applications hot-buttons. It is needless to say that almost all traditional ERP vendors (small and big alike) had to experience a wake up call' and have long been trying to expand their product offering in tune with the ever-changing trends and requirements of the new collaborative economy.

Xchange Adds To The List Of CRM Point Solutions' Casualties Part Two: Market Impact & User Recommendations

2009-09-10T00:52:00.000-07:00

According to many recent reports in the press, it appears that Xchange, Inc., once one of the leading marketing automation and analytics providers, has very recently closed down its operations. Part One of this note discussed the specifics of the Xchange demise and related it to the changing nature of the ERP market. It also noted that almost all traditional ERP vendors (small and big alike) had to experience a wake up call' and have long been trying to expand their product offering in tune with the ever-changing trends and requirements of the new collaborative economy.

To that end, over the last few years, all significant enterprise applications players have been actively partnering or finding other ways to provide solutions that allow businesses to collaborate more effectively. Consequently, the boundaries between ERP, CRM, e-commerce and SCM have meanwhile blurred so much that any attempt to functionally separate them becomes ever more pointless. If the ultimate objective is to win and retain customers, one must consider the entire chain, which includes traditional ERP and SCM functions as well as the once considered more remarkable and supposedly more relevant CRM and e-commerce activity

The 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. Otherwise, the customer will end up on a competitor's list of customers. Therefore, the relative importance of CRM vs. ERP, ERP vs. SCM or of any other match-up is irrelevant. All of these functional areas are critical, except for some esoteric or autistic businesses that can go by with implementing islands of information. 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 lifecycle, product lifecycle, and so on, to name but a few, will be a big determinant of losers and winners.

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 other side of the CRM medal nowadays, as droves of smaller pure CRM vendors have been hard pressed to survive owing to the combined effect of CRM users' disenchantment with the products' hardly ever materialized benefits, after a hasty infatuation with its touted silver bullet' mantra (which once also happened to its older sibling ERP's users), compounded with the tight IT budgets due to the worldwide economic recovery delay 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 return on investment (ROI) metrics, and indispensable features and functions germane to selected industry verticals.

Despite these niche CRM vendors' attempts to overcome these challenges, many will continue to struggle to avoid insolvency, while the luckier ones that have some attractive point solutions (e.g., partner relationship management (PRM) or portal solutions) that large enterprise vendors would still gladly incorporate will become acquisition targets. Although Xchange might have held out longer than most of its peers after the dot-com bust, it is a crumb of comfort to its stranded customer base now. Its predicament has been only aggravated and expedited by the company's public nature, given that some of its privately-held competitors have not had to come out with an array of dismal results and thereby further feed investors' bad sentiment and pessimism.

Larger CRM vendors have, on their hand, 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 particularly 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 in marketing departments. These applications will have also often been 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 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 seriousness of these narrow product footprint vendors' predicament might be well illustrated by the Applix' departure, 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-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, and Chordiant's acquisition of Prime Response all should indicate diminishing life expectancy of independent CRM point solutions providers.

Why has it been so difficult for CRM point solution providers to even find a white knight, which has not generally been the case with even ancient ERP products? With several generations of some ERP products being available over a long period of time, the product development costs have been spread among a large population of users. These annual service & maintenance fees thus represent a substantial portion of revenue for most ERP vendors, and even if the product has not been actively marketed any longer, that revenue stream is going to be attractive to someone, if not to the original developer. This large installed base also allows for a greater aggregated vendors' experience, resulting thereby in higher-quality tried-and-true products.

The untapped ERP market segments will have also benefited by vicariously learning from mistakes and failed ERP implementations in many commercial companies in the past. Additionally, many ERP systems are now componentized, which provides phased implementations in more manageable chunks (instead of a traditional 'big bang' approach) in addition to vendors' developed implementation methodologies that are based on bypassing the usual traps of past failures. Many ERP systems have meanwhile also been Internet-enabled, which also allows for a quicker and simpler implementation, because client machines do not have to be configured time and again. Consequently, a prospective customer also has a choice of either installing software on its own intranet or renting it via an application service provider (ASP). Further, the leading ERP vendors have incorporated CRM, SCM, e-procurement and business intelligence (analytic) modules by developing them in-house, by acquisition or through strategic partnerships with the best-of-breed vendors.

Both large customer base (i.e., recurring revenue) and incremental products enhancements will have favored ERP vendors' longevity in the market, which has not been the benefit of CRM weaklings. Many of them will not have gathered large enough client base to find an interested suitor to try to recuperate an immense investment given these products had to be developed on cutting-edge technologies from scratch, as seen in Xchange's case above. Still, the most likely benefactors from Xchange's sellout should be direct competitors like Unica, Chordiant, E.piphany, DoubleClick, SAS, and NCR Teradata. These vendors either have enough resources and/or they have open solutions that can either supplant or can be grafted onto Xchange customers' instances. Some of them have apparently even already migrated some chunks of customer base and will be going after the remaining installed base with much zeal, while most of them have a more attuned product, more relevant customer references, and more dedication to marketing automation than large CRM/ERP suite vendors. Still, the large suite providers like SAP, Siebel, Oracle or PeopleSoft will indirectly benefit by citing Xchange's case to point out the need for a single-source, viable provider.

Descartes Systems Group Makes D&T Growth List

2009-09-10T00:44:00.000-07:00

Deloitte & Touche ranked Toronto-based Descartes Systems Group, Inc. number 21 on their list of 50 fastest growing Canadian technology companies. Descartes obtained their position on the list because of their 1247% increase in revenues since 1994.

Descartes' growth has rocketed over the last five years, fueled largely by a buying spree that has resulted in five major acquisitions since 1997. At an average price of over $10 million USD, these purchases have enabled Descartes to expand its Supply Chain Execution (SCE) product suite, increase its overseas presence, and broaden its vertical product market focus.

Company Name	Acquisition Cost	Date	Business
Michael Mead & Associates, Inc.	$13.2 million	2/97	Distribution software for bakery and other food industries
Roadshow International, Inc.	$29.9 million	11/97	Vehicle routing and scheduling software
Lightstone Group Inc.	$11.4 million	6/98	Software for delivery of goods and services
Calixon BV	$7.4 million	6/98	Trading partner collaboration, order tracking software
NRM	$1.4 million	7/98	Warehouse optimization software and consulting

For instance, the acquisition of Dutch software maker Calixon helped quadruple Descartes' revenue in Europe from 1998 to 1999. Its largest acquisition, Virginia-based Roadshow International, in addition to bolstering Descartes' logistics scheduling capabilities, brought a large customer base (over 600) into the fold. The MMA and Lightstone Group acquisitions gave the company added expertise in two additional verticals: baked goods distribution and delivery of goods and services. Managed effectively, these acquisitions can propel Descartes into the lead position among SCE vendors, displacing larger players Industri-Matematik, Manhattan Associates, and EXE Technologies. However, rapid growth can place a significant strain on a company's management and operations. Evidence of this can be seen in Descartes' negative profits for the last ten quarters, a timeframe that coincides with the acquisitions. While it is not uncommon for company balance sheets to dip into the red during periods of growth, continued losses can erode Descartes' financial foundation, impairing its ability to serve its customers.

Marketing Automation: Advancing of Age Slowly

2009-08-18T22:36:00.000-07:00

The agitation about the approaching of the business automation and administration market, as a stand-alone sub articulation of the absolute chump accord administration (CRM) market, continues, partly attributable to alloyed signals advancing from accordant point solutions providers. On one hand, contempo demise, and buyout of Xchange by Amdocs (see Xchange Adds To The Account Of CRM Point Solutions' Casualties) was the endure in the arrangement of less-fortunate point players. At the time above-mentioned to Xchange's assets auction, allegedly over twenty companies bidding absorption in affairs Xchange's assets, and in advancement its articles and acknowledging its customers, including abundant better-performing absolute competitors Chordiant Software, DoubleClick, SAS, and abnormally Unica Corporation. While the upbeat business administration software bell-ringer Unica (www.unicacorp.com) was initially credible as a actual acceptable client of Xchange, the vendor, however, hardly decidedly adopted not to accomplish a bid for the Xchange's assets. Rather, Unica has back appear a clearing plan from Xchange's solutions to its Affinium platform, accustomed it has already migrated about 15 percent of Xchange's chump abject to Affinium, and the bell-ringer touts that behindhand of which aggregation has taken ultimate affairs of Xchange's actual assets, converting to Affinium will be the a lot of adorable band-aid for Xchange customers.

The CRM bazaar as able-bodied as its business automation sub-segment charcoal both the acreage of befalling admitting with abounding adverse patches of quicksand accessories for those with baby brand beyond in the field. While the better or the richest packaged apartment CRM or action adeptness planning (ERP) providers accept been able to adhere assimilate collapsed new sales, possibly bashful declines, or in added attenuate cases possibly bashful growth, alone a advantageous and added allegedly the a lot of apt few with a accurate adverse in a called amount of markets accept even airy the trend and accept credible some enviable growth.

Every business aeon begins with the allure of the chump through sales and marketing. This hopefully after-effects in an adjustment administration and accomplishment action and ends with a chump service, which can absorb annihilation from acreage installations through to enquiry and complaint management. All of these accomplish accept to be accomplished able-bodied after exception, back otherwise, the chump will end up on a competitor's account of customers. The "64,000-dollar" catechism is how all business processes plan together. In the cyberbanking world, the amount of adaptability and adeptness of collaborative processes apropos to the chump action cycle, artefact action cycle, and account action cycle, to name but a few, will be a big account of losers and winners. To that end, there seems to be a dichotomy amidst the business automation affiance of allowances enterprise-wide and the way it has generally been misused.

Appeal of Business Automation

The accent of award and befitting barter has alone added afresh amidst abbreviating new sales opportunities. The address of business automation has appear from its adeptness to clothier business campaigns and to clue their capability and ascendancy business costs and to accomplish better-targeted, finer-grained, multi-stage and multi-channel campaigns. These applications appropriately aim at allowance organizations articulation their chump bases, assay specific chump needs that are not that accessible to a naked eye, and body promotions and alone campaigns advised to accommodated those needs and thereby actualize added revenue.

This is all done by allegory ample volumes of broadcast data, and again by anecdotic patterns or trends that would not contrarily be credible (particularly if one is to apprehension an befalling from a non-event, such as a chump has not acclimated the ATM in the endure month). With this advice in hand, enterprises can actualize custom campaigns and clue their effectiveness, and they can aswell advantage it to drive added processes, such as absolute time, chump account interactions or cross-sell opportunities (for example, chump account agents acclaim articles ad hoc aloft chump needs over the phone, or absolute time offers and promotions alone to barter abyssal a web site).

In a nutshell, business automation software should be able to capture, blend, mine, and assay ample amounts of chump abstracts from assorted sources, including online registries or directories, chump databases, collapsed files, announcement systems, and alien chump lists. That abstracts is again acclimated to ambition a constant bulletin beyond assorted channels to specific anecdotal (profiled) chump sets. Theoretically, these applications may absolve the ROI account through

* A added able chump acquisition, attributable to acutely focused campaigns that are alone and tailored to specific chump segments

* Added chump retention, attributable to bigger amount for absolute barter by always presenting alone artefact and account business letters to added assisting customers, and through able cross-selling opportunities that leverages purchasing histories and increases the likelihood of echo business

* Bigger business strategies in about absolute time, via the adeptness to appraise abounding indicators such as chump acknowledgment rates, about-face rates, web website metrics, carelessness ante and accepted demographic abstracts to always fine-tune chump segments and profiles, and abandon business approaches that are abortive if not even counterproductive

* Cost reduction, via the adeptness to appraise the capability of campaigns and to assay acknowledged strategies, to readdress abortive campaigns and to administer the costs of all campaigns aural the organization

Analysis of the Business Automation Market

The business automation bazaar has been burst back its advent, and one could anticipate three above sub-categories of solutions:

1) business operations,

2) business analytics, and

3) attack administration solutions. Business operations software aims at managing and tracking the costs, assets and goals of assorted business programs, and campaigns beyond assorted curve of business (LOBs). Business analytics solutions, as the name suggests, were advised to abduction chump abstracts from assorted channels and abstracts sources, and to assay (i.e., "slice and dice") that abstracts in altered angles for chump segmentation, profiling and personalization purposes. Finally, attack administration software attempts to design, schedule, execute,and admeasurement the capability of multichannel (including absolute mail, telemarketing, chump account centers, computer-telephony-interaction (CTI), the web pages, e-mail, etc.) business campaigns that advantage the ascribe from business analytics.

The added way to articulation these applications would be to anticipate whether they are advised to primarily advance the use of business assets or to advance the amount hypothesis to customers, or both. The focus of the aboriginal is on designing and creating a business strategy, free the best allocation of business budgets, managing business agents skills, and finer tracking and acknowledging business processes. On the added hand, the closing applications ascertain and acquaint the amount hypothesis of the alignment to the customer, ensuring the assisting creation, development and aliment of the chump relationship. All three ahead articular categories of applications would accord to both purposes, decidedly business analytics, although business operations will acutely be added associated with the use of business resources, and attack administration would against be accumbent with chump accord optimization.

However, admitting cited allowances of the applications, abounding business automation specialists have, for assorted reasons, been a far cry from success or, at least, not had an simple time. A lot of of pure-play providers accept been either acquired or gone apprehension during the accomplished few years including Xchange, Prime Response, BroadBase, Protagona, and MarketFirst, and those that abide absolute (such as Aprimo, SAS, NCR Teradata, Blue Martini Software, DoubleClick, and Unica) are allegedly creating broader business suites to awning all the above-mentioned bases.

One acumen for this is the adeptness of ample packaged ERP or CRM apartment providers to apathetic or even arrest action applications affairs decisions even able-bodied afore their austere bazaar entry. As a result, the alcove vendors accept to action to advance their bazaar ascendancy admitting able solutions. Meanwhile the ample vendors are still developing adroit solutions and bazaar credibility, and attempting to advertise these based primarily on the affiliation of their bound functionality with the blow of their suites and a affiance of added and complete functionality some time in the future. This class would cover the brand Siebel Systems, Chordiant Software, Pivotal, E.piphany, Kana, Onyx, Amdocs, PeopleSoft, SAP, and Oracle.

Incidentally, Applix, with its contempo avenue from the CRM bazaar (see Will A Big Fish's Splash Cause Minnows' Flush Out Of The CRM Pond?), may body the aphotic ancillary of the CRM badge nowadays, as droves of abate pure-play CRM vendors accept been harder apprenticed to survive attributable to the accumulated aftereffect of CRM users' disenchantment with the products' hardly anytime embodied benefits, circuitous with the bound IT budgets due to the adjournment of the common bread-and-butter accretion and with Microsoft's access into already awash place. Although abounding mid-market pure-CRM solutions accept been crumbling and improving, they accept to abide to facilitate affiliation with back-end systems, accustomed the accretion acquaintance of this charge for full-fledged allowances of CRM. Further, they accept to aswell accommodate the adverse through absolute ROI metrics, and basal appearance and functions germane to called industry verticals.

Larger CRM vendors have, on their side, been weathering the storm by relying on cross-selling broader CRM appliance suites to their absolute and abeyant customers, involving aswell apparatus such as sales force automation (SFA), agent accord administration (ERM) or alarm centers. Business automation point band-aid providers accept aswell collapsed casualty to bleak investors and abbreviating all-around corporations' appetites for technology. They accept taken the appulse of the arrest because of a added beginning bazaar yet to actualize the bazaar acquaintance of its accurate amount proposition, and because of the slower acceptance of advice technology (IT) in business departments (such as a cultural attrition to software automation, which is perceived as akin to the art of marketing, with an blank that automation ability in actuality annihilate the low-value action to absolution added time for accurate artistic work).

The actuality is that a lot of CRM deployments so far accept focused on operational aspects like automating tasks in processing interactions with customers, whether that is registering a complaint in alarm center, closing a sale, or responding to a chump or prospect's query. The irony is that these affairs are generally larboard to languish in assorted database islands broadcast about the organization, and not acclimated to clarify business campaigns or to advance chump service. Business is possibly the alone actual above business action yet to alter its amount processes so it can yield advantage of IT that can cut time, costs, and advance the superior of its operations.

Moreover, clashing SFA or chump service, business has an aftereffect on barter throughout the absolute accord tenure, since, for archetype focus groups, business campaigns, sales collaterals, and even aftermarket activities (such as assurance allotment and account calls) present opportunities for companies to ascertain and ascendancy how their articles are perceived in the market. With advice getting broadcast and aggregate from abounding assorted sources, a unified business belvedere could be an active to advance enterprises' appeal and acquirement administration strategies.

Adonix' Barn Administration Arrangement Response

2009-08-18T22:35:00.000-07:00

Modern warehouses accept circuitous requirements. Fast artefact cycles, the charge to abatement account and access the breeze of appurtenances through the accumulation alternation agency that warehouses cannot abide static. Virtual absolute time abstracts accept to bout the accumulation to demand. Furthermore, abounding ablaze accomplishment operations, such as final assembly, customized packing, labeling, and engraving, accept been confused from boutique floors to warehouses and administration centers (DC). As a result, accumulation alternation beheading (SCE) software has been created and adapted to handle these circuitous requirements. Barn administration systems (WMS) play a key role in a company's cessation action to adjournment the customization of articles until afterwards the articles or customized apparatus leave the accomplishment plant.

Part Three of the Adonix' Mid-Market FORMULA--Adopting Best of Both "Organic Growers" and "Aggressive Consolidators" Worlds series.

To abode SCE for users of its detached and action accomplishment suites, Adonix (www.adonix.com), France's largest, abreast endemic action solutions provider for average manufacturers, provides three audible offerings for automating barn activities, based on key factors such as transaction volumes and complication of processing requirements. WMS and SCE ability be the best examples of Adonix' charge to accouterment its barter with the architecture blocks for accumulation alternation administration (SCM). Its analysis and development action has complex analytical and prioritizing bazaar trends to advice barter abound and new articles and casework are again alien through both centralized development and acquisition.

Adonix has provided barn solutions in North America back the 1980s, which has accustomed it to advantage absolute acquaintance and skills. It aswell has a adequately able actual chump abject starting with Navistar and VWR Scientific, and is a avant-garde in the radio abundance (RF) technology, assembly LXE LDS accessory drivers. Absolute and -to-be user companies can use the warehousing capabilities aural the Adonix' alms set that bout the composure of their facilities:

1. Adonix Geode GX is a full-function WMS advised aural the Adonix X3 development framework to accommodated the needs of mid-sized companies with ample transaction volumes and adult barn practices. It is an enterprise-level configurable, multisite, multi-company, multilingual, multi-database/multi-operating system, and multi-workflow band-aid with rules-based account accumulator and retrieval and automation capabilities.

Adonix' account abaft Geode GX has been to action "tier one functionality at a bank three cost-of-ownership" to average companies that do not necessarily wish to accommodation on functionality and cost. As the flagship X3 ERP product, the WMS addendum is aswell configurable for the alteration needs via a 4GL personalization and agreement toolset. Adonix afresh redeveloped Geode aural the X3 technology and affairs to advertise it both as a bore of Adonix X3 and as a best-of-breed WMS band-aid in its acceptable market, abnormally the customer packaged appurtenances (CPG) vertical.

2. The Adonix Advanced Warehousing and Adonix Abstracts Collection modules accommodate RF directed abutment for primary barn activities including receiving, put-away, palletized adjustment picking, aces planning, and shipping.

3. The Adonix X3 Account bore provides amount area and banal administration functionality as an chip basic aural Adonix X3. It can plan either as a paper-based band-aid or with ADC abutment for a lot of account transactions.

Epicor 9: Delivering What Oracle and Others Are Yet to Achieve? “ Allotment 2

2009-08-18T22:33:00.000-07:00

Epicor Softwares next-generation converged artefact suite. A agnate accomplishment has yet to be able even by boss Oracle aural Oracle Fusion Applications.

The commodity aswell discussed Epicors accompanying њProtect, Extend, and Convergeќ action for accouterment barter with a clearing aisle best on their own calendar and convenience. The commodity afresh connected on by digging added and answer a amount of enabling technologies and concepts aural Epicor 9, starting with Epicor BPM (Business Process Management).

Part 2 of this blog alternation analyzes the above enabling concepts and technologies aural the product, such as Epicor ICE 2.0, which is based on Epicor True SOAв„ў, and includes the Epicor Everywhere Frameworkв„ў. The commodity aswell address added into the suites congenital business intelligence (BI) and action achievement administration (EPM) capabilities.

ICE, ICE, Baby¦

Let me footfall aback actuality a bit, and alpha from the account that Epicor ICE (Internet Component Environment) is the vendors all-embracing active and collaborative technology architectonics blueprint. As said in Allotment 1, the framework leverages C#.NET- and Progress OpenEdge-based business logic.

Epicor ICE provides an adjustable foundation that can change as customers businesses change. The abstraction is to advice adjust action software with the business, accomplish affiliation straightforward, and bear ever-more business productivity. Epicor ICE was aswell devised with the abstraction of abbreviation the amount and complication of technology acceptance by getting accessible for business users from the chat go.

For its part, Epicor True SOAв„ў is the architectural admission that Epicor ICE 2.0 offers; it is allotment of Epicor ICE and the abstruse archetypal for Epicor 9. In added words, Epicor ICE is based on what the bell-ringer refers to as њtrue SOA,ќ and applies the moniker for the afterward two capital reasons:

1. The applications themselves are congenital with diminutive business casework (or apparatus and entities) that collaborate with one accession and are afresh apparent appliance adaptable markup accent (XML) and Web services. Apparatus can be calmly configured and orchestrated appliance the Epicor BPM accoutrement mentioned in Allotment 1, after acute IT agents or coding, in a way that survives upgrades and avoids artefact adaptation lock.

2. Epicor ICE is not just about service-oriented architectonics (SOA) on the server side, but is aswell SOA for the client-side user acquaintance (UX) design. The absolute user interface (UI) is captured in XML metadata and the ICE accoutrement acquiesce users to calmly adapt and personalize the UI and run both a acute (rich) applicant and a browser-agnostic Web applicant from the aforementioned metadata (including users customizations and personalizations, which are stored in њlayersќ in the metadata).

Much Added than an Affiliation Tool

It is important to point out afresh that Epicor True SOA considers both server business argumentation and applicant business argumentation as absent њbusiness services.ќ Few added ERP systems are accounting appliance SOA concepts that accede both applicant and server business logic. In fact, abounding added systems tend to use SOA or Web casework for check action appliance affiliation (EAI) purposes only.

While Epicor ICE is the encompassing name for Epicors technology framework, Epicor True SOAв„ў, which is a subset of ICE, is Epicors way of anecdotic its admission to SOA. Namely, SOA should not just be a agency to easier integration, but aswell an admission to action business software development (just as client-server accretion was an admission per se).

Epicor calls its SOA admission True SOA, and the bell-ringer referred to њ100% SOAќ in the Epicor Vantage 8 absolution a few years ago. What is the difference? Epicor Vantage offered a C# acute applicant and afresh a services-based middle-tier business logic. There were over 600 business services, and anniversary was afresh delivered as Web casework with annihilation from 5 to 40 methods anniversary for simple discovery, integration, and re-use.

Epicor 9 builds on the admission acclimated in Vantage but extends service-orientation to the client-side, and converts all of the C# cipher to XML metadata services. From this individual antecedent of metadata, Epicor 9 is able to accomplish assorted client-side adventures for users.

True SOA for Epicor Everywhere

Furthermore, the technology that allows this assorted UX architectonics is alleged the Epicor Everywhereв„ў Framework. The Framework is a abstraction that is enabled by Epicor ICE and encompasses the capabilities to admission the appliance from a Microsoft Windows client, a Web client, or a adaptable Web client.

The Epicor Everywhere Framework is a byproduct of the True SOA technology that epitomizes what Epicor agency by SOA on the applicant ancillary (by ensuring that all client-side cipher is stored as tagged XML metadata). Web forms are afresh generated from XML metadata that describes the applicant business logic.

The framework provides a individual antecedent of applicant cipher to be acclimated to accomplish assorted yet agnate user experiences. In contrast, a lot of action systems charge to actualize and advance altered cipher curve for Windows desktop, Web, and adaptable forms.

With Epicor Everywhere, users can use Microsoft Office, Microsoft SharePoint, AJAX, Windows Internet Explorer, Apple Safari or Mozilla Firefox browsers, Web abundance foreground applications, and you-name-a-technology-or-gadget. The framework supports about all bartering adaptable accessories (Symbian OS, BlackBerry, Windows Mobile, iPhone, etc.) appliance the Web as against to a accurate adaptable operating arrangement (OS).

The Epicor Everywhere Framework aswell refers to the basal appliance architectonics that allows for localization layers to accede with regulations and best practices in countries about the world. To that end, accession accompanying technology, Epicor Layered Applicant Stack, separates and food applicant attributes for the purposes of personalization, customization, localization, verticalization, etc.

The applicant assemblage provides a agency of extracting UI elements into altered independent layers to baby to the charge of differing user roles, sizes of business, types of industry, and even country requirements effectively, after differing cipher lines. With Epicor Layered Applicant Stack, one alone sees what and if one needs, by user and by role. It is absolutely simple for users to personalize their acquaintance and adapt their UI after recourse to antecedent code.

In added words, with these two technologies (Epicor Everywhere Framework and Epicor Layered Applicant Stack) users can accompany ERP abstracts to whatever roles they charge and in whatever architecture they want. Ray Wangs contempo blog column provides a amount of awning shots, to accommodate some of the acidity of Epicor 9.

Nothing After Intelligence and Achievement Management

Epicor Action Achievement Administration (EPM) is Epicors end-user-driven, search-enabled, and role-based supply of in-context business insight. The new real-time and contextual BI belvedere includes an operational abstracts abundance (ODS) for autumn abbreviated data, a abstracts barn for autumn analytic data, and an online analytic processing (OLAP) cube architect alleged Epicor Cube Connect.

Epicor 9 moves online transaction processing (OLTP) abstracts over to an ODS appliance Microsoft SQL Server Advice Casework (SSIS), which in about-face abide a abstracts barn aural Microsoft SQL Server Analysis Casework (SSAS). Epicor EPM Server afresh pre-populates OLAP cubes based on Epicor 9s anatomic suites.

Epicor Cube Connect is afresh acclimated to let end users (as against to IT staff) use a astrologer to footfall admitting and actualize their own angle and key achievement indicators (KPIs) based on barefaced business entities. Users can afresh arrange these KPIs and OLAP cubes wherever they wish (on Microsoft SharePoint pages, on a adaptable device, and, added importantly, aural the ERP application).

Epicor Cube Connect ships with about 500 predefined KPIs to advice users mange their business, after the claim of any ability of abstracts warehousing or OLAP architectonics techniques. The graphical decision of these KPIs is based on whatever apparatus the user wants, such as Microsoft Excel Pivot Tables.

In addition, Epicor offers Epicor Achievement Canvas. The Canvas is a Web 2.0-based (includes seek capabilities and offers publish/subscribe casework for conception of in-context business insights) OLAP decision apparatus for creating and examination KPIs and accumulating role-based scorecards (i.e., heads-up graphics).

Epicor Achievement Canvas is an automatic and easy-to-use ambiance for building, deploying and arresting analytic insights action wide. The ambiance enables seamless deployment to Windows desktops, Web, and adaptable accessories (via Epicor Adaptable EPM).

Dashboards and Trackers

Epicor Dashboards is a aggregate of assorted altered capabilities such as inquiries, ad hoc reports, workbenches, graphical analyses, trackers, alerts, and business action ecology (BAM), all in a individual view. Dashboards are role-based and pre-packaged (there are about 100 provided), yet personalizable and extensible. They accommodate alternate drill-around defended admission to all locations of the application, appropriately befitting users bigger abreast and added productive.

All of Epicors basic and adaptable role-based dashboards can run as acute clients, broken clients, or Web clients, and are active in real-time appliance the abovementioned Epicor Everywhere Framework. The Epicor Dashboards affection comes as allotment of the appliance after any added cost, which is altered from a lot of competitors offerings.

Another carefully accompanying nice-to-have affection is Epicor Trackers, which are system-wide alternate inquiries. Trackers accommodate a snapshot appearance of aggregate users may charge to apperceive about customers, orders, etc., and accommodate admission to abstracts and application-specific abstracts as required.

Mashing Up Transactions and Analytics

One accurate affair about the in-application BI adequacy is that a user can accept an Order Access anatomy that includes transactional and analytic abstracts ancillary by side, for bigger advice and decision-making. In added words, such a anatomy would be a affectionate of mashup or blended appliance (see amount below).

epicor_bi.png

[Click to enlarge thumbnail]

To that end, Epicor Blended Applications (Mashups) accredit a publish/subscribe adequacy amid functions and applications. This adequacy reduces the charge for proprietary band of business (LOB) development by acceptance accumulation of new applications by bond calm assorted abate functions. Because of the Epicor Everywhere Framework, Web forms can subscribe to added forms or canyon advice to them to actualize a individual solution.

In accession to ODS, abstracts warehouse, and Epicor Cube Connect, the above-mentioned Epicor EPM Server, which is the foundation of Epicor EPM, includes Epicor EPM Administration Console. The animate manages Epicor EPM updates via a Microsoft Administration Animate (MMC) snap-in.

Optionally, users can advantage Epicor Replication Server that replicates assembly databases to one or added added servers (including ODS) or billow account environments in abreast absolute time. The server provides cogent scalability options for amount acclimation of tasks and user communities, which increases operational performance. Replication can be an bargain way to optimize a assembly ambiance for transaction entry, by offloading trackers, reports, etc., to added servers.

In summary, Epicor EPM is an easy-to-administer Microsoft SQL Server-based band-aid that delivers plug-and-play business insights after the accepted IT overhead. Epicor hopes to assuredly accomplish BI accessories affordable, simple to implement, and advantageous for all business users, and not just for IT agents and analysts.

As for absolute EPM applications for banking and operational reporting, budgeting, planning, consolidation, etc., Epicor offers both Microsoft FRx and Microsoft PPS Administration Reporter (as able-bodied as its own anchored banking address writer) for banking and operational advertisement capabilities, and both are chip with Epicor 9. The Reporter was developed with cogent investment by the Microsoft Office PerformancePoint Server (PPS) aggregation and maintains Microsoft FRxs intuitiveness and capacity for banking professionals.

As a caveat, though, I appear on a contempo notable change in Microsofts BI artefact strategy, whereby the aggregation is breaking afar the EPM ancestors of products. To that end, Microsoft has included the ecology and analytic functionality aural Microsoft Office SharePoint Server (MOSS) 2007, while actively backpedaling on (if not absolutely unplugging) the development of its beginning banking planning and alliance appliance in PPS.

This accident could be acceptable account for Epicor, as Epicor Portal and Epicor Action Content Administration (ECN) accomplish abounding use of MOSS. Thus, the bell-ringer could now accommodate the ecology and analytic elements of PPS to its barter added seamlessly.

Who should appraise and baddest a CMMS system?

2009-08-18T22:31:00.000-07:00

Selecting a CMMS arrangement is no simple task, so allotment the actual being or bodies to do the appraisal becomes crucial. It's all-important to absorb humans who are added accustomed with the aliment action than the arrangement and who can address this advice to the software developers.

One key catechism if searching for a arrangement is "In what areas do we allegation advice from the system?" Currently, CMMS systems for aerodynamics can be composed of several modules that can be acclimated as stand-alone applications, consitute a fractional solution, or are acclimated as a complete band-aid if all the modules in the arrangement are selected.

It can be confusing if a called arrangement includes several modules, because decision-makers may focus on aggravating to apparatus a band-aid that has added modules than the alignment requires. It can aswell actualize ambiguity a part of the advisers who are in allegation of evaluating the system, abnormally in the aerodynamics industry back an aircraft's aliment action involves several specialty areas. There is the accident that the being who is knoweledgable and best able to acknowledgment questions apropos that specific area ability be absent during a key moment in the appraisal or accomplishing process.

That is why it is acute to acutely ascertain the areas area a arrangement ability be helpful, because the capacity that abstracted maintenance-related and operational needs. From that point, the agents best ill-fitted to backpack out the appraisal and alternative action can be engaged. This is decidedly the case for airlines, third affair aeriform shops, or aircraft account centers. Based on these issues, in my experience, it is best to accept a aggregation that doesn't absorb systems staff, at atomic in the alpha of the process, for affidavit which I will explain after in this article.

Adjusting the action to the arrangement or the arrangement to the process

2009-08-18T22:30:00.001-07:00

This catechism ability alpha a agitation and aftermath altered reactions a part of the bodies amenable for defining or convalescent a CMMS system. Certainly, implementing a arrangement can analyze some of the accomplish of a process, but about systems are created based on a "general" aesthetics to try to awning a lot of of the situations that could appear in the industry. It is accessible to architectonics "One admeasurement fits all" systems, but they normallyвЂ”although not alwaysвЂ”represent top costs that can adjournment the acknowledgment on investment (ROI).

An airline's needs accept to be authentic through its processes, and these needs should advice authorize an cold that will advance a bigger band-aid and ultimately advance to the alternative of the best system. The alternative action incorporates issues including the operating platform, accepted advantages and processes, users, and airlines to the system's affluence of use, size, and cost. As a systems administrator already said, it is not a amount of adapting the action to the system, back this access ability could cause problems and actualize a attrition to change a part of users.

Selecting a CMMS or MRO arrangement for aliment has to be fabricated by the agent or advisers who are a lot of accustomed with the aliment process, because they will accept to do a abundant appraisal of the system's features. A complete solutionвЂ”a individual systemвЂ”is benign for an airline and the system's users; however, this doesn't beggarly that accepting assorted systems or software modules that are added about the capital arrangement is a bad solution.

Whatever band-aid is chosen, CMMS or MRO systems developers for the aerodynamics industry accept to face the claiming of amalgam locations about aircraft maintenance. Whether the band-aid comes in the anatomy of modules or is based on functionality, it should acquiesce users to ascendancy aliment jobs, accomplish forecasts, and accommodate managers with advantageous advice that is simple to apprehend and interpret, and is aggressive to achievement indicators.

The capital allowances that a CMMS arrangement should accompany to an airline cover standardizing action time and administration advice that is accepted to every bore in the system. It should aswell save costs, as able-bodied as optimize man-hours, aliment job management, and amplitude in the aliment base.

Before analyzing, selecting, and application the best system, it is acute to apperceive the absolute aliment action or processes, including new plan alternatives, such as adaptable computing, to aggrandize the ambit of the system.

There are several CMMS systems for the aerodynamics industry in the market, and the addiction is to actualize an chip band-aid by abacus ERP appearance to accommodate advantageous advice in altered levels and automatic and convenient environments. Furthermore, such systems accept an accessible architecture, which makes them added adjustable and allows them to allotment advice with added systems and accomplish in the a lot of accepted environments in the industry. However, the best arrangement will consistently be the one that satisfies the needs accompanying to the aliment action and brings allowances to the airline.

Which is the best system?

2009-08-18T22:28:00.000-07:00

There are abounding CMMS and MRO systems in the market, anniversary one with specific appearance that can accompany allowances to airlines or adjustment shops. Moreover, back anniversary airline accept to accede the band-aid that best matches its needs, it is harder to accomplish a accepted statement. Some systems abode aliment jobs, and their ascendancy and forecasting directly. They accept angry out to be actual able and accord to the success and abundance of some airlines. On the added hand, some systems accept been developed in such a way that they can represent a actual able-bodied and complete solution. However, the best arrangement is the one that absolutely satisfies an airline's needs.

SAP has a actual accepted arrangement that has been implemented in several airlines, either as a standalone band-aid or with added systems that abode maintenance-related processes. Certainly, this arrangement has some pros, and conceivably the two a lot of important allowances it brings are acclimation and authoritative authentic processes; and accouterment afterimage to what happens to administration positions. However, it lacks some acute appearance that are specific to airline aliment processes. Even admitting this absence has led to the development of interfaces, they are cher and accept to be justified by the allowances that the arrangement will accompany to the airline.

Thus, selecting the best software starts by defining the airline's problems or areas that charge to be improved. It is followed by allegory the solutions that best fit the airline's bearings and the goals it wants to accomplish over time. Given all of these factors, the alternative action depends on the acquaintance and ability of the aliment processes that are capital to the airline.

Mobile computing: an advantage for a CMMS or MRO arrangement in the aerodynamics industry

2009-08-18T22:20:00.000-07:00

Currently, systems focus added on how adaptable accretion can account an airline. For example, if I was alive with the aggregation amenable for the accomplishing of an automated abstracts accumulating arrangement for the hangar, we advised authoritative the arrangement accessible for the technicians so they would accept the advice they bare abutting to the aeroplane they were alive on. This focus brought important benefits, such as accepting aliment abstracts the aforementioned day it was generated. Of course, this action complex analysis on the best accessible equipment, such as admission points, types of antennae, cabinets, computers, etc. that would acquiesce us to install a wireless arrangement central the aerodrome and abode computers about the airplane. We were able to accomplish arrays and casework from the airplane, alienated traveling and bifold abstracts capture, while the administrator took addendum and again captured the advice in his PC, which was affiliated to the system. Again we were able to use a laptop and a alone agenda abettor (PDA) to prove that our plan was achievable and didn't accommodation the server's or system's operation.

As a aftereffect of this accomplishing which leveraged the ability of centralized processes, we acquired applicable solutions, such as actual and basic concern and appeal through the system, bearing of abstracts for non-routine jobs, agents registry, etc., while technicians and admiral could break abutting to the aircraft. Technicians could abide alive while the actual cadre beatific them the actual or documents. This was addition account of registering the plan cards that were getting issued, and it accepted to be actual advantageous for the aliment agents alive on-line. The next footfall was accretion the allowances of adaptable accretion to the aircraft platforms and the positions anchored by the airports, which is alone accessible in some airports.

This accomplishing was the aftereffect of the actuality that CMMS or MRO systems for the aerodynamics industry should accept or should advance the adaptability to board adaptable computing. In general, these solutions are actual affordable and can be implemented in baby or ample airlines or in absolute adjustment shops, because their costs are lower than CMMS itself. This allows the amplification of the system's ambit so it can accomplish both central and alfresco the airline.

However, to install a wireless arrangement and radio abundance antennae, the assurance and candor of the abstracts have to be ensuredвЂ”this accountable will become added important as the use of wireless networks spreads worldwide. There are several adaptable accretion providers in the bazaar as able-bodied as large, diverse, powerful, and affordable equipment, that acquiesce the architecture of a band-aid to acclimate to anniversary airline or adjustment shop, appropriately abacus adaptability to the CMMS or MRO arrangement in place.

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

2009-07-08T08:14:00.000-07:00

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?

2009-07-08T08:13:00.000-07:00

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

2009-07-08T08:12:00.002-07:00

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!

2009-07-08T08:12:00.001-07:00

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

2009-07-08T08:10:00.000-07:00

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

2009-07-08T08:09:00.000-07:00

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

2009-07-08T08:07:00.000-07:00

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

2009-07-08T08:06:00.000-07:00

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?

PLM Coming of Age: ERP Vendors Take Notice

2009-07-08T08:04:00.000-07:00

Product lifecycle management (PLM) is the foundation that supports the management and automation of product lifecycle processes from early product conceptualization to retirement across multiple organization and enterprise boundaries. Critical to the success of any manufacturer is the ability to utilize the latest electronic commerce technologies available for competitive business advantage, i.e., to leverage them as a secure medium for the flow of trading partners' data, product designs, marketing data and so on—all in near real time. To that end, PLM applications, which typically integrate with existing ERP applications, extend critical product information visibility and processes beyond the Engineering Department and through the supply chain using the Internet. With a PLM solution in place, a company has the ability to automate, monitor and track product development and revision processes with their customers, suppliers, and employees amid the increasing pressures of mass customization, globalization, regulatory compliance, increased outsourcing, and product accountability, to name some market driving forces.

The need for shorter product life cycles is being driven by competitive pressures, customer demand, and the need to cut operating expenses. In that regard, PLM products should give manufacturers the tools to collaborate with trading partners for faster time-to-market, reduced manufacturing costs, higher quality products, and improved customer satisfaction, as some potential benefits. But, given the relative immaturity of the PLM movement, PLM often means different things to different people. For a discussion of the different views of what comprises "PLM", see The Many Faces of PLM.

Namely, due to its deep engineering roots from the 1980s, it still often gets confused with computer-aided design (CAD) and product data management (PDM) systems. While CAD involves the use of high-resolution graphics in product design activities, allowing the quick evaluation and modification of the designer's intent, PDM systems were originally developed as merely vaults for storing and updating data. These on-line vaults replaced paper-based processes and information storage with a single, centralized data repository that enables authorized users throughout a company to access and update current product information, while ensuring they follow specific procedures.

On the other hand, PLM, which is an overarching strategy (concept) of guiding the product throughout its entire lifecycle, entails much more than just PDM, allowing collaboration amongst many constituents and successful planning and execution of new product development and introduction (NPDI) programs. Namely, a much broader mission of PLM would be to provide a panoramic "one version of the truth" in terms of data and business processes associated with the product from start to finish (i.e., from cradle-to-grave) to any involved party, such as design engineers, manufacturing engineers, production planners, purchasing, marketing, c-level executives, suppliers, and other trading partners. In addition to supply chain benefits, PLM promises to enhance the design environment itself by providing an integrated view of product engineering, manufacturing engineering, and plant resources.

This still evolving category of software should help any manufacturing company deliver a product and continually enhance it by helping the company manage and automate material sourcing, design and visualization, engineering change orders (ECO), and product documentation, such as test results, product packaging, and post-sales data. The product development life cycle—conceptualize, plan, design, procure, produce, deliver, service, and retire—naturally includes multiple people operating in multiple departments, and (typically) from multiple companies, each with locations in many countries around the world. It should also help companies manage a mushrooming number of local, state, federal, and international regulations.

In other words, at the core of any serious PLM initiative is typically a database or data warehouse that handles and stores every important piece of information that goes into making a particular product, such as formula or bills of material (BOM), packaging information, shipping specifications, regulatory data, patent data, and so on. The emphasis is not only on how to design the products, but also how to manage the accompanying information, and from there, all the constituencies should be able to slice and dice data and create workflows to deliver specific information to specific functions.

For example, while design engineers will use the data to effectively determine the required parts for a new product, buyers can use it to source and consolidate orders afterwards as to smooth the supplies. Distributors can use it to determine the stocking space and ergonomics, and so on, ideally in every nook and cranny of the business. Therefore, the companies that would benefit the most from a PLM deployment would be those that sell products in heavily regulated industries and regions; those whose products require complex manufacturing processes; or those that have highly decentralized design and manufacturing workforces, including a lot of outsourcing. But, consequently, one should also note that a successful PLM collaboration deployment may rely more on how well relationships with trading partners are managed rather than the robustness of the software per se.

Still, a traditional approach to tackling PLM applications typically first looks to leverage PDM to establish a base environment upon which to build better business processes, better document control, and eventually, manage complexities in engineering and product development processes more effectively. In addition to more effort that is required before any meaningful benefits can be seen from traditional PDM, its realm is also not enough in a competitive and collaborative e-business environment where manufacturers are required to deliver new products faster, cheaper, with increased quality, and immaculate after-sale service. Customers, partner channels, and suppliers must be involved in a collaborative effort too, since systems without enabling processes in place to coordinate product data for outsourcing, design, manufacturing, and maintenance are destined for failure.

Conversely, in most cases, PDM has been limited to design and engineering functions, with only a limited application in sales, marketing, and manufacturing environments, making the notion of a "vault" not merely a pun. Yet, to be successful, systems require additional applications to manage the delivery of product data across the global supply chain. Leveraging the Internet as a collaboration vehicle, PLM solutions aim at enabling manufacturers, suppliers, and the partner channel to collaborate at each and every stage of the product life cycle. Yet, more comprehensive PLM solutions blending CAD, PDM, visualization technology, collaboration capabilities, program management, portfolio management, and integration with existing enterprise applications have emerged only very recently to enable organizations to fully manage this lifecycle.

Another approach to PLM is to leave existing PDM systems in place and overlay a workflow management tool to extract data, manage it in a forms-based environment, and disseminate it to users across different functional groups touching the NPDI process. A PLM with this approach is designed to take data from various systems and thus provide a mechanism for sharing all the different kinds of data required in product development (including Microsoft Excel, Word, proprietary forms, CAD drawings, non-CAD graphics, quality data, etc.), format it into an easily understandable presentation, and let users make changes, which then update the source system. This process helps companies to manage product development and change, and also to communicate data for planning and prioritization, all with a web-based and highly flexible workflow management tool, referred to as "Flex Forms," and the relative ease of creating data tables on the fly for reporting purposes. The product gives manufacturers capabilities to more effectively design, make, deliver and support products through PDM, multimedia attachment capabilities, integrated workflow and inquiry tools.

Mid-market manufacturers, which have been overwhelmed by the huge scope and complexity of still evolving PLM concept, are focusing on taking incremental steps to adopt PLM (see The PLM Program—An Incremental Approach to the Strategic Value of PLM). For that reason, manufacturing companies that use, for example, the MAPICS' ERP offerings that want to take an initial step into PLM might want to start initially from enabling design collaboration during the NPDI process, where an urgent need for a PLM solution might be felt. The messages of enabling transition of new product design to new product introduction by providing quality parameters, scrap analysis, and manufacturing process information in an iterative approach to refine a product's design for manufacturing characteristics, as the first manageable PLM initiatives, should strike chord with the risk-averse target market
The PLM market, however, covers a wide range of above-mentioned previously unrelated software applications and the suites offered from different vendors can vary dramatically. Applications include CAD files management and CAD integrations; product portfolio management; project management; customer needs and feedback management; resource management; strategic sourcing and approved vendors list management; design collaboration; 2D and 3D visualization; change management and quality assurance; and others. These are in addition to traditional engineering applications like PDM, computer aided manufacturing (CAM), manufacturing process management (MPM), product regulatory compliance, and computer aided engineering (CAE).

In other words, the PLM market is still in its infancy compared to ERP, and therefore, no vendor provides all of the required solutions for a full PLM initiative at this stage, and almost all the more complete PLM solutions will involve best of breed components. Due to the number of components, earlier stipulated, that are used to deliver a PLM solution, there is still a plethora of niche providers that offer compelling products yet fail to deliver the breadth of a required solution and sustainable customer bases. However the future for stand-alone PLM niche providers that fail to differentiate their value to the market is dubious.
A number of ERP vendors are making their way into the PLM market by bundling or partnering strategically to embed PLM functions within their suites. Namely, some enterprise application vendors like Oracle, SAP, IFS, SSA Global, MAPICS, Epicor and others have been adding some of the above PLM capability into their products, in addition to the likes of PeopleSoft and QAD still filling their gaps through partnerships, with Agile and Arena Solutions, respectively.

One example of this is the May, 2004 announcement of Vantage PLM from ERP vendor Epicor. Vantage PLM is an integrated product lifecycle and document management solution designed for Epicor's mid-market manufacturing clients. The solution provides an integrated environment between product design and production by serving as a central knowledge repository for process and product history. Epicor plans to help its customers promote integration and data exchange among all enterprise users who interact with the product—including project managers, engineers, salespersons, buyers, and quality assurance representatives.

Epicor provides integration with CAD systems, leveraging domain expertise and technology from German company PROCAD. Epicor appears to be avoiding the most common pitfall that many ERP vendors face with PLM: by providing a more flexible environment for product innovation than for the standard ERP environment that is focused more on transactional control. For example, a part does not require the full overhead of an ERP part number to be assigned before it becomes a solidified design. Another example is that engineering BOMs are defined independently of manufacturing BOMs, which may be an entirely different structure. While this solution does not provide all of the features that a full PLM system will offer, it can offer tangible benefits to Epicor customers looking to infuse more collaboration and structure into their product design processes.

Furthermore, most PLM vendors focus on specific vertical industries, and their solutions have been developed to solve the specific needs of those industries (such as, consumer goods companies focused on maintaining and extending the value and variety of merchandize brands, pharmaceuticals, and life sciences concern with ensuring regulatory compliance and patent protection, high-tech and fashion verticals focus on shorter time-to-market, manufacturing speed and change management, and automotive suppliers care mostly about effectively managing the complex supply chain). As a general rule, the closer the PLM solution gets to the design and production of the product itself, and the more complicated the product, the more industry focus will play a role (see PLM Is an Industry Affair— Or Is It? The converse reality is that a high percentage of these manufacturers have never connected their engineering data to their ERP system.

Is MAPICS Getting the Magic of PLM? Part Three: Challenges and User Recommendations

2009-07-08T08:03:00.000-07:00

How Magik! Fits with MAPICS:For over two years or so, MAPICS, Inc. (NASDAQ: MAPX), possibly the largest global solution provider of extended enterprise applications for discrete manufacturers after acquiring its former competitor Frontstep (see MAPICS to Leap Forward in a Frontstep Way), has shown both signs of significant changes and a persist number of historically recognizable and invariant tenets of operation. During the same time, the vendor has continued with the painstaking process of producing and executing a strategy going forward that would pragmatically blend the company's traditional values and success factors with new approaches to stay in tune with market trends.

To that end, on May 5, MAPICS announced it recently acquired the MAGIK! Product Lifecycle Management (PLM) solution, from its longstanding partner—Ceimis Enterprises of Laguna Hills, California (US). This former strategic extension solution has purportedly been well received by a number of MAPICS customers and is already integrated with the MAPICS ERP for iSeries product.

Ceimis has had another approach to PLM, which is to leave existing product development management (PDM) systems in place and overlay a workflow management tool to extract data, manage it in a forms-based environment, and disseminate it to users across different functional groups touching the new product development and introduction (NPDI) process. MAGIK! PLM was designed to take data from various systems and thus provide a mechanism for sharing all the computer aided design (CAD) drawings, non-CAD graphics, quality data, etc.), format it into an easily understandable presentation, and let users make changes, which then update the source system. This process helps companies to manage product development and change and helps to communicate data for planning and prioritization—all with a web-based and highly flexible workflow management tool, referred to as "Flex Forms," and the relative ease of creating data tables on the fly for reporting purposes. The product gives manufacturers capabilities to more effectively design, make, deliver, and support products through PDM, multimedia attachment capabilities, integrated workflow and inquiry tools.

Mid-market manufacturers, which have been overwhelmed by the huge scope and complexity of still evolving PLM concept, are focusing on taking incremental steps to adopt PLM (see The PLM Program - An Incremental Approach to the Strategic Value of PLM). For that reason, manufacturing companies that use MAPICS ERP offerings that want to take an initial step into PLM might want to start initially from enabling design collaboration during the NPDI process, where an urgent need for a PLM solution might be felt. The messages of enabling transition of new product design to new product introduction by providing quality parameters, scrap analysis, and manufacturing process information in an iterative approach to refine a product's design for manufacturing characteristics, as the first manageable PLM initiatives, should strike chord with the risk-averse target market (see Can ERP Speak PLM?).

The PLM market, however, covers a wide range of above-mentioned, previously unrelated software applications and the suites offered from different vendors can vary dramatically. Applications include CAD files management and CAD Integrations, product portfolio management, project management, customer needs/feedback management, resource management, strategic sourcing/approved vendors list management, design collaboration, 2D and 3D visualization, change management & quality assurance, and others in addition to traditional engineering applications like PDM, computer aided manufacturing (CAM), and computer aided engineering (CAE).

In other words, the PLM market is still in its infancy compared to enterprise resource planning (ERP), and therefore, no vendor provides all of the required solutions for a full PLM initiative at this stage, and almost all more complete PLM solutions will involve best of breed components. Due to the number of earlier stipulated components that are used to deliver a PLM solution, there is still a plethora of niche providers that offer compelling products yet fail to deliver the breadth of solutions required and sustainable to customer bases. The acquisition of MAGIK! might further confirm the trend of a dubious stand-alone future for PLM niche providers that fail to differentiate their value to the market, as also illustrated in the last year shopping spree of Agile Software (see Has Consolidation Made the PLM Market More Agile? ).

MAPICS thereby joins the mass of ERP vendors that are making their way into the PLM market by bundling or partnering strategically to embed PLM functions within their suites. Namely, some enterprise application vendors like Oracle, SAP, IFS, SSA Global, Epicor, etc. have been adding some of the above PLM capability into their products, in addition to the likes of PeopleSoft and QAD still filling their gaps through partnerships, with Agile and Arena Solutions respectively.
Still, one should note that the MAPICS PLM solution (or however it might be re-branded in the future) will not have an all-encompassing functional footprint. Furthermore, most PLM vendors focus on specific vertical industries, and their solutions have been developed to solve the specific needs of those industries (e.g., consumer goods companies focus on maintaining and extending the value and variety of merchandize brands; pharmaceuticals and life sciences are concerned with ensuring regulatory compliance and patent protection; high-tech and fashion verticals focus on shorter time-to-market, manufacturing speed and change management; and automotive suppliers care mostly about effectively managing the complex supply chain). As a general rule, the closer the PLM solution gets to the design and production of the product itself and the more complicated the product, the more industry focus will play a role (see PLM Is an Industry Affair—Or Is It?).

At this stage, it is somewhat apparent that MAPICS will not focus initially on providing industry-specific PLM solutions, but rather it will focus on off-the-shelf generic workflow collaborative capabilities. While this may be good enough for many existing MAPICS' customers, some, like aviation and defense or automotive manufacturers might be left wanting more CAD/CAM/CAE functionality that focuses on geometric design and control. This is where MAGIK! does not exactly excel. The converse reality is that a high percentage of these manufacturers have never connected their engineering data to their ERP system.

Also, while the idea to enable the product development team at MAPICS to gain economies of scale by building common application components as commodities that can be deployed within the entire product portfolio is tempting and promising in the long run, at this stage, we are not aware of the MAGIK! PLM's availability to other product lines beside ERP for iSeries and MAPICS should swiftly clarify its when and how. This is especially important given the fact that at the same time MAPICS is integrating MAGIK! PLM into the business, it does not appear to have completed its acquisition strategy, since the vendor touts it is likely acquire additional products to expand its product footprint and gain access to new industry verticals. Absorbing the current and future acquisitions will require strong vision, leadership, and execution or it will result in a company with a suite of somewhat uncomplimentary business and products.
nts, and have new product development and introduction concerns, should react positively to this announcement. The existing MAGIK! PLM users should be assured of their investment's viability; while MAPICS will likely gladly oblige the ongoing support and service for non-MAPICS MAGIK! PLM users, clarifying this with a new owner can never hurt. They should approach MAPICS to clarify its current skills to support their short- and long-term PLM initiatives, and to clarify the product roadmap.

Prospective MAPICS users should evaluate the above potential inexpensive PLM collaborative functional enhancements as a way to add value to their existing applications although bearing in mind that some other PLM vendors might currently offer more functional and appropriate products for their business at this stage. These prospective customers should consider adding the announced functionality to their requirements list, as to secure value in terms of both potential cost savings and increased efficiency. For a more complete discussion of how to select a PLM vendor, go to Selecting a PLM Vendor.

MAPICS remains a stable company, with a strong financial position, a depth of manufacturing knowledge, a strong customer service record, and a developed affiliate channel, which has also broadened its product offering. Thus, the prospective customers in MAPICS' focus industries (such as fabricated metal products; industrial/commercial machinery and computer equipment; electrical equipment and components; transportation equipment; and measurement, analyzing and control instruments and related products) should consider evaluating MAPICS, given its understanding of manufacturer's business problems, its excellent track record of customer service, and its set of solutions for discrete manufacturing companies with revenues in the range $20 to over $1 billion (USD) which consist of independent companies and divisions, sites, and subsidiaries of larger companies.

Combined respective MAPICS and Frontstep customers and partners should be encouraged by the progress of Frontstep's assimilation. Still, users will benefit from approaching MAPICS and informing themselves about what the company plans for future service and support (or discontinuation or product stabilization) of its individual products are, and what would the ramifications of migrating (or not) to its new product offering be. Existing users of iSeries, Oracle, and Progress database-based products as well as of former Frontstep's non-mainstream products (SyteCentre and SyteDistribution) would benefit the most from doing so.

Intentia: Stepping Out With Fashion and Style Part One: Characteristics and Trends of the Fashion Industry

2009-07-08T08:02:00.000-07:00

So your software vendor says that they can do fashion. You better make sure that the software features go far beyond styles, colors, and sizes. The requirements for the fashion industry are some of the most demanding and unforgiving in the world of manufacturing. If you're not careful, you may find your profits falling on the cutting floor and money being swept out with the scraps. Read on to find out why running with a pair of scissors is not the only dangerous thing when selecting software for the fashion industry and why Intentia's offering bears investigation. And even if you're not into fashion, learn what hurdles another industry has to jump to remain competitive. You may feel fortunate to be in the industry you are.

We are surrounded by fashion. In fact we come into contact with it so often that we tend to take it for granted. However, if you are in the business of fashion, you know that people's tastes are extremely fickle and ever changing. Your enterprise-wide software has to be nimble enough to turn on a dime. It also must be able to anticipate more often than to simply react.

This research note explores industry characteristics and trends and resulting software challenges. After getting an understanding of the fashion marketplace and competition, we will look at Intentia's Movex software offering. Movex's functions and features that will allow you to cut, sew, and package your products efficiently � before they are out of fashion.

And, while you may not be into haute couture or consider yourself a fashion plate, you may find how the fashion world solves problems similar to those found in your industry. For sure, you will have a better appreciation of what it takes to put that shirt or skirt on the shelves and not so quick to say it costs too much.

Industry Characteristics and Trends:

All successful companies cater to the needs of their customers. However, in fashion these needs may be more viewed as whims or temporary flights of fantasy than established trends on which you can base production and supply chain decisions. Case in point: how long has the Pentium IV computer chip has been placed on PC motherboards compared to double-breasted suits? Furthermore, in somewhat of a reversal, the requirements of fashion manufacturers are being driven more by the demands of the retailers that sell the clothes than the supplier.

A recent example between Levi's and Wal-Mart highlights a developing trend. Up until the early 1990s Levi's could pretty much deliver the merchandise and retailers would sell it. Now to do business with Wal-Mart, Levi's had to develop a new line of jeans to Wal-Mart specifications and meet very stringent guidelines regarding performance and cost control. While Levi's is still driving the car, Wal-Mart supplies the operating manual. This scenario is being repeated throughout the fashion industry as the balance of the scales shifts.

As you would expect in an industry with a diverse customer base, namely the general public, the life cycle of product is expressed in months, not years. To appease this public, a product is produced in every reasonable size and color combination. Consequently, the number of stock-keeping units (SKU) tends to be much larger than in other industries. Missing an opportunity window—that is short to begin with—may mean that you could be stuck with obsolete merchandise. Predicting the taste of the general public can, at best, be a crap shoot.

While outsourcing of production is not an unusual practice, in the fashion industry it has become a fine art. Shirt cuffs are made by one company; collars by another company; and buttons by a third company. The components are all brought together on the sewing floor to complete the finished product. Because operating and profit margins are meager, the outsourced companies can be spread throughout the world where labor and material costs are in cheap but plentiful supply. These factors create longer than usual lead times and constant managing of an extensive and far-flung supply chain. As a result, fashion is handicapped by a long time to market in the face of a narrow window of opportunity in which to attract the consumer's attention.

Illustrated in figure 1 is one of the simpler but common supply chains in fashion industry. Spread your suppliers across the Pacific Rim. Base your assembly operations in Europe. And, of course, there is a need for distributions facilities in the major population centers of the world. Accordingly, even a simple supply chain model grows in complexity as the channel partners grow in geographic distance.

A somewhat unique problem complicating the life of fashion is seasonality.

Imagine a huge shipment of winter coats usually hits the receiving docks as the spring flowers are starting to bloom. Not a problem; hold the coats for six months for the fall season. Chances that styles and tastes will be frozen are as likely as a block of ice will not melt in a 35�C (or 95� F) degree heat. Improper management of the supply chain can result in a greater risk of inventory exposure and obsolescence. Consequently, the fashion industry is faced with seasonal items (i.e., coats, jackets, fabrics) and non-seasonal items (i.e., ties, undergarments, shirts). From a software perspective there are requirements for make-to-order (MTO) and make-to-stock (MTS). However, these requirements are influenced by the special factors of fashion. In other words, you may want to have a constant stock of men's white dress shirts but will make to-order shirts in less popular colors.

Difficulties in Managing the Supply Chain:

One thing that should become increasingly obvious when working in the fashion industry is that the supply chain is extremely complex and difficult to manage, even with the use of automated tools. There are likely to be all possible combinations of components manufactured by your own resources and fully sourced throughout the world. Consequently, obtaining an accurate and current picture of the supply chain is not an easy task. Likewise, when the picture does come into focus, it is difficult to react to changes.

Directly or indirectly affecting these characteristics are several industry trends. As constant pressure is being placed on low operating margins and limited operating capital, consumers are demanding better service. These demands are being translated into penalties if delivery schedules are missed or late. As quotas, particularly in the United States, are relaxed, globalization of product components is increasing. Suppliers are looking beyond traditional geographic boundaries and are shopping the worldwide marketplace. Consequently, sourcing of these components is shifting and stretching the capabilities to manage the supply chain and meet delivery schedules.

Compliance requirements are becoming more stringent. In additional to delivery and quality constraints, the public's outcry to questionable labor practices of companies like Nike and TheGap has now placed the microscope on human rights issues. No longer is the cheapest necessarily the best in the arena of public opinion.

As cited in the Wal-Mart example earlier, retailers are taking greater control over the supply chain. Traditional boundaries between the retailers and suppliers are becoming increasingly fuzzy and difficult to differentiate. Everyone wants to own the consumer or, at least, a piece of him. Suppliers are taking a more dominant role in "store ready" inventory. For example, TAL Apparel Ltd., a closely held Hong Kong shirt maker, has a direct pipeline into point-of-sale data at JC Penney stores. With this information TAL can readily determine safety stock levels and can initiate replenishment to prevent out-of-stock conditions. Instead of asking Penney what it would like to buy, TAL tells them how many shirts were just purchased and now need to be replaced. As a result, to reduce inventory carrying costs and to better leverage available operating capital, vendor managed inventory (VMI) is being taken to another level of control and convergence.

Figure 2 below summarizes the trends in the fashion industry and their effect on manufacturing and production.

What is most intriguing about the trends is that all are out of the control of the supplier. While external forces influence many industries, the rapidity in which trends impacting the fashion industry change is somewhat unique.

Glossary of Enterprise Applications Terminology Part Two: Just-in-Time to Extensible Markup Language

2009-07-08T08:01:00.000-07:00

ERP (enterprise resources planning) was an important step in an ongoing evolution of computer tools that began in the 1960s. Each evolutionary step is built on the fundamentals and principles developed within the previous one. As systems developed over time, a continuous stream of new terminology surfaced.

Just-in-Time through Order Entry:just-in-time (JIT): A philosophy of manufacturing based on planned elimination of all waste and continuous improvement of productivity. It encompasses the successful execution of all manufacturing activities required to produce final product, from design engineering to delivery and including all stages of conversion from raw material onward.

lead time:

1) A span of time required to perform a process (or series of operations).

2) In a logistics context, the time between recognition of the need for an order and the receipt of goods. Individual components of lead time can include order preparation time, queue time, processing time, move or transportation time, and receiving and inspection time.

lean production: A philosophy of production that emphasizes the minimization of the amount of all the resources (including time) used in the various activities of the enterprise. It involves identifying and eliminating non-value-adding activities in design, production, supply chain management, and dealing with the customers. Lean producers employ teams of multi-skilled workers at all levels of the organization and use highly flexible, increasingly automated machines to produce volumes of products in potentially enormous variety. It contains a set of principles and practices to reduce cost through the relentless removal of waste and through the simplification of all manufacturing and support processes.

mass customization: The creation of a high-volume product with large variety so that a customer may specify his or her exact model out of a large volume of possible end items while manufacturing cost is low because of the large volume. An example is a personal computer order in which the customer may specify processor speed, memory size, hard disk size and speed, removable storage device characteristics, and many other options when PCs are assembled on one line and at low cost.

mass production: High-quantity production characterized by specialization of equipment and labor.

master production schedule (MPS): The anticipated build schedule for those items assigned to the master scheduler. It is a set of planning numbers that drives material requirements planning (MRP). It represents what the company plans to produce expressed in specific configurations, quantities, and dates.

material requirements planning (MRP): A set of techniques that uses bill of material data, inventory data, and master production schedule to calculate requirements for materials. It makes recommendations to release replenishment orders for materials. Further, because it is time-phased, it makes recommendations to reschedule open orders when due dates and need dates are not in phase.

manufacturing resource planning (MRP II): A method for the effective planning of all resources of a manufacturing company. Ideally, it addresses operational planning in units, financial planning in dollars, and has a simulation capability to answer what-if questions. It is made up of a variety of processes, each linked together: business planning, production planning (sales and operations planning), master production scheduling, material requirements planning, capacity requirements planning, and the execution support systems for capacity and material. Output from these systems is integrated with financial reports such as the business plan, purchase commitment report, shipping budget, and inventory projections in dollars. Manufacturing resource planning is a direct outgrowth and extension of closed-loop MRP.

manufacturing execution system (MES): A factory floor information and communication system with several functional capabilities. It includes functions such as resource allocation and status, operation/detailed scheduling, dispatching production units, document control, data collection and acquisition, labor management, quality management, process management, maintenance management, product tracking and genealogy, and performance analysis. It can provide feedback from the factory floor on a real-time basis. It interfaces with and complements ERP systems.

online analytical processing (OLAP): A category of software tools that provides analysis of data stored in a database. OLAP tools enable users to analyze different dimensions of multidimensional data. For example, it provides time series and trend analysis views. The chief component of OLAP is the OLAP server, which sits between a client and a database management systems (DBMS), and which understands how data is organized in the database and has special functions for analyzing the data. There are OLAP servers available for nearly all the major database systems.

order entry: The process of accepting and translating what a customer wants into terms used by the manufacturer or distributor. The commitment should be based on the available-to-promise line (ATP) in the master schedule. This can be as simple as creating shipping documents for finished goods in a make-to-stock environment, or it might be a more complicated series of activities, including design efforts for make-to-order (MTO) products.

Portal through XML:portal: A personalized web site or service that offers a broad array of resources and services, such as e-mail, forums, search engines, and on-line shopping malls. The first web portals were online services that provided access to the Web, but by now most of the traditional search engines have transformed themselves into web portals to attract and keep a larger audience.

process manufacturing: Production that adds value by mixing, separating, forming, and/or performing chemical reactions. It may be done in either batch or continuous mode.

product data management (PDM): A system, which controls all product-related data and associated workflow processes within an enterprise. Product data management systems replace paper-based processes and information storage with a single, centralized data repository that enables authorized users throughout a company to access and update current product information, while ensuring they follow specific procedures. PDM vendors recently have emphasized the similarities between PDM and groupware technology appropriate to a range of business environments. Besides ensuring data integrity using relational database technology, both include workflow and web-based applications that ease collaboration efforts.

product configurator: A system, generally rule-based, to be used in design-to-order, engineer-to-order, or make-to-order environments where numerous product variations exist. Product configurators perform intelligent modeling of the part or product attributes and often create solid models, drawings, bills of material, and cost estimates that can be integrated into CAD/CAM and MRP II systems as well as sales order entry systems.

product life cycle:

1) The stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline.

2) The time from initial research and development to the time at which sales and support of the product to customers are withdrawn.

3) The period of time during which a product can be produced and marketed profitably.

product lifecycle management (PLM): A process for guiding products from idea through retirement to deliver the most business value to an enterprise and its trading partners. The applications that support the business activities enabled through PLM includes product ideation, design, engineering, manufacturing process management, product data management, and product portfolio management.

real time: The technique of coordinating data processing with external related physical events as they occur, thereby permitting prompt reporting of conditions. The immediate availability of data to an information system as a transaction or event occurs.

relational database: A software program that allows users to obtain information drawn from two or more databases that are made up of two-dimensional arrays of data.

reorder point (ROP) system: Inventory method that places an order for a lot whenever the quantity on hand is reduced to a predetermined level known as the reorder point.

return on investment (ROI): A financial measure of the relative return from an investment, usually expressed as a percentage of earnings produced by an asset to the amount invested in the asset.

routing: Information detailing the method of manufacture of a particular item. It includes the operations to be performed, their sequence, the various work centers involved, and the standards for setup and run time.

sales force automation (SFA): Technology used to improve the efficiency and effectiveness of the sales force by streamlining and speeding up processes and eliminating errors. It allows the sales force to access up to date information of customer accounts and pricing. It also eradicates errors involved with placing orders.

server: A computer, or softtware package, that provides a specific kind of service to client software running on other computers. The term can refer to a particular piece of software, for example a Web server, or to the machine on which the software is running. A single server machine could have several different server software packages running on it, thus providing many different servers to clients on the network.

supplier relationship management (SRM): Evolving set of applications enabling enterprises to create a more comprehensive lifecycle view of suppliers' operational contribution to the top and bottom lines. Strategic sourcing and spend management would be some of SRM parts.

supply chain management (SCM): The design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.

supply chain planning (SCP): The determination of a set of policies and procedures that govern the operation of a supply chain. Planning includes the determination of marketing channels, promotions, respective quantities and timing, inventory and replenishment policies, and production policies. Planning establishes the parameters within which the supply chain will operate.

supply chain execution (SCE): Execution-oriented software applications for effective procurement and supply of goods and services across a supply chain. It includes manufacturing, warehouse, and transportation execution systems, and systems providing visibility across the supply chain.

supply chain inventory visibility (SCIV): Software applications that permit monitoring events across a supply chain. These systems track and trace inventory globally on a line-item level and notify the user of significant deviations from plans. Companies are provided with realistic estimates of when material will arrive.

strategic sourcing: The development and management of supplier relationships to acquire goods and services in a way that aids in achieving the immediate needs of a business. It is entirely aligned with the sourcing portion of managing the procurement process.

warehouse management system (WMS): Systems that integrate work performed within warehouses and distribution centers with a transactional-type information system. Simple storage and retrieval of materials is superseded by strategies to increase throughput and productivity by managing the full range of warehouse resources to effectively manage warehouse business processes and direct warehouse activities, including receiving, put away, picking, shipping, and inventory cycle counts. Most support radio-frequency communications, allowing real-time data transfer between the system and warehouse personnel.

work in process (WIP): A good or goods in various stages of completion throughout the plant, including all material from raw material that has been released for initial processing up to completely processed material awaiting final inspection and acceptance as finished goods inventory. Many accounting systems also include the value of semi-finished stock and components in this category.

World Wide Web (WWW) (A): A set of software, protocols, hypertext conventions, and multimedia techniques that enable use of the Internet.

Web Services: A standardized way of integrating Web-based applications using the XML, SOAP, WSDL and UDDI open standards over an Internet protocol backbone. XML is used to tag the data; SOAP is used to transfer the data; WSDL is used for describing the services available; and UDDI is used for listing what services are available. Used primarily as a means for businesses to communicate with each other and with clients, Web services allow organizations to communicate data without intimate knowledge of each other's IT systems behind the firewall. Unlike traditional client/server models, Web services do not provide the user with a GUI, but instead share business logic, data, and processes through a programmatic interface across a network. Web services allow different applications from different sources to communicate with each other without time-consuming custom coding, and because all communication is in XML, Web services are not tied to any one operating system or programming language, and they do not require the use of browsers or hypertext markup language (HTML).

extensible markup language (XML): This language facilitates direct communication among computers on the Internet. Unlike the older hypertext markup language (HTML), which provides HTML tags giving instructions to a Web browser about how to display information, XML tags give instructions to a Web browser about the category of information.

Sources and Recommended Further Readings: 1. ERP: Tools, Techniques, and Applications for Integrating the Supply Chain. Second Edition; Carol A. Ptak, CFPIM, CIRM, and Eli Schragenheim; The St. Lucie Press/APICS Series on Resource Management; 2nd Edition, 2003

2. Selected Readings in ERP; APICS Complex Industries SIG, 1999

3. Maximizing Your ERP System: A Practical Guide for Managers; Dr. Scott Hamilton; McGraw-Hill Trade, 2002

4. APICS Dictionary; 10th Edition

Consumers Shop Everywhere: Understanding Multichannel Sales

2009-07-08T07:57:00.000-07:00

Multichannel Customers:

Consumers today shop almost everywhere—in stores, at home, by mail catalogs, over the phone (soon over many mobile devices), via TV infomercials and over the Internet, and most retailers, including Wal-Mart, try to sell through as many as possible of these channels. But few can still effectively and seamlessly interact with customers across these channels. Selling accessories and installation services in-store when customers pick up goods they bought on-line or via the phone, even allowing them to redeem promotions they have come across at any other channel is difficult.

Except for a few groundbreaking companies, this is still uncharted territory, though retailers who are able to engage customers across many channels likely earn customer trust and receive more repeat business. There have been examples of retail companies using a multichannel retailing system to streamline sales of an expensive consumer product only to discover that their Web sales were significantly lower than sales made over the phone. The reason was that sales consultants were able to up-sell consumers to higher-end systems over the phone. As a result, these retailers were forced to redesign their Web sites and storefronts to provide places for customers to interact with a sales consultant, in person.

These "multichannel" customers are typically well-informed, and often more profitable buyers for a retailer, since they are driven by deliberate choice, convenience, and selection, whereby more formerly mainstream, single-channel (primarily in-store) shoppers turn "multichannel" on a daily basis. The need for on-line purchasing, account management, e-billing etc., is indeed not only here to stay, but will likely grow in the future, as users pass the phase of disillusion ("How do I reverse the wrongly clicked transaction?" or "Where on earth are my goods?"), and enter the phase of clarification how beneficial and "cool" the technology can be. Many have also turned to on-line holiday shopping in the wake of the events of unspeakable September 11, and due to occasional terrorist threats to shopping malls and other places of mass gathering.

Although multichannel sales might look like cannibalization to store executives, these fickle customers want first-class products configured just for them, backed by high levels of information and service, delivered through whatever channel suits their needs at the moment. In other words, these are the most valuable customers one can attract—they have more to spend, and are willing to spend it. By capturing them, retailers should be able to improve sales transaction values, order-to-cash speed, customer retention and marketing return on investment (ROI). There are some indications that multichannel customers spend even 50 percent or more during the holiday season than their traditional single-channel counterparts. For instance, Amazon.com is reportedly celebrating its best ever recent holiday season with record sales and bullish claims about the number of orders it was able to successfully fulfill.

Keys to Multichannel Success:

Although better Web design and a wider selection of products offered on-line are important, the keys to multichannel success lie in understanding the factors that drive revenues and the ability to fulfill Web orders. Overall revenues are driven not by simply offering products via the on-line channels, but by creating a hybrid sales model that uses the Web and other more traditional channels, including phone, TV, and the old fashion "brick-and-mortar store". The hybrid model needs to be done in a mutually beneficial way to maximize profit from these different retailing models.

The ability to fulfill requires a strong infrastructure, in terms of IT systems, traditional physical stocking, warehousing, picking, and shipping practices. Some retailers like Best Buy have well grasped the innate differences between virtual and physical storefronts and used technology to bridge that gap to enable almost a painless purchase-on-line-and-pickup-in-store effort. The retailer has well explored such important aspects as

What people like about shopping on-line (e.g., depth of details, range of options, convenience, easy comparison shopping and other related research)
What they do not like about shopping online (e.g., cost of shipping, delay of shipping, inability to see and touch product before final purchase decision, consequents of returns and additional shipping inconvenience, inability to reach and talk to a sentient being)
What they like about in-store shopping experience (e.g., the ability to touch and feel goods, the atmosphere, a person to talk with, the ability to get the product immediately)
What they do not like about in-store shopping (long lines and crowds, parking cost and inconvenience, arriving only to discover that the product that a clerk on the phone said was there is no longer available).

The retailer has thus even allocated an employee in each store to supervise the aisles to absolutely verify that the product is actually there, and then put it away for the customer just before the customer is told to come and pick it up.

A good Web site design is one that has streamlined site navigation, search, and checkout processes. It enables the kind of sales process that best fits the customer's and retailer's needs. It will have good site performance, and a well-designed user interface. Indeed, one will never achieve proper order fulfillment without a self-evident navigational structure, the right search, help, linking of the site to the support center for synchronous user support, etc. Front-end business-to-customer (B2C) e-commerce success also requires good product information and pricing, because it is easy for Internet customers to comparison-shop. A $2 or so difference in the retail price of a DVD can have a large impact on sales volume when the competition is only one click away.

But nothing has hurt the adoption of multichanneled shopping more than delayed or even cancelled orders because of stock-outs. Many retailers are thus striving towards near real-time cross-channel inventory management and visibility to mitigate this conundrum. For example, sold-out items are automatically grayed out on the screen while the back-order functionality, allowing the customer to agree to a back order, proactively alerts customers when the product is available again. When retailers design their processes to take advantage of the multichannel sales opportunities instead of simply focusing on reducing costs, a strong infrastructure that supports on-time delivery of orders and handling of returns must be built.

A few years ago highly publicized B2C Internet retailing disasters were typically not driven by bad Web site design, but were rather caused by the inability of several prominent retailers to deliver the goods in a timely manner. It was often the link between the Web storefront and the companies' traditional back-office and ERP systems, and real-world distribution systems that caused the problems. Multichannel retailers must be able to flawlessly execute a full range of services to engage, transact, and fulfill Web-placed orders. Hence, the most successful multichannel retailers of today have to either build a complete set of such services in-house or outsource some or all of them.

Traditional brick-and-mortar retail stores still rely on store clerks and managers to support customers, while multichannel retailers must provide similar support via call centers that are adequately staffed (so that customers do not have to be on hold for too long periods) and that are available around the clock. There should also be a number of appropriate financial services available, such as payment gateway, merchant account, fraud screening, and business payment services
Multichannel Retailers:

The likes of Amazon.com is an important milestone in the evolution of the B2C Internet retailing (e-tailing) phenomenon, as it seems to be proving the viability of on-line merchandizing. Amazon.com always comes to mind either as an example of what potential e-commerce offers, or as an example of how painful the road to achieving this type of profitability can be. This does not mean the unconditional endorsement of Amazon's CEO's initial philosophy of "if we build, they will come"—this has apparently been quite modified during this process.

Much of the retailer's recent success has come from its ability to tremendously improve customer service (order tracking and fulfillment). The all-but-unacceptable poor delivery record which it had several seasons ago, has been replaced with improving efficiency. This is partly through the consolidation and reduction of warehouses and staff members. This combined with offering reasonably priced quality products across a number of segments (a wider selection) has paid off for the company.

For example, Amazon is providing mobile telephones, palmtops, household equipment, and other goods in addition to the usual books, CDs, DVDs, computer games, and other software. The reasons for its success have been based on the traditional tenets of business. Seemingly, its nothing pertinent except it is new to the "new, Internet economy". Amazon.com has also announced further savings for customers by adding a free delivery option for qualifying orders over certain amount. That should alleviate much of customers' resentment towards hidden costs (shipping and sales tax) that often equal the price of one book or CD. Likewise, it will raise the bar for Amazon's competitors.

In addition to Amazon as the Internet retailer pioneer, the likes of Best Buy, Staples, Target, or Lowe's are also carving out niches. They are capturing growth and profits from multichannel, customer-centric marketing in a competitive market dominated by Wal-Mart's well-oiled retail machine. While Wal-Mart can match these retailers growth in absolute numbers just from opening new stores, it will hardly take more business in the competitive market of serving multichannel customers with individual, personalized shopping experiences, and delivering on every complex customer's requirement.

For example, Target once had a different order management system to support each of its several direct-to-customer sales channels. Nowadays, Yantra's distributed order management (DOM) product (now part of Sterling Commerce) manages orders across all these channels, for orders ranging from standard pick-pack-ship fulfillment to complex, multistep fulfillment and delivery processes. Target has also been narrowly focusing on the off-mall retailing, which crystallized with the divestiture of Marshall Fields and Mervyn's in 2004.

Target also enhances its "fast, fun, and friendly" store experience with even higher service levels, with new product-focus areas and over 10,000 scanners to speed availability and price checks. Using returns as a new opportunity to excel, Target's new receipt-lookup system reportedly saves time while protecting stores against fraud. Younger customers choose Target for "fashion-forward", chic yet reasonably priced merchandise, which requires that the store have even faster design-to-delivery cycles. Further, integrating import warehouses into its supply-chain helps distribution centers (DC) prioritize high-demand seasonal merchandise, while Web-enabled tracking delivers inventory visibility from booking through receipt, for faster response to any delay.

Along similar lines, Best Buy continues to build stores, staff, and services around its most profitable shoppers via a loyalty program that offers discounts for preference data. This has so far reportedly attracted 2 million members. Furthermore, technical specialists up-sell customers in stores and offer home consultations, while many homebuilder partnerships create thousands of "wired" (i.e., cable, phone, Internet, etc.) homes that are ready to absorb even more Best Buy goods and services.

There are indications that this multichannel customer focus has resulted in a market share increase in fiscal 2004, driven by growth in computers, digital televisions, imaging and entertainment software. These are all the high-end, configurable, service-rich products that the retailer's new strategy depends on. Results depend on a supply chain that delivers products and information as needed, and as promised. Cross-channel promotions, Web self-service and guided search, integrated sales and service �touch points' are all coordinated through Best Buy's DOM solution, again provided by Yantra.

Staples, a $13 billion (USD) stationary retailer also adapts stores and delivery formats around customers, from multiservice superstores to niche suppliers like Quill and Staples Express, each offering a particular product range, services and delivery options that are crafted to customer requirements. With 45,000 standard items and even more custom products and services, Staples' supply chain could have been a mess of stock-outs and duplicate or obsolete inventory. Quite the contrary, the company has opened back-office accessibility as a competitive differentiator, offering near real-time, on-line availability, pricing, and line item shipping status to business partners.

At its end, Lowe's offers custom goods and services for a "market of one". The "market of one" concept builds on Lowe's in-store design experience with a recently added special-orders system that allows employees and customers to track orders from placement through delivery. This service has reportedly increased customer satisfaction, reduced errors, and raised average ticket sales. All of that has required a not-too-involving integration of Lowe's IT systems with key suppliers, to deliver timely supply-chain information without big investments or delays.

IT Investment Required:However, one can imagine that a great part of Amazon.com's huge initial liability could be attributed exactly to a significant application software investment, both in license and in its subsequent tweaking. Without such an effort, one could hardly imagine Amazon.com's ability to let users know exactly when, for example, UPS will deliver their order, or to provide those sometimes annoying personalized promotions informing us that "Most of the folks that have bought �The Da Vinci Code' book have also bought�"

Although Sears, Roebuck and Co (soon to be merged with Kmart) did not reportedly sell anything on-line until 1997, with only one product category until 1999, the company's strategy, from the beginning of the Internet revolution, was to at least maintain one face to the customer. It did not want to create a rift between the "on-line" and the "off-line" Sears. Sears lets products bought on-line be picked up and returned to its stores; customers can schedule service visits to the stores on-line; and near real-time inventory visibility is available across all stores. Still, while this was impressive a few years ago, these capabilities are now a matter of course.

One of the ways Sears has achieved its goal of a single channel for multichannel customers—as well as automating supplier relationships—has been to pay paramount attention to product data quality. It has striven to concentrate data in one location as one repository for all product information which drives the financial, logistics, and legacy systems. Sears reportedly has one vendor master file that holds payment terms, contact information, electronic data interchange (EDI) routing and setup information, insurance requirements, and so on. In the field of product information management (PIM), Sears has worked closely with QRS, a company that was recently acquired by Inovis and that addresses the problem of global data synchronization (GDS) between retailers and suppliers (see Inovis Delves into PIM by Snatching QRS).

Accurate product descriptions, specifications, pictures, etc., should give consumers and business partners more confidence that they will receive exactly what they wanted. Consequently, product categories beyond traditional books, CDs, DVDs, or games are becoming more popular for multichannel retailing. QRS, which keeps a file of 90 million universal product codes (UPC), is the bridge between disparate product information protocols used by suppliers and Sears preferred single repository. For more information, see The Role of PIM and PLM in the Product Information Supply Chain: Where is Your Link?.

Retailers must start with an understanding of what will generate the most revenue and profit across multichannels, whereby e-tailing Web sites must not be seen as totally independent of other channels—quite the contrary. Web storefront usability should be addressed first, but the focus on PIM/GDS and cross-channel inventory visibility infrastructure should follow soon. It is all the matter of individual preference whether to engage in Internet shopping, and it is; however, be certain that multichannel retailers will attract new business on condition they continue with good service, wide product and service selection, and reasonable price incentives.

Merging Disparate IT Systems and Exploiting Multichannels

2009-06-17T09:09:00.000-07:00

Dealing with Multi-Channels:Companies that engage customers across many channels, earn trust and repeat business. In fact, there are some indications that multichannel customers spend even 50 percent or more during the holiday season than their traditional single-channel counterparts. For instance, Amazon.com is reportedly celebrating its best ever holiday season with record sales and bullish claims about the number of orders it was able to successfully fulfill. Yet, despite the affability of multichannels, except for a few groundbreaking companies, this is still uncharted territory.

Part Three of the Retailers Join Forces for a "Make or Break" Attempt Their Competitive Landscape series.

Better Web design and wider selections of products offered on-line are important to multichannel success; however it is crucial to understand that factors mitigating revenues and to ability to fulfill Web orders are also key. A good Web site design—one that has streamlined site navigation, search, and checkout processes—enables the kind of sales process that best fits the customer's and retailer's needs, as does good site performance, and a well-designed user interface. One will indeed never achieve proper order fulfillment without a self-evident navigational structure, the right search, help, linking of the site to the support center for synchronous user support, etc. Front-end business-to-customer (B2C) e-commerce success also requires good product information and pricing, because it is easy for Internet customers to comparison-shop. A $2 or so difference in the retail price of a DVD can have a large impact on sales volume when the competition is only one click away.

For a detailed discussion multi-channel sales see "Consumers Shop Everywhere: Understanding Multi-Channel Sales".

Once the retailer has designed its process to take advantage of the multi-channel sales opportunities, it must build a strong infrastructure that supports on-time delivery handles returns, instead of simply focusing on reducing costs. Multichannel retailers must be able to flawlessly execute a full range of services to engage, transact, and fulfill Web placed orders. Hence, most successful multichannel retailers of today had to either build a complete set o in-house or outsource some or all of them.

What's more, traditional brick and mortar retail stores still rely on store clerks and managers to support customers, while multichannel retailers must provide similar support via call centers that are adequately staffed so that customers are not on hold for too long. Additionally, these centers should be available around the clock. There should also be a number of appropriate financial services available, such as payment gateways, merchant accounts, fraud screening, and business payment services. For more information, see Differences in Complexity between B2C and B2B E-commerce.

Apart from Amazon as the Internet retailer pioneer, the likes of Best Buy, Staples, Ahold, Target, and Lowe's have also been carving out their niches. They are capturing growth and profits from multichannel, customer-centric marketing in a competitive market dominated by Wal-Mart's well-oiled retail machine. While Wal-Mart can match the growth of these retailers in absolute numbers just by opening new stores, it will hardly take more business in the competitive multichannel market serving customers with individual, personalized shopping experiences and by delivering on their complex requirements.
Dealing with Technology:Considering the use of technology for supply chain effectiveness and differentiation, new technology will be indispensable for Sears Holdings, which will be created when Kmart Holding Corporation (NASDAQ:KMRT) and Sears, Roebuck and Co. (NASDAQ:S) complete their merger. Yet, so far, neither merging party has been a dominant force in any retail segment and neither are they known for their respective IT or supply chain management (SCM) proficiency. They have only had sporadic investments in some applications with less than limited success (to put it mildly). An astute IT strategy should help any company develop a strong competitive advantage whether it be improved time-to-market, better insights about customers behavior and preferences, or devising a more efficient supply chain.

But, with the impending merger, the two giants will likely be preoccupied with rationalizing their numerous diverse IT assets, decommissioning redundant ones, and integrating the rest without losing crucial sales and inventory data, that there will be little time and resources to pursue anything else. Already lagging behind the competition technology-wise, it is difficult for us to see how Sears Holding will not fall further behind, let alone overtake the competition.

One should also bear in mind that poorly leveraged technology had been a major reason for Kmart's bankruptcy. Since the 1980s, Kmart seemed fall into complacency. It failed to stick to the traditional tenets of business—impressive customer service, constant innovation that keeps customers' attention, and cost savings. Moreover, while Kmart attempted to harness technology to address supply chain efficiency, it did not follow through to get value out of its solutions. For example, in mid 2000, Kmart deployed a number of SCM products including i2 Technologies and former EXE Technologies (now part of SSA Global), to launch an ambitious renovation attempt worth $1.4 billion (USD) of software to improve its supply chain systems. It aim to reduce store-level out-of-stocks and to increase inventory turns (see i2 Will Come Out Ahead in Kmart Deal). Unfortunately, Kmart had seemingly fallen prey to the misperception that packaged applications, in plain "vanilla mode," and without significant modification could run a complex organization of its size. The project had all but stalled. A year and a half later, before the systems ever went live, the company announced that it was abandoning most of its software and was instead buying a warehouse management system (WMS) worth $600 million (USD) from Manhattan Associates. This too apparently failed to solve the company's supply chain problems, and it went into bankruptcy in early 2002.

Yet, a significant software investment is necessary to effectively meet the needs of multichannel shoppers. Once can hardly imagine the success of Amazon.com without a significant application investment. Complex organizations need a level of applications customization. Given the potential of multichannels, the need for technology and of all these factors, Sears Holding must become more technically daring and innovative as it strives for a possible differentiation. Unlike the chaotic moves Kmart undertook a few years ago, at the same time the company was faltering, Sears must view IT as the enabler for business success, not the "be all, end all". A mitigating factor to Kmart's faulty forays may very well be that Sears seems to be more innovative and aggressive when it comes to leveraging technology to achieve operational efficiency.

Indeed, behind many success stories in American business lies an innovation. Going back a century, in the case of Sears, the innovation was the mail order catalog. At the time the company began in the late nineteenth century, rural general stores were ripping customers off by often charging 100 percent mark-ups on goods. Rural customers eventually rebelled by spending their dollars with mail-order pioneers, especially with Sears, whose model supported cheaper prices and higher volumes than the rural stores. Further, the system was backed by an ever-improving postal service. When Sears' catalog sales were at their peak, customers often ordered from the catalog over the telephone and picked up the goods at the nearest store. Since its introduction a few decades ago, the catalog pick-up area has always been very busy.

Fast forward to the 1990s. Sears did not sell anything on-line until 1997, and until 1999, it offered only one product category. From the beginning of the Internet revolution, Sears' strategy was to maintain at least one face to the customer. It wanted to ensure there were no rifts between "on-line" and "off-line" Sears. Today, products bought on-line can be picked up and returned to the stores, if necessary. Customers can also schedule in-store service visits on-line. Sears also provides near real-time inventory visibility across all stores.
One of the ways in which Sears has been able to achieve its goal of a single channel for multichannel customers and of automating supplier relationships has been to pay paramount attention to product data quality. The goal, in this regard, is to concentrate data in one location as one repository for all product information, which drives the financial, logistics, and legacy systems. Sears reportedly has one vendor master file that holds payment terms, contact information, electronic data interchange (EDI) routing and setup information, insurance requirements, and so on. In the field of product information management (PIM), Sears has worked closely with QRS, a company that was recently acquired by Inovis and that addresses the problem of global data synchronization (GDS) between retailers and suppliers (see Inovis Delves into PIM by Snatching QRS).

Accurate product descriptions, specifications, pictures, etc., should give consumers and business partners more confidence that they will receive exactly what they want. Consequently, product categories beyond traditional books, CDs, DVDs or games are becoming more popular for multichannel retailing. QRS, which keeps a file of 90 million universal product codes (UPC), is the bridge between disparate product information protocols used by suppliers and the single repository Sears prefers. For more information, see The Role of PIM and PLM in the Product Information Supply Chain: Where is Your Link?.

Sears has also been more aggressive then Kmart in pursuing other new IT initiatives during the past two years. In 2003, it orchestrated a ten year, $1.6 billion (USD) IT outsourcing deal with Computer Sciences Corporation (CSC), and it also signed a licensing deal with JDA Software and Manugistics for a more integrated set of tools to assist with merchandise management, in store systems, replenishment, merchandise planning, markdown price optimization, and planning and forecasting.

Not surprisingly, the two merging retailers have accumulated an abundance of different systems. At the store level, Kmart announced in 2001 that it was buying IBM SurePOS 700 cash registers for its point-of-sale (POS) operating system. Similarly, in 2004, Sears said that it planned to install newer SurePOS machines running 360Commerce's POS software on Microsoft Windows XP Embedded operating system. Still, a far greater challenge than merging these two POS systems will be with back-office applications at respective headquarters, including the merchandising, inventory planning, and SCM software. Each vendor has several different inventory management systems, logistics applications, or merchandize planning systems totaling nearly forty applications from vendors ranging from Caps Logistics (now part of SSA Global), via SPS Commerce to Retek (which was recently acquired by SAP), in addition to those previously mentioned.

In the case of Federated Department Stores (NYSE:FD) and The May Department Stores Company (NYSE:MAY) (although quite applicable to Kmart and Sears too), the success of the retail channel's transformation to a preferred destination for leading-edge yet affordable fashion apparel and household goods is fundamental for the long-term survival. To that end, the combined company must improve private-label sourcing and procurement operations by leveraging the latest planning and product lifecycle management (PLM) technologies to quickly bring new fashion brands to market in several weeks rather than in several months. Additionally, they too must be aware of technology. Currently, May Department stores can look up transactions, which is convenient for customers are returning goods without a receipt. Still, while impressive a few years ago, these capabilities have become a matter of course nowadays.
Conclusions and Recommendations :

Time will only tell whether the respective management teams of Sears Holding, and Federation/May, will espouse a smart, coherent strategy, and better execution and whether their cultures will effectively blend to align their strategic goals. As with all mergers and acquisitions, their ultimate success will come down to proper planning and effective execution on all levels. However, considering the sizable cultural and legacy business process differences among these venerable retailers, it is easy for observers to be inclined to doom-saying.

Yet, success is not impossible as long as new management is ready to challenge the predictable retailing acumen and start building an integrated plan for the future. They need to strive for relevance rather than only wringing out inefficiencies or bolstering the balance sheet through real estate sales. The new management team should not miss the opportunity to combine traditional efficiency savings with thought-leading process improvements in critical retailing areas and smart investments in SCM and customer relationship management (CRM) technologies. These will drive a new level of differentiation and produce stronger competition, as well as better financial performance.

The current IT practices of recording sales, doing regular backups, keeping current virus definitions, and leveraging adequate analytical packages for decision-making are quickly becoming inadequate in the face of the competitions' capabilities. This is particularly true with the forthcoming, and futuristic-feeling retail technologies, such as self-checkout, "smart shelves and carts", in-store kiosks, customer personal digital assistants (PDA), analytics-based assisted selling applications, contact-less POS solutions, or various inventive payment options with digital signatures or authentications (see The Store of the Future). The result is that fewer customer service associates will be needed to meet customer needs. By doing this, the combined businesses may be able to cut costs while concurrently improving customers' satisfaction and their perception.

In the short term, new management should continue a focused approach for their respective customers and on profitability. They should further increase market awareness to become better-known names to their target markets and to be the retail destinations for the ever-choosy consumer. Yet, evaluating options for synergy in IT and in related business processes, while not slowing down justified enterprise application investments should be a key priority in post-merger operational planning. Again, time will indicate why management has hardly mentioned anything in this regard in their merger announcement. Perhaps they do not realize its importance, or maybe, more optimistically, they will inform the market only after their explore their options with more diligence.

On a more general note, retailers must start with an understanding of what will generate the most revenue and profit across multichannels. E-tailing Web sites must not be seen as totally independent of other channels—quite the contrary. Web storefront usability should be addressed first, but the focus on PIM, GDS, and cross-channel inventory visibility infrastructure should follow suit. It is all the matter of individual preference whether to engage in Internet shopping, and it is, however, certain that multi-channel retailers will attract new business on the condition they continue with good service, wide product and service selection, and reasonable price incentives.

Responding to Warehouse Management Needs

2009-06-17T09:08:00.000-07:00

Adonix' Warehouse Management System Response:Modern warehouses have complex requirements. Fast product cycles, the need to decrease inventory and increase the flow of goods through the supply chain means that warehouses cannot remain static. Virtual real time data must match the supply to demand. Furthermore, many light manufacturing operations, such as final assembly, customized packing, labeling, and engraving, have been moved from shop floors to warehouses and distribution centers (DC). As a result, supply chain execution (SCE) software has been created and amended to handle these complex requirements. Warehouse management systems (WMS) play a key role in a company's postponement strategy to delay the customization of products until after the products or customized components leave the manufacturing plant.

Part Three of the Adonix' Mid-Market FORMULA--Adopting Best of Both "Organic Growers" and "Aggressive Consolidators" Worlds series.

To address SCE for users of its discrete and process manufacturing suites, Adonix (www.adonix.com), France's largest, privately owned enterprise solutions provider for medium manufacturers, provides three distinct offerings for automating warehouse activities, based on key factors such as transaction volumes and complexity of processing requirements. WMS and SCE might be the best examples of Adonix' commitment to providing its customers with the building blocks for supply chain management (SCM). Its research and development strategy has involved examining and prioritizing market trends to help customers grow and new products and services are then introduced through both in-house development and acquisition.

Adonix has provided warehouse solutions in North America since the 1980s, which has allowed it to leverage existing experience and skills. It also has a fairly strong historical customer base starting with Navistar and VWR Scientific, and is a pioneer in the radio frequency (RF) technology, authoring LXE LDS device drivers. Existing and prospective user companies can use the warehousing capabilities within the Adonix' offering set that match the sophistication of their facilities:

1. Adonix Geode GX is a full-function WMS designed within the Adonix X3 development framework to meet the needs of mid-sized companies with large transaction volumes and sophisticated warehouse practices. It is an enterprise-level configurable, multisite, multi-company, multilingual, multi-database/multi-operating system, and multi-workflow solution with rules-based inventory storage and retrieval and automation capabilities.

Adonix' ideas behind Geode GX has been to offer "tier one functionality at a tier three cost-of-ownership" to medium companies that do not necessarily want to compromise on functionality and cost. As the flagship X3 ERP product, the WMS extension is also configurable for the changing needs via a 4GL personalization and configuration toolset. Adonix recently redeveloped Geode within the X3 technology and plans to sell it both as a module of Adonix X3 and as a best-of-breed WMS solution in its traditional market, especially the consumer packaged goods (CPG) vertical.

2. The Adonix Advanced Warehousing and Adonix Data Collection modules provide RF directed support for primary warehouse activities including receiving, put-away, palletized order picking, pick planning, and shipping.

3. The Adonix X3 Inventory module provides core location and stock management functionality as an integrated component within Adonix X3. It can work either as a paper-based solution or with ADC support for most inventory transactions.

Adonix X3 and Geode GX:Adonix announced the North American availability of Adonix Geode GX in May at the Distribution/Computer Expo 2005 at the Navy Pier in Chicago, Illinios (US). The product is configurable for a user enterprise, and supports current technologies such as RF devices, bar coding, and features multi-site, multi-workflow, and has many accompanying automation capabilities (such as conveyors, automatic storage and retrieval systems [AS/RS], carousels and sorting equipment). Its open design orientation makes it relatively easy to fit into most operating environments including support for Microsoft Windows and UNIX platforms as well as for Microsoft SQL Server and Oracle databases. Also, its user interface (UI) is available both on the Internet and in traditional client/server mode.

GX has been implemented in over 100 Europe sites and Geode has been implemented at 350 sites, in industries as diverse as retail distribution, manufacturing, wholesale, automotive, chemical and third party logistics (3PL). Its users include market leaders such as Hewlett-Packard (HP), Wyeth Lederle, and Philips. The launch follows several years of successful implementations at customer sites throughout Europe, with other high-profile luxury CPG/retail customers, such as L'Occitane, Cartier, and Christofle, industrial/automotive customers, such as Michelin and Schneider Electric, high-tech customers like Bull, and 3PL customers like Air France, Danzas, TNT, Exel, Geodis, and Kuehne & Nagel. The North American pilot installation has been completed and is live as of early June 2005 at the US distribution operations for L'Occitane in Lyndhurst, New Jersey (US).

What might be particularly appealing about this best-of breed WMS offering, however, is that it was designed using the enterprise resource planning (ERP) counterpart, Adonix X3's toolset, and that it also mirrors the Adonix X3's target markets �process and discrete manufacturers and distributors (about 40 percent of customers), chemical and pharmaceutical distributors (about 15 percent of customer), 3PLs (about 30 percent of customers), and retailers (about remaining 15 percent). This means that, unlike most peer mid-market business solutions, which are a collection of acquired packages bolted together to form a suite, Adonix has taken the time and made the hefty investment to build a solution on a single architecture that is portable to multiple platforms. This has eliminated the need to learn and support separate system platforms and might be a key distinction for mid-sized companies with limited resources, while trying to naturally boost functionality and configurability to take business to the next level of competitiveness.

Further, Geode GX complements the needs of those industries that are targeted by Adonix X3. Although Geode GX is designed to connect easily with Adonix X3 ERP, it can function as a stand-alone or can be loosely coupled WMS application with other transactional systems. The basis of the Adonix' approach is that warehousing practices can be defined by a number of practical workflows that apply to multiple vertical industries. Examples of these workflows include supply side manufacturing, vendor-managed inventory (VMI), and other supplier visibility tools, finished goods distribution, pre-distribution (retail) warehousing, web storefronts and online ordering, shipment track and trace, etc. Each workflow can then be tailored to the specific needs of an industry such as, lot control, quality assurance, import/export, serialization, and labeling.

Based on the general warehousing functionality discussed in Who Needs Warehousing and How Much Thereof?, Geode has many traits of best-of-breed WMS solutions, such as rules-based storage; allocation; picking; packing; loading; reservation (i.e., special order items) management; batch/lot control and serial number control; management of multiple product and location classifications; inventory transfers and external warehouse management; expiration/use by/sell by date control; European Article Number (EAN-13) or universal product code (UPC) management; cycle counting and inventory management; and a bevy of inquiries and reporting capabilities.

Further, its scalable tier one inbound features would include dock scheduling and management; inventory blocking and non-conformity management; automatic or manual allocation of inventory locations; location allocation in proximity of picking bays; inventory consolidation; multi-batch and multi-product slot management; validation against expected input/ASN, bonded stock management; quality control, including the ability to apply and remove holds on the incoming inventory; and inbound sampling. On the other hand, the scalable tier one outbound features include wave simulation and wave management; batch picking (order picking); order splitting; back order, and short allocation management (in case of insufficient inventory to satisfy all the orders); dates management (first in, first out [FIFO], sell by date, ship by date, etc.); replenishment methods (by using min/max limits, override, source control, etc.); carton sizing/pre-packing or directed packing; and shipment/load control and document preparation.
Parcel Shipping Closes the SCE Offering:When coupled with Adonix's best-of-breed Transcomm Shipping Solution (TSS) add-on for supporting multi-carrier, parcel manifesting with rate shopping, so Geode GX fills the gap between order and delivery for customers that have higher volume and complex distribution operations.

Adonix TSS is designed to fully automate the parcel manifesting capabilities of companies dealing with large daily volumes of small packet shipments using multiple carriers. Namely, because warehouses are increasingly shipping orders with lower quantities, but have growing line items, small parcel shipment (SPS) management systems may be even more important than full-fledged WMS/transportation management systems (TMS) systems for some businesses, particularly for those doing high volumes and complex order profiles. To that end, these kind of products should determine where products are going and which shipper to use ( e.g., FedEx, UPS, DHL, etc.), and it then creates the appropriate label during picking.

Conversely, the traditional WMS approach involves extra steps. It has to first perform picks, move items to the shipping area, and then generate labels. Other notable features these kinds of products have include integrated WMS check/pack dialog, carrier compliant labeling, parcel rating, on-line carrier manifesting, combined carrier/compliance label, pre-print labels for cluster picking, cash on delivery (COD) support, and multiple rate servers. Another buzzword applicable to both SPS and WMS is "cartonization", which automatically determines the best way to box and package orders (e.g., how many products or boxes will fit in a bigger box, factoring in component weight and size).

Adonix Advanced Shipping

Adonix TSS, Adonix' shipping and manifesting solution was announced in 2004 and made available as two packaged configurations. Based on ConnectShip's multi-carrier shipping and manifesting technology, Adonix then enhanced the SPS system with a wide array of additional features, as well as a pre-defined two-way interface with the Adonix X3 ERP system. Called Adonix Advanced Shipping, the offering has two pre-packaged price levels associated with two or four carrier configurations, or additional carriers as required by the customer. The choice of carriers includes UPS, FedEx Ground and Air, DHL and a company's preferred less-than-truckload (LTL) partner.

Adonix Advanced Shipping is a more suitable solution for companies shipping typically more than 500 parcels per day, and that can accrue significant cost savings through rate shopping, automatic shipping cost and discount calculations, and real-time shipment tracking. While providing similar cost-saving capabilities, Adonix Shipping is more appropriate for companies employing a single carrier for fewer than 500 daily shipments, but would still like the flexibility to compare their primary carrier's price rate with others, prior to making a carrier selection.

Regardless of the configuration selected, Adonix' shipping solutions promise to enhance customer service by automatically sending customer shipment notifications via e-mail and by providing browser-based package tracking and reporting, as well as unattended electronic data interchange (EDI) carrier uploads. The Adonix shipping and maanifesting offerings also come with a fixed scope complement of value-added services, from carrier configuration and commission assistance to system testing, training, and implementation support, all designed to ensure a fully operational, integrated solution for a faster payback.

With Adonix TSS, all departments related to outbound processing, such as, order entry, customer service, accounting and the warehouse, should stay informed of when an order will ship, where it is going, and how it will be delivered. The system promises to provide the following features and benefits:

increased productivity in the shipping process, due to the ability to ship any carrier from any workstation, instead of using multiple systems and since combined picking and shipping reduces steps in the shipment process
reduced shipping costs and improved leverage with carriers due to rate-shopping searches for the lowest rate and even user's own negotiated rates, and for reduced reliance on a single carrier
enhanced customer service resulting from automatically notifying customers or customer service of shipment status via e-mail. It also can provide a single Web page for customer service and Web users can obtain current tracking information. It allows for address corrections and provide carrier/rate information at the time of order via phone or Web
improved management visibility including shipping reports provided by Web browsers from anywhere on the network, so that one can analyze late and lost shipments
enabled business expansion because a scalable design helps support higher shipping volumes, whereas the Web�based user interface supports rapid roll-out to additional workstations or sites, with no software installation necessary on the workstation, and there is the support for complex business rules

Easy ERP: A Challenge to Conventional Thinking

2009-06-17T09:03:00.000-07:00

There has been much talk in the business press about the commoditization of enterprise software. Consolidation through merger and acquisition and the stronger position of buyers at the negotiation table are just two of the early indicators of the industry's transition. As Geoffrey Moore described in his book, �Inside the Tornado' We're on Main Street now, the commodity phase where convenience and efficiency rule. It's easy ERP. Gone are the days of the tech-centric pioneers. The illustration below represents the text book view of a technology life cycle with a graph that represents the transition point between the market's technology-centric perspective of a product to a user-centric view.

From The Invisible Computer by DA Norman (1998)

In the book The Innovator's Dilemma, CM Christensen explains that new technologies start out at the bottom left of the curve, delivering less than the customers require. As a result, customers demand better technology and more features, regardless of the cost or inconvenience. A transition occurs when the technology is "good enough" to satisfy the basic needs. A new set of customers, the late majority, enter the market with a radically new set of demands. They want convenience, efficiency, stability and low prices.

How will this trend affect your next ERP purchase? It's time to look at software from a completely new perspective and challenge conventional thinking.

The Pioneer's Perspective:To ground the discussion let's start with a review of conventional thinking, the ERP visionary and early adopter view. A company's first few enterprise software implementations were strategic initiatives focused on tangible benefits in cycle time reductions, inventory turns, asset utilization, and improved customer service. The selection process was focused on identifying the unique aspects of the company by defining the processes and the functional requirements of the business. Core technology (the operating system and database) and functionality (the requirements checklist) were the primary factors in selecting a system. Functional gaps were expected, so customization and integration were a standard part of the implementation process. Software prices were high, but could be justified based on gaining tangible hard dollar business benefits so the ROI was clear.

Once the deal was inked software companies would install an empty shell of a system or possibly the "bicycle" demo data base. Customers were starting with a clean sheet of paper. They would have the dubious pleasure of setting everything just the way they wanted it, from unit of measure codes, and invoice terms, to each and every configuration parameter. The user training was akin to trying to make one feel comfortable wearing two left shoes as the instructor would explain that a recipe or formula was really a bill of material in the new system: "You'll get used to it." Time to benefit was measured in years. This was enterprise software pioneer land which molded our baby boomer generation's perspective of how to approach a software project.

Technology Doesn't Matter

Fast forward to today: The days of the wild-west are over, and a somewhat more civilized industry structure has emerged. Technology convergence has cut the link between application software and the technology it runs on. The buzz in the industry says service oriented architecture (SOA) will be the holy-grail of this movement toward a truly multitechnology society. However, other than SOA articles and a few compliance stories, the industry press has been fixated on consolidation news. It seems that nobody is interested in cool gizmos and new product features these days. It's all about risk management and which product is the next to be discontinued. Does it matter which product—JD Edwards, PeopleSoft, or Oracle, is better? I don't think so. Product benefits are so similar that the only real differentiation is expected product longevity. Longevity is the biggest cost in enterprise software. It's the cost of switching systems. In the new paradigm, technology doesn't matter. Stability does.

What's More Important Than Functionality:The day will come when you find yourself in this unenviable position: it's time to replace your old system. Just like an old car, at some point the old system is going to cost more money in incremental programming and maintenance expenses than the monthly payments on a shiny new system with the cool executive dash board. Where do you start? To refresh yourself, you review the old project notes from the last selection project and have a hard time applying them to the current situation. The last project was part of a strategic initiative to improve bottom line business results that were clearly spelled out in the project's ROI. Today's software replacement is basically an infrastructure upgrade to enable a few incremental improvements at the least cost. A hard dollar ROI justification is difficult when compliance issues are the key drivers. It's time to switch to a lowest total cost of ownership (TCO) justification model like you used to replace a phone system. Now you review the selection criteria that formed the basis for selecting your current system. Do you need to re-document all your current business processes and create a new list of 1,000 plus features to select the best fit system for your unique situation? A quick review of the old functional gap analysis showed that all the finalists were grouped in a narrow range from an 89 percent to 93 percent fit. Functionality wasn't a significant differentiating factor then, and is clearly even less so today. Your gut is telling you that usability is more important than functionality. After all, your users are hitting the tab key more than any other to skip over all the frivolous functions you never implemented and clicking window after window to find critical information. In the new paradigm, there is no ROI. It's about TCO, and functionality isn't the differentiator—usability is.

Know What You're Shopping For

Your first challenge today is to get educated to understand the product category-segment you are looking for. Are you looking for the software equivalent of a motorcycle, a sedan, a wagon or a seven passenger SUV? Don't make the mistake of trying to compare a Harley to a Hummer. Both products will get you to the office, but the similarity ends there. Know what you're shopping for. ERP evaluation centers like TechnologyEvaluation.Com (TEC) can help you develop a short list of qualified products. They categorize products by industry requirements, by business complexity, by language support, by functional scope, etc. With a few questions, they present buyers a reliable list of functionally complete products. There are over 3,400 functional specifications that underlie the recommendation list that have been certified by TEC's experts. In just a few minutes you have a short list of packages that offer comparable functionality, and you can run "what-if" scenarios by changing your profile parameters if you like. Then, without leaving the comfort of your desk, you can Google your short-list to find the buzz that's circulating about each company and product. You should be able to find interesting white papers and exciting media coverage. If not, you may want to skip to the next product on your list. Now that's convenience. In the new paradigm, you're not unique. Take advantage of industry best practice. It's better, and it's faster.

Evaluating "Easy":Now it's time to meet the vendors and take the packages for the test drive. Keep in mind that when you take that car for a test drive the focus is on the feel. You're not taking an inventory of every nut and bolt. Ease of implementation and ease of use have replaced the functionality inventory as the top priorities in a selection. We have already talked about changing the justification methodology from ROI to TCO, which changes the focus from maximizing benefits to minimizing cost. The primary objective of this project is to minimize the disruption to the business. Wouldn't it be wonderful if we could slip a new system in over the weekend without anyone noticing? Convenience factors are implementation cost minimizers that are packaged into systems to reduce the time to benefit and the man-hours required to implement a system. A preconfigured solution that can be implemented in 120 days is worth a lot more than the blank page solution that requires a year of sweat equity to get running. Convenience factors can include a wide range of offerings such as

* Pre-configured industry templates

* Best practice business processes templates

* Business performance templates

* The SOA integration architecture

* Concepts of on-demand and open source software

* Integration to popular third party applications

* Data conversion templates

* User tutorials and e-learning on-demand

* Internet support services and a 7x24 hotline

Efficiency factors, on the other hand, are usability features that reduce clicks and improve the user experience. Think lean where less really is more. The functional bloat that software suppliers added to their systems to win functionality contests and to serve multiple markets has created complexity and inefficiency in the daily life of a user. Most people rank their personal satisfaction working with application software programs near the bottom when compared to other tasks they perform in their job. Why? Because the user experience was a design afterthought. Features were added wherever screen real estate allowed. Your kid's X-box or PS2 should be the benchmark when evaluating usability. No documentation manuals or training classes required. It's intuitive. Speed is paramount to winning—even in the game of commerce. Simplicity is fast. Keeping score is fun and we all like to take pride in measuring our progress. How do you evaluate efficiency? Replace the old workflow demo with a role based demo to show what the day-in-the-life of your key users will be like. Rank each scenario based on the following metrics:

* Effectiveness � is the system helping people prioritize their work based on the organization's objectives?

* Information � is it easy to get the right information in the right format to do the right thing?

* Efficiency � is it easy to get the job done once we know what needs to be done? Count the clicks.

* Feedback � does it provide performance feedback to the user in terms of more, better, faster? In the new paradigm, you're not counting features. You want to install faster and make it easier to use.

And The Winner Is:Today's biggest risk factor is product viability because of the high cost of switching systems and the industry trend toward consolidation. Picking a stable product in your category or segment is critical to the longevity of your investment. "The Rule of Three" by J. Sheth and R. Sisodia documents the evolution of markets into two complementary sectors: generalists, which cater to a large, mainstream group of customers; and specialists, which satisfy the needs of customers at both the high and low ends of the market. Any company caught in the middle ("the ditch") is likely to be swallowed up or destroyed. This doesn't mean your choice is limited to either SAP, Oracle, or another major player. If that was the case, most of us would be driving a black Ford Model T. The next generation of killer-apps will deliver innovations in convenience, ease-of-use, and emotional appeal. The key attributes of a successful product, and hence a successful business partnership in tomorrow's ERP market include

* A Complete Product � Good enough technology and enough functionality to simplify getting the job done right

* Convenience Packaging � The extended product is bundled with implementation accelerators and usability efficiency features

* Quality � The product and process quality standards enable very high reliability standards

* Stability � The industry is rallying to create a collaborative development and support community

In the new paradigm, you're not a buyer—you're an investor. Product longevity matters.

The Check Before the Check�

You've selected a finalist, but you've still got some homework to do before you sign a contract and start writing checks. You're still going to have to answer to those old school folks in your organization who claim to be from Missouri, the "show me" state. Know what you're not getting. Go back to TechologyEvaluation.Com's detailed product rating report and review the product's unsupported features from their list of up to 3,478 criteria to make sure there are no ugly surprises down the road. Accountants and quality engineers tend to be very good at this task, but make sure your lean champions get a final review of the list to eliminate the excess functionality that contribute to organizational paralysis. Then visit customers in your industry and ask them how they've addressed the few outstanding perceived software gaps. In most cases innovations in business processes have eliminated the need.

As you complete these validation steps the implementation team should get started on some pre-implementation tasks that will validate many of the convenience factors identified in the evaluation phase. Start the e-learning process and get access to the templates to separate reality from hype.

In the new paradigm, some things never change: Trust but verify. When the going gets tough, some people will second guess the decision and will want to see your due diligence.

The Pen Please

Once you've completed these steps you can rest assured that you are implementing a system that has the traction to remain or become a stable player in your segment of the enterprise software market. But even more important, you've aligned your implementation team to focus the project on a low risk, low cost, fast implementation. Above all your team will deliver a user-friendly system to your workforce.

E-learning and Organizational Culture

2009-06-17T09:02:00.000-07:00

The success of an e-learning initiative depends as much on the people and culture of the organization as it does on the technology used.

So what is culture? One of American comedian and pop icon Jerry Seinfeld's favorite show business stories goes something like this:

One cold winter's day, the members of the Glenn Miller Orchestra are on their way to a gig when their bus breaks down. So the musicians grab their instruments and start walking. Before long, they come across a cozy little house. Inside, a family is sitting around the dinner table, talking, laughing, clearly enjoying each other's company. The band members are damp and shivering as they gaze at this idyllic Norman Rockwell scene. Finally, one of the musicians turns to another and asks: "How do people live like that?" (http://www.theage.com.au/articles/2004/03/17/1079199277227.html?from=storyrhs)

That is a story about culture.

There are many definitions of culture, however, including the following ones.

* The "customary beliefs, social forms, and material traits of a racial, religious, or social group" (Merriam-Webster Online Dictionary)

* The "set of shared attitudes, values, goals, and practices that characterizes a company or corporation" (Merriam-Webster Online Dictionary)

* Learned and shared human patterns or models for living

* Day-to-day living patterns

* The shared knowledge and schemes created by a set of people for perceiving, interpreting, expressing, and responding to the social realities around them

* The "basic pattern of shared beliefs, values, behaviors and assumptions acquired over time by organizational members" (Daryl Conner, O.D. Resources Inc.)

* The "way we do things around here" (Rob Edmonds, e-Learning and Culture, http://www.sric-bi.com/LoD/)

Whatever the definition, all social organizations—nations, industries, corporations, churches, social clubs, etc.—have characteristic cultures.

There is also quite a diversity of definitions of e-learning. One goes as follows:

E-learning: Covers a wide set of applications and processes, such as Web-based learning, computer-based learning, virtual classrooms, and digital collaboration. It includes the delivery of content via Internet, intranet/extranet (LAN/WAN), audio- and videotape, satellite broadcast, interactive TV, and CD-ROM. (http://www.learningcircuits.org/glossary.html#E)

E-learning is one methodology and technology for delivering and enabling learning. In most organizations, an e-learning initiative is an implementation of training and collaboration that is made available to employees over the corporate intranet, and is thus readily available to people at their convenience. While e-learning may partially replace classroom training, in most cases it is designed to enhance training and extend it to a broader audience, while saving costs.

This paper looks at the impacts of organizational structure, behavior, and culture in the context of an e-learning initiative. National and industrial cultures do impact the culture in a specific company, but that is not the primary focus here.

Corporate culture can help or hinder an e-learning initiative, sometimes both. E-learning can also be a tool to support cultural change.

We can study a corporate culture by observing the way it does things in order to identify its core values and beliefs. Organizations do not always behave the way they say they do. There are also subcultures within organizations that can differ greatly. By knowing the corporate culture, we will be better equipped to work with it, rather than against it.

Cultural factors can appear in many places, including the organizational structure, support from the top levels, the environment for innovation and change, the human resources situation, administrative procedures, budget, the training and learning history, the relationship with the information technology (IT) department, and the existence or non-existence of an enterprise resource planning (ERP) system.

Cultural stories can be very revealing, so here are a few illustrations.
Innovation or Change Environment:A few years ago, before the term e-learning had been coined, someone at Cisco decided to videotape a presentation and put it on their intranet. When they showed it to a vice president, he got so excited that he sent out a message to everyone saying that they should have a look at it. Hundreds did so and it nearly brought down Cisco's network—probably the most advanced network in the world at the time.

Many companies still have strong prohibitions against video. In fact, Cisco itself still does. They continue to use video extensively, but they have figured out ways to keep it off their backbone by distributing it on local area networks (LAN). Their fascination with technology led them to experiment—moving them towards e-learning. However, their technology innovation was contrasted with a very traditional view of training—videotaped presentations are very passive ways to learn, but they are a way of getting information out to employees quickly. Nonetheless, the environment for implementing e-learning was obviously right in Cisco, since it is one of the most visible corporate e-learning success stories.

A corporate culture that supports innovation is more likely to embrace e-learning.

Human Resources and Administration

In a unionized company, the director of training consulted with the labor relations group about e-learning and was told it couldn't be done. The reason was that managers would complain about it. Why would managers complain about people getting additional opportunities for training? It turns out that the problem was the instantaneous nature of e-learning. Employees would be able to sign on and take the training without the manager's approval and the manager couldn't control what the employee was doing.

There were several things at work here, one of which was an administrative procedure—when employees registered for a classroom course, the manager was sent a letter, and the manager could advise the employee not to take it. To some extent this was a control issue, but it was also legitimate because managers want employees to take courses that are part of their plan or will contribute to their job, especially if they are doing it on company time. The other was a perception issue on the part of the labor relations people—they were afraid of possible problems. Later when e-learning was rolled out without consulting with them, this problem never occurred.

It is always wise to consult with all the stakeholders in an e-learning initiative, but the Human Resources (HR) people may prove to be one of your biggest challenges, even though the training department is often part of HR. HR people are good at anticipating all kinds of labor relations problems and other issues.

Learners and Training

Some say that the greatest challenge in an e-learning initiative is the learners themselves. It may not be the biggest challenge, but it is something to consider. If people are used to going to classrooms to learn in an instructor-led social environment, then they may not understand the concept of learning while sitting at their desks in front of their computers. After all, we have been conditioned all the way through our school system to believe that being in a classroom is how we learn. So if there is a strong tradition of instructor-led training in your company, then you will need to deal with this.

In addition, in organizations with strong internal training departments, the trainers themselves may view e-learning as a threat to their jobs. This fear needs to be addressed.

In one company, some e-learning courses on communications and management were made available to people and they gobbled them up with comments like "Finally the training department is doing something for us." As it happened, although there was a strong tradition of classroom learning, it had become a perk that was provided only for a select group of people. They got to travel to the big city, do their shopping, and have time off the job—all at the expense of the company. All of the others—the ones who in many cases really needed the training—were being denied access to training. They were hungry for almost anything.

E-learning is about more than saving costs, it is about extending access to the entire organization.

Central Training Organizations

A central training organization is usually the best place to initiate e-learning because it can reach most people in the organization, and be cost-effective. While such a unit is most likely to have the necessary budget, that budget is visible and vulnerable to the whims of senior executives.

The Gartner Group's total cost of ownership (TCO) studies showed that computer support is a fairly constant cost regardless of how it is organized. Training is a lot like that too. There is a natural cycle of central training organizations. As corporations grow, each department recognizes the need for training and starts to deliver and manage its own training. The cost of this is largely invisible to senior executives. At some point in the growth cycle, a smart new vice-president sees an opportunity to save money by centralizing training. After this happens, companies often do save money, but the budget for training is now more visible and is subject to senior management approval each year. It then becomes a target for executives who don't recognize its value especially in times of fiscal pressure. It tends to be one of the first budgets to get cut. When the central training unit is downsized, the departments begin to increase their in-house training resources again. Once again, the cost is relatively hidden but the total cost to the organization is greater. And so, the cycle repeats itself every few years.
Budget:E-learning can save an organization a good deal of money in the long run, but there is an initial investment required. Therefore, to implement e-learning, you need to know the budget culture of your company.

Whether to Buy or Build a Learning Management System

One company worked hard to identify a learning management system (LMS) to suit their needs. They already had some e-learning in place and they wanted a system that would manage both classroom training and e-learning. After extensive work, it was decided that they would build it themselves—reinventing the wheel. The decision was made for political, budget, and process reasons. There was no budget in place to obtain the LMS, and there was an internal IT group who had developed some related applications. It was easier in this company to generate a project to build a system than it was to find the money to purchase a system.

You need to understand the peculiarities of the budget system in your company.

* Why, when, and by who are budget decisions made?
* Is it a capital or expense budget?
* What is the best time for a proposal?
* Are the key players drivers of the budget or driven by the budget? The ones who are driven by the budget will never find any money for you if there isn't some already in place.

Return on Investment

Budget requests require justification. If your company is very return on investment (ROI)-oriented, as most are today, you will need to justify e-learning on an ROI basis. In a study issued in September 2002, Nucleus Research (http://www.nucleusresearch.com) stated:

Nucleus Research shows that customers implementing these solutions have quickly recognized first-tier benefits, including reduced costs for travel, human resources overhead, regulatory compliance and customer support costs; and eventually received second-tier benefits, such as increased employee performance that directly impacts profitability. Nucleus found most companies could gain significant returns from even modest investments in e-learning technology.

This has not proven to be true for all companies, so the decision making along the way needs to be carefully done and a plan should be in place.

IT Environment

The IT department and the support of its people are key to the success of any e-learning implementation. Be sure to include them in the discussions from the beginning.

In one company's initial e-learning offering, there were three delivery or hosting choices—host the courses on their own server, have the parent company host them, or have the supplier host them over the Internet. These choices raised several issues.

1. Bandwidth. Do the courses use too much bandwidth? Do the courses contain any video? Even if they do not, courses may not be allowed to run over the backbone to the parent company because critical operational applications run there. Even in companies that have very sophisticated intranets, there are rules about the applications that run across backbones and key networks.

2. Internet access. Does everyone have access to the Internet? In some companies, access is a choice made by local managers, some of whom may believe that the Internet access is a waste of time. In a meeting with customer service managers in a major communications company, eight out of ten supported Internet access because their people needed to be able to see what their customers were being offered by the competition. Two managers, however, would not support it and one of them said, "Over my dead body". This resulted in inequitable distribution of Internet access throughout the company and meant that access to courses outside of the intranet would not be possible for some.

3. Corporate firewall. If a choice is made to have someone outside the company (like the vendor or another application service provider [ASP]) host the courses, you need to test the corporate firewall to see if the courses can run through it. If they don't, approach the IT department to see if it can be done. If it can't be done, then you will have to run the courses internally. Again, you will need the support of the IT people to provide the necessary server space. You may find that the firewall issues will change over time. Whether you think so or not, the IT and security people are your friends and it is important to enlist their support from the beginning.

Organizational Structure:Unions

Unions can be supportive of the idea of e-learning because more of their people will get easier access to needed training. Some unions may be resistant because they cannot control it. One company tried to provide people with an opportunity to telecommute—to work from home—but the union resisted it because then they couldn't monitor the managers while at work to make sure they were not doing union work. In another company, the union and management had been trying to negotiate a new contract for nearly two years and were getting nowhere. A union leader was quoted as saying that having to have personal development plans in place put additional stress on people. However, the personal development plans which had been initiated by senior management were the key to the success of their e-learning program.

Autonomous Departments

In 2001, Sun Microsystems was moving into the e-learning business as a vendor and had purchased an LMS to use and sell. It had a major presence at the 2001 Online Learning conference in Anaheim. During the conference, another LMS supplier was approached by someone from Sun. The other vendor responded with, "Why are you talking to us? You have it all in house." The response was that the Sun representative was from a different department and they were going to do things their way. Sun now appears to have abandoned the idea of becoming an e-learning vendor.

In many organizations departments are sufficiently autonomous to make these kinds of decisions. On the one hand, this presents an opportunity for suppliers; on the other, a single department may not have the critical mass to make e-learning cost effective, leading to its ultimate failure.

What Kind of Organization is Yours?

You want your e-learning venture to work with the culture not against it. There are at least three kinds of companies. The type of company you have will determine the most effective path for an e-learning strategy, as follows.

* For top-down, task-oriented organizations, a straightforward curriculum of courses is your best bet.

* For democratic, people-oriented companies, collaborative e-learning systems are the way to go.

* If your company is a true "learning organization", you will need a broad program of collaborative e-learning and knowledge management.

Different divisions may require different treatments. Where do you fit on this spectrum?

Organizational Support

E-learning is a significant change event and needs support at the chief executive officer (CEO) level—get him or her to actually take an e-learning course so that they know what they are talking about. It also needs a high level champion who will do the work to see it through to success, but beware of e-learning champions who believe it will replace all forms of training. Such a person can do as much damage as someone who does not believe in it at all. The reality is that instructor-led training is not going to disappear. There are things that e-learning doesn't do very well, for example, laboratory work and face-to-face interactions. There are some people who will never get used to the idea of learning at their computer. To them learning is a social event. The best solution is a multi-option, blended solution like that offered by North West Airlines, which provides people with computer-based training, classroom training, mentoring, personal training plans, and a checkout library with books, magazines, videos, and audiotapes.

Executive Computer Literacy

How computer literate are your executives? Many are quite technology challenged—even in technology companies. This can work against you because they have no idea what you are trying to do. Educate them. How often do the senior executives visit the intranet? Typically it is a rare event. This can work for you because you can use the intranet as a marketing tool without being seen as wasting money.
Opportunities:

The existence of any of the following conditions may present an opportunity to implement e-learning.

Mobile workforce. A mobile and widespread workforce is an opportunity to save a good deal of money for training, because travel costs are reduced.
Training not meeting needs. What training department can meet all of a company's needs these days? E-learning is about extending access to training.
Knowledge management. Knowledge management is about collecting and sharing corporate knowledge; thus it is part of e-learning and vice versa. Get your people to see the connection.
New products. Many companies introduce several new products per month. It may take weeks to train people on one new product, by which time there have been several more introduced. E-learning can train people almost instantly.
Highly regulated industry. Regulation compliance training is a good place to start. Large numbers of people have to get it and be regularly retested for certification. E-learning is faster, better, and cheaper than training that requires travel.
Sales people. Sales people need quick access to information because knowledge impacts their income. Moreover, they are highly mobile and computer literate. If it works for them, they will sell it.
Change. If your company is going through some significant change—anything from a merger, to a new product line, to a downsizing, to a new ERP—you can leverage e-learning to support that change. In the previously mentioned example of the initiative requiring everyone in the company to have a personal development plan, when people discovered that there were e-learning courses available for "free", they built them into their plans and started taking the courses. The personal development plan and e-learning each contributed to the success of the other.

Factors that Support E-Learning

The following factors support e-learning.

A CEO who believes
Corporate change initiatives
A central training organization
A supportive IT department
Regulatory requirements
Budget reductions
A geographically dispersed company
Having a strong network (intranet) in place

Factors that Work against E-learning

Conversely, the following factors work against e-learning.

A CEO who doesn't care or believes that e-learning will replace all training
The learners themselves, perhhaps
Trainers who feel their jobs are threatened
Managers whose control may be threatened
Conservative HR people who are nervous about anything new
A lack of a long term view of cost savings

Marketing E-learning:The following are some tactics that may be used to market e-learning within a company.

* Matching the culture
* Linking with change initiatives
* Department meetings
* Door prizes
* Rewards for participation
* Intranet announcements
* Guerilla or underground tactics

TEC recently launched its Learning Management Evaluation Center. It provides impartial analyses of learning management solutions.

Point of Sale: To Stand Alone or Not?

2009-06-17T09:00:00.000-07:00

When evaluating a point of sale (POS) solution, there are generally two approaches: best-of-breed solutions, and integrated solutions. Both have strengths and weaknesses, according to the information technology (IT) infrastructure. Retailers that have an existing back-office system should evaluate whether it is better to replace their legacy system or to choose a best-of breed solution.

For retailers that have neither a back-office system nor a legacy POS system, the question is, should they purchase a stand-alone POS system or not? In deciding between a POS system that is stand-alone, and one that is not, the organization must first understand what a POS system is. A POS system, also known as a point-of-purchase system, is composed of two main parts: software, and hardware.

It will be helpful to first provide an overview of the core and non-core areas of a POS software system, as well as a brief definition of the POS hardware component. This will help to determine whether a stand-alone POS solution should or should not be purchased.
Core Areas of POS Systems Software:Due to the diversity of the retail industry, different POS system features are required for different types of retailers. In assessing these features, the following have emerged as the six best practices core components, or must-have features, regardless of the intended application of the POS system.

1. Transaction management: The transaction management component includes all the information required to complete a transaction. This component should capture key transaction data, such as sales, sales cancellations, voids, refunds, purchase of gift certificates, layaways, service transactions, creation of special orders, and the like. The transaction management component should validate item information, automatically calculate the total purchase amount, and process the payments. This enables sales associates to give their full attention to properly serving the customer, since processing a sale would then only require them to scan in the barcode and to ask the method of payment.

2. Price management: The price management component allows a store manager or store employee to modify the retail price of an item. POS systems should allow modification of a retail price for different reasons, such as discounts on damaged items, discounts after negotiations, or competitive price matching. The price management module should track these retail price changes, by assigning a code to the reason, or total discount, or employee number, and so on. This module should have the capacity to generate a report for auditing purposes.

3. Register management: The register management component includes processes for cash opening procedures, cash closing procedures, and cash balancing procedures. Moreover, this module consists of the management of register opening funds, paid-in transactions, paid-out transactions, tenders, currencies, and taxes. Register management should track the cash flow within the business day, and should flag any unusual events. This enables a store manager to monitor and reduce employee theft.

4. Inventory management: The inventory management component includes item localization tools, physical inventory procedures, and inventory adjustments. This ensures that the store's inventory is up to date. It also helps employees to locate items at the store or corporate level. In other words, by knowing where the inventory is located and by having accurate information about the quantity on hand, this component allows employees to close sales and to increase customer service and satisfaction.

5. Customer relationship management: The customer relationship management (CRM) component has the functionality to manage customer interactions, customer sales histories, customer contact information, customer preferences, customer characteristics, customer loyalty programs, and so forth. For a retailer, customer purchases are the most important avenue of revenue. To make things more challenging, today's customers are more educated, more skeptical, and more demanding than before. With the advent of the Internet, price transparency has become a major threat to retailers. Thus, offering a personalized service to customers is crucial. Having a good CRM module which tracks customer behavior and preferences will ensure healthy relationships. For more information about CRM, see Comparing On Demand Customer Relationship Management Service Alternatives.

6. Reports and inquiries: Store employees use this component daily, to extract information on inventory, sales summaries, or commissions (if applicable). Reports and inquiries enable organizations to analyze the performance of the store by day, by week, by month, or even by year. It also shows the performance of items on numerous levels (such as color, dimension, size, characteristics, or attributes). Reports and inquiries also allow store managers to identify anomalies and to take corrective action if necessary. Reports and inquiries are widely used to obtain loss and prevention information.
Non-core Areas of POS Systems:Now that we have determined the components of a POS system that are essential regardless of the type and size of the retailer, let's continue by exploring the available features that are not essential to every system.

1. Purchase orders: The purchase order feature enables buyers to communicate a purchase to vendors, and to receive the goods ordered. A merchandise management system (MMS) or stand-alone POS system, however, requires the ability to order and receive purchase orders (POs). POS systems which are integrated with a retail merchandising system only need the capability to process a receipt. The purchase order module from an MMS offers more functionality, such as different types of POs, automatic creation of POs, or the ability to add vendor discounts at an item level. On the other hand, the PO component from a POS system will allow simple ordering and receiving functionalities.

2. Price changes: The price change feature is used to manage the retail (selling) price of goods. This feature can offer tools for lowering or raising the retail price. A POS price change component allows permanent or temporary markdowns and markups. The price change module included in the retail merchandising system, on the other hand, offers multipricing capabilities, markdown and markup cancellations, or price changes at location, department class, and vendor levels. Due to the increase of awareness among customers, prices on products must be equitable; they cannot be higher than the competitor, but they cannot be lower than the cost. Moreover, to lessen the loss, markdowns allow retailers to liquidate discontinued or out of fashion products.

3. Financials: The financials component is not considered a core element of POS systems. However, all vendors must at least have the means to communicate with a third-party financial system. This component includes general ledger, fixed assets, cost accounting, cash management, budgeting, accounts payable, reporting, and other bookkeeping requirements. For more information about financials, see Customer Choices for Achieving Growth.

In addition to the non-core components mentioned above, other features such as replenishment and e-commerce capabilities can be offered in certain POS Systems, but are usually found in a merchandising solution. Note once again that when replenishment is offered in a POS system, the capabilities are not as extensive as when the same module is found in a retail system. Moreover, other components such as planning and forecasting, allocation and distribution, open-to-buy, and stock optimization can be included within a retail system. These are all features that ease merchandise process analysis, increase return on investment (ROI), and increase employee productivity. For more information about merchandising systems, see Retail Systems: A Primer.
POS Hardware:As mentioned earlier, a POS System is composed of software and hardware components. There are two types of POS systems that are available on the market: electronic cash registers (ECR), and computer-based POS systems. An ECR will only have the capability to accumulate the total sales transaction amounts, whereas a computer based POS system allows more extensive features, due to its software. The devices in a computer based POS hardware system typically include a monitor, a cash drawer, a keyboard, a mouse, a receipt printer, and sometimes a barcode scanner. Compared to the cash register, a computer based POS system allows retailers to compute more extensive sales analysis, track "hot items," or track customer preferences, all with only a few clicks.

In addition to the typical computer based POS system, other hardware components are available, such as magnetic stripe readers, conveyor belts, personal shopping assistant (PSA) devices, pole displays, or in-counter scanner or weight scales. These optional devices reduce the time spent in serving a customer. For example, a pole display informs customers of the total amount, to encourage them to quickly have payment ready. Moreover, recent technologies also include devices which use biometric identification. In the near future, customers will be able to pay for purchases with literally one touch. All these hardware devices are tools used to increase customer satisfaction and to ensure their loyalty.

User Recommendations

Should the POS solution be stand-alone, or not? Depending on the case, here are the recommendations:

For a retailer who already has a retail system, the solution is probably the best-of-breed approach. Therefore, when evaluating a new POS solution, the organization should include all core components. Any non-core components are a bonus feature, but it is not necessary to pay for what is not needed. The downside of this approach is the difficulty of finding a software vendor who can coexist with the existing merchandising system, without charging an exorbitant fee to do the work.

For a retailer looking to replace a legacy system which includes back-office and front-office systems, the best solution is likely to have a fully integrated solution. This way, no extra costs are necessary for integration, and the look and feel of the application are consistent across the organization. The weakness in this approach is that the initial cost of implementation is higher, because software which is rich in functionality is being purchased. Moreover, the time of implementation is increased dramatically, since all back-office and front-office systems are being replaced.

For a retailer who does not have either a retail back-office system or a POS system, and who has ten stores or less, a stand-alone POS system should probably be evaluated, including all the core and non-core components. By including these, the initial costs are probably lower, and all the functions and features should satisfy the needs of the retailer. The disadvantage of this approach is that when a retailer needs to upgrade to an MMS, integration of the two systems might not be straightforward, and some features from the POS may become obsolete.

Best-of-breed or integrated systems are the two main approaches in the software evaluation process. When choosing between a POS system that is stand-alone and one that isn't, the core components of transaction management, price management, register management, inventory management, and CRM are always included. With the exception of a small retailer who has no MMS or POS system, the non-core components (purchase orders, price changes, and financials) are nice-to-have features. Whether the retailer is a large or small enterprise, they should above all consider their software strategy prior to purchasing the hardware necessary for a POS system.

Is Your Store Customer-centric?

2009-06-17T08:59:00.000-07:00

Is your store "customer-centric"? What does being customer-centric even mean? Obviously, most soccer or running stores would say that they were focused on the customer, and would point out that without customers, their store would not exist. And they are right. However, simply being there, opening the store, stocking some shoes and equipment, and having staff to collect the money, is not the same as being customer-centric. Being customer-centric means that everything we do—from the shoes, socks, and clothing that we carry, to the environment that we place them in and the staff that we have to serve those customers—is centered on and about customers and their experience in our store. There is a huge difference between simply serving a customer and centering on a customer's specific needs and satisfaction.

Students of Your

Customers Customer-centric stores are "students of their customers," which means that they literally "go to school" to learn as much as they can about their customers' needs, wishes, dreams, hopes, wants, and desires. Every customer is different. A customer-centric retailer recognizes this fact, and also recognizes that it cannot create a different environment for each individual customer. This means that it has to find a way to group similar customers together, and create solutions and environments for those groups. We call this customer segmentation. When we segment our customers, we identify clusters of customers that have similar needs, wants, demographics (age, sex, education, sport, and so on) and create environments, policies, services, and product groups especially for the customers in each segment.

The Best Buy Experiment:A good example of a major retailer who has adopted this approach is Best Buy. About two years ago, Best Buy determined that it could not continue to operate on price as its major strategy and message to its customer. Brad Anderson, its chief executive officer (CEO), stated "if we do nothing, Wal-Mart will surpass us by the simple fact that they open more stores than we do each year. There is no point in trying to compete on price." (emphasis added) With that statement in mind, Best Buy launched its customer-centric strategy. During 2005, Best Buy spread its customer-centric message to selected North American stores (110 in all), and allocated over $50 million (USD) in capital expenditures to those stores. The initiative was two-pronged: getting customers to buy what was already in stock; and asking them what products they would like to see the company offer. The 32 stores piloting the initiative in 2004 showed 7 percent sales gains over other US-based Best Buy stores, while their "conversion rates" (the percentage of shoppers making a purchase) improved by 6 percent over these same stores. Although selling, general, and administrative (SG&A) costs (including nonrecurring and investment costs) rose considerably the pilot program still delivered profits for the thirty-two stores over non-participating stores. These test stores also represented a mix of high- and under-performing operations. Best Buy identified key customer segments in five areas of its customer-centric program: affluent professionals seeking the best technology experience (internally identified as "swinging single professionals"); younger males wanting cutting-edge technology and entertainment ("gadgeteers"); fathers looking for technology to improve their lifestyle ("cherry pickers"); mothers seeking technology to enrich their children's lives ("affluent soccer moms"); and small-business people using technology to improve their bottom lines ("small business"). Part of the strategy included giving employees closest to the customer some of the more important decision-making responsibilities. In addition, Best Buy store associates received customer-centricity training to be able to really deliver the promise at the store level.

The way that the stores are adapted to each segment is interesting. For the soccer mom, the stores feature brightly colored signage, play areas for children, educational toys, and in-wall appliance displays, and provide personal shopping assistants. For the swinging single, the stores place greater emphasis on higher-end and more cutting-edge consumer electronics, and feature separate rooms with full home entertainment rooms and enhanced audio-visual product assistance. For the cherry picker, the stores focus on technophiles on a budget, and offer the most promotions and incentives, and the best financing packages. For the gadgeteer, the stores are geared toward teens and twentysomethings, and emphasize cell phones, music and movies, home theater, gaming, and mobile audio. And for small businesses, the stores are signed "Best Buy for Business," and have an expanded computer section and a stronger "geek squad" (Best Buy's in-home/office technology assistance team) presence, as well as central help islands staffed by associates wearing blue-collared shirts (as opposed to knitted golf shirts).

"People come to specialty stores because they are looking for some service or selection that they can't get from the mass market," Anderson said. He went on to say that "for those reasons, Best Buy intends to invest more heavily in customer service, and position itself as a solutions provider for consumers of high-tech entertainment products. Best Buy's customer service initiatives will mean a more decentralized structure for the business. We are moving power from Minneapolis [US] to wherever the engagement is with the customer. Instead of Minneapolis telling the store what to do, it would be the store asking what it can do in assisting its customers."

Internally, Best Buy has also worked extensively on its customer database. The company wanted to identify who its best customers are, as well as who are the customers that are costing them money by abusing their customer service policies. The name that they gave to their best customers was "angels," and their problem customers were called "devils." This terminology is not for the public, however: it is only used internally! The goal is to get more angels and to stop selling and serving devils.

Initially, the customer-centric strategy in the stores paid off, as Wall Street praised the new focus by the company. The company posted an incredible 85 percent profit gain in its fiscal first quarter in 2005—a gain Best Buy attributed, in part, to its customer-centricity initiative. In the first quarter, sales increases at stores converted to the new model were more than double the increases at Best Buy's regular stores. But in December 2005, shares plunged 12 percent after Best Buy said its third-quarter profit would fall well short of Wall Street expectations because of higher costs. Anderson said in an interview in December that the company's "customer-centricity" initiative has proved more expensive than anticipated, and Best Buy might have to eliminate staff to help control costs. "Right now, the evidence suggests that we overspent" on customer-centricity, Anderson said. "We have to make adjustments." But he also says that Best Buy's commitment to customer-centricity has not lessened at all. "Customer-centricity at its core is ... identifying a customer that you want to serve better," he said. "In some stores, it's working great."

Lessons Learned:

The lesson to be learned from Best Buy's move to customer-centricity is not that it doesn't work, but rather, that it is not an easy thing to accomplish. They moved too fast, and should have done it slower and used more of what they learned about each segment before they expanded the program. Another issue they are trying to address is that many locations have a mix of all five customer segments, and to design a store for just one of these segments can be dangerous. They are trying to integrate areas for all five segments, with one being dominant (without ignoring the others).

So, the lesson for soccer and running stores is that customer-centricity is key to future growth and profitability, but it must be done right. Your store will need to identify the segments you serve. For example, how many serious or professional athletes do you serve? How many amateurs or first-timers? How many of each specific group in your trade area are customers in your store? And there may be more segments that you need to identify. Do you have a large group of young people as customers, or more mid-lifers? Are most of your customers women? Do you have a large group of team players? First you need to identify the major groups of customers that now shop at your store, and then identify what these customers have in common, how they like to shop, and what products they like. When you have answered these questions, you are ready to structure your store experience for these customer segments. For example, if you have a large segment of younger customers, you should most likely have staff that are also part of this segment: young people often will feel more comfortable being served by sales associates that are in their age group, and this is also true for mid-lifers. Have you created an assortment of product that appeals to young customers? Have you displayed and signed it so that these customers find it easy to shop and browse? Have you planned special events that young people would find fun and interesting? For each segment you identify, you should create a specific strategy around merchandise, display, signage, staff, and special events that addresses the needs of each segment. Not an easy task!

Checklist For Creating a Customer-centric Store

Have I identified distinct customer segments? (Two or three are good, but more than five is too many!)
Do I know the special needs and wants of each segment? (Have I asked them in either informal focus groups or by observing their current purchases?)
Do I have products and services that meet these customers' needs and wants?
Have I created an environment that is attractive to each segment? (Mid-lifers, for example, would welcome larger price tickets, chairs, and more open areas)
How will I communicate with each segment? (Can I identify the media that each segment reads or listens to or watches?)
Is my staff aligned with these segments? (Can my staff empathize with each segment? Do they "run and play" at the same level?)
Is my staff trained to meet the requirements of these customers? (Have I put a training program in place?)
How will I measure success? (What specific measures will I use to insure that the program is working?)

If you have the right answers to these eight questions, you will be well on your way to making your store customer-centric, and enjoying the increased sales and customer satisfaction!

A Drop-ship Enablement Pioneer Leads the Way

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Meet a Drop-Ship Enablement Pioneer:CommerceHub (www.commercehub.com) is an Albany, New York (US)-based provider of hosted supplier integration and order management services for multichannel retailers. These retailers include QVC, Target, Sears, Staples, ShopNBC, Costco, and Federated, all of which have since reportedly reduced costs of owning, warehousing, and distributing inventory. The vendor is privately held, albeit with limited outside funding, and has operated profitably for the last few years. CommerceHub's hosted platform provides one single, universal hub- or bus-like connection between a retailer's business and all its distributors, suppliers, and manufacturers.

Part One of the series A Drop-ship Enablement Pioneer Leads the Way

By providing a single plug-and-play connection to multiple trading partners, CommerceHub strives to enable basically any retailer to electronically integrate with its suppliers, regardless of the idiosyncratic systems and capabilities that might exist among them. Such system-to-system communication allows both merchants and suppliers to eliminate costly, inefficient, and error-prone manual procedures, from point-of-sale (POS) through delivery. In addition to connectivity, its applications enable retailers to simplify order management and gain near real-time visibility into their entire supply chains, and control over transactions to ensure the proper delivery of goods under a variety of fulfillment models. Last but not least, the applications were devised to enable merchants to expand product offerings, preserve brand identity, and manage, analyze, and deliver inclusive order information to their customers, all with a lesser inventory risk.

Drop-shipping is not a new concept, but CommerceHub's founders had a notion that the Internet should change the way retailers and manufacturers communicate to make drop-shipping work. For more information on retailing trends and drop-shipping, see Consumers Shop Everywhere: Understanding Multichannel Sales), Retailing Trends—Shopping Anyway and Everywhere, The Challenge of Fulfillment, and Drop-Shipping—Internet Retailers' "Little Helper"?.
The company was founded in 1997 as an e-commerce integrations firm connecting suppliers to retail partners, after recognizing significant barriers to establishing supplier integration and managing the fulfillment process. The emergence of the Internet and associated technologies like extensible markup language (XML) has also brought about the promise of electronic data interchange (EDI) connections (if not necessarily the complete demise of manual communication methods), and expanded the role and value proposition of traditional value-added networks (VANs).

The company's board of directors and top executives have vast experience and resumes from Internet pioneers like iQVC (the Internet division of QVC), Kmart's equivalent BlueLight.com initiative, and JC Penney's Internet division, to name only some. Frank Poore, the company's co-founder, president, and chief executive officer (CEO), had previously developed an intranet for Nike's world finance division in the early 1990s. A few years later, he was working for a video game company, when he had an epiphany: 100 retailers having to connect to 100 suppliers meant 10,000 simultaneous information technology (IT) projects. He then envisioned a "universal connection platform" that would serve as middleware (resembling, to a degree, a credit card clearing facility), invisibly translating one computer dialect into another, in a manner of speaking, so that the same scenario would require only 200 total connections, no matter how many different dialects were involved. The idea was to design and deploy an advanced infrastructure enabling any merchant organization, regardless of internal systems or capabilities, to connect to all of its trading partners, by establishing only a single connection to CommerceHub.

To use an analogy with simultaneously translating to and from a multiplicity of human languages (as during United Nations [UN] sessions), it would be as if the connection platform took Spanish (or Russian, or Swahili for that matter) instructions from the retailer, and translated them into English (or German, or Chinese) for the supplier, and then translated the supplier's English response back into Spanish for the retailer. CommerceHub's hosted application is similar—regardless of any differences between their system formats (for example, the retailer's format might be some EDI standard, and the supplier's format might be XML, or even flat files), partners can communicate without errors by passing their information through CommerceHub's universal translator. The painstaking process of adding suppliers and getting everyone on the same page involves evaluating each participant's current order processing protocol, and either agreeing on a common format or creating a translator for CommerceHub's private exchange, based on the retailer's and supplier's requirements. If any participating company is still in a low-tech environment (working through phone and fax exclusively), CommerceHub can set up a web interface for the supplier.

As an example of solving dialect problems, there is the case of a renowned musical instrument manufacturer that could not send the retail customer tracking numbers for its shipments, which was an important piece of information for the retailer. Yet it was not the case that the supplier did not have the information, but that the company was using different EDI messages to move tracking numbers, as compared to those the retailer used. Fixing the problem on the manufacturer's end would have entailed a great deal of programming expense. Instead, CommerceHub's staffers extracted the information from the supplier's messages, and inserted it into the type of message the master retailer used.

What is important to note about CommerceHub's infrastructure is that it acts as an invisible translation tool, converting all styles of XML, EDI, web form, or even custom file data transmissions from one party into a format that can be digested by the other. This eliminates the need for a master retailer to impose a common data standard onto hundreds of supplying companies, or to work out expensive hardwired data connections with each of them.

In addition to this sort of plug-and-play supply chain integration via the Universal Connection Hub product, CommerceHub's value proposition to a retailer is that it can fairly quickly expand product offering without owning, warehousing, or distributing inventory. And by being able to brand itself across multiple channels, a retailer can provide customers with a seamless shopping experience, whether a product has been shipped from internal warehouses, remote suppliers, distributors, or manufacturers.

In a sense, CommerceHub can be regarded as a traditional VAN provider, albeit with many more benefits that go well beyond the mere connectivity of VANs. VANs serve the purpose of a "glue" connecting merchants with their drop-shippers, by leveraging EDI to allow information files to flow back and forth. With a multi-supplier scenario in place, order flow (and tracking each order back to every drop-shipper) gets terribly confusing and time-consuming if there a hub-like exchange to handle this complexity and monitor any exceptions. To that end, CommerceHub allows trading partners to electronically transmit and receive documents like purchase orders, retailer-branded packing slips, shipment confirmations, carrier tracking numbers, inventory updates, cancellations, returns, invoices, payment remittance, advance shipping notices (ASNs), and more. But contrary to traditional VANs, connectivity and integration options for suppliers range from full data- and process-based integration to collaborative web browser use, while communication methods can be via Internet browser, file transfer protocol (FTP), virtual private network (VPN), and VAN.
Going Beyond Mere Connectivity:

As hinted earlier, besides connectivity, CommerceHub delivers both near real-time order status visibility into the supply chain, and advanced exception-based management applications to overcome the complexities associated with multichannel retailing. This ensures that orders reach their end destination in the most efficient manner possible, without sacrificing quality or service levels. The product enables the customer's team to create their own exceptions definitions (for example, per supplier, per item, per item group, and so on), which can be individually monitored, along with the ability to track the performance of suppliers and carriers through customized reporting and supplier report cards.

CommerceHub Drop-Ship Master is a suite of applications that provides retailers with the supplier management tools necessary to confidently build and expand inventory-less drop-shipments directly to customer programs. On the other hand, CommerceHub's Bulk-Ship Master is a suite of applications that provides retailers with the supplier management tools necessary to minimize warehouse and store-level inventories. On a high level, Drop-Ship Master features the following applications and capabilities:

Real-time supply chain monitoring, to provide near real-time visibility into the supply chain and enable the user merchant organization to manage its entire fulfillment process from order capture through carrier delivery.
Business rule enforcement, to automate information management by applying the user organization's business rules to data exchange among various trading partners. CommerceHub has long been offering automated messaging services so that the management can always be in touch with their operations: merchants and suppliers can receive appropriate e-mail alerts to pagers, cell phones, or their desktops, in order to quickly respond to any delay or shortage before it becomes a problem.
Customized branding and labeling, to produce printer-ready, partner-branded packing slips, barcode labels, coupons, and promotional materials at the supplier's locations, with relative ease. Merchants can transmit a customized and personalized promotion with each order they route through CommerceHub, and in turn, suppliers can perpetuate the merchant's branding and promotions by printing out the files locally and including the documents with every order they ship on a merchant's behalf. Suppliers thus have an opportunity to make themselves true extensions of a merchant's organization. Further, the Catalog Manager handles product images and descriptions, so as to eliminate supplier headaches of reformatting product content to fit the requirements of each of their merchant partners. On the other hand, for merchants CommerceHub reduces the effort required to assemble their web sites, catalogs, and promotional materials.
Inventory synchronization, to simplify and streamline the management of inventory between the user merchant company and its business partners, regardless of differences in systems. As a centralized solution, CommerceHub aggregates product photos and descriptions into the repository so that merchants do not have to customarily chase the various elements down in order to promote new products. In addition, the products are individually linked to the actual suppliers so that merchants can get real-time inventory reports for the product without ever placing a phone call.
Reverse logistics, to support customer product returns to a user retailer's suppliers, enabling a retailer to process customer credit without actually handling and warehousing returned merchandise. The returns processing capabilities allow virtual stores to remain virtual, since customer service agents can communicate return authorization numbers to suppliers right through CommerceHub, and in this way, the return information becomes part of the order history. Alternatively, merchants can have bar-coded return material authorizations (RMAs) integrated with the branded packing slips that accompany each of their drop-ship orders. Either way, merchants obtain real-time notification as soon as the supplier receives the return, ensuring that the accounting department can promptly and correctly issue any credits.

By leveraging these solutions, the idea is for a retailer to be able to achieve the same levels of management, control, and fulfillment performance from a remote supplier fulfillment network as they can from goods shipped from internal warehouses. To track its orders, the merchant customer can, for example, use a private Internet site that connects it with its suppliers, where the site will employ a color-coded system that ranks the level of inventory on each product. If a particular item is marked yellow, that signals availability is low; if green, then the retailer should know that it can promote the item on its public site and that delivery should not be a problem.

he Essential Components of Quote-to-order Application Suites

2009-06-17T08:56:00.000-07:00

Current customer relationship management (CRM) and enterprise resource planning (ERP) software may still have limitations for companies selling complex products (please see part two of this series, The Complexities of Quote-to-order and Possible Solutions.

For more background, please see The Basics of Quote-to-order Systems. CRM and ERP solutions require custom programming for deployment and maintenance, and provide limited interactive experience. Quote-to-order (Q2O) applications, on the other hand, may be able to bridge the gap for complex manufacturers by providing proactive solutions to their complex sales concerns.

Nothing but an Underlying E-business Platform

Communication is vital in any supplier-buyer relationship, and even more so in supplier-indirect channel relationships when offering and selling complex products. Information exchanged between supplier and buyer must be bidirectional and, above all, up-to-date if the relationship is to realize its full potential for both parties. It is a well-known fact that traditional phone, fax, and paper-based communications systems are labor-intensive, inefficient, and prone to error. Companies have historically dedicated significant resources and time to the manual entry (re-keying) of information from faxed or phoned-in purchase orders, as well as to the manual processing of paper checks, invoices, and shipping notices. While spreadsheets and e-mail are also used to manage their business relationships, even these electronic systems can be inefficient and difficult to integrate.

The large volume of paper generated by these systems, and the mass of information to be sorted and processed, frequently produce hidden costs due to errors and delays in information delivery, as timely changes can be difficult to implement in manual processes. The cost related to such changes can also be significant. For example, a paper-based catalog (if even applicable in selling complex products) cannot be quickly or inexpensively updated to inform customers of changes in product offerings, availability, or pricing.

In addition, a manufacturer and members of its distribution network often have limited capability to track orders, inventory, warranties, and other information (or to compile useful databases) using paper-based or semi-automated processes. These forms of communication do not permit manufacturers and their business partners to exchange information on a real-time basis, and thereby prevent easy access to key information needed to transact business. Manufacturers may also have to deal with differences in languages and time zones—additional barriers that traditional methods cannot easily overcome. Even so, increasing market and supply chain complexity motivates companies to improve operations and communications with their trading communities.

Furthermore, traditional ERP systems tend not to provide the visibility and control required to efficiently manage and synchronize extended business processes. This results in excess operating costs and poor customer service. The ability to view complete and accurate orders, to integrate data, and to manage inventory and activities for effective fulfillment execution is necessary to effectively respond to challenging customer requirements and to achieve competitive advantage. Hence, modern Q2O suites have to provide access to design, planning, and material data for customers and suppliers.
Access to Q2O information enables users to proactively understand various aspects of the project, as well as reduce planning time, document activities, and promote communication throughout the engagement cycle. Multiple deployment modes (such as on-premise, hosted, mixed-mode, etc.; see Software as a Service's Functional Catch-up) and a highly scalable architecture are required to support millions of simultaneous users (even if, in case of scalability needs, more servers are installed to share the load). Q2O modules have to integrate (via open standards) with other Web-based applications and legacy systems through Web services. The ability to dynamically update product information without stopping the selling process is often needed.

Some potential benefits of information access include

* increased communication, with around-the-clock information access for customers and suppliers;
* reduced customer service calls by providing up-to-date status of orders and schedules;
* improved delivery performance by enabling suppliers to review requirements, schedules, and needed materials; and
* increased supplier collaboration by sharing quality nonconformances and requirement changes in real time.

These points are especially important when selling complex products because the knowledge that is so often inaccessible elsewhere in the organization needs to be made available to field salespeople and the sales channel. Sales channels need solutions to help them close sales rather than to just manage their contact lists.

To that end, Q2O applications have to be designed to enable enterprises to easily develop and rapidly deploy an Internet sales channel that interactively assists the enterprises' customers, partners, and employees through the selection, configuration, pricing, quoting, and fulfillment processes. Such a platform has to be able to provide up-to-date product, price, and customer information, as well as have the ability to develop a more complete and accurate product offering to meet a specific customer's requirements on the spot.

Furthermore, the solution has to have “point-and-click” synchronization with central enterprise systems to rapidly assimilate new or upgraded products, revised pricing, and other changes. The Q2O product also has to enable mobile users to access the solution with the same user interface (UI), performance, and reliability as a connected system. The Q2O solution must allow companies to use the Internet platform to deploy a selling application to many points of contact, including personal computers (PCs), in-store kiosks, and mobile devices (such as personal digital assistants [PDAs] and cellular phones), while offering customers, partners, and employees an interface customized to meet their specific needs. Only by fulfilling these promises will customers and sales forces alike see these solutions as delivering true benefits (and not extra burdens).

In order to expand Q2O into the opportunity-to-cash realm, some more advanced Q2O systems provide the functionality, business rules, and integration required to support multiple distributed order management (DOM) scenarios. DOM scenarios can come in many forms, including a single face to the customer across business units and internal systems, central order placement with distributed fulfillment, shared commerce and partner storefronts, private marketplaces, and more.
Some enterprise vendors have attempted to provide such functionality by layering a business process management (BPM) tool (please see The Future of Business Process Management: Where is BPM Heading?) on top of existing applications. Yet some DOM specialists, like Yantra (please see Yantra—Leader in Distributed Order Management, but Wait, There's More) and Comergent (both now part of Sterling Commerce), take the noble approach of building configurable DOM functionality and business rules into the applications. This allows for quick deployments with limited customization, where Web services integration enables a fairly smooth orchestration across multiple internal and external systems.

Commonly Used Quote-to-order Components

It must be apparent by now that selling complex products and services has always presented special challenges. These challenges have been magnified by recent demands from the global marketplace, distribution channels, technology, and customer expectations. To retain a position of leadership, organizations need to understand the specific threats to and opportunities for their products and markets, and they must develop approaches that will allow them to become more efficient, more reactive (if not even proactive), and more effective.

Certain specialized software suites (and components) are now available that address the very specific issues of selling complex products and services, and these solutions enable these new approaches to be implemented. These software components help compress the Q2O lead times—to within an hour—by facilitating such processes as needs assessment, specification and pricing, design validation, product configuration, automated drawing and document generation, and workflow management.

To that end, Q2O solutions promote operational superiority in several ways, starting with guided selling. Guided selling matches the right moderately complex product and the right set of services to customers' needs at the right time in the sales process. As the increasing complexity of products and service offerings, combined with increased focus on the customer, has forced companies to seek ways to improve how they sell their products, guided selling has become essential for any organization that wants to sell customers the exact product that meets their unique requirements. Companies are able to augment their catalogs with a guided selling environment that includes selling scenarios geared to any customers' experience levels, so that customers can more easily find the products and services that best meet their needs.

Guided selling solutions typically provide the tools that allow manufacturers of complex products to capture product, service, and business knowledge—potentially increasing overall productivity, sales effectiveness, and profitability. This makes it easier and less expensive for enterprises to conduct business, as well as for customers, in turn, to do business with the company. Moreover, guided selling solutions accelerate salespeople's learning curves (especially new hires and new partners), allowing companies to keep engineering and product development experts dedicated to their assigned tasks rather than being constantly disrupted by the sales cycle.

On the other hand, guided buying and selling become integral components for any organization that wants to sell simple-to-complex products and services over the Internet. As discussed earlier, historically, the Internet has not been a viable channel for products and services (please see part one of this series, The Basics of Quote-to-order Systems) that require the skills of a knowledgeable salesperson to guide the buyer. Namely, to be successful, Web-based sales applications have to guide customers to the exact product or service that meets their distinctive requirements, regardless of the complexity involved.
Thus, by deploying the knowledge of the most experienced salespeople, the benefits and opportunities of guided selling include

* improved win rates (by providing real-time feedback at the point of sale);
* delivery of a consistent customer experience throughout the entire sales channel;
* faster market share growth (by growing revenue through cross-selling and up-selling) and channel expansion;
* reduced time-to-market for new product and service offerings; and
* increased sales productivity, while reducing training and support time.

Product Configuration—the Heart of the Quote-to-order Process

Bundled with guided selling is product configuration, which translates features, dependencies, and options into a product variant that can be built and delivered. Configurators, in fact, provide a validated guided selling process by enabling customers to define product and application requirements by description. Customers can then work at their own pace and make selections in any order (as the configurator should not require defined start and endpoints). If an error is made during the selection process, it is correctable at any time. Similarly, if additional options or accessories are required as revisions, they are also modifiable at any time. Furthermore, contextual “help” bullets and suggestions are often provided to assist customers in making appropriate selections that satisfy their requirements.

Product configuration is a key technology that enables the implementation of mass customization. As discussed earlier, mass customization means that customers can select, order, and receive a specially configured product, often from among hundreds of product options and with assurance of no significant increase in price, to meet their specific needs. Providing customers with exactly what they want is not exactly a new concept, but the idea of giving the customer an ever-expanding range of choices as early as possible has become the center of various industries' customer-oriented activities, given that getting an accurate, customized product to the customer more quickly fosters competitiveness.

To that end, configurators also strengthen the business of customer care by streamlining and accelerating the entire sales process, as well as by deploying uniform and accurate information at the point of sale. Since configurators facilitate identification of customers' wants, they are becoming central in many traditional selling environments and in e-commerce applications. Configurators can also be deployed over multiple channels, such as the Internet, local area networks (LANs), desktop computers, and laptops for salespeople on the road.

To implement mass customization successfully, manufacturers need to overcome several major challenges. For one, the time taken to configure products manually is often prohibitive because of the huge number of combinations that need to be considered before arriving at a valid configuration. In addition, extensive training and expertise are needed in creating configurations of complex products, while there is always the possibility of making errors, since the final product may involve thousands of configurable parts. Errors, obviously, can create major schedule slips and lead to costly iterations in downstream processes. A product configurator that enables manufacturers to efficiently deliver customized products by automating product configuration processes is one of the key technologies in implementing mass customization.

APICS Dictionary (a reference guide for the operations management field) defines configurator as a software system that creates, uses, and maintains product models that allow complete definition of all possible product options and variations with a minimum of data entries. A product configurator is a system, generally rule-based, used in design-to-order, engineer-to-order (ETO), or make-to-order (MTO) environments, where numerous product variations exist. Product configurators perform intelligent modeling of the part or product attributes, and often create solid models, drawings, bills of material (BOMs), and cost estimates that can be integrated into computer-aided design/computer-aided manufacturing (CAD/CAM) and ERP systems, as well as sales order entry systems.
Simply, the product configurator is just a rules (sometimes called procedures) and constraints software tool that captures a customer's requirements as input, and then automatically generates a configured product exactly matching a customer's specific needs, based on predefined design constraints. Given customer requirements and built-in product descriptions, the configurator will first search all possible product options and combinations within the restrictions imposed by design constraints, and then create a valid product configuration that matches the customer's specifications.

The solution “guides” the user through the process (where the user can specify requirements and make selections in any order) and “streamlines” order entry process (by asking the customer to select from a set of predefined options associated with a generic product line). At the end of the process, it populates the attributes of the newly configured end item (called the variant product), tests for any conflicts (based on a set of well-defined restrictions on how the component types can be combined), and generates the variant product with the appropriate BOM, routing, and pricing, based on preconceived rules and calculations.

Any sound CRM strategy revolves around clear communication with the customer—knowing what the customer wants, when he or she wants it, and what price is acceptable to both parties. Configurators have long been available for “internal use” by highly trained personnel, but the newest generation of online configurators is “customer-focused” and developed first and foremost to meet the needs of customers when purchasing products. Thus, configurators are crucial to the sell side of business-to-business (B2B) and business-to-consumer (B2C) e-business applications because they can be the foundation to self-service applications on a web site and available for use by potential customers. At the conclusion of the selection process, the item can be placed in a shopping cart, while the configurator generates all pertinent product information including specifications, prices, quotes, proposals, and order fulfillment lead times.

As product configurators have evolved to include even more sales, marketing, and financial functions divergent to the product (such as pricing, cost analysis, sales commissions, available-to-promise [ATP], order status, etc.), the term “sales configurator” has increasingly been used to reflect the tool's expanded role. It may more accurately describe the configurator's extended role as a tool that assists salespeople with not only building viable products, but performing such related tasks as proposal and quote generation. Depending on the complexity of the product and customer needs, configurators (at the wish of the supplier) might also generate installation and assembly instructions, user manuals, and literature. Not only do configurators generate product information (such as part numbers and specifications) as an intuitive interface for customers and sales channel participants, they may also generate specific multiple, user-defined outputs, including orders, BOMs, routings, work breakdown structures (WBSs), contracts, discounts, and “special offer” pricing in multiple currencies. Such transactional data and documentation often have to be integrated with other business systems, including ERP, CRM, and supply chain management (SCM).

Online configurators provide many potential benefits to both suppliers and their customers. Primary customer benefits include not needing to be an expert on the supplier's products; having instant, around-the-clock information; and placing orders easily (without any paperwork).

Some possible supplier benefits include

* Increased customer satisfaction and loyalty via the guided selling process (which actively engages the customer in the decision-making process), simplification of complex products and processes, and timely product information updates.

* Reduced sales cycles via faster and error proof product specification and quoting, shorter sales order processing, and the ability to offer more aggressive manufacturing lead times.

* Increased sales via improved cross-selling and up-selling opportunities. For example, a prospective PC buyer may be prompted to consider additional features, such as increased memory, or complementary products, such as a printer, based on specific selections made. Increased sales also stem from flexible, dynamic pricing and lower customer transaction costs.

* Reduced costs of goods sold; of administration (by eliminating ordering errors); of selling (by freeing sales and marketing personnel to focus on more profitable activities, such as building relationships, prospecting for new accounts, and executing promotional programs); of engineering staff (by eliminating many review steps); and of IT departments (in the case of very functional off-the-shelf packages, IT personnel roles and responsibilities can be limited to the initial installation of the configurator application and the integration of the application with other business system applications).

* Reduced products and parts. By discerning which items are being configured together, organizations can decrease inventory and eliminate slow-moving and nonstandard items or parts from inventory, thus stocking only high-demand items. Without a configurator, manufacturers would have to create large numbers of customized products straight from stock in anticipation of potential demand, which has become prohibitive and impractical. With a configurator, enterprises can have many components and raw materials identified, preassembled, and ready for final assembly.

* Increased efficiency of sales and operations planning (S&OP). Provided the configurator is integrated with other CRM and ERP applications, an organization can discern the upcoming, exact configurations in real time, and create more accurate forecasts and final assembly schedules (FASs) from this data. For more information, please see Sales and Operations Planning.

* Improved time to market via easier online administration, more consistent and simultaneous product information, reduced pre-engineering and manufacturing requirements, and reduced dependency on experts.

Portals: Necessary But Not Self-sufficient

2009-06-17T08:54:00.000-07:00

Portals: Necessary But Not Self-Sufficient:Previously, portals were merely Web "super-sites" offering a broad array of resources and services, such as (free) e-mail, forums/discussion groups, search engines, on-line shopping malls, news, white and yellow pages directories, and links to other sites. Now they are pervasive in the business world and used at the departmental and corporate levels. The major, general-purpose Web portals are still Yahoo!, Excite, MSN, and America On-Line (AOL) and are the Web equivalent of the original, pre-Web on-line services such as CompuServe and AOL, which initially was only an Internet provider. Now most of these traditional search engines have transformed themselves into Web portals to attract and keep a larger audience.

However, one should differentiate between a public portal, which is a high-traffic Web site with a wide range of content, services, and vendor links; and an enterprise or corporate portal, which is a Web-based presentation and interaction interface for users of enterprise applications and resources. In other words, a corporate portal is an internal Web site (intranet) that provides proprietary, enterprise-wide information to company employees, selected trading partners, and selected public and vertical-market Web sites. It typically includes a search engine for internal documents and the ability to customize the portal page for different user groups and individuals. It is the internal equivalent of the general-purpose portal on a company's corporate Web site.

Aptly named, portals open a window of communication between enterprise applications and communities of customers, partners, content providers, advertisers, and, in most cases, the general public. Furthermore, enterprise information portals (EIP) provide windows into enterprise information, applications, and processes Leading enterprise applications vendors have made moves to adopt Internet portal strategies. The basic goal is to create a virtual workplace and marketplace for users, where enterprise applications, disparate back-end systems, and external content and services (catalogs, directories, travel services, benefits administration, etc.) can be seamlessly and transparently accessed by users via the Web. From this emerges the term business intelligence (BI) portal, which is a corporate portal that enables users to query and produce reports on enterprise-wide databases.

By personalizing, profiling, and presenting information, business applications, and inter-organizational interfaces in the context of roles and work processes, an enterprise portal provides a thin-client, Web-based link to work-based resources within the enterprise. On the Web, personalization means returning a page that has been customized for the user, taking into consideration that person's habits and preferences. Customization may be done by the user, appear on the Web site, or both and may be aimed at the general public or at company employees.

Portals are a natural result of increased global competition, the need for better and faster customer support, and the Internet phenomenon. If nothing else, they also afford technology-challenged suppliers a low cost, low risk entry into the Internet marketplace ("the global village"). Portals also allow software vendors to reach a greater number of power and casual users alike, which increases system usage and creates the opportunity for higher license revenues.

However, while there has been a cornucopia of portal applications (including Web-based interfaces into any number of enterprise-level applications) within any given enterprise, there has been a tendency for tying all the necessary capabilities within a single framework. Namely, this is seen in customer- and consumer-facing portals, where usability focuses on developers and features like personalization come notably into play. This differs from employee- or supplier-facing portals, where usability focuses on end users, with their need for collaboration, search, and content management features. In other words, the higher one goes in the hierarchy of portal architecture, the fewer vendors will offer a single portal framework accommodating most of these capabilities. As satisfied as they may have been with the particular standalone portal applications, over time users begin to seek fewer vendors and gravitate toward those with the firmest strategic position and long-term viability.
Evolution of the Portal Market:At its peak, the portal market had around 30 portal start-ups and full-fledged independent software vendors (ISV), and attracted larger information technology (IT) players like Sybase, SAP, IBM, Computer Associates, Oracle, Vignette, and Hummingbird (some of which once even took the daring step of reinventing themselves as portal companies only to make u-turns soon thereafter). However, because customers were looking for established vendors, the portal markets has reached the end of its life as a standalone market, which was symbolically marked by BEA Systems' recent acquisition of the last standing portal vendor Plumtree, which pioneered portal software that connects workgroups, computer systems, and multi-channel processes back in 1996. Given the earlier disappearance of portal pure-player like Epicentric and Corechange, many now recognize that portal technology should be included as part of infrastructure— specifically application servers that bundle together different software programs in order to work with each other.

Having moved beyond its original role as a standalone presentation layer to become a part of a larger technology stack, the portal is now considered part of a larger offering, be it in collaboration, vertical-specific applications, or application infrastructure and middleware. Even the recent, much talked about composite applications have promoted the portal as kind of lightweight integration layer for people, data, and processes.

Yet, niche portal vendors have had difficulties with the best example being Plumtreee. Despite fine-tuning its product strategy towards syndicated portal services, the enterprise web, activity management, and composite applications development, Plumtree has struggled to sustain momentum and growth in the market. It found itself squeezed by the strategic infrastructure aspect of portal frameworks, which the likes of Microsoft and IBM tend to dominate. It also had to contend with enterprise application portal heavy-weights, such as SAP and Oracle, being ill-able to make the same types of investments in development. However, even SAP, with its vast install base and research and development (R&D) resources, still hasd to resort to acquiring TopTier, a specialist vendor, in order to deliver SAP Enterprise Portal (see SAP Acquires TopTier to Further Broaden Its Horizons).

These developments have been in tune with the continual blurring of the traditional lines and layers which have demarked middleware applications and their underlying infrastructure. This has created the so-called "appli-structure" (see SOA-based Applications and Infrastructure--The Next Frontier?). The middleware stack is being squeezed, and application integration and configuration management is becoming rooted in both the application and infrastructure layers. Also, in most existing and prospective user enterprises, application vendors own business relationships, while infrastructure providers have IT relationships. But these large vendors cover both bases and will naturally have the most influence during the selection and implementation of applications and middleware/infrastructure.
Partner Rather Than Compete for the Portal Commodity?:Thus it is only logical to see many mid-market enterprise applications vendors ally with the providers of the highest-level portal framework, rather than to waste precious and scarce resources on "reinventing the wheel". This approach should help their bid to increase the use of Web-based portals among their enterprise customers while, at the same time, make more efficient and pointed use of their own R&D resources. In addition, some acquisitive ERP vendors with multiple product lines should be able to make new features and, at the same, improve the "look-and-feel" of their assorted ERP product lines faster and concurrently.

Given the "commoditization of technology" (which is not a disparaging term for the likes of IBM and especially Microsoft, which has been thriving on high-volume software sales), vendors that sell Java 2 Enterprise Edition (J2EE) or Microsoft .NET-based applications to a J2EE or Microsoft shop will pragmatically begin accommodating IBM WebSphere or Microsoft SharePoint Portal frameworks, respectively.

Enterprise applications vendors SSA Global and Epicor Software have recently debuted new versions of their portals for their primarily mid-market customers. Respectively, these vendors are working with IBM and Microsoft so that portal adopters can benefit from WebSphere's and SharePoint's models and access other enterprise data. At the same time, customers can continue to approach diverse applications, such as SSA Global and Epicor through individual SSA Global or Epicor portals. This should appeal to existing IBM and Microsoft shops that are thinking of adopting these vendors' applications for their particular industry fit, it may also be a bonus for existing customers that are loath to unnecessarily "graft" an unproven proprietary n application-centric portal onto a well-known portal framework they may already have in place.

For example, soon after Epicor introduced its own portal applications in 1999, nearly half of Epicor ERP accounts jumped at the opportunity and licensed the portals. Yet, more recently, that number has dropped significantly to less than 15 percent of user companies licensing portals for their initial deployments. The vendor hopes to reverse this negative trend by piggybacking on Microsoft's uncontested popularity on the desktop-side (see The Technology Choices), and use its high, mid-market popularity on the server-side.

In general, portal server is an application that is used to develop, deliver, and maintain a Web portal, which typically includes a variety of tools and functions, including user authentication, identity management, personalization, a search facility, and content aggregation capabilities. To that end, the Epicor Portal Server component of Epicor Portal will leverage Microsoft SharePortal's commoditized features to provide secure role-based access to Epicor and other business applications. It will also provide self-guided discovery and data visualization, targeted content through personalization, Web-query access for application integration, and schemas for the Epicor Enterprise, Manufacturing, and iScala products.

Although Epicor increasingly competes with Microsoft Business Solutions' (MBS) mid-market ERP products, such as Great Plains, Navision, and Axapta (recently renamed into Microsoft Dynamics GP, Dynamics NAV, and Dynamics AX, respectively), there is no severe risk of Epicor closely tying its portal strategy with Microsoft. This is really another case of "co-opetition," where competitors come together for a particular product or concept, yet still remain competitive in the market. Such practices have become common in the industry, and are not particular to Microsoft, especially given Oracle's foray in the database, middleware, and applications markets, and IBM's presence everywhere except for applications. It would be detrimental (if not foolish) for any underlying technology provider (however powerful it might be) to sabotage a partner-competitor applications vendor.

Microsoft should be a winner in this race, even if its applications do not win a particular selection gig against Epicor; Microsoft Information Worker and Server & Platform divisions will still benefit indirectly from every instance of Epicor's deployment. After all, MBS is only a minor (however important) part of Microsoft, with still fledgling revenues compared to its sister divisions. Certainly, Microsoft would not want to alienate its ISV partners and push them into the embrace of IBM, BEA, or Oracle.

Ironically, like in the case of embracingg .NET, Epicor will likely offer a more complete implementation of SharePoint technologies across its business application products than Microsoft offers, given that Microsoft Axapta product does not yet leverage SharePoint portal technologies. The win-win situation extends to Epicor too, as it will still have its hands full to populate the Epicor Portal Content component with pre-packaged workflows, key performance indicators (KPI), strategic operations for specific industries, process flows, and organizational structures. Multiple, diverse audience targets have to be provided with collaborative workspaces and document management solutions. There is also a significant opportunity (but also impending development work) to provide composite applications that link Epicor Web parts (transactional portlets), multiple Epicor BI, Web parts (for online analytic processing [OLAP] cube analysis), and various Epicor and third-party applications, with reporting, SharePoint discussions, and other pertinent components, in a best-of-breed fashion.
To put it into context, portlet is a mechanism used to more readily integrate content, applications, and processes into portals via providing a low-level, point-to-point integration approach by accessing application programming interfaces (API), structured query language (SQL) statements, Web services, and more. Web services and Java provide mechanisms for enabling portlets written for one vendor's portal to run unchanged in another vendor's portal. Emerging standards that promise to enable this portlet interoperability include Java Specification Request (JSR) 168 and Web Services for Remote Portlets (WSRP). JSR 168 is a specification from the Java Community Process (JCP) organization designed to enable interoperability between portals and portlets. It defines a set of APIs for portal computing, addressing areas such as aggregation, personalization, presentation, and security. On the other hand, WSRP is a specification designed to establish a common means for portals to obtain and display information reaped from Web services, and it was approved as a standard of the Organization for the Advancement of Structured Information Standards (OASIS) in 2003. By embracing these facilities, Epicor (and SSA Global from the IBM/J2EE camp) might actually remain as mainstream portal technology where its products should become more attractive for environments with diverse systems.

Much like Epicor, SSA Global's mission for its portal solutions is to increase productivity and effectiveness by providing every employee, customer, supplier, and partner with easy access to all the information and tools they need to do their jobs. The strategy is to

* Improve productivity by providing each person with immediate access to aggregated content from their most relevant SSA Global application pages

* Improve alignment by highlighting the most important business information, including KPIs, for each user role

* Improve responsiveness by enabling end users to drill into information and take action

* Improve agility by enabling customers and end users to easily personalize their portals

* Increase institutional knowledge by facilitating collaboration

The vendor's portal solutions are service-oriented composite applications that should enable customers to combine their existing IT assets in new ways to better support their changing business processes. SSA Global's most recent portal solution is a financial management portal that provides a near optimal user experience for seventeen different financial user roles ranging from chief financial officer (CFO) to billing clerk. The vendor's product roadmap calls for a steady stream of portal solutions being released every quarter. Next up are a human capital management (HCM) portal and an industry-oriented portal for the consumer packaged goods (CPG) industry. SSA Global also has a strategic partnership with IBM and leverages the renowned IBM WebSphere Portal server for its solutions.