No One Is Immune to Challenges
As said many times before, SAP AG (NYSE: SAP) has ruled for some time in the upper tier of the chemicals kingdom, but competition in the chemicals mid-market is far from non-existent, given strong offerings from vendors such as Oracle, Ross Systems/CDC Software, Infor, 3i-Infotech, SSI-World, and SSA Global. These are only the mainstream enterprise resource planning (ERP) vendors focusing on the chemicals industry. There are also a number of point solution providers that cater to several industry-specific needs. For a detailed tutorial on the chemicals industry see So What's the Big Deal with Chemicals?.
Part Three of the series SAP for Chemicals: A Packaged Solution for Mid-market Companies.
SAP offers enterprise applications software tailored to the chemicals industry. For a discussion of the SAP approach to packaged solutions see SAP Industry Solutions for Mid-market Companies. For a discussion that is directly concerned with SAP and the chemicals industry, see SAP for Chemicals: A Packaged Solution for Mid-market Companies, and SAP for Chemicals Functionality.
SAP as a whole, including SAP Chemicals IBU, has admittedly been battling some hard-to-kill beliefs about its complexity, price, rigidity, and so forth—even with these preconfigured solutions. Lately, the vendor has been making the following claims, which are slowly gaining credibility (although prospective customers should continue to challenge SAP for tangible proof of concept, and talk to similar reference customers):
* Some SAP packaged industry solutions are poster children for mid-market success: 65 percent of existing customers have less than 1,000 employees, but the belief is that it is only for the truly "big" guys.
* SAP packaged solutions often drive high value returns for their customers, with value-based selling included as critical step in the sales process.
* These solutions provide the customers with industry expertise and capabilities (such as industry business process support, best practices, breadth of solutions, and so on) that often drive greater value than competitive offerings.
But to disprove the so-called myths of its cost, complexity, and inflexibility, SAP will have to continue by documenting successful case studies. Without these well-documented and substantiated positive returns on investment (ROIs) or favorable total cost of ownership (TCO) metrics, the market might still be led to believe that that SAP is trying to circumvent the market perception by highlighting a much-talked-about claim of a 32 percent increase in profitability for many high-profile customers (along with the claim that running SAP was the main cause thereof (see What Are Your Competitors Telling You? A Case Study: SAP's New Advertising Campaign).
SAP Avoids Mid-market Trap
To be fair, it appears that in the chemicals industry, it is possibly SAP who has made the best efforts not to fall into the usual trap of mid-market product oversimplification (see Cookie-cutter Solutions Won't Cut It with the Mid-market). SAP's flexible building block technology enables midsize businesses to implement and adapt their solutions and to incrementally exploit the potentials of mySAP ERP, mySAP CRM, mySAP SCM, mySAP BW, and mySAP SRM. The template currently covers fifty-four industry-specific building blocks, on top of the numerous baseline building blocks. Still, despite an impressive array of capabilities for the chemicals industry, SAP needs to fill many more functional gaps, and this is where it can try to convert independent software vendors (ISVs) into allies rather than leaving them as competitors.
This could be a win-win opportunity for both sides: while ISVs can work with SAP rather than being distracted by competition with the giant (where it is difficult to win in the long term), SAP obtains an aggressive external support for its efforts to quickly fill the gaps in its industry maps. In this way, its internal resources can be directed at the massive service-oriented architecture (SOA)-based rewrite of existing functionality into a more agile business process platform. SAP xApps combine Web services and data from multiple systems, with the SAP NetWeaver technology platform providing the interoperability. They consist of software that combines new business logic (the packaged part) with functionality borrowed from pre-existing components (the composite part). In practice, an SAP xApp is an application layer that sits on top of other applications, which therefore can provide a cross-functional process that is collaborative and integrative.
Given that there are nearly a hundred common customers between SAP and Lighthammer (prior to the acquisition), and about twenty shared customers with Vendavo, it is obvious that customers are amenable to a tightly integrated partner solution rather an endless wait for SAP functionality. The Chemicals IBU thus wants to develop and grow an ecosystem for the chemicals industry that should provide value to its customers, partners, and SAP. Indeed, the chemicals unit is one of the first within SAP to pilot SAP's Industry Value Network (IVN) program.
One example of critical industry needs that SAP addresses via partnership is profit analysis and price management (meaning how to manage price changes in market with central control and direction). Margin compression and (recently) comparative analysis of relative customer profitability are real issues for the chemicals industry, and pricing analytics and support tools can be used to better manage pricing and improve margins. To that end, SAP has partnered with Vendavo, a provider of price management software solutions, to offer an SAP xApp or packaged composite application for pricing management called SAP Price and Margin Management (SAP PMM) by Vendavo that runs on SAP's NetWeaver (see Applications Giants Bolster their Pricing Management Capabilities). There are other vendors with pricing optimization routines, but this is not the current functionality of Vendavo. SAP strongly believes that all commodity producers (and many specialty producers) should start with price management, while only the more complex specialty chemicals producers should start with optimization.
On the other hand, Technidata has been helping shape environmental health and safety (EH&S) functionality for several years, as well as providing the SAP xApp for Emissions Management (SAP xEM), a targeted SAP xApp for the chemicals industry. Regulations such as the US Clean Air Act require companies to reduce emissions, and SAP is thus providing a tool now that evolves around real-time processes to help chemicals companies with compliance. Technidata has also been helping to develop a content server for SAP EH&S that includes data for over 200,000 substances.
The SAP Plant Maintenance (PM) suite includes such modules as Preventive Maintenance, Breakdown Maintenance, and Structuring Technical Systems, so as to execute and record planned and unplanned maintenance activities, including maintenance tasks and work orders. SAP will also work towards full-fledged reliability-centered maintenance (RCM) capabilities, which are becoming standard among asset-intensive manufacturers (see Reliability Driven Maintenance--Closing the CMMS "Value Gap"?). The connected nature of agile manufacturing will probably elevate asset management capabilities to a higher level, whereby attached sensors will monitor the equipment and provide the data that can be used to more accurately predict inefficient operation or failure, reducing the chance of downtime and lost production. This is particularly true in light of Infor's recent acquisition of the enterprise asset management (EAM) specialist Datastream. Again, partnering with the likes of Ivara might come in handy, as with AspenTech or WAM Systems for some tricky chemicals SCM functional nuggets (see WAM Systems Offers Supply Chain Planning Packaged Solution For Chemicals), or with a chemicals-focused logistics prospective partner such as Odyssey Logistics.
User Recommendations
Mid-market chemicals companies searching for enterprise systems should certainly put SAP and its burgeoning consulting, development, and implementation service partners on their list. SAP Best Practices for Chemicals is a strong, free-of-charge foundation for partner templates, new installations, and global rollouts. It is based on a new technology that enables users to create their best practices, and it can even be used for software evaluations or implementations.
But although SAP offers extensive functionality, these companies should compare their needs to the offerings from SAP and alternative viable vendors, in order to find the best fit. SAP still has a reputation as being difficult to implement, change, and manage. The company has made strides in addressing these issues, but mid-market companies should decide for themselves (via detailed real-life business scenario demonstrations) whether SAP is "overkill" for their needs or not.
Using the SAP ERP Packaged Solution for Chemicals may represent a significant advantage. However, it is only an advantage if SAP is the right ERP system for the prospective user company, and if the prepackaged business processes fit adequately. SAP acknowledges that they typically find a 70 to 85 percent fit, but even companies with very distinct processes should see benefits as they get a blueprint starting point: they can in most cases adopt many of the core' processes out-of-the-box, and with best practices, they can then pick and chose any process. While SAP rightly claims that the packaged solution is a more rapid, lower cost, and lower risk implementation methodology (at a minimum, best practices can even help with a quick pilot installation to evaluate scenarios, train people on SAP, and so on), these comparisons are mainly relative to implementing SAP without the packaged solution.
Companies should thus look at the total cost of ownership (TCO) picture with respect to each vendor (assuming the vendor can meet their needs) before they embrace the SAP ERP Packaged Solution for Chemicals as the right implementation approach. For more on avoiding awkward comparisons between "apples" and "oranges," see Prepackaged SAP Best Practices—Are They for You?.
When looking for a vendor, there are certain questions which companies should never fail to ask, under any conditions:
* Can the vendor provide a list of relevant chemicals industry references? It goes almost without saying, but time spent on evaluating which references are in fact relevant is time well spent. Too many companies, in all industries, have made rash decisions based on irrelevant references.
* Does the vendor address the unique requirements of the chemicals industry? If the model cannot fully define the realities of the user-specific chemicals processes and practices, it cannot possibly manage these realities.
* Was the solution built specifically for the chemicals industry (good), or does it use a generic solution employing templates (OK, but not necessarily excellent), or is it simply a generic product (almost certainly bad)?
* Is the solution a single, integrated application with one common model, or is it a collection of interfaced modules? Obviously, the appeal of unity of structure is more than simply aesthetic: a single, integrated application may make it easier to trace unexpected data to its source. On the other hand, it may be the case that interfaced modules offer more aggregate functionality.
* Is the solution a complete application, or is it a modeling language that forces users to create their own solution? The trade-off here is that a vastly greater ability to customize comes with a vastly greater investment of resources.
* Can existing personnel (such as planners or IT staff) support the system, or does it require specialized assistance from an operations research or modeling group? Again, a company's preference may be determined by the sheer number of headaches it is willing and able to accommodate.
Enterprise systems have brought many benefits to chemical environments, but for individual enterprises, gaining these benefits requires the selection of a solution that can deal with the unique needs of the business. Although only a handful of vendors claim they can support these needs, some first-class options do exist. Only by focusing on the requirements that will make or break the project will the chemical operation select the right solution and gain these benefits. And that can make all the difference between a pipeline and a pipe dream.
SOURCE :http://www.technologyevaluation.com/research/articles/sap-for-the-chemicals-industry-challenges-and-user-recommendations-18566/
Saturday, July 31, 2010
Gain More from Your IT Projects
Information technology (IT) projects and initiatives are about change or, at least, the bar is about to be raised. Change is about transforming the current state into a desired state. However, when and how do we know that we have reached the desired state? How do we know what the business gained from the IT project?
Often, when companies embark on any IT initiatives like enterprise resource planning (ERP), customer relationship management (CRM), business intelligence (BI), or knowledge management (KM), the focus is purely to digitize operations, cut operation costs, improve productivity, and shorten decision-making cycles. However, in general, there are very few (if at all) business impact studies and analyses conducted on IT projects, measuring how much the business has gained in terms of tangible and intangible values, like intellectual capital. Imagine that you have managed an IT project, after which management or the board of directors asked how the company benefited. Will you be able to present a returns and business impact analysis to them?
Measuring the return on an IT expenditure at the company and process level is crucial to align IT strategies with business strategies. In doing so, shareholders and stakeholders will have a good view of what was initially expected from the IT initiative and what benefits were gained. It also synergizes IT strategies and business strategies to meet common business-oriented goals.
By measuring the gains expected from implementing a new IT solution, users can eliminate any potentially poor IT investment. Thus, justifying the purpose of the IT project and how the project will benefit the organization is crucial.
Any initiative or project should have objectives and expected returns, and IT initiatives or projects are no exception. In practice, objectives and expectations are the basis of how to strategize, plan, and manage projects in order to accomplish the returns as expected.
To start, before even looking at any business software or application, think about the following:
- Who is going to benefit from this initiative? The sales department, operations, finance, or the company overall?
- Based on who is going to benefit from this initiative, who should collaborate on this initiative or project? Involve the project team and the affected staff as early as possible, and prepare them for return on investments (ROI) assessments.
- What are objectives or changes expected at the end of the project? Stating objectives will help to create a clear picture of what is to be achieved making it easier to monitor the project.
- What values will the organization gain from the objectives set? For example, is the goal to improve productivity by 5 percent? by more? By setting expected values, a benchmark is created that can be used to measure the project.
- What are the metrics and variables for this project? Based on the effectiveness and efficiency factor, you need to formulate the metrics and variables that will help you collectively measure the outcome.
By addressing these questions, an organization can be steered through a clear and guided path, and can be confident that the IT project will not labeled "overkill" or worse still, "a poor investment". It also creates a clearer picture whether the IT project constitutes an economical investment. For example, if operations inefficiency is costing the company $200,000, and after an evaluation, the available solutions work out to be an average of $300,000, then, the option to improve will either not make economical sense, or the ROI will simply take too long to be realized.
Of course, a shorter ROI cycle is not only desired, but is essential to the survival of the company, given the rapidly changing nature of business. Cases that involve longer timeframes have much more complex their measurements, because the variables involved change constantly. That is why, for example, ambitious CRM projects with a broad scope, and span over a long period of time are often difficult to justify.
In any business, there are indicators of performance. Whether financial or operational or based on external, or internal assessments. By providing a macro view of the company's performance and growth, these indicators give directors and management insight on how the company is performing as the whole and what areas they should focus on for improvement.
Indicators are like the dashboard of your car telling you how fast you are going, how much fuel is left in the tank, how hot the engine is, and how far you have traveled. This current information is needed to make the right decisions, like whether to look for the next gas station, or if you should slow down. These pre-emptive signals from your dashboard are fully appreciated when used during a cross-terrain drive where resources are scarce. From a business perspective, indictors include the limitations of time, money, and human or machine capacity. Without these indicators, management will only know how well the company had performed financially, as most companies routinely focus on financial analysis. However, this is an era of information-intensive business environments that require accurate and decisive actions that businesses have to commit to. The lack of timely information and knowledge about the company's performance will only result in the inability to effectively compete in the industry—and will even prevent setting realistic goals.
Forming key performance indicators (KPI) for the business is a good way to start this process, because a business-oriented initiative for the company's strategies, planning, and management practice must be considered. The IT projects that will be implemented are intended to contribute some changes to the indicators. Hence, if there aren't any changes to the indicators, then, the change is either not executed properly or it was an unwise IT investment.
When to Measure and Monitor
Most software vendors conduct ROI analyses at the end of the project. However, this only gives a vague assessment of the change, because no benchmark has been set for any basis of comparison. In some scenarios, the analysis is devised by the vendor. However, ROI analyses should always be planned by the customer, because the customer knows the business better than the software vendor. A good operational start is to formulate a comprehensive project schedule and plan clear ROI activities that will be used to realize the true value of the project with the vendor.
Plan and include the pre-intervention and post-intervention stage assessments into the vendor's project schedule if they haven't been included, and execute the ROI analysis on the IT project. It is also appropriate to organize the parties involved, determine responsibilities, and formulate improvement metrics at the project's initiation. Creating control groups within the internal staff will also help to determine the difference in the outcome. Control groups consist of two separate groups of internal personnel. One is involved in the IT project, and the other with remote dealings in the project. Both have should have similar roles and work responsibilities. This sets the stage for comparing performance differences within the company.
Table 1. ROI Stages
| ROI stages | Post Intervention Formulate control groups and performance metrics Capture current metrics | During Intervention Control group interviews and surveys on changes | Post Intervention Collect post implementation results Consolidate and compile all data collected | |||
| Typical Project Phases | Project initiation | Business/ GAP analysis | Customization development | Installation and configuration | User training | Live operations Cutover assistance |
The ROI assessment shouldn't stop after the project closes. It should continue for at least six months or more. When the cutover of the parallel, running and live computer systems have been completed and migrated to the new system, the measurements should still continue. However, at times, the variables used to measure return will change what is measured. A good ROI plan should include at least six months' to a year's worth of analysis. It is good practice to review the ROI analysis because it measures ongoing improvement and the state the company is hoping to achieve.
Finally, an effective ROI assessment should isolate the effects of the project. No ROI assessment is going to be accurate if there is no isolation. Isolating the effects of the project includes the determining what external and internal factors will influence the outcome of the project. This is done before the project is carried out and may include
- Economic turnarounds. For example, the retail industry is cyclical and picks up during the holiday session. If a new ERP system is implemented during that time to overcome inefficient order taking and supply chain problems, then the gains should typically be measured against the previous year's holiday session. However, what if an economic downturn occurs and consumers cut their spending? That will definitely impact on the number of orders, and the supply chain problems would look as bad as before.
- Staff turnover. Sometimes, inefficient operations create a history of high staff turnover. Inefficiencies may caused employees to work overtime most of the time. Now, whenever staff leave, time and resources are spent to employ and train someone else to take over. Newly trained staff are normally slower in their work compared to their peers. There will be a negative impact on productivity even with a new system is in place.
- Staff efficiency with computer systems and the mentality to change. If generally, the staff is inefficient with computer systems, there will be a longer learning phase for them to adapt and adopt the new system in their work.
- Corporate culture. The culture of the organization significantly contributes to the ROI result of any project, especially how the company operates. When an organization does not have a culture of collecting and analyzing tangible and intangible data pertaining to any corporate initiative that they embark, it is difficult to determine the confidence level and accuracy of influencing variables.
These are only a few factors that can impact ROI. Determining what the factors are should only be done by the internal project team, not the vendor. Reason? Putting the vendor in a position to unearth the root of the problems may result in a bias assessment.
It is also advisable to carry out interviews and surveys with the internal staff to rule out other factors that may contribute any negative impact to the business during the IT project.
Get what you have invested in. That's what it's all about. Every IT project should provide a certain level of return, big or small. Still, it is essential to set out clear and reasonable expectations on how the investment will impact business and what value it will bring. If the expected returns are just arbitrarily set, use vaguely drawn out measures, or are in short, a perfunctory exercise by management to avoid being labeled "antiquated", the project will do more harm than good impacting both the bottom line and company moral. It will also lull management into a false sense of security believing there is a "magic pill" for business issues in technology.
Ultimately, it comes down to only one thing, "Know thyself". Sort out business issues and challenges on the business level first before embarking a IT project. No IT project is a magical solution to a company's issues or challenges. It can be a very powerful tool for management, but its role can only be determined through a detailed business analysis, which should be done before talking to any software vendor. Knowing your business and the critical information and performance indicators that are used in ROI assessments for IT projects will benefit an organization greatly. Also, knowing the limitations and constrains of business and technology offerings will create a realistic ROI. Pushing these limits too far will only hurt the IT project and the company's involvement in the project.
As for increasing the credibility of the ROI, squarely address the issue and ask: "Is this IT project really creating a positive impact on business?" Isolate as many that will influence the impact of the project factors as possible. A business environment with too many elements will affect the business' performance. Know them the same way you know when the market is going for a turnaround.
Don't just stop the assessment right after the project. Include the assessment during management meetings and seek out ways to further improve. Continuity is the key to gathering and validating the effects on a project that are less apparent at first glance. After all, it is a business initiative to improve the environment and operations, not an IT initiative.
It is time for companies to demand the returns and gains that vendors are bringing to the table. Explore your gains and returns. Don't just focus on features and functions of an IT solution. Only profit, expense, and investments can ensure the existence of a company. IT helps address "bread and butter" issues, and the key to differentiating a company from another rests in other qualitative issues. Correctly leveraging IT tools to address these issues will give a company the qualitative and quantitative edge it needs to face its business concerns. After all, why spend money when there isn't anything to gain for the business?
SOURCE :http://www.technologyevaluation.com/research/articles/gain-more-from-your-it-projects-18380/
Defogging the “Mission/Vision Thing”
The Issue
Without a clearly stated Purpose, Mission, Vision, and Values, employees, including IT professionals, lack adequate guidance and boundaries of empowerment. This lack of context is likely to result in them taking actions that are consistent with their individual 'visions' but collectively fail to maximize business value from their efforts.
The vast majority of personnel who fill corporate ranks at all levels, show up to work each day with the desire to do the right things and help make their company successful. In high-performance companies there is little confusion about what to do and why. In lower performing companies managers often work at cross-purposes because their vision of what they are contributing to is inconsistent with that of their peers.
The Path to Clarity
Purpose, Mission, Vision, and Values are the cornerstones that guide strategy creation and action. Despite their importance, there is a wide disparity among individuals' definition and their resultant response to each. Similar confusion exists with respect to their hierarchical interdependence. Confused definitions coupled with misstated, ambiguous, or non-existent statements create an environment that fosters dysfunctional, counter-productive, and unaligned or misaligned behavior.
In his recent article Built to Flip, published in Fast Company Magazine, Built to Last author Jim Collins captures such misalignment with the following observation:
"We can all point to companies that should have viewed themselves as "Built not to last." Confronting that reality would have helped them understand that they were never more than a project, a product, or a technology. Lotus, VisiCorp, Netscape, Syntex, Coleco -- all of these companies would have served themselves and the world better if they had accepted their limited purpose from the outset. Ultimately, they squandered time and resources that might have been applied more efficiently elsewhere."[1]
Collins' reference to "squandered time and resources that might have been applied more efficiently elsewhere," is a classical representation of what we recognize as organizational misalignment; where energy and resources expended are not synergistic and not contributing fully to the goals of the company. Collins is highlighting that it is extremely important for a company to have a crystal clear understanding of what it is about and where it is going. In most companies this is assumed to be addressed by the Mission/Vision, but the problems surrounding the domain of mission and vision are three-fold:
- The determination of exactly what constitutes a valid or appropriate mission, vision, strategy, etc. is incredibly foggy. You can place 10 books by supposed gurus side by side and have differing interpretations of what these elements should look and sound like, as well as their hierarchical interdependence.
- Many companies duck the truly hard work of defining these elements by creating platitudinal statements, loaded with "generic goodness," that offer neither guidance nor inspiration.
- When these elements are highly ambiguous or left undefined, individuals within the company will fill the gap by "making it up." When these elements are misstated, intentionally or unintentionally, in a manner where what is stated does not reflect true intent, it lays the groundwork for dysfunctional and counter-productive behavior.
This analysis will sort through much of the confusion, leverage some of the better thinking that exists on the subject and lay out a framework for defining a high-level organizational context that establishes direction and guidance to enable aligned action.
Figure A depicts the hierarchical relationship among the drivers of change in any organization. This analysis will focus on the upper 5 levels of the Organizational Context Pyramid spanning from a company's purpose to its strategy. The lower, and much more dynamic, portion of the Organizational Context Pyramid will be covered in greater depth in a future note.
Figure A:
Establish Direction
| Pyramid Level | Definition |
| Purpose |
|
| Mission |
|
| Vision |
|
Purpose, Mission & Vision lie at the pinnacle of the Organizational Context Pyramid. They are intended to establish a "true north" for the company as well as provide inspiration for its employees. They are relatively stable and change infrequently. They may remain intact, relevant and consistent for decades.
Purpose
In their book 'Jumping the Curve, Innovation and Strategic Choice in an Age of Transition,' authors Nicholas Imparato and Oren Harari state:
"Thirty years ago Peter Drucker advised executives to ask the question: What business are we in? Today we can up the ante by challenging leaders and organizations to choose what they stand for. To say that an organization "stands for" profits says nothing at all. Yes, every organization needs profits just like every body needs food but it is as absurd to say that the purpose of an organization is to make money as it is to say that the purpose of a human being is to eat or breath."[3]
Many companies fail to isolate purpose as a singular statement, or believe that it is inferred within the Mission Statement. Sometimes as well, the company purpose may be inferred from a company motto or from the words of a founder or Chief Executive. Sometimes they are written, often the are not. Failure to explicitly isolate a Purpose weakens the communication of a company's essence and works against employee empowerment. What is important is that there is shared understanding of these concepts across the company.
Beyond making money and creating shareholder value, companies are frequently created for other (and sometimes less than obvious) purposes:
- Outdoor gear manufacturer Patagonia exists to use business to inspire and implement solutions to the environmental crisis.
- Ben & Jerry's is dedicated to the creation & demonstration of a new corporate concept of linked prosperity.
- The founding prospectus for the company that would become Sony Corporation cited the primary motive for its creation (in post-war Japan): "To create a stable work environment where engineers who had a deep and profound appreciation for technology could realize their societal mission and work to their hearts content." The second of several Purposes of Incorporation was "To reconstruct Japan and elevate the nations culture through dynamic technological and manufacturing activities."[4]
- Bose Corporation founder Amar Bose once stated, "Research is the reason we exist." The company's slogan "Better Sound through Research" was consistent with corporate activities. The company has always done research and product development outside of Sound, but for many years it has been the focus of product development. Only when choosing the words for a marble-inlay for the foyer of its new company headquarters building did the Purpose of the company reveal itself to be "Better Products Through Research" a much less confining statement that initially, caused a good deal of confusion.
Mission
The examples of Purposes given above talk mainly to the "why we exist" question, but most say little about the business itself. Whereas many texts intermix Purpose with Mission, a clear definition of Mission that compliments a standalone Purpose was presented by George A. Steiner in his book 'Strategic Planning':
"Mission statements identify the underlying design, aim or thrust of a company Missions should be stated at least in both product and market terms Mission statements, aside from providing general guides for strategic planning, have specific relevance to the formulation of program strategies and the nature of a business. Mission statements determine the competitive arena in which a business operates.... they make it much easier the task of identifying the opportunities and threats that must be addressed in the planning process. They open up new opportunities, as well as new threats when changed. They prevent people from "spinning their wheels" in working on strategies and plans that may be considered completely inappropriate by top management."[5]
In effect, the Mission of a company begins to define "What business we're in, what we'll do, for whom and to what extent." Beyond "Purpose" which states the companies reason for being, the Mission Statement, at a high level, starts to scope out the space in which the company will compete, which may be further clarified in terms of product types, customer types, geography, etc. Mission statements provide focus, but they do not state how the goals of the company will be accomplished.
The following are some mission statements that reflect this level of abstraction:
- The Salvation Army: is a worldwide evangelical Christian church, human service agency and non-profit corporation. Its message is based on the Bible. Its ministry is motivated by the love of God. Its mission is to preach the gospel of Jesus Christ and to meet human needs in His name without discrimination.
- Deluxe Checks: To provide all banks, S&L's and investment firms with error-free financial instruments delivered in a timely fashion. Error-free means absolutely no errors; timely means a 48-hour turnaround.
- Otis Elevator: To provide any customer a means of moving people and things up, down and sideways over short distances with a higher reliability than any similar enterprise in the world.
Management should be able to look to the Mission Statement first to assess the appropriateness of possible courses of action. These actions must be assessed for compatibility with the mission. For a business that is clearly established as a retailer, starting a consumer financing division is apparently far afield from the retail business, but the appropriateness of such a move would be heavily influenced by the company's Mission. If their mission was tightly focused retail (i.e., resale of consumer products), then such a move would likely be inappropriate. But, if their Mission is to meet the needs of a certain consumer segment (i.e., provide consumer goods to middle income Americans), then the action is not necessarily inconsistent. A Statement of Purpose is a backstop should the Mission Statement fail to cover the issue.
There will be times when a Mission must be revisited and redefined. This often happens when an organization is undergoing radical transformation, stimulated by a significant external event such as deregulation, new regulations and/or the advent of e-commerce. In these cases, the organization frequently must adopt an entirely new business model and a re-crafted Mission.
Vision
A vision statement can serve as the most powerful motivator at leaderships' disposal. Vision describes "Where and When" - It paints a compelling picture of the company at some future point in time. Many people cite President Kennedy's challenge to land a man on the moon, and bring him safely back alive before the end of the decade as a classic example of "a vision." In his statement there was no question as to where we were going, and when this must be achieved by. With this vision firmly implanted, the focus and energy of all parties involved immediately moved down a level in the Organizational Context Pyramid, to begin strategizing "how to make it happen."
Financial software developer Intuit's "Vision for 2010" (available on it's web site) is remarkably bold in that it discusses the businesses and industries that they will be in, their position within them and their reputation. It describes the legacy that they've created (at this future point in time) from servicing customers with a focus on quality; balance between "evolution and revolution" that drives the products that they've created; products have become an integral part of the daily lives of their customers.
While leaving plenty of room for the influence of unknown variables, they have painted a detailed and compelling picture of a destination point in the future. Managers can truly evaluate the plans and strategies they are developing to assess whether they get the company closer to realizing their vision.
During a 1999 speech announcing the Windows CE operating system for portable devices, Microsoft Chairman Bill Gates announced that Microsoft would be revising its original vision of 'a PC in every home and on every desk,' inferring that this context was limiting in a world that is seeing explosive growth of portable devices. "This is the first time in our 25-year history we've actually changed our vision statement," said Gates. This is a classic example of how a Vision Statement must be periodically revisited and revised to reflect new and previously unforeseeable change drivers impacting the business. It also gives Microsoft employees the empowerment to explore opportunities in new areas that previously would have appeared to be inconsistent with the stated direction of the company.
Vision is what propels a company forward, even in the face of discouraging odds. If it is compelling and meaningful, individuals will embrace it on a personal level and go to great lengths to make it happen. Every employee of a company should be able to talk to it and about it, and explain how their daily activities contribute to its realization. If they cannot, then the vision probably hasn't been developed at the right level of abstraction, or management has not developed a compelling case.
Guidance & Boundaries
| Pyramid Level | Definition |
| Core Values |
|
| Strategy |
|
With organizational context and direction firmly established through the definition of Purpose, Mission and Vision, the focus turns to achieving desired outcomes. Without constraints, there would be virtually infinite possibilities. But in reality, constraints exist; they can be voluntary (as defined by values) or practical, forced by limited resources (which must be dealt with via strategy). Values and Strategy offer important guidance for determining the path that the company should pursue at the present time based upon its knowledge about itself and its environment.
Core Values
Values guide choices. They describe many of the qualitative aspects of life within the organization on a day-to-day basis, and they frequently describe what is truly important to the company. Values can be written or unwritten, but everyone knows they exist. Virtually all aspects of a company's culture are inextricably linked to its collective and individual value system(s). Articulating values provides everyone with guiding lights, ways of choosing among competing priorities and guidelines about how people will work together.
Shared Values are of particular importance at the executive leadership level, not only because employees look to their behaviors for clues as to whether stated values are still valid but also because values cannot be acted upon directly. Executive leadership controls the systems and structures such as competency models and reward systems that must change if there is going to be a shift in corporate values. If the systems and structures do not shift, there will be no shift in values and corresponding behaviors. In their book Results-Based Leadership, Ulrich, Zenger & Smallwood cite a link between values and results:
"Leaders who understand their company's and their personal values build lasting results. In the Tylenol-tampering incident, Johnson & Johnson executives were willing to absorb short-term reduced investor results because of their overriding commitment to producing ethical drugs. Lacking clear values, rudderless leaders shift from goal to goal. With values, while actions may change, the overall direction and focus stay clear."[7]
Strategy
Strategy is how the company commits to a certain path of action based upon its understanding of where it wants to be (Vision), the dynamics of the external business environment (including competitor actions, the shifts in technology, the shifts in demographics, consumer behaviors, politics, etc.), and the internal change forces.
Strategy is how the company determines the actions it must take in the marketplace and how it will allocate finite resources to them This then places immediate demand to deploy and/or create operational capabilities for strategy realization. With this level of directional definition, a company can establish milestones and metrics to propel it towards the realization of its vision.
Hamel and Prahalad provide an example of a rich Strategy in their article Strategic Intent, where they discussed how Honda Motor Corp. pursued its Vision of becoming "the second Ford," by first establishing itself as a major player in the U.S. motorcycle market:
"When Honda took on leaders in the motorcycle industry it began with products that were just outside the conventional definition of the leaders' product-market domains. As a result, it could build a base of operations in underdefended territory and then use that base to launch an expanded attack. What many competitors failed to see was Honda's strategic intent and its growing competence in engines and power trains. Yet even as Honda was selling 50cc motorcycles in the U.S., it was already racing larger bikes in Europe - assembling the design skills and technology it would need for a systematic expansion across the entire spectrum of motor-related businesses."[8]
Conclusion
Purpose, Mission, Vision, and Values clarify thinking about what is important and set the tone for actions that will produce business value. We have seen many instances where companies become separate camps as a result of a lack of clarity in these areas, as well as cases where Purpose, Mission, Vision, and Values are clear but the senior executives refuse to commit to them. We have also seen the negative impacts of conflicts between stated Purpose, Mission, Vision, and Values and those held in the boardroom.
On the other hand it is quite rare to find a case where clarity of Purpose, Mission, Vision, and Values had anything other than a positive impact on a company's long-term performance, as the directional context for effective strategy has been established.
A future note will complete the analysis of the Organizational Context Pyramid, probing deeper into Strategy and the rapid alignment cycles that must exist between Strategy and action.
SOURCE :http://www.technologyevaluation.com/research/articles/defogging-the-mission-vision-thing-15726/
May a New Day Begin for Mature Enterprise Applications – Part 2
Part 1 of this blog series outlined the trend of enterprise applications vendors’ attempts to win their users’ hearts and minds (as well as wallets) via more intuitive and appealing user interface (UI) and user experience (UX) design. What that means is that users can now more quickly obtain all of the relevant information they need in a personalized way, with drill-downs and other slick navigational Web 2.0 gadgets.
For users, personalized screens and forms provide immediate access to issues that require immediate action or reassurance that situations are under control. Such intuitive UI allows users to diagnose the most critical business situations they face and immediately drill into the source transactional systems to get the data they need and decide on appropriate actions.
The analysis then focused on Infor and its Open SOA framework, which is the enabling linchpin for the vendor’s delivery of next-generation interoperable value-adding solutions. About two years ago, Infor espoused its so-called “Three E’s” strategy (“Enrich, Extend & Evolve”) to deliver agile and adaptive software components on top of the Infor Open SOA platform.
Infor’s “Three E’s” Approach
The “enrich” part of the strategy refers to adding value to Infor’s raft of current products (solutions or assets). Infor has released over 100 product upgrades and feature (service) packs free of charge for customers on active maintenance contracts. It is also important to note that there is no forced march imposed upon customers here; these feature packs can be enabled or disabled by turning the appropriate switches “on” or “off” in a parameterized setup.
The “extend” part of the strategy refers to extending functional footprint via OSGi standards–based interoperability within Infor’s portfolio of applications in order to meet the growing complexity of global supply chains. Customers will receive ongoing service-oriented architecture (SOA) integrations. On one hand, these product connections represent cross-selling opportunities for Infor, on the other hand, they should also enable customers to extend their current solutions and build a broader foundation for future capabilities that might be required.
For example, Infor’s enterprise resource planning (ERP) users will be able to leverage, e.g., Infor’s supply chain management (SCM), business performance management (BPM), or enterprise asset management (EAM) products. But in contrast to the “extend” feature packs (and new individual product releases), these new functional capabilities are logically available for an additional license fee.
Finally, the “evolve” part of Infor’s Open SOA strategy follows along the lines of developing brand new products that will solve some particular business problem and improve users’ competitiveness (and thus will not become obsolete for quite some time). These new components promise to feature universal interconnectivity to major Infor products.
Depending on their nature, they will either be free of charge (e.g., Infor MyDay) for eligible customers or for a commensurate license fee. For more details, see TEC’s previous article entitled “Ambitious Plans and Promises: An Enterprise Software Provider Keeps Its Word.”
At the Inforum 2008 user conference, Infor touted about 20 new “evolve” components to be generally available (GA) , i.e., tested on limited release with real customers for several months) by the end of 2009 (and many more to come afterwards). In addition to the MyDay role-based portal (which will be described soon), are Infor Decisions and Infor Order Management are already GA.
Infor Decisions brings real-time, enquiry-driven business intelligence (BI) to line of business (LoB) managers. These folks have been inundated with data coming from disparate sources such as financial management systems (e.g., actual vs. budget), customer service systems (e.g., customer and product profitability), external systems (e.g., a customer’s financial performance) and operations (e.g., inventory status).
But this overflowing data has unfortunately not traditionally been linked to the context of business. To that end, Infor Decisions drives a “train of thought” inquiry, which transforms users from transactional to information workers and facilitates informed decision-making and action.
For its part, Infor Order Management provides multi-model pricing and time-phased inventory reservation right across supply chains. The solution was built to enable the true and unified order experience, i.e., how companies really sell and how customers buy (and not how the system “thinks” the trade happens).
For example, order capturing and inventory reservation can take place centrally, while the actual delivery and customer service takes place in a certain local division. Infor Order Management was designed with flexibility in mind to accommodate ever-changing business practices.
Evolution Continues
The upcoming Infor Advanced General Ledger (formerly also known as Multi-Books Accounting) module is an “evolve” component that should give global companies the ability to conform to multiple, country-specific accounting standards and currencies. The module can either run concurrently with an existing general ledger (G/L) system or serve as the primary accounting module.
The idea behind the multi-books accounting capability is to enable the system to work alongside financial management systems to help companies cast their financials in multiple ways. If, for instance, a corporation has an operation in China, India, or Brazil, and it has to follow these governments’ rules on what one precisely refers to local accounting concepts and regulations, like “salary,” “wage,” or “value-added tax” (VAT) or “sales tax,” how do users get a system without having to rip and replace what they already have in order to work in China, Latin America, the US, and Europe? Advanced G/L and about a few dozen other upcoming “evolve” components, such as, e.g., Pricing, contracts & promotions; Actual costing; Multi-echelon inventory control, and Sales & operations planning (S&OP), are slated for delivery by the early 2010s.
So, What’s The Big Deal with Infor MyDay?
Typically, when I attend vendors’ annual events, I ask their staffers to tell me what in their mind is the highlight of the conference. I was a bit dismayed after hearing the strangely named MyDay feature as the major theme of the Inforum 2008 event.
Namely, IFS Enterprise Explorer (IEE, part of the ongoing Project Aurora), Microsoft Dynamics Client for Office (DCO), Lawson Smart Office, Epicor Productivity Pyramid, IQMS Smart Page UI and so on revolve around themes like role-based portals, contextual analytics, KPIs, alerts, dashboards, shortcuts, favorite/recently used pages, etc. In addition, the role-based UI was implemented with common controls and gadgets, and delivered for basically all of the Microsoft Dynamics enterprise resource planning (ERP) products after introducing it and testing first in Microsoft Dynamics GP.
Thus, I wondered what I was missing at the time within MyDay that was making me a bit indifferent (and why I should not have been indifferent). To be fair, Infor MyDay is designed to deliver persona-based content to over 150 roles Infor has identified in its customers’ businesses. Infor’s blog post explains as follows:
“…What do we mean by persona-based? A persona is a composite of a user within an organization. A lot of vendors talk about role-based interfaces. A persona takes this concept to the next level. A role is generic, designed for a departmental role such as the “finance user.” A persona is specific to an individual user within that department, such as the VP of Finance or Controller. A persona also adds texture to that individual. At Infor, we’ve given them names and faces and built stories around their life. These are imaginary people, but they are based on the hundreds of users we studied to understand the real needs that real people need to get their jobs done. From conception, design and development to sales education and marketing, this gives us the understanding we need to build and deliver great content for people.
Let’s take a look at one of the 16 persona roles we are delivering with this first release, Bob the Production Planner. Bob is a composite of the typical production planner. He is the choreographer of the manufacturing shop floor, managing planning and production. He determines what to produce, how much and when it’s needed. He acts as the go-between between the shop floor and the corporate side of the firm. He has a degree, probably business or engineering, and about 10 years experience with manufacturing. He knows how to use applications but he’s not an IT gearhead.
Bob has to deal with unexpected events – late purchase deliveries, machine downtime or last minute work orders. He wants to be more proactive, but the reality is that he is in ‘reacting mode’ much of the time and plans are always changing. He has to deal with inaccurate inventories and bill of materials, and he has an avalanche of unstructured information that he needs to gather, format and assimilate to take action on.
From our research, we have learned Bob’s typical responsibilities, his skills, his working environment, pain points and goals. We have learned how he uses his ERP software, the other applications he uses and the value he needs to get from them. We learned all of this because we’ve done our homework. A lot of it. We started in early 2007, logging thousands of hours of research into the personas of the people using our software. We’ve built-in the content they need to make their lives a little easier, so they can focus on strategic activities instead of looking for information…”
While an impressive and thorough exercise, persona-based profiling (and subsequent UI tailoring) is not necessarily a unique practice. Namely, TEC’s recent article entitled “Application Giants in Duel—and Duet—for Users’ Hearts, Minds … and Wallets” explains at great length Microsoft’s rationale for its elaborate approach to UX, including role centers (based on numerous interviews of real-life users and their needs).
It’s About Making the Users’ Day (and Less about Impressing Analysts)
The just-announced availability of Infor MyDay for Infor ERP Adage [evaluate this product], the renowned process manufacturing ERP solution, has given me an answer to my quandary. After Infor MyDay was unveiled at Inforum 2008, this represents its first GA for one of many Infor ERP solutions.
As the recent Infor blog post explains, one issue that almost all of the process manufacturing companies can relate to is cost to service customers. In most process ERP systems, actual cost of production, post invoice rebates, disallowed discounts, non-salable allowances, and return data are just some of the data captured over time.
“…This data often resides in ERP modules or disparate, standalone systems. Most companies struggle to pull this information together with customized reports, spreadsheets or complex general ledger allocations. The problem is, by the time you sort through all the noise, the information is months old and the impact is diluted.
With Infor MyDay, the information is immediately at your fingertips, without having to call IT to develop a custom report. This information is built into the Infor MyDay personas for finance and sales managers, who receive these reports on their personalized page and can now better control cost to service and ensure their most profitable customers get the most profitable products…”
For all this time, I was thinking as an industry analyst (rather than a user of a specific product), and comparing MyDay to what other vendors are doing, thinking about the possible market differentiation. On the other hand, to a user of an aged Infor ERP Adage instance, which has been a very functional product but with a rudimentary UI (to put it mildly), MyDay will likely feel like time travel to at least two decades in the future (or as if they were participants in ABC’s Extreme Home Makeover show).
And who might then care about what other vendors might be doing in this regard? The Infor ERP Adage MyDay Datasheet is available at the company’s web site here.
Now I get that MyDay, being free of charge and exhibiting a unifying, dynamic, and snazzy UI, should resonate with Infor customers on antiquated and diverse products. The UI enhancement has also very recently been made GA for Infor ERP LN, Infor ERP SyteLine, and Infor ERP Visual to provide these users as well with visibility into the “why” and “when” and not just the “what” of business operations. As mentioned in Part 1, Infor MyDay does this by filtering data by job function and relevancy and delivering it in a condensed home-page format.
SOURCE :http://blog.technologyevaluation.com/blog/2009/05/04/may-a-new-day-begin-for-mature-enterprise-applications-%E2%80%93-part-2/
For users, personalized screens and forms provide immediate access to issues that require immediate action or reassurance that situations are under control. Such intuitive UI allows users to diagnose the most critical business situations they face and immediately drill into the source transactional systems to get the data they need and decide on appropriate actions.
The analysis then focused on Infor and its Open SOA framework, which is the enabling linchpin for the vendor’s delivery of next-generation interoperable value-adding solutions. About two years ago, Infor espoused its so-called “Three E’s” strategy (“Enrich, Extend & Evolve”) to deliver agile and adaptive software components on top of the Infor Open SOA platform.
Infor’s “Three E’s” Approach
The “enrich” part of the strategy refers to adding value to Infor’s raft of current products (solutions or assets). Infor has released over 100 product upgrades and feature (service) packs free of charge for customers on active maintenance contracts. It is also important to note that there is no forced march imposed upon customers here; these feature packs can be enabled or disabled by turning the appropriate switches “on” or “off” in a parameterized setup.
The “extend” part of the strategy refers to extending functional footprint via OSGi standards–based interoperability within Infor’s portfolio of applications in order to meet the growing complexity of global supply chains. Customers will receive ongoing service-oriented architecture (SOA) integrations. On one hand, these product connections represent cross-selling opportunities for Infor, on the other hand, they should also enable customers to extend their current solutions and build a broader foundation for future capabilities that might be required.
For example, Infor’s enterprise resource planning (ERP) users will be able to leverage, e.g., Infor’s supply chain management (SCM), business performance management (BPM), or enterprise asset management (EAM) products. But in contrast to the “extend” feature packs (and new individual product releases), these new functional capabilities are logically available for an additional license fee.
Finally, the “evolve” part of Infor’s Open SOA strategy follows along the lines of developing brand new products that will solve some particular business problem and improve users’ competitiveness (and thus will not become obsolete for quite some time). These new components promise to feature universal interconnectivity to major Infor products.
Depending on their nature, they will either be free of charge (e.g., Infor MyDay) for eligible customers or for a commensurate license fee. For more details, see TEC’s previous article entitled “Ambitious Plans and Promises: An Enterprise Software Provider Keeps Its Word.”
At the Inforum 2008 user conference, Infor touted about 20 new “evolve” components to be generally available (GA) , i.e., tested on limited release with real customers for several months) by the end of 2009 (and many more to come afterwards). In addition to the MyDay role-based portal (which will be described soon), are Infor Decisions and Infor Order Management are already GA.
Infor Decisions brings real-time, enquiry-driven business intelligence (BI) to line of business (LoB) managers. These folks have been inundated with data coming from disparate sources such as financial management systems (e.g., actual vs. budget), customer service systems (e.g., customer and product profitability), external systems (e.g., a customer’s financial performance) and operations (e.g., inventory status).
But this overflowing data has unfortunately not traditionally been linked to the context of business. To that end, Infor Decisions drives a “train of thought” inquiry, which transforms users from transactional to information workers and facilitates informed decision-making and action.
For its part, Infor Order Management provides multi-model pricing and time-phased inventory reservation right across supply chains. The solution was built to enable the true and unified order experience, i.e., how companies really sell and how customers buy (and not how the system “thinks” the trade happens).
For example, order capturing and inventory reservation can take place centrally, while the actual delivery and customer service takes place in a certain local division. Infor Order Management was designed with flexibility in mind to accommodate ever-changing business practices.
Evolution Continues
The upcoming Infor Advanced General Ledger (formerly also known as Multi-Books Accounting) module is an “evolve” component that should give global companies the ability to conform to multiple, country-specific accounting standards and currencies. The module can either run concurrently with an existing general ledger (G/L) system or serve as the primary accounting module.
The idea behind the multi-books accounting capability is to enable the system to work alongside financial management systems to help companies cast their financials in multiple ways. If, for instance, a corporation has an operation in China, India, or Brazil, and it has to follow these governments’ rules on what one precisely refers to local accounting concepts and regulations, like “salary,” “wage,” or “value-added tax” (VAT) or “sales tax,” how do users get a system without having to rip and replace what they already have in order to work in China, Latin America, the US, and Europe? Advanced G/L and about a few dozen other upcoming “evolve” components, such as, e.g., Pricing, contracts & promotions; Actual costing; Multi-echelon inventory control, and Sales & operations planning (S&OP), are slated for delivery by the early 2010s.
So, What’s The Big Deal with Infor MyDay?
Typically, when I attend vendors’ annual events, I ask their staffers to tell me what in their mind is the highlight of the conference. I was a bit dismayed after hearing the strangely named MyDay feature as the major theme of the Inforum 2008 event.
Namely, IFS Enterprise Explorer (IEE, part of the ongoing Project Aurora), Microsoft Dynamics Client for Office (DCO), Lawson Smart Office, Epicor Productivity Pyramid, IQMS Smart Page UI and so on revolve around themes like role-based portals, contextual analytics, KPIs, alerts, dashboards, shortcuts, favorite/recently used pages, etc. In addition, the role-based UI was implemented with common controls and gadgets, and delivered for basically all of the Microsoft Dynamics enterprise resource planning (ERP) products after introducing it and testing first in Microsoft Dynamics GP.
Thus, I wondered what I was missing at the time within MyDay that was making me a bit indifferent (and why I should not have been indifferent). To be fair, Infor MyDay is designed to deliver persona-based content to over 150 roles Infor has identified in its customers’ businesses. Infor’s blog post explains as follows:
“…What do we mean by persona-based? A persona is a composite of a user within an organization. A lot of vendors talk about role-based interfaces. A persona takes this concept to the next level. A role is generic, designed for a departmental role such as the “finance user.” A persona is specific to an individual user within that department, such as the VP of Finance or Controller. A persona also adds texture to that individual. At Infor, we’ve given them names and faces and built stories around their life. These are imaginary people, but they are based on the hundreds of users we studied to understand the real needs that real people need to get their jobs done. From conception, design and development to sales education and marketing, this gives us the understanding we need to build and deliver great content for people.
Let’s take a look at one of the 16 persona roles we are delivering with this first release, Bob the Production Planner. Bob is a composite of the typical production planner. He is the choreographer of the manufacturing shop floor, managing planning and production. He determines what to produce, how much and when it’s needed. He acts as the go-between between the shop floor and the corporate side of the firm. He has a degree, probably business or engineering, and about 10 years experience with manufacturing. He knows how to use applications but he’s not an IT gearhead.
Bob has to deal with unexpected events – late purchase deliveries, machine downtime or last minute work orders. He wants to be more proactive, but the reality is that he is in ‘reacting mode’ much of the time and plans are always changing. He has to deal with inaccurate inventories and bill of materials, and he has an avalanche of unstructured information that he needs to gather, format and assimilate to take action on.
From our research, we have learned Bob’s typical responsibilities, his skills, his working environment, pain points and goals. We have learned how he uses his ERP software, the other applications he uses and the value he needs to get from them. We learned all of this because we’ve done our homework. A lot of it. We started in early 2007, logging thousands of hours of research into the personas of the people using our software. We’ve built-in the content they need to make their lives a little easier, so they can focus on strategic activities instead of looking for information…”
While an impressive and thorough exercise, persona-based profiling (and subsequent UI tailoring) is not necessarily a unique practice. Namely, TEC’s recent article entitled “Application Giants in Duel—and Duet—for Users’ Hearts, Minds … and Wallets” explains at great length Microsoft’s rationale for its elaborate approach to UX, including role centers (based on numerous interviews of real-life users and their needs).
It’s About Making the Users’ Day (and Less about Impressing Analysts)
The just-announced availability of Infor MyDay for Infor ERP Adage [evaluate this product], the renowned process manufacturing ERP solution, has given me an answer to my quandary. After Infor MyDay was unveiled at Inforum 2008, this represents its first GA for one of many Infor ERP solutions.
As the recent Infor blog post explains, one issue that almost all of the process manufacturing companies can relate to is cost to service customers. In most process ERP systems, actual cost of production, post invoice rebates, disallowed discounts, non-salable allowances, and return data are just some of the data captured over time.
“…This data often resides in ERP modules or disparate, standalone systems. Most companies struggle to pull this information together with customized reports, spreadsheets or complex general ledger allocations. The problem is, by the time you sort through all the noise, the information is months old and the impact is diluted.
With Infor MyDay, the information is immediately at your fingertips, without having to call IT to develop a custom report. This information is built into the Infor MyDay personas for finance and sales managers, who receive these reports on their personalized page and can now better control cost to service and ensure their most profitable customers get the most profitable products…”
For all this time, I was thinking as an industry analyst (rather than a user of a specific product), and comparing MyDay to what other vendors are doing, thinking about the possible market differentiation. On the other hand, to a user of an aged Infor ERP Adage instance, which has been a very functional product but with a rudimentary UI (to put it mildly), MyDay will likely feel like time travel to at least two decades in the future (or as if they were participants in ABC’s Extreme Home Makeover show).
And who might then care about what other vendors might be doing in this regard? The Infor ERP Adage MyDay Datasheet is available at the company’s web site here.
Now I get that MyDay, being free of charge and exhibiting a unifying, dynamic, and snazzy UI, should resonate with Infor customers on antiquated and diverse products. The UI enhancement has also very recently been made GA for Infor ERP LN, Infor ERP SyteLine, and Infor ERP Visual to provide these users as well with visibility into the “why” and “when” and not just the “what” of business operations. As mentioned in Part 1, Infor MyDay does this by filtering data by job function and relevancy and delivering it in a condensed home-page format.
SOURCE :http://blog.technologyevaluation.com/blog/2009/05/04/may-a-new-day-begin-for-mature-enterprise-applications-%E2%80%93-part-2/
The Seven Deadly Sins of Software Marketing
Marketing collateral does not come cheap. Costs associated with textual content, graphic design, and production quickly add up. Obviously, you want to get an appropriate return on your investment. This article looks at seven common mistakes, or "sins," made when developing marketing collateral for the software industry. The sins discussed consider such concepts as targeting your market, lowering costs, and making it convenient for your potential customers to use your marketing collateral. Also considered are the various forms of marketing, such as hard copy, electronic, and e-mail. Finally, we consider the cost of changing marketing collateral and its reproduction.
However, before we start confessing our sins, we need to state the obvious. Marketing collateral must be tailored to your marketplace and products. To sell a car, you probably would emphasize miles per gallon, passenger accommodation, and maintenance costs. Applying these same metrics to software may not make a lot of sense or demonstrate the strengths of your software products. While it may go without saying, never lose sight of the obvious—know your marketplace. This simple statement is not considered one of the deadly sins because if you are committing this grievous offense, you need to go back to the basics and seriously rethink your marketing plan.
The good news is that committing one sin may not condemn you to marketing hell, but committing enough of them surely will. So, grab your holy water, prayer beads, or whatever your religion provides for protection, and let's proceed.
Sin #1. Hiding Your Message
Have you ever gone to a web site that is plastered with customer testimonials, but with either no indication of what it is selling or, at best, with its products or services written in small print? It's like lighting a candle and covering it with a basket. You need to tell your audience what you are selling, what services you offer, and what support you provide. Tell them up front that "We offer software designed for the process manufacturing industry," "We cater to the food and beverage industry," or "Our software was developed to support the field services industry."
To avoid the "hard sell" approach, it may be helpful to ease into the description of what you have to offer. Consider the example below for the food industry.
They say that "it's the ingredients that make food taste good." However, in a rapidly changing marketplace, it takes a lot more than ingredients to compete effectively and efficiently in the food industry. Our software is designed to take care of the production and operational issues of the food industry so you can focus on the freshness of the ingredients.
Don't assume that your audience already knows what you do. If they did, they probably would not need a marketing brochure in the first place. In creating marketing collateral, assume that the reader is seeing your company and its products for the first time. Stating the obvious is not a bad thing. With marketing collateral—hard copy or electronic—readers already familiar with a particular content can simply read on or scroll down.
In the case of the cluttered web site, consider your own buying practices. If you were buying a car, would you start by finding out what current customers say, or by finding the car that meets your needs? Your next-door neighbor may be enthusiastic about his truck, but you're hauling kids, not lumber. Marketing collateral, which includes the web site, must clearly state what you are about and leave no room for doubt. When developing a piece of marketing material, remember that this is probably a prospect's first introduction to your company and its products and services.
When driving down a highway late at night on a business trip, looking for a place to stop, does the bright neon sign say in big letters "Free HBO" and in small letters "Motel"? Of course not. Likewise, if your marketing material emphasizes effective formula management before you mention that you cater to the chemical industry, you may want to reverse the order.
Sin #2. Swerving off Course
Too often we give up before the finish line is in sight. We become impatient if the results of a marketing campaign are not immediate. Here are some simple facts. Getting more than a 1 percent hit ratio for a marketing campaign is considered a success. So, if you send out a mailer with a response card to 100 prospects and 1 responds, don't give up. It usually takes between eight and ten contacts before you can expect to get your foot into your prospect's door. Accordingly, when planning a monthly e-mailer campaign, make sure you have enough material for at least eight months, hopefully avoiding repetition. Think about your reading habits. If you are extremely busy, you probably push unsolicited mail into your wastebasket and e-mail into your "deleted items" folder. On those rare occasions when you have time, you may actually peruse the mail, if only briefly. This is why success takes so long. The mail habits of your prospects are not much different from yours. However, if you incorporate consistent, eye-catching graphics, the chances are better that visual recognition will kick in a little sooner than normal.
Constantly changing directions confuses your prospects. Let's say your most recent sell was to a computer manufacturer. Now you want to switch to the discrete manufacturing space, when all along you have been proclaiming software development for process. Sure, make the sale, but don't let it change your focus—at least not after the first sale. Constantly changing your marketing plan destroys your credibility. Trying to be all things to all prospects is a bad business plan—and a worse marketing strategy.
There was a local dentist whose slogan was "We cater to cowards." On every piece of literature he sent out, the slogan was prominently displayed. Now, he did not have the advertising budget that most companies have, but after three years, whenever someone mentioned his name, the response was "Oh, the dentist who caters to cowards." Staying the course does pay off.
Sin #3. Failure to Create Reusable Material
Being able to use a piece of marketing collateral for multiple purposes can significantly reduce your overall marketing costs and time to deployment. If considered from the onset, this is not a difficult objective to achieve. If not, there could be a lot of redundant effort.
Let's look at a simple example to illustrate this point. Typically, marketing collateral is available in hard copy for one-on-one meetings, and electronically for ease of transmission. A nice, professional-looking, hard-copy format is an 11 x 17 inch paper folded in half, giving four 8.5 x 11 inch sides to the brochure. While you could easily convert this to a PDF format for electronic transmission, anyone who has tried to read such a document online knows it is like paying Pac-Man with your scroll bar. Left, right, up, and down just to center the content on your screen, making it difficult for the reader to maintain a steady train of thought. However, the advantage of the 11 x 17 inch format is that it can be easily converted into four 8.5 x 11 inch pages. When this document is converted to a PDF, you just read straight down as you would a normal paper document. When advance consideration is given to the various ways of using a piece of marketing material, your overall costs can be reduced.
Agreeing on a standard format and content can eliminate the typical floundering phase that goes into any creative process. Don't be afraid to reuse textual content. An example will illustrate this idea. In process manufacturing, you are always talking about formulas, pack recipes, ingredients, and scalability. If one of the sections of the marketing piece talks about software functions and features, it is all right to repeat these common aspects in a brochure for the food and beverage industry as well as for the chemical industry. Some might say that you are being redundant. Of course you are. The industries are both process-manufacturing-oriented. Furthermore, you are not going to send the same prospect both the food and beverage and the chemical brochures. With this approach, you need only pepper the functions and features with the uniqueness of each industry—say, catch weight for food and beverage, and carcinogenic reporting for chemicals.
You also want to give some thought to the preferred method of delivery for marketing information to prospects. An electronic transmission with an attachment or an e-mail campaign is the least intrusive and least costly. The problem is getting the e-mail addresses. Unless you have made a concerted effort to obtain addresses over a sustained period of time, the campaign may not have much impact. While you can buy lists, you do not get the list. The owner of the list e-mails your message. Consequently, you must rebuy the list each time. E-books—brochures that you read online as if you were turning the pages of a book—present the most professional-looking, electronic delivery mechanism. Unfortunately, they are typically executable files, which many corporate servers reject as potential virus-spreading attachments.
Another technique is useful for trade shows, where you can expect to meet a cross section of prospects. For them, burn all of your marketing collateral onto a CD, indexed by industry and topic. Essentially, you are creating a highly adaptable CD-based marketing (CBM) environment. If you have ever been to a trade show, you know that repacking for the trip home can be a humbling and difficult experience. Let's face it: you have to leave room for the stress balls, tote bags, and, if there is still room, vendor brochures. CDs take up little room. Since marketing material rarely consumes all of the space on a CD, you can re-burn it with updated information. The major cost components—the physical CD, label, and case—are reusable.
There are other ways to promote reusability and delivery options. Thinking about them in the early stages of design may save you dollars, pesos, or yen.
Sin #4. Ignoring the KISS Principle
To borrow a line from a popular movie, "An article should only be as long as it takes to drink a cup of coffee." You usually finish a cup in ten minutes. The KISS principle—keep it simple and short—takes this idea one step further. Namely, avoid complexity. In this hectic, go-go business world, prospects have limited amounts of time for reading marketing material, and probably less time to fully comprehend what they are reading.
Consequently, it is a good idea to highlight or "bulletize" the key messages you want to convey. The advantage of bullets is that it only takes one to hit the target. A reader's eye can quickly scan keywords, and one just might strike a sensitive cord. You should assume that your piece will be read by non-technical individuals who may not understand all of the information technology (IT) jargon and three letter acronyms (TLAs). In fact, you really want marketing collateral to be read by the decision makers—chief executive and chief operations officers (CEOs and COOs), and chief financial officers (CFOs). Just as techies may not know the differences between accrual and impress accounts, a CFO may not appreciate software designed to support a service-oriented architecture (SOA) environment.
A good rule of thumb is to let a non-technical editor have a go at the piece before finalizing the content.
Sin #5. Giving Away the Store
Is the purpose of a marketing piece to close the sale? If you have found such a brochure, stop reading this article, and just duplicate the piece. No, the purpose of marketing collateral is to encourage prospects to pick up the phone and call for more information. If you give away too much detail, prospects may feel that they have a full understanding, decide they don't need the product or service, and never make the call. The more likely scenario is that prospects misunderstand what you are trying to tell them. In either case, the prospect will not pick up the phone or send an e-mail requesting more information or answers to potential buying-signal questions.
Again, using an example for a software solution for the process manufacturing industry, let's say this was your main thrust:
Our enterprise-wide solution for the process manufacturing industry supports flexible formularization, separate pack recipes, and flexible pricing algorithms.
All of these functions are critical for process manufacturing. But so are scalability, catch weight, and repackaging. By not mentioning them, are you giving the misimpression that they are not supported? An alternative way of presenting this concept could be
Our software, designed specifically for process manufacturing industries to include food and beverage, chemical, pharmaceutical, and consumer products goods is a comprehensive, affordable, and full-featured ERP solution.
You have given the reader the basic information that you have targeted their industry and that your product should satisfy all the needs of process manufacturing. They can call and ask, "Can the software do this?" or "What about this scenario?" In either case, you should be able to do a much better job responding to a prospect's interest than any marketing brochure could. Right?
Sin #6. Showing Inconsistency
A nagging problem is in maintaining consistency across the spectrum of all marketing collateral. Did I say 1 + 1 = 2 in the brochure for the automotive industry, and 1 + 1 = 3 in the brochure for warehouse management? This inconsistency becomes embarrassing, since you are probably going to send both brochures to the same automotive prospect. Nothing puts you in a deeper hole than trying to explain away inconsistencies on your initial visit. And even if you can talk your way out of the hole, the prospect is looking for instances to push you back in.
Reusability can help greatly to maintain consistency or, at the very least, be consistently wrong. Remember, in a parade you can be out of step, but if everyone else is in step with you, who will notice?
Sin #7. Forgetting to Toot Your Own Horn
Marketing collateral is not the time when you step back and let others shower you with praise and adulation. If you don't praise your company and its products and services, no one is going to do it for you. But remember, the reader is not naive. If you say the software is the best thing since sliced bread or that your company walks on water, you are going to create more skepticism than goodwill. At least, make sure the water is frozen solid.
Summary
Of all of the sins, hiding the message and not staying the course are the two most common and fatal. Too often we create marketing materials as if we were the recipient. Being so close to the subject matter, we tend to assume that the reader has our level of knowledge. It is better to write down to the audience than above their heads. After your initial face-to-face meeting, you can assess and calibrate the appropriate level of knowledge.
Most busy professionals have little patience. Consequently, it is all too easy to forsake the current campaign and try something new. This creates confusion and doubt with some of your prospects, and with others, you never get to first base. At the very least, if you are going to change the strategy for marketing your software, have the good sense to segregate your prospects so that you do not appear to be abandoning relationships you have been attempting to cultivate.
Finally, when you are preparing your annual marketing plan, it may be helpful to add a column for the corresponding marketing collateral—brochures, e-mail campaigns, e-books, CBMs, web site updates, banner ads, success stories, press releases, white papers, and more. In so doing, you can help promote reusability, ensure consistency, and achieve a greater return on your marketing dollars.
If you have committed some of the sins mentioned in this article, you are absolved. Go my child, but sin no more. If you want to confess sins of your own or have better candidates for the seven deadly, let me know.
However, before we start confessing our sins, we need to state the obvious. Marketing collateral must be tailored to your marketplace and products. To sell a car, you probably would emphasize miles per gallon, passenger accommodation, and maintenance costs. Applying these same metrics to software may not make a lot of sense or demonstrate the strengths of your software products. While it may go without saying, never lose sight of the obvious—know your marketplace. This simple statement is not considered one of the deadly sins because if you are committing this grievous offense, you need to go back to the basics and seriously rethink your marketing plan.
The good news is that committing one sin may not condemn you to marketing hell, but committing enough of them surely will. So, grab your holy water, prayer beads, or whatever your religion provides for protection, and let's proceed.
Sin #1. Hiding Your Message
Have you ever gone to a web site that is plastered with customer testimonials, but with either no indication of what it is selling or, at best, with its products or services written in small print? It's like lighting a candle and covering it with a basket. You need to tell your audience what you are selling, what services you offer, and what support you provide. Tell them up front that "We offer software designed for the process manufacturing industry," "We cater to the food and beverage industry," or "Our software was developed to support the field services industry."
To avoid the "hard sell" approach, it may be helpful to ease into the description of what you have to offer. Consider the example below for the food industry.
They say that "it's the ingredients that make food taste good." However, in a rapidly changing marketplace, it takes a lot more than ingredients to compete effectively and efficiently in the food industry. Our software is designed to take care of the production and operational issues of the food industry so you can focus on the freshness of the ingredients.
Don't assume that your audience already knows what you do. If they did, they probably would not need a marketing brochure in the first place. In creating marketing collateral, assume that the reader is seeing your company and its products for the first time. Stating the obvious is not a bad thing. With marketing collateral—hard copy or electronic—readers already familiar with a particular content can simply read on or scroll down.
In the case of the cluttered web site, consider your own buying practices. If you were buying a car, would you start by finding out what current customers say, or by finding the car that meets your needs? Your next-door neighbor may be enthusiastic about his truck, but you're hauling kids, not lumber. Marketing collateral, which includes the web site, must clearly state what you are about and leave no room for doubt. When developing a piece of marketing material, remember that this is probably a prospect's first introduction to your company and its products and services.
When driving down a highway late at night on a business trip, looking for a place to stop, does the bright neon sign say in big letters "Free HBO" and in small letters "Motel"? Of course not. Likewise, if your marketing material emphasizes effective formula management before you mention that you cater to the chemical industry, you may want to reverse the order.
Sin #2. Swerving off Course
Too often we give up before the finish line is in sight. We become impatient if the results of a marketing campaign are not immediate. Here are some simple facts. Getting more than a 1 percent hit ratio for a marketing campaign is considered a success. So, if you send out a mailer with a response card to 100 prospects and 1 responds, don't give up. It usually takes between eight and ten contacts before you can expect to get your foot into your prospect's door. Accordingly, when planning a monthly e-mailer campaign, make sure you have enough material for at least eight months, hopefully avoiding repetition. Think about your reading habits. If you are extremely busy, you probably push unsolicited mail into your wastebasket and e-mail into your "deleted items" folder. On those rare occasions when you have time, you may actually peruse the mail, if only briefly. This is why success takes so long. The mail habits of your prospects are not much different from yours. However, if you incorporate consistent, eye-catching graphics, the chances are better that visual recognition will kick in a little sooner than normal.
Constantly changing directions confuses your prospects. Let's say your most recent sell was to a computer manufacturer. Now you want to switch to the discrete manufacturing space, when all along you have been proclaiming software development for process. Sure, make the sale, but don't let it change your focus—at least not after the first sale. Constantly changing your marketing plan destroys your credibility. Trying to be all things to all prospects is a bad business plan—and a worse marketing strategy.
There was a local dentist whose slogan was "We cater to cowards." On every piece of literature he sent out, the slogan was prominently displayed. Now, he did not have the advertising budget that most companies have, but after three years, whenever someone mentioned his name, the response was "Oh, the dentist who caters to cowards." Staying the course does pay off.
Sin #3. Failure to Create Reusable Material
Being able to use a piece of marketing collateral for multiple purposes can significantly reduce your overall marketing costs and time to deployment. If considered from the onset, this is not a difficult objective to achieve. If not, there could be a lot of redundant effort.
Let's look at a simple example to illustrate this point. Typically, marketing collateral is available in hard copy for one-on-one meetings, and electronically for ease of transmission. A nice, professional-looking, hard-copy format is an 11 x 17 inch paper folded in half, giving four 8.5 x 11 inch sides to the brochure. While you could easily convert this to a PDF format for electronic transmission, anyone who has tried to read such a document online knows it is like paying Pac-Man with your scroll bar. Left, right, up, and down just to center the content on your screen, making it difficult for the reader to maintain a steady train of thought. However, the advantage of the 11 x 17 inch format is that it can be easily converted into four 8.5 x 11 inch pages. When this document is converted to a PDF, you just read straight down as you would a normal paper document. When advance consideration is given to the various ways of using a piece of marketing material, your overall costs can be reduced.
Agreeing on a standard format and content can eliminate the typical floundering phase that goes into any creative process. Don't be afraid to reuse textual content. An example will illustrate this idea. In process manufacturing, you are always talking about formulas, pack recipes, ingredients, and scalability. If one of the sections of the marketing piece talks about software functions and features, it is all right to repeat these common aspects in a brochure for the food and beverage industry as well as for the chemical industry. Some might say that you are being redundant. Of course you are. The industries are both process-manufacturing-oriented. Furthermore, you are not going to send the same prospect both the food and beverage and the chemical brochures. With this approach, you need only pepper the functions and features with the uniqueness of each industry—say, catch weight for food and beverage, and carcinogenic reporting for chemicals.
You also want to give some thought to the preferred method of delivery for marketing information to prospects. An electronic transmission with an attachment or an e-mail campaign is the least intrusive and least costly. The problem is getting the e-mail addresses. Unless you have made a concerted effort to obtain addresses over a sustained period of time, the campaign may not have much impact. While you can buy lists, you do not get the list. The owner of the list e-mails your message. Consequently, you must rebuy the list each time. E-books—brochures that you read online as if you were turning the pages of a book—present the most professional-looking, electronic delivery mechanism. Unfortunately, they are typically executable files, which many corporate servers reject as potential virus-spreading attachments.
Another technique is useful for trade shows, where you can expect to meet a cross section of prospects. For them, burn all of your marketing collateral onto a CD, indexed by industry and topic. Essentially, you are creating a highly adaptable CD-based marketing (CBM) environment. If you have ever been to a trade show, you know that repacking for the trip home can be a humbling and difficult experience. Let's face it: you have to leave room for the stress balls, tote bags, and, if there is still room, vendor brochures. CDs take up little room. Since marketing material rarely consumes all of the space on a CD, you can re-burn it with updated information. The major cost components—the physical CD, label, and case—are reusable.
There are other ways to promote reusability and delivery options. Thinking about them in the early stages of design may save you dollars, pesos, or yen.
Sin #4. Ignoring the KISS Principle
To borrow a line from a popular movie, "An article should only be as long as it takes to drink a cup of coffee." You usually finish a cup in ten minutes. The KISS principle—keep it simple and short—takes this idea one step further. Namely, avoid complexity. In this hectic, go-go business world, prospects have limited amounts of time for reading marketing material, and probably less time to fully comprehend what they are reading.
Consequently, it is a good idea to highlight or "bulletize" the key messages you want to convey. The advantage of bullets is that it only takes one to hit the target. A reader's eye can quickly scan keywords, and one just might strike a sensitive cord. You should assume that your piece will be read by non-technical individuals who may not understand all of the information technology (IT) jargon and three letter acronyms (TLAs). In fact, you really want marketing collateral to be read by the decision makers—chief executive and chief operations officers (CEOs and COOs), and chief financial officers (CFOs). Just as techies may not know the differences between accrual and impress accounts, a CFO may not appreciate software designed to support a service-oriented architecture (SOA) environment.
A good rule of thumb is to let a non-technical editor have a go at the piece before finalizing the content.
Sin #5. Giving Away the Store
Is the purpose of a marketing piece to close the sale? If you have found such a brochure, stop reading this article, and just duplicate the piece. No, the purpose of marketing collateral is to encourage prospects to pick up the phone and call for more information. If you give away too much detail, prospects may feel that they have a full understanding, decide they don't need the product or service, and never make the call. The more likely scenario is that prospects misunderstand what you are trying to tell them. In either case, the prospect will not pick up the phone or send an e-mail requesting more information or answers to potential buying-signal questions.
Again, using an example for a software solution for the process manufacturing industry, let's say this was your main thrust:
Our enterprise-wide solution for the process manufacturing industry supports flexible formularization, separate pack recipes, and flexible pricing algorithms.
All of these functions are critical for process manufacturing. But so are scalability, catch weight, and repackaging. By not mentioning them, are you giving the misimpression that they are not supported? An alternative way of presenting this concept could be
Our software, designed specifically for process manufacturing industries to include food and beverage, chemical, pharmaceutical, and consumer products goods is a comprehensive, affordable, and full-featured ERP solution.
You have given the reader the basic information that you have targeted their industry and that your product should satisfy all the needs of process manufacturing. They can call and ask, "Can the software do this?" or "What about this scenario?" In either case, you should be able to do a much better job responding to a prospect's interest than any marketing brochure could. Right?
Sin #6. Showing Inconsistency
A nagging problem is in maintaining consistency across the spectrum of all marketing collateral. Did I say 1 + 1 = 2 in the brochure for the automotive industry, and 1 + 1 = 3 in the brochure for warehouse management? This inconsistency becomes embarrassing, since you are probably going to send both brochures to the same automotive prospect. Nothing puts you in a deeper hole than trying to explain away inconsistencies on your initial visit. And even if you can talk your way out of the hole, the prospect is looking for instances to push you back in.
Reusability can help greatly to maintain consistency or, at the very least, be consistently wrong. Remember, in a parade you can be out of step, but if everyone else is in step with you, who will notice?
Sin #7. Forgetting to Toot Your Own Horn
Marketing collateral is not the time when you step back and let others shower you with praise and adulation. If you don't praise your company and its products and services, no one is going to do it for you. But remember, the reader is not naive. If you say the software is the best thing since sliced bread or that your company walks on water, you are going to create more skepticism than goodwill. At least, make sure the water is frozen solid.
Summary
Of all of the sins, hiding the message and not staying the course are the two most common and fatal. Too often we create marketing materials as if we were the recipient. Being so close to the subject matter, we tend to assume that the reader has our level of knowledge. It is better to write down to the audience than above their heads. After your initial face-to-face meeting, you can assess and calibrate the appropriate level of knowledge.
Most busy professionals have little patience. Consequently, it is all too easy to forsake the current campaign and try something new. This creates confusion and doubt with some of your prospects, and with others, you never get to first base. At the very least, if you are going to change the strategy for marketing your software, have the good sense to segregate your prospects so that you do not appear to be abandoning relationships you have been attempting to cultivate.
Finally, when you are preparing your annual marketing plan, it may be helpful to add a column for the corresponding marketing collateral—brochures, e-mail campaigns, e-books, CBMs, web site updates, banner ads, success stories, press releases, white papers, and more. In so doing, you can help promote reusability, ensure consistency, and achieve a greater return on your marketing dollars.
If you have committed some of the sins mentioned in this article, you are absolved. Go my child, but sin no more. If you want to confess sins of your own or have better candidates for the seven deadly, let me know.
PeopleSoft - Catching Its Second Wind From The Internet Part 2: Strengths and Challenges P.J. Jakovljevic - June 6, 2001 Printer Friendly * E-ma
PeopleSoft, Inc. is one of the leading developers of enterprise business applications, which helps governments, higher education institutions and large-to-medium sized corporations manage human resources (HR), financials, supply chain management (SCM), customer relationship management (CRM), e-Business and business intelligence data from a wide range of operating systems and hardware platforms.
From its founding in 1987 PeopleSoft grew at a breakneck pace with a number of consecutive years of doubled sales until 1998, when its sales all but stalled due to increased competition and a saturated market. 1999 and 2000 were years of changes and adjustment culminating in a company with a pure Internet platform, a new set of products, and a new assertive attitude.
Indisputably, the most prominent event and the turning point for the company was the delivery of PeopleSoft 8 in September 2000. The product is an Internet-based collection of 160 applications, with 59 new applications in the 8 release, that span well beyond PeopleSoft's HR stronghold into e-business collaborative applications, CRM, SCM, professional service automation (PSA), and analytics to name but a few.
PeopleSoft's announcement of pure Internet connectivity with the elimination of required client side software represents a new twist. Not only should it speed application deployment time (browsers are free and often pre-installed), it should also allow access to anyone with a cell phone, hand held or browser equipped machine, which is an attractive prospect for remote offices, sales teams, and business partners.
This part examines the strengths and challenges PeopleSoft now faces in today's cutthroat competitive environment.
About This Note
This is a three-part note:
- Part 1 contains the Vendor Summary, Trajectory and Strategy, and Major Developments during the past two years.
- Part 2 contains an Analysis of PeopleSof's Strengths and Challenges.
- Part 3 contains the Bottom Line information with Predictions, and Recommendations for both the PeopleSoft and users.
Part 3 contains links to Parts 1 and 2.
PeopleSoft Strengths
HRMS/Payroll Software Leadership: PeopleSoft is indisputably one of the best, the earliest-to-market and the most comprehensive human resource management system (HRMS) applications available. As it was the first application that the company developed, it drove the rest of development of PeopleSoft enterprise applications suite. This was in a sharp contrast to its ERP counterparts for which HR application was only a necessary add-on, and, subsequently, these competitive HR applications often display a financial and/or manufacturing approach to HRMS and use terminology that is not user-friendly to human resources and/or payroll staff. As a result, PeopleSoft can often compete with 'best-of-breed' HRMS applications with its product depth in areas such as performance reviews, benefits management, salary planning, complex payroll calculations (and transactions reversals if need be), pension administration, employee and managerial self-service, etc.
PeopleSoft HRMS is also delivered with a number of Business Process Graphical Maps for the users to easily navigate and process key functions (i.e., new hire process, termination process, performance review process), which include integration with email online alerts and automated work lists ('to do' lists) creation. Moreover, the PeopleSoft 8 product features architecture that may improve the ability to support internal and external enterprise processes, which will increase the need for employee and managerial self-service functionality and access to e-HR communities.
By delivering PeopleSoft MarketPay and PeopleSoft MarketPlace products, the company has extended its HR and financial systems expertise and taken a thought leadership over its direct competitors, which are currently only at early planning stages of developing these capabilities. Handling payment settlements and HR requirements are the next hot issues in the digital marketplaces frenzy, given the fact that ways of trading goods via Internet have mainly been resolved.
Also, PeopleSoft 8 Financials functionality is one of the strongest and broadest in the market. It features a high degree of flexibility (e.g., daily periods in the calendar, unlimited account key, etc.) and offers treasury management, as well as strong expense self-service module that is tightly integrated with Accounts Payable and Payroll modules. Having garnered strong HR/Payroll and recently financial functionality, PeopleSoft offers a strong and comprehensive vertical industry solution for non-manufacturing industries like government, utilities, financial, insurance, healthcare and higher education.
Sound Corporate Viability: PeopleSoft has restored a sound financial situation during the last 18 months (See Figures 1 - 2) in terms of growth and profitability, with exorbitant investment in R&D (27% of revenue, 26% of workforce), and a strong and efficient direct sales force (measured in revenue per sales employee ratio), and a traditionally congenial corporate culture that nurtures creativity and initiative of employees. In addition, having been able to provide a complete solution with a minimum reliance on 3rd-party products (and, consequently, with a lesser cost of software license), PeopleSoft should continue to post high margins and solid profits provided sustaining revenue stream. These impressive results coincide with the final phase of integrating the acquired Vantive CRM product within its flagship PeopleSoft 8 product suite and with the winding down of its ambitious and over two years long R&D endeavors.
Figure 1.
Figure 2.
Figure 3.
Further, PeopleSoft has a large and loyal HRMS (over 60% of global HRMS market share) and financial modules customer base, which could provide a significant recurring revenue stream through sales of new components and/or product upgrades. The blessing in disguise for the company is the stronghold within the service industries that have been much less affected by the current economic slowdown than their manufacturing or telecommunications counterparts.
Advanced Product Architecture and Technology: While we have strong reservations towards companies utilizing bombastic words like "technology leap", there may be a point in PeopleSoft's suggestion that its competitors' (read Oracle and SAP) products were initially (or currently) only Web-friendly, rather than an Internet-only application. Early Web enabled releases from both Oracle and SAP were a mere porting of client/server architecture to the Internet (in other words, basically rejuvenated versions of the existing, proprietary Windows-like screens and forms) through a number of Java applets and/or intermediary architectural layer.
Therefore, PeopleSoft's announcement of pure Internet connectivity with the elimination of required client side software represents a new twist. Not only should it speed application deployment time (browsers are free and often pre-installed), it should also allow access to anyone with a cell phone, hand held or browser equipped machine, which is an attractive prospect for remote offices, sales teams, and business partners. To that end, PeopleSoft currently offers an impressive range of mobile applications.
Also, PeopleSoft's architecture will challenge competitors' offerings with advanced XML messaging and application programming interfaces (APIs) options that promise to ease bi-directional integration. Other indisputable advantages of a browser are the ease of training and use, as well as a broad-scale deployability. The new architecture should also enable release independence, allowing upgrades of a single module without the need to upgrade the full suite.
Furthermore, PeopleSoft has possibly the strongest product technology in terms of support for almost all industry relevant OS and DB platforms and/or middleware standards and in terms of scalability & performance metrics, system monitoring & load balancing (e.g., by using BEA Systems' Tuxedo Monitor tool), backup & recovery issues, authentication, and authorization & transaction security issues.
Product Flexibility: Owing to an early modular approach of the design of PeopleSoft applications, its suite can be implemented in phases as required. This allows for critical functions to become operational without having to undergo a risky and harrowing big-bang approach. Also, given that PeopleSoft enterprise applications have been developed and added incrementally to the suite, the company has long had to rely on product flexibility and integration to 3rd-party products or tools. As an example, PeopleSoft features a set of embedded powerful and easy to use reporting tools like nVision, Crystal and Cognos Powerplay. Further, PeopleSoft Workflow integrates with any VIM, MAPI, or SMTP compliant email system.
Also, all PeopleSoft applications use effective dating and not only the applications where effective- and back-dating are generally accepted ways of doing business. In other words, it is not only limited to detailed transactions like journal entries or employee personnel transactions, but also to the supporting and edit tables (e.g., translate values). Also, with PeopleSoft 8, the Unicode language standard is supported which should grant the products strong global capabilities.
Product Horizontal Breadth: PeopleSoft 8, offering non-proprietary browser looking user interface, a completely redesigned Internet architecture, and notable additional functionality, places the company as one of the frontrunners in the next generation of e-business applications. It stands a chance to currently be the only vendor, other than SAP and Oracle, that can deliver a majority of the components of a complete e-business solution with its PeopleSoft 8 suite including CRM, SCM, HR, professional service automation (PSA), data warehousing, e-procurement applications, business intelligence, and enterprise resource planning (ERP) applications.
Consequently, PeopleSoft offers its integrated product suite as a solution that could bundle necessary application components within a single integrated product (a "one-stop shop"), thereby avoiding the middleware porting and connectivity standards issues. Avoiding the need for integration between disparate components reduces the cost and risk associated with implementation and maintenance and the product can be implemented more quickly. The approach can also lead to more effective customer relationship management since the customers should obtain the identical response from the business application regardless of which communication channel they use (Internet, call-center, direct mail, etc.).
Moreover, in some instances, PeopleSoft may be able to offer best of both worlds (one-stop shop and best-of-breed). In addition to a leading HRMS product, the company's pervasive Business Intelligence (Analytics) components are impressive, with dedicated complex analysis and reporting around almost all crucial business areas including several new CRM components. Although the marketing, so far, of its Vantive CRM product acquisition has not matched the efforts of rivals such as Oracle or Siebel, PeopleSoft's huge potential advantage is the integration of its Vantive product to the back-office ERP system that handles the vital internal processes so important to customers.
The new system should allow manufacturers to get a 360-degree view of all their customer relationships. It provides tracking and management of marketing campaigns, the entire sell cycle, the fulfillment cycle, and customer service. This kind of knowledge only comes from integrating CRM software with back-office systems. Additional advantages of the Vantive product are its ability to easily integrate with other 3rd-party ERP systems as well as improved scalability (the company claims to be the first vendor to support 20,000 CRM users).
Also, supplier-facing applications have long been a strength of PeopleSoft, with over 1,200 existing customers. With PeopleSoft 8, new additional collaborative applications have led to the launch of a supplier relationship management (SRM) solution. PeopleSoft 8 SRM is designed to help organizations effectively evaluate the strategic value of their suppliers and leverage their relationships accordingly. It is envisioned to integrate the design, sourcing, procurement, manufacturing, and replenishment processes within a company. Since the solution offers an array of both direct and indirect materials procurement processes, it might provide PeopleSoft with the opportunity to sell its SCM products into some non-manufacturing industries such as healthcare, telecommunications and utilities, where it already has a large user base.
Furthermore, integration of SCM and CRM products should result in a convergence of these traditionally disconnected business processes (e.g., campaign-to-order, order-to-cash, service-to-profit, design-to-acceptance, plan-to-service, request-to-resolve, agreement-to-profit, etc.) through information at every touch point, and every channel across the expanded enterprise. To enable effective collaborative commerce, PeopleSoft has delivered role-based portals that encompass business applications, transactional data, workflow and analytics to make employees more productive. This approach has also been extended out to address specific industry needs as in the example of the broker portal for the consumer goods industry.
Partnerships and Service & Support Infrastructure: PeopleSoft has been adept in forming alliances with industry leaders to deliver a full range of Internet based solutions. From ASP/hosting and infrastructure to joint development initiatives, continued strategic alliances will contribute to the company's success. PeopleSoft seems to understand the benefits of effective channel management and of limiting channel conflict, the importance of developing vertical, industry-specific products, and the integration of the ASP delivery model as an upfront option during the sales cycle.
PeopleSoft has positioned the ASP business in a right manner - rather as a viable option for delivering PeopleSoft products, as opposed to a cheap, deal-striking alternative. Owning all elements of ASP business and/or selectively partnering with viable, vertically focused ASP service providers, along with its readiness to accommodate some degree of customization have reduced customers' initial reticence to venture into the uncertain land of ASP.
Product Immaturity, Functional Holes and Integration Work-In-Progress: PeopleSoft 8, achieved through a radical rewrite of over 14,000 PeopleSoft 7.5 enterprise suite panels and/or program sessions and through acquisition of Vantive CRM product, is still an unproven product in its infancy and adopted mainly by a number of early adopters.
PeopleSoft has yet to resolve integration issues and reworking disparate CRM and ERP pieces into a unified data model. If one wants to be nit picking he/she may also notice that the entire PeopleSoft 8 product suite does not exhibit an identical look and feel across the board. Namely, its Vantive CRM suite still requires Java virtual machine and will supposedly be re-architected for the Internet and fully integrated within the suite in the 2nd half of 2001. This can prove to be a drawback at this stage, given that CRM is often the driving force behind e-business projects. In addition, while all PeopleSoft transactions are processed through the Web applications, part of its development tools, PeopleSoft Tools (e.g., administrative functions) are still WIN32 based.
In addition, SAP's recently renewed joint development alliance with Commerce One may derail PeopleSoft's own technology alliance with the same marketplace vendor. PeopleSoft MarketPlace is its e-procurement suite for which Commerce One's MarketSite technology is used to power content management, auctioning, and searching, with the initial target markets to be professional services, educational, and financial services. Future collaborative services are said to include direct procurement, travel, benefits, resource management and recruiting. PeopleSoft may now be forced to develop its own marketplace technology as a result of the SAP deal.
It also appears that Oracle and SAP have seriously closed the HR functionality gap with their latest product releases and have jeopardized PeopleSoft invincibility in the realm of HR. Both vendors have long provided better global features and integration to non-HR processes, which may be a decisive factor in some global selections within manufacturing industries. Furthermore, Lawson Software, Great Plains, Infinium, etc. are becoming ever more competitive in the HR mid-market, while the niche non-ERP HR vendors like Concur exhibit stronger vertical focus, alliances with major HR consultancies, and competitiveness for organizations that have older HR systems (e.g., Cyborg) or older versions of ERP HR packages.
Cutthroat Competition: PeopleSoft faces almost internecine wars from formidable competitors like SAP, Oracle, Siebel, and i2. Primarily service & maintenance revenues have driven PeopleSoft's revenue growth in the last two years (over 70% of total revenue), and one should note that PeopleSoft's license revenue in 2000 was still 25% less than the corresponding revenue in 1998 (See Figure 1), back when the company was only a mere ERP player. Therefore, one should not be too overly impressed with the magnitude of recent quarterly improvements that compare to the worst quarters in the company history during 1999/2000.
Despite a significant growth of PeopleSoft's license revenue in the last quarter, a more detailed look reveals things to not appear quite so rosy. Namely, Vantive CRM products have been the major license revenue contributor, which means that PeopleSoft traditional breadwinners' (HR and financial systems) revenues have shown below the market average growth year over year. Moreover, the overwhelming impression is that Vantive has not been utilized to its full potential either despite the fact that the CRM market has been experiencing stellar annual growth. PeopleSoft has recently recognized the issue though, and has taken the steps to address it by concentrating on delivering integrated CRM modules within its product suite and seeking acquisitions that would boost its CRM offering. However, replacing the Vantive brand with PeopleSoft CRM brand may disconcert current Vantive non-PeopleSoft users and may also confuse the marketplace.
The company has a reputation of squandering very promising acquisitions away - the Red Pepper purchase from a few years ago being one. A similar mistake with Vantive could be ruinous, particularly since CRM is part-and-parcel of the new IT trends giving PeopleSoft a golden opportunity. Its competitors will actively sow fear, uncertainty & doubt (FUD) in the market based on the above-mentioned PeopleSoft missteps and the lack of awareness about the enhancements of the Vantive product since the acquisition. One is to expect the likes of Siebel to counterattack users of Vantive products, particularly those that do not run on PeopleSoft back office, given that switching to PeopleSoft's next generation product would require spending more money and tinkering with the systems. In case PeopleSoft CRM 8 does not break any new ground, current Vantive users may opt to switch to still a deeper and broader leading CRM product.
While PeopleSoft now has strong management with an invigorated stance, and is running a profitable business, it may be short-lived without sustaining license revenue. PeopleSoft has lower license revenue (expressed both as a percentage of total revenue and in raw dollar amounts), market share, global presence, and resources compared to SAP, Oracle and, in part, Siebel Systems. Also, the great part of its revenue comes from its existing customer base, which may be reluctant to jump on a heavily involved product upgrade both because of current economic conditions and because of their contentment with the current product release in use. On the other hand, potential users that might be attracted to the new release, may postpone the software acquisition until economic conditions improve.
While PeopleSoft's international expansion has been impressive during the last few years, it still lags the international diversifications of its peers. There is also an indication that the most of its international accounts are the divisions of US-based corporations where the company already had an instance of its product. Given that these markets are likely to feel the economic slump echoed from the US, PeopleSoft's further international expansion efforts may be seriously hampered.
Low Mind Share within the Manufacturing Industries and Insignificant Number of Full-ERP Reference Sites: PeopleSoft is still not regarded as a full-fledged ERP solution provider, owing to lagging main competitors in complex manufacturing functionality and with only a few hundreds full-ERP reference sites overall. While the number of additionally released applications is impressive, the product portfolio still shows serious functional holes or unproven new functionality, particularly in its proverbial 'bogey' areas like manufacturing and supply chain management, where its competitive position is not going to improve dramatically very soon (see Vendor Predictions in Part 3).
While there is significant new supply chain execution (SCE) functionality (e.g., directed put away and/or picking, steamlined fulfillment, wedge-based parcel packing, available-to-promise (ATP) reservations, tolerance-based over picking, etc.) and in supply chain planning (SCP) functionality such as promotion planning and collaborative planning, forecasting, and replenishment (CPFR), vendor managed inventory (VMI), transportation management and warehouse management system (WMS), the company is still mainly doing the catch-up with the major SCM players. Also most industry-based templates have not been revised from the 7.5 release and will only be delivered with PeopleSoft 9 release.
Nonetheless, while PeopleSoft has so far failed to exploit its purchase of Red Pepper several years ago, its new tack of addressing manufacturers' needs may result in far greater success. Namely, for the last two and a half years, PeopleSoft has focused its manufacturing and SCM solutions on only consumer packaged goods (CPG), high tech/electronics, and wholesale distribution industries. It already has a strong customer base within these industries, primarily with its financial and HR applications, but also to a degree with its manufacturing and supply chain modules.
During the above mentioned period, the company has built out functionality specific to these industries and has become a competitive force therein. A good example in that regard would be its new promotions management module, which offers CPG manufacturers a flexible, comprehensive way to manage and optimize trade-spending funds. As a closed-loop solution, PeopleSoft promotions management integrates with existing supply chain management and financial systems for efficient promotions and forecasting, planning tracking, reporting, and execution. It is designed to capture information across the entire supply chain and to reveal both visible and hidden costs.
What may also help PeopleSoft in this particular endeavor is the change in both the business applications climate and the users' mindset. The times when features and functions (bells and whistles) were the order winners are over. The new selections fights are fought on the peripheries of ERP, in the CRM, the SCM and e-collaboration arenas, with very sharp vertical focus. Assuming solid flow manufacturing functionality, bundled with CRM capabilities and with traditionally strong analytic applications developed in house, PeopleSoft may turn out to be an adequate contender in future manufacturing and material management software selections.
The company's biggest challenge, without doubt, lies in creating marketing awareness, promoting its new products, and the Web architecture as well as in crisp sales execution.
Dubious Early Adoption of Pure Internet Architecture: Another impediment to PeopleSoft's short-term success may be the market's generally low awareness of the Internet-only architecture advantages. At this stage, users mainly require the look and feel of the Internet and, therefore, other only Web-enabled products may not be seriously disadvantaged while competing against Web-based PeopleSoft 8. Besides, Oracle, J.D. Edwards, Baan and SAP have already significantly improved their latest product releases and there is every reason to believe that they may eliminate the PeopleSoft architectural advantages very soon. And this is aside from Lawson Software that has long been acclaimed for its advanced product architecture and superior user interface.
Furthermore, the client/server architecture is still far from being dead. There is a great likelihood that client/server and Internet architectures will coexist for a long time until interruptions and Internet instability are tremendously curbed.
Moreover, PeopleSoft's decision to offer only an Internet browser look-and-feel interface has, in some instances, initially met the power-user resistance and resentment for not being given the choice. While the HTML-like interfaces are perfect for casual and task-specific users with minimum training requirements, power-users may still prefer the functionality and drill-around capability of Windows-like user interfaces (drop-down menus, right-click menu, etc.). Some power-users cite the awkwardness of conducting more complex transactions only via hyperlinks, jumping to and fro among a number of screens, which defeats the purpose of simplicity. In that regard, the Web-enabled user interfaces of its competitors (e.g., Oracle, SAP, J.D. Edwards, Lawson Software, etc.) that either still contain many Windows features or offer different interfaces for casual and power users, may be the better approach at this stage.
Some prospective customers who have seen the new Internet UI in demonstrations use words like "complicated", "flimsy", and even "tedious" to describe it. For starters, the browser-based client lacks the cohesiveness and predictability of the Windows-metaphor version. Users have become accustomed to Windows-like GUIs that respond to mouse clicks in a timely fashion, while the browser often fails to load quickly or accurately. Another complaint is the search feature that seems to wipe out the users' work environment while in use rather than appearing in a frame or separate dialog window.
Availability of Upgrades: Timeliness and availability of upgrades have always been a concern for PeopleSoft clients, but that is particularly true with migration to PeopleSoft 8, which might require a considerable effort, one that feels like a new implementation. As the system is responsible for a company's mission critical data, upgrades must be scheduled in advance and PeopleSoft will have to work closely with its customers to provide a detailed upgrade timeline.
Like SAP and Oracle, PeopleSoft should also carefully reevaluate its product migration strategy from current product instances (7.5 and earlier), in order not to alienate and disillusion its loyal customer base. PeopleSoft 8 has allegedly disconcerted some users because its licensing model requires that existing customers re-license its older software, rather than pay a lower upgrade charge as with previous updates. Some customers may see this as only another hefty investment with little added value other than improving the user interface. The competitors are only begging for a surge of similar news.
Sales and Consulting Force Orientation: The PeopleSoft sales and consulting force will need to embrace a "service" sales model as the company begins supporting hosted applications and Internet solutions. This is a departure from the license-based architecture the company has traditionally sold. Also, one should expect a significant effort to train the sales force in the new product and to change their mindset from a Windows-like to a browser-like metaphor. In either case, the fact remains that PeopleSoft is not simply a basic and easy-to-use enterprise application.
Perhaps more disappointing is that the PeopleSoft 8 Web interface seems to have lost the intuitiveness that was a hallmark of its past releases. The natively supplied menu is difficult to navigate for novices and even PeopleSoft presales representatives are reluctant to use it, preferring instead to streamline their demos by setting up Internet Explorer-like "favorites" in advance.
Performance: Dynamic pricing, Personalization, real-time Collaboration, Complex Product Configuration and Virtual Live Caching all require high bandwidth, efficient networks and hardware optimization. This challenge is not only PeopleSoft pertinent though. Any application run on a network or across the Internet is limited by its narrowest point. Additionally, by shifting much more processing power to the application server side, PeopleSoft 8 may require much more hardware processing power of the application server compared to its preceding releases. The company will have to work with each customer to establish appropriate performance benchmarks in an effort to set customer expectations.
SOURCE :http://www.technologyevaluation.com/research/articles/peoplesoft-catching-its-second-wind-from-the-internet-part-2-strengths-and-challenges-16393/
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