tag:blogger.com,1999:blog-14892185980272671312024-03-13T13:19:50.357-07:00Training And DevelopmentsHarihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.comBlogger133125tag:blogger.com,1999:blog-1489218598027267131.post-59696499145439130902010-08-18T23:11:00.002-07:002010-08-18T23:12:06.045-07:00SAP - A Humble Giant From The Reality Land? Part 5: Challenges and User Recommendations<div style="text-align: justify;">Event Summary<br /><br />During its international e-business conference, SAPPHIRE, on June 12-15, SAP AG (NYSE: SAP), the leading provider of business software solutions, released a spate of upbeat announcements in its effort to portray itself as a reformed vendor of choice for all aspects of e-Business, including planning and collaboration. As an illustration thereof, SAP cited that its flagship mySAP.com suite has met with remarkable success in the market. SAP reached a major milestone in 2000 when the number of licensed users of its mySAP.com platform reached 1 million. Since then, more than 3 million additional users have reportedly licensed mySAP.com.<br /><br />About This Note: This is a five-part note covering the announcements at the SAPPHIRE conference.<br /><br />Part One covered Alliances and Partnerships<br />Part Two covered Expanding Functionality<br />Part Three discussed Market Impact<br />Part Four discussed SAP Strategy<br />Part Five covers the challenges faced by SAP and User Recommendations,<br /><br />Challenges<br /><br />Delivering on this extremely ambitious strategy will be an enormous challenge. Although SAP has done a remarkable job of demystifying the mySAP.com conundrum, there will still be confusion as prospects might be overwhelmed with all the new products and unfamiliar terminology.<br /><br />It appears that SAP's recent revenue growth is attributable to its market recognition, large customer base, and to risk-averse customers' unwillingness to go for less viable vendors, rather than to SAP's immaculate marketing effort. Moreover, SAP's sales force will not only have to learn how to sell the products but also whom to target within a prospect's organization with every piece of software.<br /><br />The fact remains that many new SAP modules are quite cross-functional, while some may even require the creation of new roles within an enterprise (e.g., a VP of new product introduction (NPI)). One should also account for the ongoing costs of cross training the SAP consulting force on new and still developing e-business applications from its traditional ERP functional orientation. The same holds for the sales force that has been reorganized around vertical industries in respective CRM, SCM, business intelligence and other product areas.<br /><br />Another caveat is that as a result of the changes within the company, a significant part of the SAP US-based workforce has been with the company for only a year of less. The challenge for SAP is to get enough experienced people who can sell point solutions CRM, SCM, PLM, e-procurement, etc, both within the realm of SAP and as stand-alone components that can be integrated with other products. Since the longer term SAP sales people are accustomed to selling the monolithic ERP SAP product, 'the whole enchilada', contracts and /or upgrades rather than selling CRM, SCM and PLM point products, it will take time for them to be retrained or cross-trained to sell the new components. The result is when it comes to the new components, the entire sales force is still learning. The lack of experienced sales resources in these new areas may impede SAP's proficiency in selling these products outside of its install base.<br /><br />The Key is Execution<br /><br />Therefore, SAP's potentially unwieldy and scattered global development organization, disparate product components and their developments' coordination, and the lack of sales focus may hamper the execution of its otherwise attractive strategy.<br /><br />SAP should clearly articulate the delivery milestones of its recently announced e-business strategy. These should address time frames for all main product lines releases, and also, how customers can feasibly migrate piecemeal from individual components to the integrated whole. SAP R/3 Enterprise, the next major release of its flagship ERP suite, which is slated for general availability in 2Q 2002, and which will supposedly provide an R/3-based kernel of horizontal components, upon which customers can incrementally deploy new mySAP.com and 3rd-party components without the need to update their core ERP systems, is the step in the right direction, but with the long way to go. Also, although SAP Web Application Server (SAP Web AS), which is an incarnation of SAP Basis as the underlying technology for most of SAP's solutions, should enable new Internet paradigms to be combined with the transactional operations of ERP, it will also require significant mindset change and retraining of former ABAP programmers into e.g., HTTP or JavaScript.<br /><br />While SAP seems to have finally realized that it would unlikely be the sole application provider within a single enterprise and that, for it to provide more value to its customers, it must be more open with its competitors, some reservations in the market about its sincere intentions will remain. Partnerships have been ephemeral, however, and remain effective only as long as the partners have common interests. Any partner's commitment to SAP is certainly not unique. However, SAP relationships with Commerce One and IBM do seem to have merits and should remain solid and produce results for both partners for some time to come.<br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/sap-a-humble-giant-from-the-reality-land-part-5-challenges-and-user-recommendations-16439/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-48874598284757758022010-08-18T23:11:00.001-07:002010-08-18T23:11:40.335-07:00Sagent Improves Its Image With SAS Partnership<div style="text-align: justify;">Event Summary<br /><br />Business intelligence and data warehousing software vendor Sagent (NASDAQ: SGNT) has announced a strategic agreement with SAS Institute (the largest privately held software company in the world), a strong presence in e-intelligence, data mining and data warehousing, and best known for its statistical software. Under the agreement, Sagent will integrate and license select SAS analytic and customer relationship management (CRM) software within its business intelligence solutions. The target market for these SAS-enhanced offerings from Sagent will be the mid-market (generally defined as companies with revenues up to $750 million). That market will include sectors such as credit unions, community banks, and select property and casualty insurance companies, among others.<br /><br />As a result of this agreement, Sagent will offer SAS' world-renowned data mining and CRM software as part of its business intelligence solution. "SAS' credibility in the marketplace, as well as its broad and deep analytic and e-intelligence offerings, made it the clear choice as a partner and a provider of analytics and CRM solutions to integrate with Sagent's existing offerings," said Bob Flynn, senior vice president, marketing and strategy, Sagent. "We are pleased that SAS and Sagent have agreed to work together on this important initiative."<br /><br />Market Impact<br /><br />One of SAS Institute's biggest problems has been its lack of visibility and name recognition beyond Global 2000 companies. The majority of business professionals have worked with SAS software at some point in their career, but usually aren't exactly sure what SAS does as a company. The agreement with Sagent supports SAS' objective of developing additional channels for sales and distribution to accelerate revenue growth and increase market presence by reaching market sectors that it has not traditionally served. SAS has stated that they will continue to focus the efforts of its direct sales force on expanding its presence among large enterprise customers.<br /><br />According to Graeme Woodley, SAS' senior vice president for business development and channel operations, "Sagent has a proven track record of providing business intelligence and data warehousing solutions to mid-markets, enabling their customers to streamline operations and improve decision-making. Our agreement with Sagent brings powerful SAS analytical solutions to the vertical mid-markets served by Sagent." The agreement between SAS and Sagent covers the Americas and Europe, and includes development assistance for the integration of SAS Enterprise Miner and other software, as well as training for the Sagent sales force in the positioning of the new combined offerings. The integrated offerings are scheduled for release in the first half of 2001.<br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/sagent-improves-its-image-with-sas-partnership-16355/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-62172913622158798212010-08-18T23:10:00.002-07:002010-08-18T23:11:07.707-07:00The Challenges that Remain for One Aspiring Global Sourcing Vendor<div style="text-align: justify;">Despite Eqos's encouraging growth, increasing momentum, cumulative savvy, and indisputable experience as a provider of global sourcing and supplier management solutions for the retail supply chain worldwide (please see the previous parts of this series: One Vendor's Quest to Garner a Global Sourcing Ecosystem, A Retail Sourcing Suite Built on Experience, The Secret of One Vendor's Success in the Retail Supply Chain, and How One Sourcing Vendor's Offerings Are Bolstered by a Wealth of Services), it would be shortsighted not to acknowledge the challenges that still loom on the horizon for Eqos (www.eqos.com).<br /><br />Eqos is, after all, still an up-and-coming company with a blossoming client roster (especially outside the UK), and with many product enhancements and improvements yet to be developed and launched. As such, the vendor still lacks global name recognition. Thus, many of the first few “proof of concept” customers came from the UK market.<br /><br />As for penetrating the US market, fierce competition has already come from TradeStone Software (see A Well-designed Solution for Sourcing: Its Technological Foundation and How It Works). Like Eqos's solution, the TradeStone Suite is also a scalable, multitiered, server-based enterprise application built on the standards-based Java 2 Enterprise Edition (J2EE) development model, with support for Web services and extensible markup language (XML) that is leveraged for integrations (see Understand J2EE and .NET Environments Before You Choose.)<br /><br />The two vendors' offerings and aspirations appear to be similar, with each vendor sometimes being “accused” of copycatting the other's messages and offerings. Yet in their efforts to keep up with each other, the companies are in fact validating each other, as well as the market in general. However, the companies are approaching the market from different perspectives. While Tradestone is a relatively new software company, Eqos has evolved from its heritage as a consulting company with a collaborative platform into a provider of standard application service provider (ASP) hosted solutions.<br /><br />The issue of expanding the footprint occurs because of the intricacy of global trade and international logistics—an intricacy that stems from having to involve so many parties or intermediaries and their accompanying processes. Namely, buyers, foreign sourcing offices, and agents that have to deal with targeted suppliers (contract manufacturers) in terms of bidding processes, contract negotiations, product sampling, quality and safety, the tracking of advanced shipping notices (ASNs), shipment status, regulatory compliance, financial settlements, supplier scorecards, bid comparisons, and so on, is only one part of the entire process.<br /><br />But what about the other accompanying processes involved with compliance and testing partners, local and international third party logistics (3PLs), customs, financial institutions, distribution centers (DCs), individual stores, and so on? Accommodating and enabling freight forwarders, non-vessel operating common carriers (NVOCCs), consolidators, customs house brokers, export management companies (EMCs) and export trading companies (ETCs), shipping associations, shipping brokers, shipping agents, export packaging companies, etc. further complicates the picture. For more information, please refer to APICS Certified Supply Chain Professional (CSCP) Learning System, Module 2: Building Competitive Operations, Planning and Logistics, 2007.<br /><br />Also, the market in which all global sourcing vendors operate is characterized by early adopters, and it is rapidly evolving. A company of Eqos's current stature and means will be challenged to maintain its competitive position against competitors having significantly greater financial resources, name recognition, and other resources. The market is highly fragmented, and the intensity of competition can be expected to increase in the future, where competition might come from in-house development efforts, consulting companies, other software companies, financial institutions, logistic companies, customs brokers, forwarders, and third party development efforts.<br /><br />As user companies continue to embrace the value of broader sourcing and global trade management (GTM) solutions, software vendors will often be looked upon to provide leadership and to add more value to the entire order life cycle, including purchase order management, total landed cost modeling, insurance and claims, import and export compliance, security regulations, and more seamless integration with invoice reconciliation and trade financing systems.<br /><br />Given user companies' awareness of their need for GTM solutions and the like, there is a plethora of point solution providers that specialize in narrow areas of this growing yet fragmented market. Such areas range from landed cost calculation, retail product lifecycle management (PLM), visibility and event management, collaboration, export compliance, trading document generation, hazardous material handling, supply chain and production planning (see Production Planning and Scheduling Software for the Textile Industry: Unknown Frontiers), lead times, pricing or inventory optimization, and distribution order management (DOM), to more complete transportation management capabilities—just enough to muddle the message and nibble at the potential revenues of full-fledged retail sourcing players. For a slew of potential competitors in the market, see Challenges and User Recommendations for a Global Trading Solutions Provider on a Roll.<br /><br />Eqos would likely point confidently to its focus on supermarkets and hard-goods and soft-goods retailers, its happy customer references, and the comprehensiveness of its solution, complete with business process management (BPM) and business intelligence (BI) enablement. However, even if not as well-versed and successful as Eqos is in these areas, some of the larger market players will likely be able to creep into a number of enterprises and reduce the share of the Eqos's account dollars.<br /><br />While generalist sourcing vendors like Ariba and Perfect Commerce might not have the retail expertise per se, they might still cause the slowdown or postponement of some executive decisions. Additionally, given SAP's recent ecosystem push to recruit the “SAP Powered by NetWeaver” and “SAP Certified by NetWeaver” partners (see Multipurpose SAP NetWeaver), it might not take long before the giant partners up (or eventually acquires) with some of the above providers, thus creating a barrier of entry for Eqos and its contemporaries to its vast install base. The same could only be expected from Oracle given its recent appetite for acquisitions and for rolling them into the Oracle Fusion platform. And let's not forget the retail industry incumbent JDA Software of i2 Technologies.<br /><br />Furthermore, given Eqos's needs and its intentions to broaden its channel abroad and to tackle industries beyond retail (for example, consumer packaged goods [CPG], consumer electronics, or pharmaceutical manufacturers), the vendor might end up with double the amount of investment (expenses) and additional competition from these markets' incumbents.<br /><br />Turning Challenges into Opportunities<br /><br />Eqos's strategy, based on its current state of affairs, is to first deliver an expanded solution footprint (Eqos Global Sourcing & PLM) by leveraging its existing assets and continuing with operational excellence. The vendor is also exploring potential alliance partners, and it is working on promoting the on demand-software as a service (SaaS) business model (for more information, please see Software as a Service's Functional Catch-up).<br /><br />Following this, the long-term goal is to reach a “sourcing-as-a-service,” game-changing initiative by offering the expanded solution value via content partners and “on-the-ground” service partners.<br />Partner Type Example Categories Reason for Partnering Advantages for Eqos Advantages for Partner<br />Technology platform market credibility global reach gap in the footprint<br />Sales and Implementation global / regional / country-specific systems integrators (SIs) scale sales leads and global reach consulting revenues<br />Sales retail-specific consultancies and content providers route to market sales leads new business streams<br />Application retail enterprise resource planning (ERP) / supply chain management (SCM) / PLM / supplier relationship management (SRM) vendors and resellers route to market installed base gap in the footprint<br />Service Provider order / logistics / 3PLs / financial services route to market installed base gap in the footprint<br /><br />Table 1. Eqos's alliance strategy and value proposition<br /><br />To that end, Eqos has been occupied lately with devising a sound alliance program and strategy in terms of goals, revenues, markets, and channels. The strategy seems to be doing well within the initial phase of identifying target geographic regions (the UK, the US, continental Europe, and the rest of the world) and channels as well as the types of partners (see Table 1). Only time will tell how well Eqos will execute the subsequent phases of recruiting the partners, striking the mutual commitment (to the agreements with spelled-out roles and responsibilities, commitment levels, marketing plans, etc.), and pursuing the joint engagement developments and joint support programs (in terms of education, training, Web-based support, incentives, ongoing relationship management, etc.).<br /><br />User Recommendations<br /><br />As retail and manufacturing enterprises, in their quest for lower item costs, move their production or continue to source from remote places throughout the world, complexity is inevitably introduced into the supply chain, which often results in bloated, multi-echelon inventories or lower customer service levels (higher stockouts). Companies that need to manage the intricate details of moving their goods across borders (such as trade financing, regulatory compliance, accompanying detailed documents, harmonized tariff schedule [HTS] coding, multimodal carrier handling, brokers management, etc.) might want to look for a full-fledged global sourcing system that is also well-attuned for their particular industry.<br /><br />Since the Internet has become a commonly used medium for managing such complexity in near real time, enterprises should try to take advantage of sophisticated sourcing tools and processes to share and respond to once-complex scenarios in real time. The idea is to optimize around the unexpected events by becoming more responsive, as the expected ones become the exception rather than the rule.<br /><br />Since the potential advantages of global sourcing are often hampered by increased supply chain complexity and bloated lead times, prospective companies should investigate the way global sourcing and supplier management tools and practices, like those from Eqos, could help them to enable their supply network flexibility, visibility, and rapid reaction process. Visibility typically has a direct correlation on perfect order fill rate, which ultimately affects margin and profit. The way to fight price pressures and shrinking margins is not always to go for the cheapest remote suppliers, but rather to focus on quality and turnaround time. Sourcing and supplier management processes based on best industry practices should also help retailers with balancing cost, flexibility, speed, and risk in their sourcing strategies.<br /><br />Being service-oriented architecture (SOA)-based, Eqos's solution allows buyers to build on the infrastructure they already have in place rather than have to deploy a complex new system that most likely has at least some level of duplicate functionality. This system's openness should be used by retail channel masters to court the best trading partners. However, achieving an efficient online supplier management system is a considerable undertaking, and prospective customers should make sure their own “houses are in order” before trying to open up their systems to others in the supply chain and harness open standards.<br /><br />In addition to overcoming the usual political and cultural issues (such as the onboarding of suppliers, issues of ownership, and trust and competitive privacy issues), there are a number of other issues that need to be tackled, as suppliers are called upon to share sensitive information. In addition to existing, rigid technology standards for exchanging information electronically (although the XML-based systems like Eqos can help here), there are issues concerning the way business processes have long been handled in different companies. Without common standards for information exchange and process integration, smaller companies face sizeable costs if they seek to comply with the online supply chain demands of each of their large retail customers. The malleable BPM-based solutions from retail sourcing providers like Eqos can go a long way toward mitigating these conundrums.<br /><br /><br /><br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/the-challenges-that-remain-for-one-aspiring-global-sourcing-vendor-19136/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-91970458328768912712010-08-18T23:10:00.001-07:002010-08-18T23:10:41.041-07:00PeopleSoft: Giving Fervent Hope To The Market And Jitters To The Competition. Part 2: The Implications<div style="text-align: justify;">Event Summary<br /><br />PeopleSoft is seeking to make bigger strides in the CRM, SCM and B2B software markets with its recent spate of product releases. The rhetoric and hype aside, the fact is that PeopleSoft has become a fearsome enterprise applications provider. PeopleSoft has joined the elite group of vendors that can deliver a majority of the components of a complete e-business framework. If one considers all aspects of a CRM or SCM evaluation, PeopleSoft has earned the license to be evaluated along with market leaders. Possibly more encouraging is PeopleSoft's upbeat prediction for the rest of the year, optimism only a few of its competitors can currently exhibit.<br /><br />While Wall Street praises the vendor's new product initiatives and its strong first quarter results and optimism for the future, its direct competitors are far from feeling easy.<br /><br />About this Article: This is a two part note, Part One covered the news from PeopleSoft about new products and its first Quarter results. This part discusses the Market Impact of this news and how it affects Users.<br /><br />Market Impact<br /><br />The rhetoric and hype ("pure Internet technology" that has "no code on the client" and allows "universal access from any Web device, anywhere in the world, at any time", also with "embedded analytics", etc.) aside, the fact is that PeopleSoft has become a fearsome enterprise applications provider. The new products and partnerships give the company an exciting look. Even with well-known caveats about product immaturity, PeopleSoft has officially joined the elite in the CRM, SCM and eBusiness battlefields. Additionally, its results present a ray of hope for the market in these otherwise dismal times that have seen many software vendors disappear, downgrade earnings, or otherwise struggle. Possibly more encouraging is PeopleSoft's upbeat prediction for the rest of the year, optimism only a few of its competitors can currently exhibit.<br /><br />PeopleSoft has expanded much beyond its kernel Human Resource (HR) applications, with a broad product portfolio that might sell well in a number of geographic areas and/or industries. But PeopleSoft did not abandon its HR roots either. The purchase of SkillsVillage proves that PeopleSoft is still quite committed to the workforce management market. PeopleSoft has thereby upped the ante in the HR market, primarily for SAP, Oracle and J.D. Edwards, although the move has only slightly surpassed Lawson Software's e-Recruiting Services (formerly ijob) functionality.<br /><br />The move might also promote PeopleSoft into the leadership position within the services procurement market, which was quite neglected in the past, as attention was traditionally focused on material goods procurement. This is not necessarily the case any more as companies look to apply similar principles of automation and savings to services procurement. But, the greatest value may likely be in integrating SkillsVillage with a slew of other PeopleSoft applications, like e-procurement, professional services automation (PSA), and e-payment.<br /><br />The Positive Implications<br /><br />With its spate of new products, PeopleSoft joins the elite group of vendors that can deliver a majority of the components of a complete e-business framework. The PeopleSoft 8 suite includes CRM, SCM, professional service automation (PSA), data warehousing, e-procurement applications, business intelligence (analytics), on top of traditional ERP applications. Moreover, in some instances, PeopleSoft may be able to offer the best of both worlds (one-stop shop and best-of-breed). In addition to the leading HRMS product, the company's pervasive Business Intelligence (Analytics) components, with dedicated complex analysis and reporting around almost all crucial business areas including new CRM components, is quite impressive.<br /><br />PeopleSoft was one of the first major enterprise application vendors to deliver an analytic product with its Enterprise Performance Management (EPM). However, PeopleSoft does not yet support predictive data mining, needed for behavior modeling and prediction or for targeting and segmentation to drive campaigns, and has only partially embedded the analytics into the major CRM business processes, which are part and parcel of leading CRM products.<br /><br />PeopleSoft, however, is not breaking much new ground with these new products. PeopleSoft 8 CRM exhibits strong service and support (call center) functionality (a result of Vantive expertise), but only basic marketing and sales force automation (SFA) modules. There is also ample room for improvement of the following components: pervasive wireless connectivity, content management, partner relationship management (PRM), multi-channel service escalation, interactive selling system (ISS), and vertical solutions/templates. Most of these developments are slated for the end of the year according to the company's officials.<br /><br />The functionality of the PeopleSoft 8 CRM product suite has not yet matched the breadth and depth of CRM pure players (e.g., Siebel, Onyx, etc.), PeopleSoft's (as well as SAP's and Oracle's for that matter) huge potential advantage is the integration of its CRM, SCM and eBusiness products to its back-office ERP systems that handle the vital internal processes so important to customers. The new system should potentially allow manufacturers to get a 360-degree view of all their customer relationships. This kind of knowledge only comes from integrating CRM software with back-office systems. Additional advantages of the PeopleSoft 8 CRM product are its alleged interconnectivity to other third-party ERP systems as well as improved scalability (the company claims to be the first vendor to support 30,000 CRM users).<br /><br />Also, supplier-facing applications have long been a strength of PeopleSoft, with a sizable customer base. 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.<br /><br />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 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.<br /><br />The Downside of Product Expansion<br /><br />The downside of this product expansion is the resulting attention and retaliatory actions of a wider number of formidable competitors. While PeopleSoft now has strong management with an invigorated stance, and is running a profitable business with a good control of its financial, sales, and marketing activities, it may be short-lived without sustaining license revenue.<br /><br />Although a broader product range should provide more revenue, one should bear in mind that PeopleSoft's license revenue in 2000 was still 25% less than the corresponding revenue in 1998, back when the company was only a mere ERP provider. PeopleSoft still 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 and i2 Technologies. Also, the great part of its revenue comes from its existing customer base (almost 50% of PeopleSoft's existing customers have reportedly upgraded to the new product), while the rest 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 the economic conditions improve.<br /><br />One is also to expect the likes of Siebel to counterattack by going after 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 anyway. In case that PeopleSoft CRM 8 does not offer significant new functionality, current Vantive users may opt to switch to a deeper and broader leading CRM product (or only a component thereof).<br /><br />While the methodology, toolset and packaged services to assist customers in migrations from Vantive to the new PeopleSoft 8 CRM platform, which are scheduled for the release in July, are a step in the right direction, they do not address integrations Vantive customers might have made to other systems, such as other ERP systems or Computer Telephony Integration (CTI) and Interactive Voice Response (IVR) functionality. The tools are designed to examine an existing Vantive implementation, determining where customization has occurred and mapping existing business rules and data to the new system. Also, current Vantive users may not appreciate the need to convert to PeopleSoft's value-based pricing model that charges based on the number of modules and the size of the company, which is a departure from the user-based pricing Vantive had originally used.<br /><br />PeopleSoft will use Internet-based product architecture, analytics, and integration with its own back-office and/or the openness to other products/platforms to snatch a bigger market share in the CRM market. While its product might currently be more Internet-based than those of other leading enterprise application vendors, it holds some caveats too. Some competitors cite that PeopleSoft is trying to present virtue out of necessity (in other words, to go for only HTML interface as the easiest way out of outdated fat-client two-tier architecture it had belatedly abandoned). In fact, PeopleSoft's decision to offer only an Internet browser look-and-feel interface has even, in some instances, initially met the power-user resistance or a displeasure for not being able to choose between many options.<br /><br />Customers also prefer more gradual and, therefore, less painful, transition from their current client/server based systems, and may consider PeopleSoft's new product release as a steep technology leap. While the HTML-like interfaces are perfect for casual and task-specific users with a minimum training requirements, power-users may still prefer the functionality and drill-around capability of Windows-like user interfaces (drop-down menus, right-click feature, etc.).<br /><br />Some early PeopleSoft 8 power-users cited the awkwardness of conducting more complex transactions only via hyperlinks and through jumping to and fro a number of screens, which defeats the purpose of simplicity. In that regard, the competitors' Web-enabled user interfaces that either still contain many Windows features or offer different interfaces for casual and power users, may be the better approach at this stage. As a remedy, PeopleSoft had to turn to proprietary technology called PowerHTML that enables the use of hot keys in a browser to reduce navigation time. Also, the zero footprint client does not lend itself to disconnected mobile computing. PeopleSoft will have to provide a solution to enable mobile users (salespeople) to use the system without the mandatory need for Web connections, which is a key issue for sales force automation (SFA).<br /><br />The Challenge<br /><br />PeopleSoft's major challenge remains in further increasing the marketing awareness, promoting its new image, products, and the Internet architecture as well as in crisp sales execution. The success of the PeopleSoft 8 product portfolio may be difficult for the company to manage in the near future. PeopleSoft needs to keep the ball rolling by providing efficient and knowledgeable sales and services teams that can articulate the vision and provide the expected value to customers. Therefore, while PeopleSoft should continue to focus on enhancing its products on time, it should also ensure stringent training of its sales and customer support forces, and partners as the spotlight is only going to intensify.<br /><br />Like SAP, Oracle and Baan, PeopleSoft will preach the power of integration with the back-office to downplay their current inferiority in feature-function battle against the CRM or SCM specialist vendors. Except for Oracle that remains adamant on its unitary one-stop-shop mantra, the other vendors can also tout strength to support integration with other vendors or legacy systems on a wide range of platforms. The fact that most of leading ERP vendors have delivered CRM and SCM modules integrated with their back-office systems (although not the cutting edge functionality), and a tamed growth of the CRM market recently, might force the likes of Siebel or i2 to finally get out of their complacent mindset and to start considering acquisition of an ERP vendor or at least the provision of an interconnectivity of their modules.<br /><br />In addition to ERP giants battles against best-of-breed vendors, look for particularly fierce intra-market duels between SAP, Oracle and PeopleSoft owing to the closeness of the companies' product offering. The technological advantage that PeopleSoft currently has in terms of the pure Internet architecture may not last for long. On the other hand, SAP's and/or Oracle's advantage due to larger market recognition and resources, broader product foothold and better international presence may be diminished by PeopleSoft's new product release. Every selection war will be won by mere nuances. The use of a statistically valid decision-making tool and careful discernment of importance (weight) factors for all selection criteria will be of paramount importance (see Knowledge Based Selections). When more than one vendor ranks well within a given set of areas (as is very likely in the case of the above vendors), the decision hierarchy provides the supporting material required to justify the rationale of the final decision.<br /><br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/peoplesoft-giving-fervent-hope-to-the-market-and-jitters-to-the-competition-part-2-the-implications-16408/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-6883283422711822162010-08-18T23:09:00.000-07:002010-08-18T23:10:03.391-07:00From Shoestring Budget to Millions: The Road Ahead for an Enterprise Management Software Vendor<div style="text-align: justify;">Challenges and Opportunities<br /><br />Run for over two decades under the stewardship of the deLaski father-son team, Deltek Systems, Inc. has become North America's principal provider of enterprise software and solutions for project-focused organizations. In mid-2005, Deltek announced that New Mountain Partners II, L.P. would make a majority capital investment in the company. See Mountainous Investment Transforms Enterprise Management Software Vendor and Enterprise Management Software Vendor Welcomes Additions for more information about this investment and its implications. This move, while certainly enhancing Deltek's prospects in terms of strengthening its global position, should not deflect attention from their already impressive offering (see Sweet Spots and What-Nots: Enterprise Management Software Vendor Provides Notable Solutions). But the road ahead presents its own particular challenges and opportunities.<br /><br />Part Four of the series Mountainous Investment Transforms Enterprise Management Software Vendor.<br /><br />Thanks to its internal developments and acquisitions, Deltek currently boasts more than 11,000 customers worldwide, and 1,000 employees in 14 locations in the US, Canada, and the UK. The vendor has long since established its strategy with respect to its large installed customer base:<br /><br /> * to maintain and strengthen relationships with the existing customers by providing ongoing support services;<br /> * to derive additional revenues by migrating clients to more advanced products within its product line, licensing add-on application software products, and offering its customers additional consulting and training services; and<br /> * to target existing customers for front-office add-on solutions such as Deltek CRM & Proposals, Deltek Time Collection, Deltek Employee Expense, Deltek GovWin, Deltek BPM, and Deltek Employee Self-Service.<br /><br />However, based on strong recent execution, tried-and-true alliances, and its "trusted specialist" and niche leadership auras in targeted project-oriented vertical markets, as well as its new management and infusion of capital, Deltek has recently been working to harness its indisputable differentiators, in order to move into new markets and position itself for continued growth. Since its inception, the company's product line has expanded from applications for managing core back-office processes, to front-office and e-business processes for professional services and other project-based companies, many of which provide products and services beyond the realm of federal government contracts. However, room for expansion remains, in certain areas. But these opportunities (although some of them may be low-hanging-apple easy pickings), will also present the upbeat vendor with challenges, if only because of the difficulties involved in sailing uncharted territories.<br /><br />Geographic expansion into Canada, the UK, and Australia seems the most feasible option in the short term, given that they are English-speaking regions, and also given Deltek's ongoing effort to incrementally internationalize its product portfolio beyond the Costpoint, Vision, and T&E products. One should keep in mind, however, that in many Deltek markets, particularly in the federal government sector, its customers are inherently focused on the US, and will likely remain so. Therefore, multicompany and multilanguage features have only recently been introduced within the Costpoint 5 release (and Vision 3 release), which has likely meant many missed opportunities in the past—and possibly in the future while these immature features gain some traction. Despite some international clients (including pharmaceutical company Kendle International [Germany] and General Dynamics [Saudi Arabia]), Deltek has thus far achieved an only limited presence in international markets, which is a weakness compared to the global capabilities of competitors such as Oracle, SAP, Microsoft, Epicor Software, and Exact Software (see Global Software Aspirations).<br /><br />Deltek's international business strategy is being energetically refocused, from opportunistically targeting potential user organizations, to marketing and selling its solutions through value-added reseller (VAR) channels. For one thing, it always helps to have an expert third party certify the best practices and value proposition of the enterprise solution, especially for those that require, even for occasional users, a thorough education with respect to concepts and lingo (as is the case with regulatory and reporting compliance in many project-based businesses). For another thing, VARs might be more savvy about meeting the integration or customization requirements of certain customers; as a rule, in certain industries and regions (such as the Asia Pacific), software vendors have to side with local resellers and integrators, or else face an insurmountable cultural and financial barrier to market entry. Furthermore, although Deltek's reputation for high quality service and support, and its ability to work directly with customers, along with its ability to provide reasonably rapid implementations, have all constituted competitive advantages to date, its primarily direct sales approach might not be the most appropriate for the lower end of the mid-market. VARs understand professional services prospective customers, simply because they are in the same type of business as their prospects, and in this context, the likes of Microsoft, Epicor, Exact, and Sage Software have an undeniable advantage. For more information, see The Cha(lle)nging World of Value-Added Resellers.<br /><br />Despite having 600 international customers in 25 countries, Deltek has yet to show that its strategy and technology can consistently "travel abroad," especially to Europe, where it has to sow many more seeds than it has, if it is to fulfill its global ambitions. There is certainly no debate about the company's current lack of significant international presence, since a significantly smaller portion of its total revenues comes from sales outside North America. This is despite the fact that the company launched its international push nearly a decade ago, with the establishment of a direct UK presence; but there, it has had limited success. This kind of profile flies in the face of the accepted economics of the packaged software market, whereby a vendor of Deltek's size should have at least a third of revenues flowing from outside its domestic market. The vendor admits to not having put previous focus in international expansion, as instead its focus was on the US. Now, it believes itself ready to expand strategically, and for 2006 and beyond this expansion has become a key priority for Deltek and the executive team. The vendor now has leadership and executives with the proven international experience to map a much stronger international strategy. Also, Welcom's portfolio adds complex international capabilities to its earned value management (EVM) and project portfolio management (PPM) suites. Government mandates for EVM (that is, mandates for the Department of Defense [DoD], the Department of Energy [DoE], and National Aeronautics and Space Administration (NASA) in the US, and similar mandates for the UK's Ministry of Defense [MoD]) make this additional functionality a critical addition to Deltek's portfolio, given its client base as well as its goal of international expansion.<br /><br />The company will also have to support and nurture its relationship with existing overseas clients in markets such as Europe, the Middle East, India, Australia and New Zealand, the Philippines, and South Africa, where it needs a local partner that can offer responsive customer support and knowledge about relevant laws and tax regulations. But the challenges of international expansion go far beyond product localization, which alone is an overwhelming challenge. Deltek will also have to invest sizeable financial, time, and human resources in order to prospect and identify an optimal internationalization roadmap, and then find, ally with, and manage appropriate channel partners (including during the typical fits and starts of the ramp-up phase). Additionally, the vendor will have to finance the necessary marketing and product and independent software vendor (ISV) technology alliance campaigns, which need to be well-attuned to the regions it decides to target, while ensuring that its own presence expands where applicable and without conflicts.<br /><br />Bundled with the international channel push is the need to significantly expand its previously skimpy marketing budget (and mindset), which is of a strategic nature. This concept is opposed to Deltek's previous industry-specific targeted marketing (and word-of-mouth tactics within the Washington, DC [US] "beltway"). This is all necessary if the vendor is going to enhance its brand name and value proposition (the concept of selected project-based industries and their exacting needs) towards a greater, more global scale of presence and recognition. In addition to more purposeful and encompassing multichannel lead generation activities (see The Web-enabled Sales Process), alignment of the vendor message with alliances and a channel will require a sizable budget for more comprehensive marketing activities. Steps in the right direction include a whopping increase in the 2006 marketing budget over 2005 (so as to accommodate some 2006 events, including strategic hires in the marketing department, the re-branding effort, record user conference attendance, and so forth), and increased and planned growth in the direct sales force. However, the associated costs of hiring the right personnel, as well as a related increase in the marketing budget, will have to be handled carefully in order not to displease New Mountain, which might see its payback from Deltek coming at a slower pace than initially envisioned. This is certainly not the case now, since the company's business plan remains and has remained consistent and on track, and the progress has thus far been "above plan."<br /><br />Tackling Earned Value Management and Project Portfolio Management<br /><br />With new finances, Deltek certainly plans to continue its quest to build complete project solutions, from award to audit, via both internal development and acquisitions. As for future developments of Deltek Enterprise (Deltek Costpoint), in addition to ongoing Web enablement of key business processes, and delivery of control and reporting documentation related to the US Sarbanes-Oxley Act (SOX), major new "order winning" capabilities will include EVM and PPM. For more on achieving SOX compliance, see Using Business Intelligence Infrastructure to Ensure Compliancy with the Sarbanes-Oxley Act and Joining the Sarbanes-Oxley Bandwagon; Meeting the Needs of Small and Medium Businesses. While EVM is meant to be added to both Deltek Costpoint and GCS Premier (but not to Deltek Vision, which already has the capability), PPM modules such as portfolio management, risk management, project scheduling, project analytics, and so on, are currently planned for Costpoint, although the intent, strategy, and actual product set allows for integration to any back-office solution.<br /><br />More Opportunities and Challenges While the Deltek strategy to shore up its current install base and to target new related markets has been sound to date, one should never discount fierce competition as a factor, given that the market for enterprise application software has become highly competitive and dynamic. Deltek products are targeted toward a wide range of project-oriented organizations, and the competition varies depending on customer size, industry, and specific system requirements.<br /><br />For larger implementations of enterprise-wide products, the principal competitors include Oracle (including former PeopleSoft and JD Edwards), Lawson Software, CODA, Unit 4 Agresso, and, inevitably, SAP. For smaller implementations of enterprise-wide products, competitors include Microsoft Business Solutions (especially when augmented by partner solutions for Microsoft Dynamics SL and Microsoft Dynamics GP [formerly Microsoft Great Plains]), Intuit, MYOB, Exact, Epicor, and Sage. Although many of the above vendors have not really competed regularly with Deltek so far, this will not necessarily be the case in the future, given Deltek's expansion aspirations.<br /><br />There are also many other players which offer industry-specific products, such as (in the architectural, engineering, and construction [A/E/C] sector) Constructware, BST Consultants, and Axium, with some nifty features such as an electronic stopwatch for time collection, spread among several projects; and built-in warning systems when project is over budget (although Deltek Vision has this functionality, which will be released in version 4.1) or when the firm is going to overpay a subcontractor. Furthermore, Deltek Time Collection competes with electronic timekeeping systems offered by vendors such as Kronos, ADP, Ceridian, and Kaba Benzing. Its newly acquired Welcom applications face competition from such well-known companies as Microsoft Project, Primavera, Business Engines, Dekker, C/S Solutions, Artemis, Mantix, Integrated Management Concepts (IMC), and so on.<br /><br />As the nonprofit sector requires automated allocation to support multiple funding sources under one project for billing and revenue recognition (which is traditionally done via manual calculations or custom programming within generic accounting solutions), Deltek has long supported multiple-source funding capabilities. The vendor has a nonprofit accounting product coming out later in 2006, which will target grant-based, or (as designated in the US) "A-133" nonprofit organizations. This product will be an affordable grant-based financial management system for small to medium nonprofit firms, which is a fairly sizable market in the US, contested by leaders like Blackbaud, Sage, Serenic Corporation, Intuit, Microsoft, Kintera, ASP eTapestry, and so on (see Nonprofits and Public Sector: The Latest Hot Market). While these leaders dominate the nonprofit market in a broader context—and no one is going after A-133s in any significant way at this time—this might change down the track. Point solutions like Deltek GovWin and CRM & Proposals might find their match in comparable solutions from providers like Adonix Inc., Map ROI Systems Inc., Input Inc., and others. Numerous project organizations have gotten used to manual "workarounds," and might still prefer the best-of-breed solutions they have in place—which might just be enough to represent a barrier for Deltek's all-encompassing offering.<br /><br />Some of these competitors still have significantly greater financial, technical, marketing, and other resources than Deltek, not to mention a higher profile and recognition on a worldwide basis. Since they have begun to experience a deceleration in their core upper-market business, and have thus refocused their marketing and sales efforts towards the upper-middle market where Deltek actively markets its products, one should expect them to implement increasingly aggressive pricing programs. Furthermore, certain competitors, particularly Microsoft, SAP, Oracle, and Lawson, have well-established relationships with many Deltek customers (both current and prospective), and with major accounting and consulting firms which might have an incentive to recommend such competitors over Deltek. All these vendors, while possibly inferior regarding project-oriented, government-compliant, or service industries focus, will influence some purchase decisions by offering more comprehensive horizontal product portfolios and by touting a superior global presence and greater multinational product capabilities, which are still hurdles for Deltek. Still, comparisons to competitors need to be weighed with the understanding that no matter how large these competitors are, that they do not have the specific is industry focus and staff experience that Deltek does. Despite industry consolidation, Deltek remains a vendor that provides total solutions for project-oriented companies. There are really no competitors in the same space; either they are point solutions that compete in certain areas, or larger, non-project oriented vendors trying to tunnel down into this space.<br /><br />But also, while Costpoint has long been very competitive with other major enterprise resource planning (ERP) systems with respect to features and capabilities for project-oriented businesses, the market has lately become more focused not only on the need for Web-based applications, but also on the need for intuitive role- and process-based user experiences (see Easy ERP: A Challenge to Conventional Thinking and Portals: Necessary But Not Self-sufficient). The lack of a fully Web-enabled system might for some time have hindered Deltek's potential growth objectives, and so the vendor has lately increased activity with respect to the Web-based development of Deltek Costpoint. Deltek believes that the realities of the market do not support the approach that the "best" solution is the one that is fully Web-based, based on the vast feedback from its customers. Deltek has chosen instead to build to the realities of the market and its customers, and the recent product developments reflect that pragmatic approach.<br /><br />While the Web-enabled version is a great boost, the vendor needs to catch up with regard to developing portal-based solutions and user empowerment, especially in light of SAP's Mendocino and Microsoft's People-Ready recent initiatives (see Major Vendors Adapting to User Requirements). Each role in a service organization has a unique e-project perspective. For instance, while project managers often need full control (including the ability to change project projections), rank-and-file staff typically only need to be able to record billable project hours, and accounting needs only enough access to build the company cash flows from aggregate project data. However, all these constituencies increasingly want to accomplish these tasks from their familiar Microsoft Excel and Outlook workspaces, without the need to switch between office productivity solutions and the underlying enterprise applications. Deltek is developing a portal-based strategy, which was one of the reasons for the Welcom acquisition. Furthermore, Deltek Vision supports this type of Outlook integration, and the vendor will be releasing Excel-based interactive billing in the 5.0 product release.<br /><br />Also, some prospects, especially from the commercial sector, may find Deltek's products too rigid and training-intensive, given that these products have had to abide by rigid regulatory requirements, and thus embed many features not required by commercial sector prospects. For example, while projects must be tracked and billed separately, and while services companies often need to run forecasts and what-if project scenarios (and to modify renegotiated total costs as a project evolves), they do not necessarily want to be encumbered with an additional set of stringent audit requirements for government contractors, which is Deltek's area of expertise. Some existing customers, especially of older Deltek products, might say that the system requires several rigid steps to create a purchase order, for example, or that it has only limited workflow and e-mail notification, meaning that it is still not possible to attach important documents in the database for other users to see and analyze via drill-downs. A notable exception would be Vision, which has extensive workflow capabilities and does not feature rigid regulatory requirements.<br /><br />There might also be opportunity and need for Deltek to explore software as a service (SaaS) deployment opportunities for some applications. Pioneers in this regard are eProject and OpenAir in the project management arena, and a slew of competitors in the time and expense (T&E) sector. The ability to offer both on-demand and on-premise software in a near real-time synchronization mode is possibly the best overall solution to optimizing user access to applications. Deltek's readiness for this undertaking, however, remains to be seen. For more information on SaaS, see Software as a Service Is Gaining Ground.<br /><br />Thus, Deltek faces the challenge of continued investment in redeveloping legacy systems or acquiring new vertically-astute technologies, while holding back on operating costs. This brings us to the burden of still outstanding research and development (R&D) work, which may prompt some observers to categorize Deltek's touted generous investment in R&D as making a virtue out of necessity. However, Deltek strongly believes that its specialization and focus equal "a price to be paid" in R&D, and that its R&D expenditure is not out of line with other top software vendors in the industry. This might even be considered impressive against a backdrop of supporting many products for up to twenty years and more since commercial release. It does not cost a lot of money to run these legacy systems and keep customers on them. That being the case, the vendor does not see the compelling need to move these customers off legacy solutions .<br /><br />The picture becomes still more complex due to the fact that Deltek incorporates certain application software licensed from third parties into its software products (although most vendors, if not all, incorporate third party tools). In addition to attempting more market visibility and noise in its new target segments (as opposed to a largely word-of-mouth principle in the past), Deltek will have to further clarify its remaining hodgepodge of disparate technologies and solutions. Although it has grouped its offering within the three major branded groups of products, Deltek's offering still resembles an exotic and troublesome restaurant menu, where one has trouble guessing what goes well with what, and so on. Room for synergistic integration of staff members remains too, since some product specialists, while indisputably knowledgeable about their realm (timekeeping, say), do not necessarily have "big picture" knowledge of the entire Deltek portfolio. A mitigating fact is that certain products, such as FMS, Advantage, and Sema4 are no longer sold. Also, while one could argue that it would be "easier" for Deltek to have fewer offerings, after carefully reviewing and understanding the needs of the market, Deltek believes that its three flagship platforms offer the right mix.<br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/from-shoestring-budget-to-millions-the-road-ahead-for-an-enterprise-management-software-vendor-18628/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-49420712957854041772010-08-18T23:08:00.002-07:002010-08-18T23:09:33.731-07:00Outsourcing Security Part 1: Noting the Benefits<div style="text-align: justify;">Introduction<br /><br />Remember the carefree days of summer? The memories aren't so positive for many corporations hit by cyber attacks during the summer of 2001. Three especially menacing threats-CodeRed, CodeRed II, and Nimda-cost U.S. corporations more than 12.3 billion dollars. After the fall-out, one company reported it had over 60 software engineers working for a week to recover from Nimda, and it still had work to do.<br /><br />For many organizations, these recent network security breeches, as well as cyber terrorism discussions in the wake of the September terrorist attacks, have served as a wake-up call regarding the need for information security. Without effective security, companies risk losing money and customer trust. With good security, companies have the power to maintain stakeholder value, customer loyalty, and competitive advantage.<br /><br />The Internet and the big "E's": e-business, e-commerce, and e-retailing, contribute to today's necessity for a protected company network. Big-even small-holes can lead to formidable problems. Consequently, a bullet-proof security program is critical to an enterprise's survival. Whether this effective security management comes from an in-house or outsourced program is a decision that must be made within a corporation using only its best data.<br /><br />As the first of a three-part series on managed security services, the following describes why many organizations are choosing to outsource management and monitoring of security systems.<br /><br />This is Part 1 of a 3-part article.<br /><br />Part 1 notes the benefits of outsourcing security.<br />Part 2 will evaluate the cost of such an outsourcing.<br />Part 3 will provide guidelines for selecting a security services provider<br /><br />Open for Business<br /><br />E-commerce and e-business initiatives inspire companies to move toward an open, distributed network-computing environment. These environments are designed to enable employees, customers, partners, suppliers, and distributors to exchange and access information critical to conducting business. Unfortunately, these same networked environments create vulnerabilities that allow disgruntled workers, hackers, and other types of attackers-both internal and external-to wreak havoc on corporate systems through malicious acts of fraud and vandalism.<br /><br />With customers and business partners dependent on accessing critical product and service data via open networks such as the Internet, companies must ensure the integrity of this information or risk jeopardizing their reputation and brand equity. The need to protect the bottom line, as well as corporate image and customer trust, drives the demand to effectively manage information security.<br /><br />Other situations challenge today's networked businesses:<br /><br /> * Rise in deliberate criminal behavior directed at corporations<br /> Following the September 11 terrorist attacks, government attention has increased focus on legislation calling for stricter punishments for hackers. Even with this focus, recent studies find the rate of cyber attacks to be on the rise. Research also reveals that some industries are more often victimized than others. Specifically, the high-tech, financial services, media, and energy sectors experience the most frequent attacks.<br /><br /> * Growing mobile workforce<br /> An increasingly mobile workforce, telecommuting, and remote computing create special security problems for companies. Enterprises are driven not only by the desire to protect their information and physical assets, but also by the need to ensure worker productivity. There is an increasing acceptance of worker mobility and remote computing, but traditional corporate LANs and WANs are insufficient to support this growing off-site work force. As remote access to corporate networks increases, so does the need to protect transmission of information to these remote points.<br /><br />Surrounded by Obstacles<br /><br />While security has never been so critical to the profitability of an enterprise, businesses face a number of barriers to achieving and maintaining in-house security programs.<br /><br /> * Shortage of qualified security professionals<br /> IT personnel are short in supply. According to The Meta Group, businesses face a deficit of over 1 million IT professionals in the matter of a few years. Experienced information security professionals are even harder to find, expensive to hire, and difficult to retain due to extremely strong market demand. This contributes to a high attrition rate among security workers that can reduce a company's ability to effectively safeguard its valuable information assets.<br /><br /> * Insufficient resources and infrastructure to support 24x7 security<br /> To provide around-the-clock security coverage, requirements are many: manpower and supporting hardware, as well as software and equipment to build, upgrade, maintain, operate, and control the systems. Companies often find these security necessities don't fit with limited corporate resources sanctioned to support the organization's primary business requirements.<br /><br /> * Rising complexity of security technology<br /> Security for today's networks and information systems is more complex than a few years ago. The methods and technologies used by hackers grows more sophisticated each month. Particularly threatening are the devastating payloads of blended threats. After being planted, blended threats simultaneously search out a variety of vulnerabilities. Unlike a hacker who targets a specific application or entity, blended threats currently carry as many as four different ways of propagating themselves. Experts warn future blended threats may contain as many as 15 or 20 propagation methods.<br /><br /> * Lack of time to dedicate to security issues<br /> Keeping pace with the latest protection strategies demands extensive time and training. For in-house professionals, tracking new cyber threats, vulnerabilities, hacker techniques, and security developments removes them from other mission-critical activities that provide higher return on investment.<br /><br />Numerous organizations currently managing security in-house are looking for alternatives to overcome these obstacles. They want a way to maintain a strong security posture while focusing on core, revenue-generating e-business functions.<br /><br />Outside the Box<br /><br />For a growing number of organizations-large to small-outsourcing security tasks offers improved information protection by a seasoned team of experts in a cost-effective manner. According to a June 2000 survey by Hurwitz Group, as many as a quarter of companies with more than $10 billion in annual sales are using or considering handing over some of their security, such as firewalls, anti-virus software, virtual private networks, or intrusion detection, to a managed security service provider.<br /><br />Analyst firm Gartner Dataquest states managed security services, defined as outsourced management and monitoring of security systems, is the fastest growing segment of the information security services market. "Managed Security Services Providers (MSSPs) use high-availability security operation centers (either from their own facilities or from data center providers) to support 24X7 services designed to reduce the number of operational security personnel an enterprise must hire, train, and retain to maintain an acceptable security posture."<br /><br />For organizations facing the challenges of orchestrating in-house security, outsourced security represents a more effective alternative. Among other benefits, managed security offers the following:<br /><br /> * Maintenance of positive company reputation<br /> By protecting critical assets from damage, theft and misuse, managed security services help organizations avoid negative publicity and reduce network downtime that can lead to diminished revenues and customer dissatisfaction.<br /><br /> * Freedom to focus on company growth<br /> At the strategic level, managed security services can free organizations to focus their IT resources on strategic initiatives more central to core business priorities.<br /><br /> * Improved information protection<br /> With the growing complexity and importance of today's networks and information systems, managed security services offer the concentration and components needed to provide a complete, impenetrable security management program.<br /><br />The following table details comparisons between in-house and outsourced security.<br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/outsourcing-security-part-1-noting-the-benefits-16627/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-32584913027785262822010-08-18T23:08:00.001-07:002010-08-18T23:08:46.816-07:00Integrated and Process-oriented Solutions Are Required for Competitiveness Integrated solutions that optimize only at a company- or department-level<div style="text-align: justify;">Event Summary<br /><br />On May 8, Infinium Software (NASDAQ: INFM), a provider of Web-integrated enterprise business solutions, announced that Rampart Resort Management, operators of The Rampart Casino at the Resort at Summerlin and owner/operators of The Cannery Hotel and Casino, selected Infinium Financial Management, Human Resources, and Payroll solutions to support its ambitious expansion and growth strategies. In an effort to provide its patrons with a world-class gaming experience, Rampart Resort Management is investing $6 million in The Rampart Casino at the Resort at Summerlin to renovate the property to better serve its patrons, more than double its hotels convention space, and hire up to 150 people to join the casinos 310-person workforce in time for its "Grand Re-Opening" set for June, 2002.<br /><br />In support of its ambitious expansion and growth strategies, Rampart Resort Management began to evaluate enterprise business solutions and reportedly narrowed their search to include: PeopleSoft, J.D. Edwards, and Infinium. Rampart Resort Management reportedly selected Infinium because of its long-established, in-depth understanding and commitment to the hospitality and gaming industry; its over 20 year commitment to the IBM iSeries (formerly AS/400) platform, which is regarded by many to offer strong platform reliability at the lowest total cost of ownership (TCO); its iSeries channel partnership with Computer Configuration Services (CCS); its competitive functionality, utilization of innovative technologies, rapid implementations, and outstanding customer service. Infinium's solutions are used at more than 60% of the Fortune 500 companies in the hospitality industry, approximately 90% of the hotels and casinos on the Las Vegas Strip, and 100% of the Fortune 500 companies in the gaming industry.<br /><br />To illustrate its unrelenting commitment to the iSeries platform, on April 29, Infinium announced that it has signed IBM eServer iSeries channel partnership agreements with Computer Configuration Services (CCS); Dynamix Group; Essex Technology Group, Inc.; Inter-American Data, Inc. (IAD); Mainline Information Systems, Inc.; and Sirius Computer Solutions (SCS) to increase its revenues and grow its customer base. As part of Infinium's relationship with its new IBM iSeries channel partners, those partners' sales forces will become an extension of Infinium's direct sales force. Infinium and its iSeries channel partners will allocate internal resources to develop joint marketing programs that promote their respective offerings and enhance their awareness within targeted markets, generate sales leads, and ultimately, drive new business revenues. All of Infiniums iSeries channel partners were selected by Infinium based on several, specific criteria including: number of existing customers, number of U.S. sales representatives, geographical coverage, technical competence, and vertical market expertise, among others.<br /><br />Further, in its endeavor to create another strong vertical industry awareness, on April 23, Infinium announced that Catholic Medical Center, a 330-bed full-service healthcare facility in Manchester, NH, selected Infinium's Financial Management and Materials Management solutions to streamline its non-clinical operations. As part of its strategic initiatives to reduce costs and enhance operating efficiencies, Catholic Medical Center reportedly began evaluating high return-on-value (ROV), low TOC enterprise business solutions and selected Infinium's solutions to streamline and automate its processes to reduce the time and money spent on its non-clinical operations, freeing those resources to focus on delivering the highest-quality of patient care. More than 100 healthcare organizations, ranging in size from 100 to 800-plus beds, reportedly rely on Infinium's solutions to help streamline their non-clinical business operations, reduce administrative costs, and maximize their capital and human resources. Infinium believes its solutions provide healthcare organizations with the ability to:<br /><br /> * Reduce administrative costs<br /> <br /> * Streamline business processes and improve workflow<br /> <br /> * Manage constant change<br /> <br /> * Recruit, retain, and maximize the value of professional staff<br /> <br /> * Ensure compliance with JCAHO (Joint Commission on Accreditation of Healthcare Organizations), HIPAA (Health Insurance Portability and Accountability Act), and OSHA (Occupational Safety and Health Administration) 300 regulations<br /> <br /> * Interface easily with leading insurance processing, medical practice, clinical information, and inventory and supply management solutions<br /><br />To point out success in its third vertical industry of focus, on March 28, Infinium announced that Crest Foods Company, a process manufacturer with ingredient, consumer products and contract packaging divisions, enhances the efficiency and increases the productivity of its operations with Infinium's Process ERP solution. Infinium's integrated Process ERP solution, which includes: Process Manufacturing, Materials Management, Human Resources (HR), and Financial Management, streamlines Crest Foods operations, from formula to accounting, and unites everyone in its organization, from operations managers to the CFO. All departments, from human resources to shipping, reportedly operate from the same page, with the same updated information, creating administrative efficiencies from division to division and allowing for timely adjustments according to market demands and fluctuations.<br /><br />For example, Infinium Advanced Planning helps Crest Foods production planners, schedulers, and buyers determine a time-phased production schedule and calculate the amount of critical resources needed to fulfill it on time. Thereafter, Crest Foods scheduled requirements are fed into Infinium Purchase Management and Manufacturing Control to automatically create purchase and production orders. Infinium Manufacturing Control helps Crest Foods maintain, update, and provide detailed, real-time information for production, including batch scheduling, instructions processing, and batch ticket and production order printing. Designed from the ground-up for formula-based process manufacturing operations, Infinium Process Manufacturing solution captures and reports in logical combinations all the cost resources, raw materials, labor, containers, machines, and burdens and might particularly be effective in environments like Crest Foods where the production process can change dramatically.<br /><br />The above-espoused renewed focus resulted in improving financial performance according to Infinium's April 22 announcement of its financial results for the second quarter of fiscal year 2002 that ended March 31, 2002. Software license fees for Q2 2002 were $2.9 million, a 34% increase compared to $2.2 million for the previous quarter, and a 3% decline compared to $3.0 million for Q2 2001. Total revenues for Q2 2002 were $16.5 million, a 1% increase compared to $16.3 million for the previous quarter, and still a 13% decrease compared to $18.9 million for Q2 2001 (see Figure 1 below). However, net income for the quarter was $3.5 million including a $337,000 gain from the divestiture of a Netherlands subsidiary, compared to $2.7 million Q1 2002, and the net loss of $2.9 million the second quarter of the prior year. Also important, Infinium's cash, cash equivalents and marketable securities balance for Q2 2002 was $17.5 million, compared to $13.7 million for the previous quarter, and $15.3 million for the fiscal year ended September 30, 2001.<br /><br />Figure 1:<br /><br />This is Part 1 of a 2-part note on Infinium.<br /><br />Part 2 continues the Market Impact and makes User Recommendations.<br /><br />Market Impact<br /><br />Infinium seems to be rebounding from hitting rock bottom during 2001 just when the market thought that it could not have been worse than 2000 (see Infinium Ends Its Most Challenging Year). Indeed, the last two years were not for the faint-hearted - Infinium saw crippling revenues, bloated losses, departures of almost the entire management team, and the first significant layoffs (20% of staff) in the company history. Particularly painful was Q4 2001, when its revenues all but vanished (see Figure 1 above) as the company wrote off its failed ASP (application solution provider) venture. Against this backdrop, the company's tenacity and ability to launch a comeback deserves praise.<br /><br />While the company did not cry over spilled milk for long, it also did not pour ashes over its head for long either. The time to take stock of its of its competencies' and/or resources' had come. At the end of 2001, Infinium seems to have successfully bitten the bullet. Consequently, the fast tracked return to profitability during the last two quarters, a $3.8 million positive cash flow and revenue growth in the last quarter have renewed customers' and investors' confidence; the company has recently been reinstated into NASDAQ, and its recent stock performance seems to be on a fair way to create a decent market capitalization and to wipe off any remaining negative stock equity.<br /><br />After close scrutiny and assessment of the company's strengths and weaknesses, the new management has concluded that Infinium's over two decades long operating history, its functional and scalable solutions, over $40 million of recurring service & maintenance revenue stream (out of $74 million total revenues in 2001), and loyal customer base (with over 90% customer retention) due to traditionally exceptional customer care should vouch for future success provided the company can curb challenges. Some of these, like a broken financial model, cash burning, and a 'revolving door' management have apparently been successfully addressed. The result is a renewed employees' and the market's enthusiasm to move forward.<br /><br />Hard Decisions Produce Results<br /><br />Infinium also had to make some gutsy and necessary business decisions. First one was the discontinuation of its ASP service and consequent closing of its costly investment - a spacious enterprise applications hosting center. The lack of traction which resulted in less than two dozen ASP customers forced the company to swallow a bitter pill and write off ~$10 million. As everyone is always wise after the event, many may castigate the company's failed decision at the time of ASP euphoria. Although it was an injudicious reaction to many analysts' overly optimistic predictions of outsourcing business, the company's ASP strategy to provide holistic, turnkey solution as to also obfuscate its IBM AS/400 platform confinement had some temptation and merit at the time. The fact is also that all of Infinium's ASP customers are reportedly still happy and referenceable Infinium customers. Many of them decided to go with traditional in-house implementations, while others decided to continue to outsource Infinium's applications at other ASP providers.<br /><br />Incidentally, another crucial decision was the sole focus on iSeries platform and on IBM technology and infrastructure. It is a prudent decision against the backdrop of the company's recent business circumstances and its resources. While not a platform with a high growth potential, iSeries remains a proven technology that is highly regarded for its reliability, stability, and robustness, which all typically result with a low TCO. The fact that IBM continues to invest in the platform's development and its Web-integrated infrastructure was yet another reason for Infinium to stick to its long partner's recognized technology.<br /><br />Having decided on its platform support, Infinium has energetically embarked on the mission to modernize its products architecturally while preserving its customers' investment in its older product releases. Its Web-integrated business applications framework has been laid out -- it features multi-tier (3-tier) architecture with applications/data services layer, Web/applications service layer, and client/presentation layer. It is based on commonly used Web standards such as XML, HTTP, Java/J2EE, and DHTML.<br /><br />Furthermore, a brand new browser-based user interface (UI) should have an appeal to current users and prospects, and should alleviate Infinium's proverbial problem of bland user interface and unexciting product that has often plagued its sales in the past and prevented its more widespread recognition. Also, to alleviate anxiety of many of its users, which have heavily customized its older, 'green-screen' product versions, the company released in March a redevelopment tool designed to extend the business logic and interfaces of these product instances to the Internet. The tool uses XML to communicate with the IBM's WebSphere Application Server.<br /><br />Infinium's Strengths<br /><br />Infinium's enterprise business solutions include human resources (HR), payroll, financial management, customer relationship management (CRM), materials management, process manufacturing, and business intelligence (BI)/analytics offerings. While its product is not based on object oriented programming (OOP) code per se, it has nevertheless long provided a great number of application programming interfaces (APIs) for interconnectivity among its own and third-party applications, all providing for flexibility and incremental deployment. Infinium has therefore been quite competitive in speed of implementation, TCO, and price/performance ratio. Furthermore, as the company supports both IBM and Microsoft endorsed middleware standards, it is well poised for future technological developments and interconnectivity requirements.<br /><br />Concurrently with interconnectivity and workflow enablement of its suite, Infinium has also developed strong back-office functionality, particularly human resources/payroll and financial management suites. Infinium Financial Management was devised to help organization streamline the entire financial management chain, from budgeting expenses, to recording transactions and forecasting revenue, and was designed with strong internal controls to ensure accuracy and compliance while inherent flexibility should provide the ability to grow and adapt to business change.<br /><br />Its Web-integrated capabilities include rich reporting and analysis, and self-service options may empower organizations to work more efficiently. The suite includes the following modules: general ledger, accounts receivable, accounts payable, fixed assets, purchase management, project accounting, self service, global taxation, income reporting, and budgeting, while treasury management is offered through partnering.<br /><br />Infinium Human Resources is a comprehensive HR/Payroll solution devised to enable organizations to manage and motivate their workforce, minimize administrative tasks, and empower HR to play a strategic role in their overall success. It is a Web-integrated solution with e-business capabilities, such as manager and employee self-service, and offers many HR-related functional requirements, from compensation and benefits management and in-depth employee training and career-path tracking features, to workforce management and critical line-manager empowerment. The suite offers the following modules: HR administration, payroll, benefits administration, manager and employee self-service, training administration, and recruiting management.<br /><br />Infinium's ideal users are larger mid-market companies with a large number of employees, differing pay scales among a wide range of varying positions/job descriptions, and a need to adhere to union requirements, but that are also looking for a functional product without too much complexity that comes from Tier 1 product offerings. As an example, the HR product was designed with user self-sufficiency and a minimal training need in mind. To that end, on all screens users get a bird-eye view of the data pertinent to them, and a web-based intuitive UI makes user interaction more recreational than painful experience of e.g., enrollment, or changing data. Still, to keep the information cohesive and in check, HR managers are required by alerts to approve all updates/changes. Also, Infinium Corporate Performance Manager (CPM), powered by Cognos, ensures effective data utilization, as only the necessary data is used during any transaction or update, and is put into the appropriate business context. CPM helps also ensure that the business strategy is aligned with execution at all levels by linking people, information, and decision-making processes throughout an organization. It thereby enables the entire management cycle including: planning, forecasting, budgeting, reporting, analysis, and scorecarding.<br /><br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/infinium-returns-to-its-core-competencies-to-succeed-part-1-recent-announcements-16665/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-68468291482121625262010-08-18T23:07:00.001-07:002010-08-18T23:07:58.532-07:00Business Process Management: A Crash Course on What It Entails and Why to Use It<div style="text-align: justify;">Integrated and Process-oriented Solutions Are Required for Competitiveness<br /><br />Integrated solutions that optimize only at a company- or department-level are no longer sufficient for success in today's highly competitive, integrated supply chain environment. Every department contains mountains of data, but without an integrated and process-oriented solution, all this valuable information is often lost to the company as a whole. What is needed is a real time solution that goes beyond integrating the content and processes of individual sales, marketing, or support department data.<br /><br />Companies need a higher level of agility to respond to the different types of customer behaviors and over the last several years, cleaner, more reliable data has become the mantra of organizations seeking to improve their customer focus. As a result, user organizations are now swimming in improved data, which are still stored in disparate applications, data marts, operational data stores, and data warehouses. Companies have even attached sophisticated analytic tools to this scattered data with the hopes of gaining insight into customer attributes and behaviors (see Why Are CRM and Analytics Intrinsically Connected?). Despite these efforts, many companies have still failed to link data to business processes, and only a few companies have changed their business processes to reflect the insights gained from the data side. Even fewer have harvested this knowledge to make the most of every interaction with their customers.<br /><br />Due to commoditization, a company that does not have a competitive product- or service may still be able to compete, if it has a nimble enterprise information system and process. The same holds for relationships with supplier on the other side of the supply chain, not to mention relationships with employees within the four walls of an organization.<br /><br />Linking data and content to processes falls in the realm of business process management (BPM), a technology that coordinates the data and actions of disparate information technology (IT) systems and should allow companies to transform potentially damaging customer interactions into revenue opportunities. An ideal enterprise system in an ideal world would have a single software vendor providing 100 percent of the data, content, business processes, and connectivity to the outside world, and would accommodate changes instantaneously when required. However, this is a utopian ideal. Unfortunately in the real world, communication is impeded because content silos exist everywhere, and engineers, production, and sales people do not talk the "same language" and do not always use the same software.<br /><br />Reality tends to fall short of ideal situations and processes on paper, because many issues can crop up at any time such as delays; "black holes", where information disappears; human errors; different context and semantics within different departments; and regulatory and compliance issues that must be addressed, etc. For example, it is not uncommon to see an invoice sent several days after the goods have been shipped. Thus, coordinating systems should help companies respond to key business events in real time (or close to it), and to minimize the risk of lost revenue. For example, a sales representative can contact and offer a customer discounts to pay bills on-line. Ultimately, by responding with the right action at the right time, companies can become real time enterprises (RTE).<br /><br />BPM is a methodology backed by software used to manage businesses at a higher efficiency. It has emerged from the rising complexity of doing business in a competitive economy, where margins continue to narrow and the pressure to respond to market shifts is greater than ever. Companies are under increasing regulatory and investor scrutiny and must be run successfully, both in the short and long term.<br /><br />A BPM high-level mission lets business processes become as manageable as data. To that end, BPM has to integrate existing applications, Web services, and people in a such way where it can quickly change, destruct, or construct processes, which is a capability that is far beyond the traditional enterprise application integration (EAI).<br /><br />BPM: A Crash Course on What It Entails<br /><br />As a nascent software category, BPM often means different things to different people. One could, in great part, blame this on the slew of budding pure-play software providers that refer to themselves as full-fledged BPM providers, but really only cover a niche or two of the entire BPM realm. One should also distinguish clearly between BPM as a management activity and BPM as a modeling tool, since these definitions are often used interchangeably. Below are the typical high-level tasks that a comprehensive BPM solution should cover (listed sequentially):<br /><br /> 1. Process definition or modeling, which maps and defines business process;<br /> 2. process execution, which is a critical task that requires a core database and engine that contains process rules, and automatically initiates and manages processes;<br /> 3. process monitoring, which enables managers to see potential bottlenecks and monitor work in process (WIP);<br /> 4. integration layer, which, logically, links an organization's diverse business applications; and<br /> 5. user interface (UI), which enables people to interact with the process engine.<br /><br />There is an ingrained belief that BPM is the enabler of agility; flexibility; increased competitiveness; compliance; actionable information sharing and collaboration; and workflow execution. To satisfy these assumptions, BPM software should be<br /><br /> * event-driven, since it is triggered by internal and external events;<br /> * orchestrated, since predefined process flows must enable complex process steps that can be completed without human intervention;<br /> * enable internal processes, inside the organization's firewall; and<br /> * exchange process information with external user groups.<br /><br />Further, despite the need for orchestration, a human-centric workflow is still necessary in many instances. Therefore, BPM should support both exception-based human interaction and human decision-making. And last but not least, business analytics in the system must enable real time business event processing through management dashboards and similar decision-making tools. BPM also often includes integration capabilities including extract, transformation, and load (ETL) tools, multi-channel integration, and support for enterprise mobility, though these are available through other functions.<br /><br />Some pundits believe that the enterprise software world is being revolutionized by two big complementary developments: service oriented architecture (SOA), and event driven architecture (EDA). SOA is a formalized approach for managing Web services, which means that some kind of platform is needed to orchestrate how services interact, and to ensure that processes are auditable, flexible, scalable, and secure (see Understanding SOA, Web Services, BPM, BPEL, and More). On the other hand, EDA is about giving applications the ability to handle unexpected events and events that occur in conjunction with others. Full-fledged BPM systems exhibit many of the same functions on both sides (see The Future of Business Process Management Where is BPM heading?).<br /><br />Moreover, business processes should by no means be viewed within the confines of departmental or even organizational boundaries, as businesses are becoming increasingly horizontal in terms of cross-departments (not to be confused with a vertical industry focus, which remains paramount) and role-based. Therefore, what is needed is an enterprise system with holistic, "big picture" answers for the entire enterprise, if not the entire supply chain. Basic questions like "What is the profit per product line?", "What is our current sales pipeline and how does that compare to last year?", and "Who are our most profitable customers?" need to be answered. With BPM-enabled and integrated solutions, these answers might come naturally, since BPM aims to formalize intricate business processes into highly manageable and visible workflows.<br /><br />These processes already exist, but vary from department to department, by function, and as well as in their requirements to interact with various software products and business partners. This creates a management and training burden, stymies attempts at holistic reporting across the business, and often results in the duplication of information handling as the information moves from one department to the next.<br /><br />Conversely, BPM forces common business process methodology across the enterprise, and if everyone uses the same system, a commonality occurs that should considerably reduce training requirements, simplify compliance efforts, and enhance internal communications. Duplication can also be eliminated because everything is under the same system, and in cases where information must exist in duplicate form, the BPM-enabled system can be configured to replicate it.<br /><br />BPM: Why Use It?<br /><br />Why anyone would want to consider deploying BPM? Some reasons include the potential to dramatically reduced operation costs, reduced lead times, streamlined outsourcing, improved performance visibility, better management of global operations, faster time-to-market, exceeded customer expectations, and so on. The Business Project Management Institute reports that an effective BPM strategy can<br /><br /> * reduce product design time by 50 percent, resulting in faster time-to-market, more competitive products, and increased revenue;<br /> * reduce order time by 80 percent, leading to cost savings, improved customer satisfaction, and revenue gains; and<br /> * help organizations achieve efficiency gains of 60 percent in call centers, resulting in improved asset management, reduced customer service costs, and improved customer satisfaction.<br /><br />An Accenture report claims that a BPM-enabled enterprise resource planning (ERP) system can cut inquiry response time by 70 to 90 percent, decrease customer order lead time by 50 percent, increase inventory turns by 35 percent, and cut manufacturing cycle time by 40 percent.<br /><br />An added benefit of BPM (combined with analytics) is that it can improve compliance with initiatives such as the Sarbanes-Oxley Act (SOX). In particular, the sheer number of provisions contained within the legislation is daunting, and although it is possible to use checklists and spreadsheets to achieve compliance with all of SOX mandates, most companies recognize that specialized software and systems can streamline the process of tracking tasks and managing the overall process (see Attributes of Sarbanes-Oxley Tool Sets). To that end, BPM technology should improve management control by automating processes and enforcing business policies. Management dashboards also assist executives in spotting problems earlier, through greater visibility of critical business information.<br /><br />In the past, tweaking a current ERP system to simplify a job would have customarily involved costly custom programming. Today, BPM can streamline business processes within and between systems, because it is a mix of workflow, EAI, and application development that makes it easier for companies to codify current processes, automate their execution, monitor performance, and make "on-the-fly" adjustments to improve the processes.<br /><br />BPM Cautions and Caveats<br /><br />We do not necessarily see BPM as a significant enabler for reinventing mature, "cut-and-dry" ERP or computerized maintenance management systems (CMMS) processes, particularly not in a single-site environment (although it remains important to automate and keep these routine processes in check). Indeed, how many ways can one think of to pay vendors, create invoices, book debits and credits, or schedule maintenance? However, with respect to more "extrovert" collaborative applications like supply chain management (SCM), product lifecycle management (PLM), and customer relationship management (CRM), it is important to be able to model the application exactly to how an organization does business with its trading partners, and not be constrained by software. The need for SOA, Web services, and BPM has been boosted by these external processes, which are most often automated workflows that involve multiple companies and a diverse, existing enterprise systems.<br /><br />The still emerging BPM market has resulted in a number of point solutions that excel in only a few of the aforementioned components of BPM. Therefore, following the same route as ERP players in the older ERP market, niche BPM vendors will have to partner to deliver a more comprehensive BPM solution, and mergers and acquisitions (M&A) and market consolidation are bound to happen in the future.<br /><br />In addition, though BPM vendors come from different backgrounds, and they can basically fall into three groups, each having typical strengths and weaknesses. These groups include traditional enterprise application vendors; enterprise content management (ECM) or infrastructure/EAI vendors, such as IBM, Tibco, Stellent, FileNet, SeeBeyond, and WebMethods; and BPM pure-play specialist vendors like Fuego, Savvion, Ultimus, IDS Scheer, and Pegasytems.<br /><br />The first group appears in every software category related to process and consists of traditional enterprise applications vendors, such as Oracle, SAP, or Microsoft. Owing to their expertise in enterprise-wide business processes, these vendors have typical strengths, such as astute offerings for initial software releases and tight integration with (their own) ERP systems; good control and risk documentation; and good reporting and monitoring tools. A typical weakness of these vendors' solutions is that they have entered the market late, and consequently have had less time to mature, and offer poorer integration with existing document and records management systems.<br /><br />Exact Software could also be categorized with the traditional enterprise vendors, although it does display some of the best traits from all three worlds. Namely, though it lacks modeling, the Exact e-Synergy product exhibits the typical strengths of a BPM or ECM offering. For example, it offers collaboration, document management, and records management functions, and Exact has a good track record of BPM implementations. Furthermore, the product has certainly not been late coming to market (on the contrary, it has been abreast, if not ahead, of the curve), and has been maturing ever since. Below is a summary of the benefits e-Synergy users have experienced.<br /><br /> * Improved consistency, as fewer issues are inadvertently overlooked and everyone is operating with the same information to achieve a common end;<br /> * lower training costs for new staff;<br /> * paperless office is possible, if desired;<br /> * increased productivity;<br /> * continuous process improvement, as one can tweak processes as needed, and institute lean concepts even in white collar, "ivory tower" environments; and<br /> * reduced organizational stress and frustrations, by preventing many errors and resolving exceptions that typically fester unnoticed.<br /><br />SoftBrands evolution is another extended-ERP product worth pointing out. In contrast to many complete peer ERP systems sold in a standardized form, evolution is designed to allow customers to customize the system to their own unique operations. It offers a wide range of functionality and tools that can tailor the application, and evolution provides businesses with a platform for business process improvement and growth. Having been built on SOA principles, and by using BPM tools to model, design, configure, and implement user enterprises' unique functional requirements, the product allows customers to tailor the application without modifying underlying source code.<br /><br />A great example of a vendor within the pure service industry, is Unit 4 Agresso, a fellow Dutch competitor of Exact. Pure service sectors, such as professional services or local governments, offer "know-how" based products rather physical goods. Unit 4 Agresso's architecture is quite malleable, largely because the solution was, from the onset, designed to drive business from the top down, and uses business goals to shape business processes.<br /><br /><br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/business-process-management-a-crash-course-on-what-it-entails-and-why-to-use-it-18301/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-74615206904320937602010-08-18T23:06:00.002-07:002010-08-18T23:07:19.672-07:00TEC Talks to the Compiere ERP/CRM ProjectFree and Open Source Software Business ModelsPart Three: Compiere/ComPiere<div style="text-align: justify;">Introduction<br /><br />Consider that Free and open source software models, as opposed to the traditional proprietary models, may afford end user organizations a direct line to getting the software that is most well-adapted to their specific needs and at a lower cost. If that tends to be the case, one should ask how it is that the groups providing Free and open source enterprise software model their businesses to support that notion.<br /><br />TEC talked about business models with three organizations centered around Free and open source enterprise software. In the first part we talk with David E. Jones, project leader of the Open For Business (OFBiz) project (www.ofbiz.org). OFBiz is an e-commerce and enterprise automation (ERP, CRM, EAM, etc.) solution developed through open source methodologies. The second part focuses on a discussion with Edward L. Lilly, Jr., CEO of OpenMFG (www.openmfg.com), an ERP solution geared toward small and medium-sized manufacturers. While OpenMFG itself does not strictly fit the definition of Free or open source software, it is based on open source platforms such as Linux and the PostgreSQL database. Finally, we talk with Jorg Janke, founder and project leader of the Compiere (http://www.compiere.org) ERP and CRM solution. Compiere, like OFBiz, is an open source project. Compiere runs on a combination of open source and proprietary platforms.<br /><br />This is Part Three of a three-part series.<br /><br />Part One was based on a discussion with David Jones, leader of the Open For Business project and in Part Two we talked with the CEO of OpenMFG, Edward L. Lilly, Jr.<br /><br />Part Three—Compiere/ComPiere<br /><br />Jorg Janke began developing the Compiere project in 1999 (for a detailed analysis see the ERP Evaluation Center or Accounting Software Comparison Center). Compiere is available under the Mozilla Public License (MPL), which is approved by both the Free Software Foundation (www.fsf.org) and Open Source Initiative (www.opensource.org). Thus, the software is not only an open source ERP/CRM solution, it also supports certain Free or open source platforms as well as proprietary ones. Traditionally software is sold based on license fees, but Compiere, as an open source solution, relies on a different model. According to Jorg, with Free and open source software you can only charge for real services.<br /><br />TEC: Is your revenue more likely to come from implementation, consulting, training, or other service areas? Could you also explain how your business is arranged around Compiere, insofar as the difference between Compiere and ComPiere?<br /><br />Jorg Janke: ComPiere with a capital P is the commercial company, Compiere with a lower case p is the Open Source project. Nevertheless, you can go to the dot-org site, download Compiere, use it, and never talk to the professional services side ComPiere. From that perspective . . . if you are technically savvy, have the time to experiment and the tolerance for downtime, there's no need for us. Our services help people to efficiently implement and use Compiere and eliminate the risk of open source software.<br /><br />Our forty plus partners provide implementation help—we concentrate on development, second level support, and training.<br /><br />What I meant with "real services" is that, especially in some countries, it is easy to get paid for providing direct services. That's what we do. In some countries, people are not very keen on paying for licenses or something abstract like a usage right.<br /><br />TEC: Do you think that stance is common? The fact that Compiere is open source somewhat eliminates the whole idea of "piracy" in your case, since you can download the software at no cost anyway.<br /><br />JJ: Piracy is not necessarily so unusual even in the US. Paying for something intangible obviously has less acceptance then paying for a concrete service offering.<br /><br />We have a significant number of downloads and a significant user base, but as a percentage, the number of people who pay is relatively low. That's the general business model you find in the open source area, i.e. lots of people are using it, but not that many paying for support. For example JBoss has several million downloads but if you take the number of support contracts they have, it's actually not even in the percentage range. From that perspective, if you don't have a high volume constituency, open source software is not a long-term viable business.<br /><br />TEC: You offer a guaranteed support option, which is one method for generating revenue from open source software. What does your support constitute?<br /><br />JJ: There are three main areas. One is if there is a bug or some needed change, we fix it and make it available in source code, so what you then need to do is build your system and apply it. With support, you can download the ready-built system and just go on with life. The second added service is version migration. If you have version 2.5.0, and want to take advantage of the new functionality in 2.5.1, you need to migrate your data. What we provide in the service is the migration of your data from any version to the current one. Alternatively, you can do the migration yourself, which is a little labor-intensive and a bit risky. The third area is the priority. If a customer has an issue, that's the ultimate priority—we make things work and follow things up very effectively. In a complex system, there are many areas of potential improvement. Our partners and customers determine the priority.<br /><br />There are companies who are not too keen on diving into source code, making our professional support attractive. We know that not every Compiere user will sign up for support—and "unfortunately" Compiere is more stable than most ERP/CRM products. We are offering basically insurance that if something happens, you are up and running ASAP and that your issues are on the top of our priority list.<br /><br />TEC: How do you support a client that has made their own modifications to the code?<br /><br />JJ: This is one of our design principles. We distinguish the core solution and any number of extensions and customizations. So, it's no issue at all if you "copy and modify" or add-on. If you change the core solution, the next migration will eliminate the changes. But, before we overwrite them, we tell the user, so that you have the chance to mark the modifications as yours. We have people with very extensive customizations and extensions and it has never been an issue.<br /><br />TEC: These guaranteed support services are provided by ComPiere with the capital P. How does that work with your value added resellers (VARs), what is the process that goes back and forth with ComPiere and the VARs?<br /><br />JJ: Yes, that is our support offering. In ERP, people want to have local guys to call. In our business model, partners are the only channel. What we offer is second-level support. We do not directly get involved in implementations; that is what our partners concentrate on. Their advantage is that they are local, they speak the language, they know the industry better. They are the local representatives of Compiere and can help the customer do whatever is needed. Partners resell our support offering and provide first-level support. First-level support is especially needed in the small and medium markets - preparing everything so that the user can just enter the transactions, etc.<br /><br />TEC: Some people believe the open source methodology works well for commodity software such as an operating system or database, but is not well-suited for building a business around specialized applications like an ERP system. It may be difficult to develop something specialized without a lot of customer funding. Compiere itself is open source and it is not a commodity application. How does this work for you? Do you agree or disagree that development based on the open source model is only good for commodity types of software?<br /><br />JJ: There is a lot of discussion on what open source is but one situation where open source is usually not a good model, is where the requirements and priorities are diverse or even conflicting. That is the case for business applications where in general; there is not the single spec you can work from.<br /><br />There are basically two approaches. One is a tool-based approach, which I think is used by most of the other open source business applications. The user assembles the application by selecting the different set of tools and develops the missing or specific parts.<br /><br />We have always had a very product-centric "works out-of-the-box" approach. You install it and can go into production—I think the record was over a weekend. For that, we have to be very disciplined in managing the scope of the application. Our partners help us getting the priorities right.<br /><br />TEC: So for example, in your case, Compiere is very strong for financials and for inventory management it has a lot of functionality. Human resources (HR) on the other hand is not an area that seems to have been developed.<br /><br />JJ: Yes, so far HR did not get many votes, but the demand is actually increasing.<br /><br />TEC: Suppose that was something that a customer required, would you then need them to fund that? Is that how that functionality would become part of the system?<br /><br />JJ: Yes, at this point we're exclusively doing sponsored development. That means that either one or multiple customers have said "we want this, do this for us." Certainly, if someone wants to have HR functionality they could build it themselves. People are not comfortable building core functionality, but they are comfortable adding customizations and functionality to give them a competitive advantage. HR is a relatively central area you may not want to maintain yourself. We see all sorts of extensions, billings extensions, etc. and people are very comfortable doing this. One customer for example, extended Compiere to manage their diamond and gold transportation business. They told us,<br /><br />"We need extensive security—that's something you need to build in, we don't want to maintain it, we just want to use it. Whereas the operational part as to how to move diamonds and gold around the world, that's something just for us, we do not intend to share this."<br /><br />That is part of their security—that they don't share it and it is part of their business model. From that perspective they were very comfortable adding significant functionality to Compiere but didn't want to touch the core engine. Another reason for customer driven development is that we want to make sure that the solution meets actual operational needs.<br /><br />TEC: So ComPiere keeps them up-to-date. Do you find that you've had many people using Compiere that contribute back new functionality?<br /><br />JJ: In the beginning we looked around for a business-friendly license, which does not require that you publish or make available any additions. One benefit of the GNU or other licenses is that the developer gets feedback and sees what's going on in the market, but people are a little bit cautious sharing their specific business functionality. With Compiere there are no publication requirements even if you distribute Compiere with your own extension.<br /><br />In tightly coupled systems, contributing code is always an issue. Realistically, it works only if the API and timeframe is agreed first. We found that many contributions were built on "old code" and sometimes hard to integrate or were made to support just a very specific business case. One of our main responsibilities is to ensure a stable application and we need to make sure that contributions meet our quality standards and do not destabilize the application.<br /><br />Code is also just 10 percent of the development effort and with today's tools actually the easiest part. The main challenges are the requirements and the design. This is the real work and here we get lots of help from our partners. These "do things right" contributions are invaluable. One of the reasons why open source applications are far more stable than commercial applications is because of the "do things right" contributions—i.e. the bug feedback of many people testing very different scenarios. We get this feedback very early and can make sure that our releases are very stable.<br /><br />TEC: Even though you do want people to contribute, they don't always do it the right way, so you have to act as custodians. A benefit of open source is that anyone could contribute, but you're saying if it's not managed properly, in some cases that can become a detriment.<br /><br />JJ: Yes, I think the open source business applications nowadays have learned to manage contributions. Three years ago there were many more of them, but they killed themselves quite effectively through contributions.<br /><br />TEC: In what ways do you see Free and open source software solutions impacting customer implementation timeframes and budgets?<br /><br />JJ: Compiere requires no final decisions at implementation time! You can change everything, even in production. This unique design principle of Compiere allows companies to go into production very fast. The record we know of is three days—average one to two months. The good thing is that it takes the pressure out of implementation projects. You make sure that it is working and then have time to fine tune and evaluate alternatives later on. Bigger projects take longer to implement, but Compiere also reduces the risk as you can get Compiere into production earlier and iteratively. Compiere is not designed for "Big5" consultants to burn hours.<br /><br />TEC: You've said that open source can better suit a client's business requirements. Because communications are visible to everyone, an open source-based provider wouldn't be able to tell a client that that client is the only one with a particular problem. In addition, in true open source fashion you've mentioned that customers are part of the solution—meaning they have the option of fixing problems themselves or with others. So for the issue of communications being visible to everyone, how do you deal with facilitating that? You use SourceForge (www.sourceforge.net), for example, you have newsletters, what other ways do you communicate with your community? Are there certain communication services you're in a position to provide from the core of the Compiere project?<br /><br />JJ: No information hiding. The SourceForge forums are for users to talk, exchange views, enter support requests, etc. If a customer has an issue, we ask them to create a support request visible to everyone and we then follow up. In addition, we conduct monthly conference calls for partners, where we say this is what's going on, this is what we're planning and ask for feedback. We also have a restricted partner forum where we give nearly daily updates of developments and plans and directions. This is helpful for partners and customers developing extensions and doing implementations to help their planning and prioritization. The reason we use a restricted forum is to make the communication efficient, as all participants are Compiere and functionality experts. In the beginning we did this in a SourceForge forum and got too much volume and "noise." My favorite was a posting starting with "I don't know ERP or Java, but this is what you should do..."<br /><br />The open forums and discussions allow that you get direct, uncensored information—although you need to develop your own validation filter as even repeated information may not be accurate.<br /><br />TEC: Is the role of conducting the partner forums and monthly conference call, a responsibility of ComPiere, the business not the open source project?<br /><br />JJ: Yes, that comes from the capital P. We found it increases the efficiency of the communication significantly due to the lack of "noise". As we have a significant number of partners, we have a good representation of the committed user base.<br /><br />TEC: Let's discuss presales. In the open source world you don't seem to think it's necessary to have people putting their efforts into selling software. Your point seems to be that with open source projects such as Compiere, the sales and presales work is left up to the customer, which might work well for a lot of people but potentially not everyone. What does this mean for the potential ComPiere client and why is this the case for an open source project?<br /><br />JJ: I've been with Unisys, Oracle, and the company that developed the basis of SAP's R/2 in development capacities, but also in presales. Basically presales is funded by licenses. Development is always funded by support. I always wondered why that is. It is more or less obvious: development needs the stable funding base of support, whereas if you get more sales people, in theory the sales [of licenses] go up. As an open source application you have no way to recover presales costs. If someone says "I would like support from you" it means the money goes to direct services. We can do only some general marketing, part of which is appearing in the TEC knowledge bases (www.erpevaluation.com).<br /><br />You can check out the documentation and web site, and also install and test it yourself. Many people get Compiere up and running in two to three hours but there are also too many "drop-offs" either in the installation part or when testing or implementing Compiere. One of our [ComPiere's] goals is to ease the installation further and provide more "get going" help. If you want local help or assistance, you probably need to pay someone.<br /><br />Both ComPiere and our partners offer "Next Step," a service you can use to get your questions answered and/or get a custom-tailored demo. "Next Step" also acts as a filter for our partners and us, to make sure that there is a real interest in using Compiere. Some partners also restrict their "Next Step" offering as they get more leads then they can handle.<br /><br />TEC: Would you say that's how all your VARs, across-the-board, work now?<br /><br />JJ: I think so. In the beginning, many gave free help, hoping to recover the effort during implementation. That did not work as the margin on services is not high enough to recover product marketing costs. The "Next Step" model also allows the do-it-yourselfer to get the questions answered without pretending to be interested in implementation services. We are also looking for more partners to handle the number of requests we get.<br /><br />TEC: What are the target markets most suited for open source software?<br /><br />JJ: The criteria for a customer to implement an open source solution are functional fit and risk assessment. We concentrate on distribution, retail, and professional services industries; and are extending this into utilities and manufacturing. The general perception is that open source is a higher risk. This risk is reduced if you have people in-house who are capable of handling the technology. I actually think that the risk is less, as you are not dependent on your vendor—if necessary, you can help yourself.<br /><br />We offer traditional support services to reduce the risk of open source software. We are now about five years old as an application and people now are more comfortable trusting Compiere to run their business. People are also getting more comfortable with the open source business model and realize that successful open source applications will not just vanish. Compiere has far too many users to be discontinued.<br /><br />The size of the company is also a factor. Very big and very small companies tend to be more risk-adverse. From a functional perspective, the flexibility of the software seems more important for small-medium companies, so a good fit for Compiere.<br /><br />TEC: I read that Compiere would be functioning with PostgreSQL soon. Do you think it will be a greater trend in the industry to move toward open source databases or is this effort just because Compiere is open source? Is there even a relation?<br /><br />JJ: We have two motivations for database independence. One motivation is to increase the number of implementations for the guys on a very tight budget. They will, as they do now, help in stabilizing and improving Compiere. We also have customers and many prospects with a very high number of outlets or franchises. They found that, for them, the required licenses [for non-open source databases] are cost prohibitive.<br /><br />TEC: The main motivation is cost.<br /><br />JJ: If you're talking about 5,000 outlets, if something even costs just 500 dollars—you can do the multiplication. It's a significant cost area. It's basically distribution companies who have a few hundred plus outlets or franchises.<br /><br />TEC: Are training services a reliable stream of revenue? Is it a growing area for ComPiere?<br /><br />JJ: At the moment training is a funding source, but we do not want to get into the training market itself. That is something we say our partners should do. We limit ourselves to four trainings per year, where you can learn everything about Compiere. Our trainings are geared towards super-users and new partners. Even though at this point in time, training is one of the major funding sources, we need to restrict them because we want to concentrate on development.<br /><br />Conclusion<br /><br />The Compiere project is one of the most well-known and mature pure open source ERP/CRM solutions. Not only does it successfully attend to industry concerns for operating on the stable database platform, Oracle, but the project is also managing to respond to client demand for a less-expensive open source alternative. While Compiere is not immune to the difficulties that can arise in developing specialized functionality under the rubric of Free or open source software, it seems the ComPiere business is functioning as a clear example of one way that a group can sell important services based on its expertise with a Free and open source project.<br /><br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/tec-talks-to-the-compiere-erp-crm-projectfree-and-open-source-software-business-modelspart-three-compiere-compiere-17494/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-29194623061632433712010-08-18T23:06:00.001-07:002010-08-18T23:06:49.056-07:00SAP Industry Solutions for Mid-market Companies<div style="text-align: justify;">Introduction<br /><br />For well over a decade, SAP AG (NYSE: SAP) has been offering market-leading enterprise applications software tailored to specific industries, starting with the oil and gas and the utilities industries (the original SAP industries). Other industries, such as media, insurance, chemicals, banking, and the public sectors have followed, highlighting SAP's lesser-known side as a market-oriented provider of industry-tailored solutions for midsized enterprises. For instance, SAP software has mapped standard business processes as well as particularly specific core banking processes in financial accounting since 1997, with solutions for other industries following suit. Over the years, the vendor has created twenty-eight industry-specific products, thus offering customers a mass of expertise, along with information technology (IT) solutions particular to their respective industries.<br /><br />This segmentation is also reflected in the company's organization: in 1996, SAP started creating specialized departments called industry business units (IBUs) for groups of targeted industries, such as financial services, manufacturing, public services, trading, and service industries. Accordingly, the SAP NetWeaver platform and standard enterprise suites like mySAP ERP and mySAP CRM, as well as applications for user productivity and analytics, have all recently been designed with an industry perspective. Certainly, insights from SAP's core or standard developments, along with partner solutions, benefit all of SAP's industry units, and cover common business processes. But each industry has particular demands that cannot be met by generic solutions, and SAP thus invests in complementary programs, with the goal of a complete and integrated solution portfolio that will eventually support every process in each industry.<br /><br />In close cooperation with leading industry customers, and with consulting and independent software vendor (ISV) partner companies, SAP has created more than fifty SAP "solution maps," which chart consolidated best-practice approaches for specific industries. These maps are checked and updated annually with the latest business and technical requirements, enabling SAP to promptly react to regulatory requirements such as the US Sarbanes-Oxley Act (SOX), Basel II, and a raft of other environmental compliance measures. Many SAP solution maps even provide specific requirements for sub-segments of certain industries. For instance, media customers can leverage microvertical maps designed for broadcasting, entertainment, newspapers and magazines, and premium-content publishing houses.<br /><br />Consequently, perhaps, most of the chemical, high tech, and pharmaceutical Fortune 500 are SAP customers. The vendor boasts eight of the world's top ten banks, thirty-three of Europe's leading fifty financial institutions, and nine of the ten most successful insurance companies in the world. SAP also claims leadership in ten of the eleven manufacturing industries it targets, and asserts that over 900 utility companies in seventy countries are using SAP software, in nearly thirty languages. To better understand the market, SAP maintains close contact with relevant industry players, and organizes and attends industry-specific user events and forums. There are a number of regional and international information days aimed at continuing an in-depth dialog with customers, so as to identify new specific market segment requirements, and to assess the vendor's current functional and technological fits and gaps in its portfolio.<br /><br />SAP has also created advisory councils and architect forums for thought leaders from the individual industries to maintain close and regular contact with the market, with the focus on ever-evolving business issues and IT infrastructure landscapes. Finally, SAP also contributes to the development and definition of industry standards as a member of industry associations, standards committees, and various user groups worldwide. The best examples include RosettaNet for the high tech and electronics industry, Chemical Industry Data Exchange (CIDX) for the chemical industry, Petroleum Industry Data Exchange (PIDX) for oil and gas, and Automotive Industry Action Group (AIAG)/ Standards for Technology in Automotive Retail (STAR) for the automotive industry.<br /><br />For instance, the Chemical Industry Data Exchange (CIDX) (www.cidx.org) is a nonprofit, industry-funded standards body whose mission is to improve the ease, speed, and cost of conducting business electronically between chemical companies and their trading partners. Industry players, through the central coordination of the CIDX group, have created standards for about sixty business transactions: this standardizes the transmission of data between chemical company buyers and sellers. For example, in a transaction such as create purchase order, a 50-character alphanumeric field that shows line #1 of the vendor address might be prescribed for field #32. Using CIDX standards to transmit data via extensible markup language (XML) technology means that everyone should thus know where to store (or look for) information, allowing everyone to speak the same language when exchanging data. This enhances the industry's overall ability to automate business and increase data visibility.<br /><br />SAP Partners<br /><br />One should never neglect the importance of a partner ecosystem, given that even the formidable SAP cannot be all things to all people. Thus, early in 2006, in order to expand its offering of business management software solutions for the resource and industry requirements of small and medium enterprises (SMEs), SAP introduced 39 new qualified mySAP All-in-One partner solutions to an overall portfolio of over 600 such solutions. The solutions were developed and delivered by SAP partners in countries including Australia, Belgium, China, Denmark, Germany, Hungary, India, Italy, Korea, New Zealand, South Africa, Spain, Sweden, the UK, and the US.<br /><br />Each offering includes built-in best practices for managing business processes within a specific industry, giving these new solutions the ability to address diverse industries ranging from biotechnology, plant construction, and transportation services, to aviation and fashion retailing. The latest additions to the world's largest portfolio of microvertical solutions for SMEs, the thirty-nine new offerings are part of more than a hundred new solutions introduced in the last twelve months. Nearly 600 qualified mySAP All-in-One partner solutions are available in over 50 countries; they are used by more than 7,100 customers worldwide.<br /><br />Midsized enterprises require business management solutions that provide the same advantages enjoyed by larger competitors, but that are also priced and sized to fit their resources and demands for fast results, rapid return on investment (ROI), and high quality support. A wealth of research shows that mid-market companies are concerned about the price and complexity of enterprise packages, along with the scope of associated implementations; all this is bundled with limited in-house IT resources and high project risks (in terms of cost overruns, project methodology, and the need to find the right partners with the necessary industry expertise). Also, there are inevitable ROI concerns, such as which measurable key performance indicators (KPIs) can be produced, and which solution is future-proof. For these enterprises, it all comes down to determining whether the headaches are worth the trouble.<br /><br />The mySAP All-in-One solutions from SAP partners aim at enabling these companies to adopt industry best practices for managing core areas of the business, while allowing modifications (configurations) to maintain the unique processes that distinguish companies from competitors of all sizes. SAP channel partners build solutions based on "SAP best practices," the building blocks developed by SAP and its partners over more than thirty-three years of serving leading companies of all sizes. Templates (consisting of core processes, industry-specific processes, pre-configuration, and accompanying documentation) assemble the savvy and experience coming from user groups, representative clients in the industry, partner input, industry analysts, SAP's industry experience, and SAP's own industry surveys. Partners can then add capabilities to support microvertical processes based on their distinctive industry knowledge and expertise.<br /><br />These mySAP All-in-One solutions are sold, deployed, and supported by SAP channel partners as defined- or fixed-scope implementations. The packaged implementation offering contains a specific mid-market methodology, project management, implementation roadmap, and pre-filled "accelerators." Basic services, which are part of SAP best practices (and not necessarily restricted to partner services), entail project management, delta (fit-gap) requirements workshops, implementation, key-user training (on the job), user documentation, predefined sheets for master data migration, predefined test catalogs, predefined forms, standard SAP reports, and go-live support. However, optional additional services, still within the fixed price arrangement, feature the development of offshore components (custom forms, custom reports, data migration, and authorization concept), user training, post-implementation support, and hosting.<br /><br />Recently Added Solutions<br /><br />Some of the new solutions include Ki4 Medical Devices, developed by Ki Solutions, LLC to address the needs of midsized makers of medical devices. With preconfigured capabilities for managing industry processes such as US Food and Drug Administration (FDA) compliance, patient device tracking, and shelf-life management, Ki4 Medical Devices has harnessed the power of SAP's manufacturing industry expertise to fit the price, resource, and process requirements of midsized manufacturers and distributors of medical supplies, diagnostics, and implants.<br /><br />The Pharmsys solution, from CVSIT Services India, Pvt. Ltd., provides capabilities for midsized pharmaceutical companies to manage industry-specific processes such as the manufacturing of bulk drugs, generics, and formulations; loan licensing; customer material tracking; planning and costing; and active-ingredient material quantity calculations.<br /><br />The KBMS solution targets midsized food and beverage manufacturers. This company's extensive operational experience in the food industry joins meaningful SAP expertise within this sector. KBMS offers preconfigured solutions, along with a series of extensions that address needs unique to the food industry, as well as specific categories within the food industry.<br /><br />Additional new mySAP All-in-One solutions from SAP partners address microvertical industries including pharmaceuticals, consumer products (food), grocery retailing, sea transport, project management, construction components, trucking and warehousing, chemicals, textiles, publishing, automotive dealership, steel products, and diamond trade and promotion. For more on these new solutions, including information about where they are available, and about the partners that offer them, SAP provides fact sheets at its corporate Web site.<br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/sap-industry-solutions-for-mid-market-companies-18556/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-41952429699397789492010-08-18T23:05:00.000-07:002010-08-18T23:06:01.190-07:00Is There a Panacea for Enterprise Software Pricing Yet?<div style="text-align: justify;">Problem Analysis<br /><br />Though there is a growing sentiment that enterprise applications are reaching a commodity status (see If Software Is a Commodity, Can You Still Win Some Competitive Advantage? ), software pricing does not seem to be following the same rules. Indeed, we can hardly think of any top-of-the-line enterprise application (the equivalent of a Lamborghini or Harley Davidson, say) that a wealthy business would deploy just to feel "cool," regardless of the application's high price-per-performance ratio. (Forgive us if we are not yet aware of an enterprise application that run on Macintosh, which would allow customer-supplier collaboration, and permit customers to order and track their complex products via iPod-based portals).<br /><br />Part One of the series Is There a Panacea for Enterprise Software Pricing Yet?<br /><br />Joking aside, while enterprise software is apparently reaching commodity status, no one can determine with certainly what a fair price should be for a solution that fits the needs of most enterprises. If the price is dependent on the functional fit, then should a highly functional enterprise resource planning (ERP) or supply chain management (SCM) cost $1,200 per user? Should it be more? Less? Working on the assumption that the product fits the prospective customer's needs "like a glove"—and the importance of this fit cannot be overemphasized—what would be a fair price? Note that we're not necessarily talking about a "fair" price. After all, in the free market, pricing is based on supply and demand, the customer's state of urgency, and the perceived value of the product.<br /><br />The real problem is how to compare one vendor's pricing against others in a like-for-like manner. After all, total cost of ownership (TCO) calculations should not be rocket science. One has to start by determining application software license fees (which occasionally include third-party software license fees). To this, add professional services costs (which typically includes training, implementation services, and so on), hardware costs, and annual support and maintenance costs (which may also include support for third-party software and hardware, such as bar code readers in the case of radio frequency [RF] applications).<br /><br />Comparing License Fee Pricing Methods<br /><br />Certainly, there might always be some optional software or service costs, but basically, TCO revolves around total software- and service-based costs. So what is the problem? Well, let us first tackle comparing common license fee pricing methods. When we are involved in the software selection process, we normally help clients come down to a few finalist solutions based on functional and technological fit, whereupon they then ask us to help them negotiate the best contract price, and finally select the winner. Yikes! Deciphering the US Tax Code is a simple task compared to that!<br /><br />Plenty of vendors, of course, may produce nominal price lists for their software modules, but if chief information officers (CIO) at prospective user enterprises (or professional negotiators acting on their behalf) want to know the actual pricing benchmarks that similar customers have paid, they either must have insider knowledge, or a hotline to some of the vendor's reference enterprise customers. And of course, they can only gain access to this information when such details are not protected by confidentiality or non-disclosure agreement (NDA) clauses. Even then, these figures are typically muddled by an absence of like-for-like pricing models.<br /><br />One vendor charges license fees per user (named, concurrent, or casual) and per module (or per bundle of functional modules in a suite). Another bases prices on server/central processing unit (CPU) size. And still another bases prices on its perception of how large (read "wealthy") the customer is, the likelihood of implementing a total functional footprint, and the total number of users the customer might ever want to have. What can one discern from all this? Such a scenario is truly comparing "apples with oranges," and then dumping berries into the mix. However, some vendors will rightfully say that they cannot simplify pricing because different customers want different pricing systems, and they have to do what customers want.<br /><br />For example, many customers resent the notion of paying for functionality they are not likely to use. In some instances, even if a large corporation needs expanded functionally down the road, they will only pay for the modules they need at the time of selection. Lengthy implementations of (for example) financial management and consolidation, or human capital management (HCM) systems over several divisions and several hundreds (or even thousands) of users worldwide, may make an enterprise reluctant to embark on another lengthy implementation adventure right away.<br /><br />Thus, a vast majority of business application software vendors still generate most of their revenues by selling their software licenses based on the number of named or concurrent users or seats, typically on a per module or per suite basis. They may also generate revenue based on an excessive "wall-to-wall," "all you can eat" functional scope. The accompanying implementation service, post-implementation service, and support and maintenance services also add to the "pot." These are all are priced as a percentage (and more often multiples) of the software license fees.<br /><br />However, from the user perspective, there is a fitting analogy: in one trip to the store, no one will ever buy a lifetime's worth of snacks and coffee. We are selective, and over the course of a lifetime, we will buy different products based on what we feel we need or want. Software applications should be treated the same way. To return to our analogy: the stockpile of snacks will ultimately go stale, and the coffee will lose its flavor, or go rancid. Little is consumed, except hard-earned money.(see Application Erosion: Eating Away at Your Hard Earned Value). The same happens with software that is not used.<br /><br />However, purchasing software la carte is easier said than done. The trouble comes from the "fine print" addendums in software purchase contracts, which are often longer than the main contact itself. These clauses are typically designed to protect the vendor from any future liabilities or to "nail" the gullible customer with extra costs. The fine print will customarily include a statement to the effect that the contract includes only the stipulated basic functionality. Any additional modules will use a different pricing structure, whereby the client will likely pay far more at the end of the day than if the whole application license had been purchased up front. Smaller enterprises (given their smaller number of users, and less complicated implementations), typically want most of the available functional footprint implemented at once, with the option to expand to additional functionality later. These customers might appreciate the option of "wall-to-wall" functionality up front.<br /><br />Another pricing option variation is based on what users use, and not on what they can get. This is the so-called "pay as you go" option. Typically, enterprise software comes with parametric "switches" that can be set based on a need. For example, a small-to-medium enterprise (SME) user might set a switch to use multicurrency, consolidate financials, use warehousing management, or use standard or actual costing. Based on a contractual agreement, these switches can be set at the "software factory" to limit the functionality that is available to the user. If an enterprise decides later to activate a function, such as warehousing management, the enterprise would have to pay. While feasible, this requires serious contract management and tracking, and an argument could be made that SMEs that use less functionality require less support.<br /><br />Service and Support Calls<br /><br />This brings us to the next fine print item, the point which is possibly among the most controversial: service and support calls. With some large software customers reportedly spending obscene amounts of money just to patch their existing software, the cost of poor software quality is becoming painfully apparent to software customers. Vendors typically provide a short period of time—from ninety days to a year—as a "warranty period," within which software fixes are available for free. After that initial period, software customers must pay for service and maintenance, on an annual subscription basis, or on a per-incident basis. As a result, many customers feel taken advantage of, and those who select the solution are presumed "guilty" of paying for the vendor's ineptitude to deliver quality software in the first place.<br /><br />From this vantage point, many wonder whether the urge to hastily implement these systems prior to the Y2K deadline was so big that it blinded common business sense. Consequently users have ended up on the losing end of their contractual rights, and have become the victims of exorbitantly high costs for enterprise software use, upgrades, and administration.<br /><br />However beside user frustration, vendors are facing the pressures of cutthroat competition, which is pushing prices downwards. Users also have strong expectations that improvements in software quality should allow vendors to significantly extend the "free" period to something closer to the expected life of the software.<br /><br />Software customers have a legitimate right to expect their vendors to stand behind their products for a few years or more. During this time, vendors should back product capabilities based on the user's requirements (these capabilities are all too often easily "promised" by aggressive sales personnel). This backing would also make certain that the cost of the software product would remain fixed (and known) during that time. Through this approach, software vendors would have more difficulty in passing the expense of poor quality software to their customers through arbitrary rate increases for software maintenance. Rather, they would have to focus on producing better software to reduce their support costs, in order to remain viable players in the market.<br /><br />Business-related issues related to software use inevitably arise daily. These issues may result from flaws or bugs in the software, a misunderstanding about how the software works, or both. In any case, software customers want to be able to contact a qualified expert to discuss the issue and resolve it in a timely fashion, with minimal impact on their business. The customer does not really care whether the issue arises from a bug, user error, or lack of knowledge.<br /><br />Software vendors need to provide unlimited access to support services, including experts trained in the detection and fixing of design flaws in the software, as well as having the ability to explain (in lay terms) how to get the software to perform the functions required by the customer. To that end, no one wants to plow through the fine print to understand how many free-of-charge calls are permitted. Instead, it would be more reasonable to allow for unlimited calls during a multiyear warranty period.<br /><br />Then comes the dreaded 15 to 20 percent (or more) of nominal license fees for annual service and maintenance costs after the software purchase. Many customers wonder why they should cover the future developments of a few early-adopter customers, since they do not necessarily need additional functionality or the latest "bells and whistles" any time soon (this is what software vendors claim is the reason for these recurring annual costs). Their customers' grievance is akin to the irony of car insurance, where the majority of decent drivers have to pay for an inept few.<br /><br />Software customers do not see these technological changes as changing the business value of their software, nor do they see them as a justification to pay more money to their software vendor. They are unwilling to pay their vendor to port the software onto a new operating system (OS) or server platform if the value provided by the software has not really changed. They might be willing to pay their vendor for more functionality if it drives additional business value, but even then, they want to pay only when the functionality is generally available and required, not while it is still in development.<br /><br />Business processes and practices do undergo constant change (see What's Wrong With Application Software? Business Changes, Software Must Change with the Business). For example, changes in business strategy (such as shifts to lean manufacturing) can mandate changes to business processes. Regulatory changes, such as those stemming from the US Food & Drug Administration (FDA), the Heath Insurance Portability and Accountability Act (HIPAA), or the Sarbanes-Oxley Act (SOX), can also mandate changes to business processes. Software vendors have an obligation to keep their products from becoming obsolete even in these contexts, and customers have the right to expect that they can use updated products to address these issues, including reasonably easy and cost-effective upgrade processes.<br /><br />One can only imagine the public outcry and revolt if car manufacturers decided to charge car drivers an annual fee—a percentage of their nominal car model price, say—indefinitely, for future developments! At this stage, software vendors are participating in a practice similar to that of pharmaceutical companies. Pharmaceutical companies justify the exorbitant prices of critical medications for consumers by professing the need to reinvest part of their hefty profits for future developments, but even in this case, customers know what they have to pay when they are at the counter. Maybe if enterprise software development could come up with a cure for cancer, AIDS, or Alzheimer's, or implement some other supreme benefit to humanity, then software users would also put up with the recurring service and maintenance costs.<br /><br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/is-there-a-panacea-for-enterprise-software-pricing-yet-18320/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-26840565300261139552010-08-18T23:04:00.000-07:002010-08-18T23:05:24.558-07:00Global Trade Solutions: Competition, Challenges, and User Recommendations<div style="text-align: justify;">Competition<br /><br />TradeBeam, one of the largest global trade management (GTM) solution providers in the market, provides an indisputably competitive product. Through a series of mergers and in-house, organic developments, TradeBeam has developed or is in the process of cultivating a holistic approach to global trade, encompassing import shipment visibility to trade compliance. However, the GTM market is characterized by early adopters and is rapidly evolving and a company of TradeBeam's current stature, with only several years of existence and an estimated (less than) $20 million (USD) in annual revenues, might not be able to maintain its competitive position. Despite TradeBeam's immaculate financial position and slew of marquee customers, TradeBeam may find itself struggling against current and potential competitors in the long term, especially against those with greater name recognition, and financial and other resources. The market is competitive, rapidly evolving, and highly fragmented, and one should expect only intense competition in the future. In-house development efforts, consulting companies, other software companies, financial institutions, logistic companies, customs brokers, forwarders, and third-party development efforts will strive to increase their market share.<br /><br />In addition to the changing role of banks, third-party logistics (3PL) providers are also focusing predominantly on the management of the shipment booking through proof of delivery process and the management of logistics costs. As user companies continue to embrace the value of broader GTM solutions, logistics providers will be looked upon to provide leadership and to add more value to the entire order life cycle, including purchase order management, total landed cost modeling, insurance and claims, import/export compliance, and security regulations. 3PL providers will also be sought to seamlessly integrate invoice reconciliation and trade financing systems.<br /><br />Like other involved parties in global trade, 3PL providers must still mitigate the risks of providing correct and timely documentation relative to transportation, customs, and settlement, including letters of credit (LC). They will need a corporate-wide solution to protect them from liability from trade compliance issues such as denied parties and anti-boycott. Thus, while TradeBeam would prefer to partner with banks, 3PL providers, or even some logistics management vendors like G-Log or Xporta (now defunct), these entities will likely decide to grab a "bigger slice" of the GTM pie for themselves via acquisitions la JPMorgan Chase and Vastera, or through in-house developments and competency building. For more information on the JPMorgan Chase acquisition of Vastera, see Merging Global Trade Management with Global Finance.<br /><br />Recently, the number of standalone GTM vendors is quickly dwindling, as a result of mergers including SSA Global and Arzoon (see SSA Global Forms a Strategic Unit with an Extended-ERP Savvy); TradeBeam with Open Harbor, Qiva, etc.; and Kewill and TradePoint (which had previously acquired ClearCross). One should also expect GTM software technology and managed services to continue to merge. These acquisitions continue to indicate that more accelerated restructuring in the logistics services market is inevitable, because there is a plethora of point solution providers that specialize in narrow areas, from land cost calculation, visibility, collaboration, export compliance, trading document generation, hazardous material handling, to more complete transportation management capabilities.<br /><br />There are, however, a number of remaining players in several niches—just enough to muddle the message and nibble at the potential revenues of full-fledged GTM players. For example, we could talk about the remaining ITL players like NextLinx, Precision Software, Intermart, Nistevo, MercuryGate, Xporta (now defunct), Tarrific.com, OCR Services, Importers Software Services, MSR Customs Corp., Questaweb, GT Nexus, and LOG-NET; global settlement players like Bolero.net, TradeCard and S1; and a number of others vendors that are, arguably, more specialized in supply chain electronic management (SCEM), and visibility and shipment tracking like Viwelocity, Descartes Systems, Management Dynamics (through recently acquired BridgePoint), Timogen, etc. However, none of these vendors handle all the requirements of automating global e-business. To provide more complete offerings, some of these vendors have apparently merged or have acquired other companies.<br /><br />Still, companies that are comfortable with using freight forwarders to handle the details of cross-border movement and only want critical events like departed origin, estimated arrival date and time, arrived at customs, cleared customs, etc., to be visible, may be better served by supply chain management (SCM) vendors, and stand-alone SCEM and visibility solutions. Namely, supply chain planning (SCP) vendors like i2 Technologies, Manugistics or Logility, and SCE vendors like Manhattan Associates, RedPrairie, HighJump, and Provia offer visibility and trading partner collaboration components to provide transparency of inventory, orders, and shipments across the entire trading network. These systems do not typically have the capability of sharing demand forecasts with suppliers, but, in addition to products like TradeBeam's CIM Solution, there are others offered by the likes of OneNetwork, weSupply, RiverOne, or Valdero.<br /><br />Furthermore, to build a complete and fully-functional GTM system, any user enterprise will have to integrate it with transportation management systems (TMS), enterprise resource planning (ERP), supplier relationship management (SRM), partner relationship management (PRM), and other adjacent enterprise applications. We may very well be talking about a full-fledged logistics resources management (LRM) system that would provide total "command and control" over the entire spectrum of global logistics activities, including transportation procurement contracting, shipment planning and optimization, load tendering, trade compliance, customs reporting, shipment and inventory visibility, warehousing, reverse logistics. Such a system would manage all of these events over the Internet, so that all internal managers and trading partners can access logistics information. This approach would still be limited in assisting all the critical elements of global trade including LC, foreign exchange, invoice management, and trade financing, but, at this stage, there is no such thing as a native LRM application that covers all these bases.<br /><br />This is Part Five of a five-part note.<br /><br />Part One discussed TradeBeam and GTM.<br /><br />Part Two presented TradeBeam's background.<br /><br />Part Three covered TradeBeam's tackling of the supply chain.<br /><br />Part Four covered TradeBeam's GTM solution blueprint.<br /><br />Shippers Balk at One System Fits All<br /><br />Currently, TradeBeam is far from espousing an LRM system, as it is focusing on delivering intrinsic GTM capabilities, such as foreign exchange, transfer pricing, contract management, compliance audit, and inter-company orders. On the other hand, some point solutions might still have exceptional functional traits that appeal to customers who are still cutting-back on enterprise-wide software purchases. Due to weak economic developments, shippers currently favor purchasing specific pieces of a vendor's software lineup, as customers often want partial solutions, not the entire product line. Consequently, many are buying one piece at a time and are adding modules on an as-needed basis.<br /><br />Some believe that there are too many silos of technology for any vendor to handle all aspects of global logistics. Many companies may decide to opt for separate packages for trade compliance, TMS, forecasting, and other tasks. Given logistics and manufacturing is frequently outsourced, companies need technology to work with the counterpart systems used by their carriers and 3PL providers. Trying to roll all of these diverse capabilities into a single application, based on a single set of universal data standards, is certainly daunting, if not the wrong approach. No doubt, trying to integrate disparate systems has always been a challenge; however, the emergence of Web services-based architectures may ease some of these integration issues, at least in a loose-coupled and hosted mode.<br /><br />For instance, a freight forwarder and customs broker may first buy modules to help conduct denied-party screenings and put together landed-cost quotations, based on customers' requests for assistance on specific activities. The software typically steps in when automation can meet customers' requirements faster and more efficiently than existing, pedestrian capabilities. TradeBeam rightfully hopes that many of its seed applications, such as inventory replenishment, trade compliance, event management, LC management or trade financing, which are scattered, though widely used throughout its install base, will lead to up- and cross-sell opportunities within the broader TradeBeam 3.0 GTM platform. Trouble, however, might come from the many best-of-breed solutions featuring exceptional functional traits, which will give TradeBeam a "run for its money," so to speak.<br /><br />For example, landed cost field providers like Vastera, Kewill, TradeBeam, and NextLinx are primarily subscription consultants and information brokers who provide up-to-date, nation-by-nation trade information on complex and changing terms; the rules and conditions that dictate duties; trade agreements; and transfer of ownership. However, Xporta (now defunct) brings something new to the table—a decision support engine that can combine total landed cost with the customer's sourcing inputs to deliver the total cost of ownership (TCO) rationale for multiple plant and supplier scenarios. The vendor has an optimization tool that could truly adjust a large number of variables and what-if scenarios to fully understand the user enterprise's best alternatives when considering TCO.<br /><br />Possibly the most important things Xporta (now defunct) can contribute (beyond landed cost data) is the betterment of sourcing on inventory and cash flow, since the engine also allows the user to assign risk in its calculations. In turn, this may allow users to estimate required buffer stocks of inventory, or determine if it would be profitable to negotiate with the supplier to build a local distribution center. The risk does not only have to apply to a country. It might be the risk associated with a specific supplier, based on quality level and yield rate, such as the cost of switching new suppliers, in terms of the cost of evaluating their capability, or the cost of introducing new tooling for the supplier. These costs do not show up in the nominal unit price, but the customer will still incur them if and when the customer makes the switch. Xporta's (now defunct) TCO optimization solution may often be a complementary add-on to GTM or landed cost vendors, sourcing, or SRM/e-procurement platform vendor<br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/global-trade-solutions-competition-challenges-and-user-recommendations-17992/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com1tag:blogger.com,1999:blog-1489218598027267131.post-20721031523060674512010-08-18T23:03:00.000-07:002010-08-18T23:04:35.434-07:00Collaborative Sourcing Solution Vendor Leaves No Stone UnturnedThe year 2003 saw the birth of TradeStone Software, Inc. (www.TradeStoneSoftware.com), a provider of collaborative e-sourcing solutions for Global 2000 companies. But let us clarify something beforehand: TradeStone Software may appear to be a brand new vendor, but in fact its management team and offering are at least the third reincarnation (and improvement) of trailblazing products and companies that had all attempted to tackle the conundrum of imports and exports. Led by industry pioneer Sue Welch, TradeStone's executive team delivered such market firsts as personal computer (PC)-based import software in 1984, and Microsoft Windows-based sourcing software in 1994. TradeStone Software is thus another improved attempt by the (virtually intact) team to deliver on the vision of global trade that has been honed through over twenty years of hands-on experience, always leveraging the technology which was available at the time.<br /><br />Part One of the series Collaborative Sourcing Solution Vendor Leaves No Stone Unturned.<br /><br />Welch got her start in the early 1980s working as an import manager for Zayre, a large erstwhile apparel retailer, when she realized there was a real need to automate international trade processes. She learned on the fly that the profit margin for imported goods was far greater than for domestic goods, and she attempted a concerted effort to increase the number of imports. Being well ahead of the times—even heretical—she boldly suggested eliminating the buyers, thinking that with a heightened number of transactions supported by fewer humans, profits would increase even more. However, at the time, neither the technology, nor her superiors' approval, was available to support the endeavor.<br /><br />For an extensive discussion of global retail sourcing, see The Gain and Pain of Global Retail Sourcing, The Intricacies of Global Retail Sourcing, and The Fashion and Apparel Retailers' Conundrum.<br /><br />Disappointed, but neither discouraged nor dismayed, Welch started her first company in 1984, called IMC Systems Group, to provide PC-based import software technology solutions to the international market and to automate the import operations of global organizations. Teaming up with her long-standing business partner Jack Zakarian to form IMC, Welch took care of the conceptual product design, while he performed the software coding. It was the first import program delivered to the market, and was launched at a trade show, where the company managed to sell international trade automation to Spiegel and TJ Maxx. Disney and JC Penney bought the product later, but the weakling ahead-of-the-curve company struggled to break even.<br /><br />It was the very first company with software for importing, at a time when companies did very little direct importing themselves. This meant a lot of proselytizing, and painstaking market awareness work. They raised venture capital (VC) in 1987, but was still not profitable by 1992, and the VC investors became impatient. Eventually, in 1994, the investors infused more money, and put themselves at the helm of IMC, which did not exactly correspond to Welch's vision.<br /><br />Welch walked away with plans to found another company, and did just that (reportedly on the very day after being let go from IMC; other former co-workers at IMC joined soon after). She built on the foundation of IMC's import software, but with many improvements based on customer feedback and suggestions (along with the advent of Microsoft Windows). She named the business RockPort Trade Systems, and the Windows-based sourcing software RockBlocks. Microsoft Windows was a new technology (and a user interface [UI] metaphor) at the time, and there was also an opportunity for combining exporting and importing, which was an either-or proposition at the time.<br /><br />RockPort Trade Systems became the number one global sourcing and supply software package in the world, with Global 2000 customers including Home Depot, JC Penney, Unisys Computer, Sears, Ames, Federated, Timberland, and UPS. The product was agnostic with respect to import, export, product, and country, and it lured all the old IMC customers to the new company. IMC never sold another software package, and eventually sank into oblivion.<br /><br />In contrast to IMC, RockPort was profitable virtually from its inception, thanks to its lucrative and value-adding consulting practice, and thanks also to the early critical mass of customers signing up, which all helped the sustained development of the technology. As with Windows, when the Internet took off as another disruptive technology, the RockPort team excitedly tracked the evolution of web-based browser technology.<br /><br />In the late 1990s, the company added an Internet-based front end to RockBlocks, enabling its customers and their suppliers to access relevant data, and to send responses using just a web browser. By 2000, the company was filling its entire Gloucester, Massachusetts (US) harbor headquarters building, supporting offices in London (UK) and Hong Kong (China), employing about one hundred, and serving the Who's Who of the global retail space. In 2000, amidst pressure to either go public, go for additional VC investment, or be acquired, Welch sold RockPort to California (US)-based QRS Corporation (now part of Inovis—see Inovis Delves into PIM by Snatching QRS) for over $100 million (USD).<br /><br />Why QRS?<br /><br />The acquisition by the former electronic cataloguer and trading connectivity (electronic data interchange [EDI] and value added network [VAN]) provider QRS was initially seen as a good match, with the thinking that its behind-the-scenes "plumbing infrastructure" profile would complement RockPort's customer-facing approach. However, hindsight was to show that this was just wishful thinking.<br /><br />For its part, QRS remains a technology company that serves the retail trading community with collaborative commerce solutions by managing the flow of critical commerce information between companies, and also by leveraging its retail technology expertise to address fundamental industry challenges such as global data synchronization (GDS), compliance mandates, transaction outsourcing, product sourcing, store-level information gathering services, and product information management (PIM). It also offers solutions that help meet the diverse needs of members of the global retail trading community, regardless of company size, technology infrastructure, or retail segment (including general merchandise and apparel [GMA], consumer packaged goods [CPG], health and beauty, consumer electronics, hard lines, do-it-yourself [DIY], sporting goods, and grocery).<br /><br />These products and services are typically used with customers' existing enterprise systems in order to deliver greater benefits and efficiencies. Prior to the merger, QRS had even broadened its customer base across other segments of the retail industry (through QRS Retail Intelligence Services, it had penetrated the grocery and mass merchant segments). QRS had more than 10,000 customers in the retail industry, including the top 10 retailers in the US (for instance, Lowe's, Sears, Best Buy, The Home Depot, and so on), 5 of the top 7 retailers worldwide, the top 10 apparel and footwear companies worldwide (Adidas America, Reebok International, American Eagle Outfitters, and the like), 10 of the top 12 department stores in the US (JC Penney, Neiman Marcus, Nordstrom, Saks, and so on), and 9 of the top 10 supermarkets in the US (such as Ahold, Albertsons, and Kroger).<br /><br />Given this possible synergy, at first Welch and her team turned their attention to consulting with these organizations to help them implement global sourcing strategies. But the two merged corporate cultures would not mesh well. The QRS approach to delivering cash-cow, low-maintenance (meaning that when something works well, it's nearly invisible) communications and trading platforms did not have much enthusiasm for continually extending RockBlocks (subsequently renamed QRS Sourcing), which remains a software solution with a very active presence inside customer's organizations.<br /><br />Despite the importance of sourcing in GMA, this acquisition never really worked for QRS, perhaps because of bad execution, or perhaps because sourcing was a product before its time. This is especially strange given that the value of business-to-business (B2B) integration should be fully realized by providing enhanced visibility of products flowing through the supply chain via business applications such as business activity monitoring (BAM), supplier enablement, and collaborative planning. With declining margins and competitive pressures in EDI and VAN services, one would have expected QRS to attempt tightly coupling supply chain data with value-added business applications for better visibility and collaborative process, so as to also help its bottom line.<br /><br />In any event, with a sort of sense of dj vu, Welch again walked away, and after some natural initial thoughts about retiring, traveling, writing memoirs, and so on, the undying entrepreneurial spirit again caught fire. She had some ideas about an e-sourcing software further improved over the one she had sold to QRS. For the first year of her two-year non-compete severance agreement, Welch and Zakarian traveled, in order to better understand from third world leaders the other, supply side of imports and exports to RockPort's Global 2000 clients. They also met with key organizations, including the World Trade Organization (WTO), the International Monetary Fund (IMF), and the International Trade Center (ITC), and visited less-developed countries to determine how to best approach the building of a collaborative global commerce community. They also met with government officials and trade organizations in countries such as Costa Rica, to discuss how to help them reach out to Global 2000 organizations in North America and Europe.<br /><br />TradeStone Approach<br /><br />With this concern, the team has been focusing on ways to further harness the Internet to ease sourcing and procurement among international trading partners. They spent two years researching the marketplace and exploring new technologies that could serve as a catalyst for yet another iteration of the international sourcing and procurement application. Finally, in 2003, Welch once again tackled the acute problem of sourcing: the headache caused by separate (and "autistic") systems for domestic and international buying, and the inability of smaller companies to leverage global buying platforms. Partly owing to the market epiphany of standardized buying practices, and partly owing to the latest service-oriented architecture (SOA) developments, more and more user organizations are seeking to bridge "global gaps" in their sourcing infrastructure by unifying their international and domestic business practices, and tying them together on a single technology platform.<br /><br />Thus, this time around, Welch has tied the unifying solutions (processes across systems, organizations, and geographies) to the Internet, whereby the system layers into, enhances, and expands existing IT functionality, with the model-based "data anywhere" Web services architecture that eliminates database replication and reduces integration. This also embeds much more intelligence and process management for ease of use (in other words, no shoehorning the system), whereby the solution deployment cycles can further be shortened with a step-based approach and retail-industry best-practices to "fill in the global functionality gaps"; training can be improved (if not completely obviated); and international links can be enhanced. By accomplishing these principles, one can also establish true collaboration, and close the loop with a single way to do business, achieving the coveted "one version of the truth."<br /><br />The year 2003 marked the founding of TradeStone, gathering the executive management team (which happens to consist of much of the former core RockPort team), and also marked a large customer win with Rhode Island (US)-based Ocean State Job Lot. With Welch as chief executive officer (CEO) and president, and Zackarian as chief research officer (CRO), TradeStone has rounded out its management team with Ann Diamante (chief product officer, including consulting, product design, custom modification, and integration services), Kamal Anand (chief technology officer), Robert Kaufman (vice-president [VP] of professional services), Jeanene Bettner (VP of sales), and Holly Allison (VP of marketing). Diamante is also part of the executive team involved in the development of the company's international finance reconciliation software.<br /><br />With the concept of delivering a deployable and functionally rich collaborative e-sourcing technology to the global sourcing market in hand, TradeStone signed up Ocean State Job Lot as its development partner in May 2003. By October 2003, having proven that it was possible to layer across an organization's current infrastructure and build a sourcing system requiring hardly any training, the worldwide opportunistic buyer's technology was up and running. Users anywhere could sign on and have the system handle all the intricacies of international trade, without having to experience its complexities themselves.<br /><br /><br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/collaborative-sourcing-solution-vendor-leaves-no-stone-unturned-18650/Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-51061860472803531552010-08-18T23:02:00.001-07:002010-08-18T23:02:43.689-07:00SAP – A Humble Giant From The Reality Land? Part 3: Market Impact<div style="text-align: justify;">Event Summary<br /><br />During its international e-business conference, SAPPHIRE, on June 12-15, SAP AG (NYSE: SAP), the leading provider of business software solutions, released a spate of upbeat announcements in its effort to portray itself as a reformed vendor of choice for all aspects of e-Business, including planning and collaboration. As an illustration thereof, SAP cited that its flagship mySAP.com suite has met with remarkable success in the market. SAP reached a major milestone in 2000 when the number of licensed users of its mySAP.com platform reached 1 million. Since then, more than 3 million additional users have reportedly licensed mySAP.com.<br /><br />About This Note: This is a five-part note covering the announcements at the SAPPHIRE conference, the market impact of those announcements, the challenges SAP faces, and user recommendations. Part Five will contain links to the previous parts.<br /><br />Market Impact<br /><br />SAP has exhibited an amazing ability to gradually change, while remaining with both feet on the ground and somehow keeping up with the trends. It is no longer the heavy SAP from a few years ago, although it continues to be a stalwart behemoth. The company has broken away from its traditional unitary ERP mindset and is moving in a direction to penetrate most of the prospective markets in the realm of e-Business. To that end, SAP's strategy to un-bundle itself into disparate centers of excellence was with the aim to become more efficient and competitive. SAP AG, SAPMarkets and the recently announced SAP Portals reflect the approach to build upon SAP's recent open integration strategy to rapidly exploit new technologies for current and future customers. Each entity has the respective expertise and lead responsibility for sales and development of mySAP.com components, exchanges and portals. The desired effect should be the improvement of time-to-market for new solutions.<br /><br />Moreover, SAP has even abandoned its proverbial stubborn policy of only developing functionally superior software in-house. To that end, SAP has become more focused on partnerships and working with other vendors that specialize in e-business software. The recent partnerships with Yahoo! and the partnership with IBM (see Part One) along with recently reinforced wedding vows with Commerce One speak in that regard, while the portals OEM alliances with its fierce enemies might have left some speechless. We believe the alliance with IBM has a true mutual potential. Training thousands of IBM consultants on the mySAP.com suite should tremendously speed up its adoption.<br /><br />Since SAP's most recent focus is on new sexy application areas such as CRM, PLM and SCM, it needs plausible implementation partners to succeed, and it is difficult to think of any more appropriate partner in that regard than IBM GS. Also, IBM's decision to license and integrate SAP's enterprise portal technology for use with IBM's WebSphere Portal Server considerably fortifies the new SAP Portals business. On the other hand, SAP will make expanded use of the IBM WebSphere Application Server within its MarketSet development. IBM hopes to increase the use of DB2 and WebSphere via partnerships to primarily compete against Microsoft and Oracle. Also, one should not neglect IBM GS' opportunity for providing consulting, implementation and outsourcing services around mySAP.com.<br /><br />Consequently, at SAPPHIRE user conference, SAP articulated a sound e-business strategy, which is also quite ambitious and will have to be substantiated in the forthcoming period though. Its product's componentization, openness and outward-looking strategy should be appealing to both current and potential users nonetheless. SAP's alleged humility and non-insistence on locking customers into its technology would virtually leave Oracle as the only apparent proponent of the 'one-stop shop' mantra.<br /><br />Being Open and Flexible Pays Off<br /><br />One can wonder what stands behind SAP's decision to be more open and flexible though - a sudden epiphany of being unable to be all things to all people or some deeper reasons? Whatever the case may be, the decision was wise and pragmatic. As an illustration, TEC recently facilitated an ERP software selection for a division of a large global corporation with over 50 divisions using a plethora of diverse ERP packages (over 30 different packages deployed worldwide, with the 'winning' vendor having 4 instances of its product within the corporation). The chances of any single vendor succeeding in swaying the corporate management to adopt its product as a corporate-wide standard, even if that product should be a good fit everywhere, are very slim. However, linking these disparate systems through portals and private exchanges, would not be a far-fetched idea. That is where SAP can obtain a significant portion of new business, on top of being able to participate in any other software applications selection corporate wide, which would also be with less scope and much simpler owing to the possibility of selecting only a pertinent applications component.<br /><br />SAP Is More Competitive<br /><br />Furthermore, we believe SAP now can afford to compete on a component per component basis, having basically reached its limit in capturing most of large customers in the market with an integrated product suite. The SAP R/3 product suite has long been one of the strongest in terms of feature-function for most of vertical industries as well as for horizontal administrative applications.<br /><br />Where SAP has traditionally lagged though, was the simplicity of implementation and users training partly owing to deep intricacies and interdependencies of modules within R/3. The somewhat facetious comments that SAP R/3 has been more complicated than the US Tax code have not been that far from the truth. By breaking up the huge monolithic R/3 into a subset of mySAP.com components, SAP should be able to more quickly fix or add new functionality independently of other pieces. And once any applications vendor has established component architecture, it becomes easier and safer for IT departments to customize the system.<br /><br />Additionally, componentization proves to be crucial to enable ERP systems to support e-business activity since the new e-commerce capabilities are being delivered as individual components. Componentization also helps the vendors extend the core ERP system with SCM, CRM, and other collaboration solutions. Also, componentization would not only make it easier for the SAP to enhance mySAP.com but also make it easier for customers to upgrade the software. With componentization, a customer could incrementally upgrade only selected components without having to upgrade the entire solution, which usually would entail a colossal effort.<br /><br />Big bang implementations are becoming a matter of past and have often been cited as the main reasons of large implementations fiascos. Users are also becoming savvier and are able to discern when Toyota's functionality and price would suffice instead of opting for unneeded, complicated and expensive Cadillac's features. All the above reasons indicate SAP's increased competitiveness in the lower and medium end of the market in the future.<br /><br />This concludes Part Three of a five-part note on recent developments covered by the SAPPHIRE e-business conference. Part One covered Alliances and Partnerships. Part Two covered SAPs expanding functionality. Part Three discussed the Market Impact. Part Four will discuss SAP's strategy.<br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/sap-a-humble-giant-from-the-reality-land-part-3-market-impact-16435/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-18722697738075793762010-08-18T23:01:00.002-07:002010-08-18T23:02:18.497-07:00Enterprise Applications--The Genesis and Future, Revisited Part Three: 2000s--Back to the Future<div style="text-align: justify;">2000s—Back to the Future<br /><br />Integrated enterprise resource planning (ERP) software solutions became synonymous with competitive advantage, particularly throughout the 1990's. The idea behind ERP systems was to replace "islands of information" with a single, packaged software solution that integrates all traditional enterprise management functions like financials; accounting; payroll; human resource (HR) management; and manufacturing and distribution, and thereby ensure enterprise-wide transaction system coherency. Knowing the history and evolution of ERP within the broader enterprise applications concept is essential to understanding its current use and its future developments. The following is the genesis of enterprise applications by era.<br /><br />ERP systems should help companies become leaner by integrating the basic transaction programs for all departments, allowing quick access to timely information. However, ERP inherited MRPII's basic drawbacks, which are the assumption of infinite capacity and the inflexibility of scheduling dates, preventing companies from taking full advantage of speedy information flow.<br /><br />This brings us to the still ongoing phase of users' disillusionment and their consequent wising up, while the vendors had to take the school of hard knocks and adapt accordingly or fail. Namely, the growth and heydays of ERP throughout the most of the 1990s had been a direct result of the fierce global competition, shortening product life cycles, highly distributed operations, and information-driven management that largely characterize today's business environment. The vast majority of companies have always hoped to purchase an information system as a product, not as a collection of technologies, components and services. Leading ERP vendors have been relatively successful at that stage because they had attempted to build such a product.<br /><br />A typical ERP system indeed now offers broad functional coverage nearing the best-of-breed capabilities; vertical industry extensions; a strong technical architecture; training, documentation, implementation, and process design tools; product enhancements; global support and an extensive list of software, services and technology partners. While it is not a system-in-a-box yet, the gap between its desired and actual features is becoming smaller every day.<br /><br />However, ERP vendors have by and large not fared so well lately. The initial plight of the vast majority of ERP vendors was mostly attributable to the Y2K-problem caused market slowdown that started in the fourth quarter of 1998 and continued in full force throughout 1999 and 2000. Indications of it winding down finally surfaced late in 2000.<br /><br />Particularly affected was license revenue, and the market (with some honorable exceptions) was dramatically less expanding and profitable during 1999 and 2000 than in 1998, measured in the total raw dollar revenues and net income. But, the 2000s have proven to be even more adverse years in the entire enterprise applications market. Following the whopping growth rates of the late 1990s, and the short-lived spending surge on sexy e-business-related technology in 2000, hard times worldwide and in almost all sectors have since subsequently morphed into harrowing times for all enterprise systems providers alike. While the biggest and richest vendors have been able to hang onto flat new sales, potentially modest declines, or in other cases, potentially modest growth, only the lucky or the most apt few with a true differentiation in a selected number of markets (such as warehouse management systems [WMS]/supply chain execution [SCE] or strategic sourcing) (see Glossary*) have bucked the trend and have recently shown some enviable growth (see The Hidden Gems of the Enterprise Application Space).<br /><br />This is Part Three of a six-part note.<br /><br />Parts One and Two covered developments from the 1960s through the 1990s.<br /><br />Parts Four and Five will discuss ERP evolution.<br /><br />Part Six will look at the future.<br /><br />*There is a Glossary for the terms italicized throughout this article.<br /><br />Causes of Market Slowdown<br /><br />We believe that the ERP market slowdown since the end of the 1990s has in a great part been attributable to the following factors:<br /><br /> * The historical growth in sales of ERP applications had come from large, Fortune 1000 multinational corporations. This market has consequently been highly penetrated (well over 70 percent), and new, large-scale back-office implementations in the F1000 customer base have all but stalled. For that reason, most vendors, tier 1 and lower tier ones alike have lately focused more on the less penetrated lower-end of the market, with variable success. For more info on large vendors' attempts at the market segment, and on incumbent mid-market vendors' defensive moves, see Software Giants Make Courting A Small Guy Their 'Business One' Priority.<br /><br /> * However, even the relatively untapped small-to-medium enterprises/businesses (SME/SMB) market has been cautious about starting new projects due to the bad publicity caused by a large number of unsuccessful ERP implementations in the past. Namely, it has long been an open secret, general feeling based on rumors, news headlines, and many survey reports albeit hidden within trade publications' or analyst houses' vaults and largely inaccessible to mass audience owing to exorbitant subscription fees—the fact that many major companies are still having difficulty achieving effective ERP systems even after a full year of implementation.<br /><br /><br /> The above information is based on the report titled ERP Trends (Research Report 1292-01-RR), which was released in 2001 by The Conference Board (www.conferenceboard.org), the premier business membership and research network worldwide. The general feeling, however, is that the situation can be mirrored across the entire enterprise applications space. Namely, when at the end of the 1990s many decided to put ERP down as systems for merely "crunching back-office transactions, which remain locked up therein ever after," guess what, the seemingly sexier customer relationship management (CRM) or supply chain management (SCM) systems have not meanwhile proven any more beneficial either.<br /><br /><br /> In any case, approximately 40 percent of participants in The Conference Board survey reportedly failed to achieve their business case even a year after having implemented ERP. What has generally not been known for sure though was the more exact percentage of failed implementations. Vendors and consultants, on one hand, would argue that these were mere individual cases out of thousands of implementations, and that the bad perception is merely a product of media's overzealous attention to only the bad news. On the other hand, many prospects and customers may believe that the situation has even been worse than some may have thought as most of these problems typically never make it to the headlines because either a more convenient and less embarrassing justification exists or the company cannot reliably trace the problem back to the software or implementation. Although the report does not mention it specifically, the general feeling is that the percentage of failed implementations is higher in the higher-end of the market. For more information, see The 'Joy' Of Enterprise Systems Implementations.<br /><br /> * Closely related to the above would be the inherent adequacies that traditional ERP systems have had, some of which have been noted earlier, and which have left enterprises struggling with a system that does not mesh with their operations. This has particularly been true for manufacturing companies that account for the lion share of ERP customers given their early adoption, as also depicted earlier. Thus, the lean, flow or demand-pull manufacturing support philosophy has lately been getting an increased interest, given the ERP systems of the 1990s have been burdened with the liability of carrying on some well-publicized MRP problems like complex multilevel BOMs, infinite capacity, inefficient workflows, and unnecessary (for example, no value-adding) transactions, activities and data collections, which have not been amenable to mass-customization but rather to traditional push-demand, mass production, and inventory building trends. For more details, see Pull versus Push: a Discussion of Lean, JIT, Flow, and Traditional MRP.<br /><br /><br /> The fact is also that only a minority of all ERP vendors properly support certain manufacturing environments, such as engineer-to-order (ETO) or process manufacturing. This brings us to so called "fatal flaws", which are missing functions that may make it extremely difficult if not impossible for the application software to run the physical business. For more details, see Find The Software's Fatal Flaws To Avoid Failure and The Fatal Flaws for Process Manufacturers.<br /><br /> * Further, many ERP systems have also been based on a top-down, centralized organization, which does not enable effective planning and management of autonomous satellite plant operations. What will thus differentiate the leaders from the rest of the ERP pack will be the breath, depth, and diversity of plant-level, and distribution centers requirements (this includes flow-based manufacturing, work instruction, dynamic dispatching, etc.). The planning functionality will have to extend to the shop floor or distribution center level, whereby manufacturing and distribution functions will become intermingled. For more information, see Trends Affecting Manufacturers and ERP and Standardizing on One ERP System in a Multi-division Enterprise.<br /><br /> * The above predicaments have been additionally aggravated by the need to integrate disparate systems, given that currently no single vendor can offer a complete end-to-end solution (from supplier to end customer), despite some enterprise vendors' marketing rhetoric. This will be the topic of another forthcoming article on the evolving core-ERP scope. Meanwhile, for more information at this stage, one can peruse Best of Breed Versus Fully Integrated Software: The Pro's and Con's, Single Source or Best of Breed - The Debate Continues.<br /><br /> * The ongoing technology paradigm shift from client/server to the Internet-based architectures has created uncertainty about investing in traditional client/server technologies, which are still present (however in an obfuscated manner) among many ERP players' offerings. The second half of 1999 marked a dramatic and fundamental shift in the enterprise applications market with the emergence of the Internet as a viable platform for business-to-business (B2B) e-commerce transactions, which has rendered the outdated architectural and business perspectives of traditional ERP obsolete.<br /><br /><br /> In order to reinvent itself for the new collaborative external world, ERP products will have to exhibit Web-based, service oriented architecture embodied in componentized products, and better data availability (internally and externally published and subscribed) among ERP and non-ERP applications. The new generation of ERP systems will have to be more customer-focused and will extend beyond the enterprise through e-commerce interaction and collaboration with business partners. Like some of the above bullet points, this one too will be the topic of another forthcoming article on the underlying technology of enterprise applications. For more information at this stage, one can peruse What's Wrong With Enterprise Applications, And What Are Vendors Doing About It?<br /><br />Consequently, many have failed to see deploying ERP (and other enterprise applications for that matter) as a competitive advantage. Therefore, we believe that many outlined trends in the enterprise applications market, some of which will be analyzed here and will be the subject of another forthcoming article on the trends in the enterprise applications market, are the direct consequence of vendors' attempts to<br /><br /> 1) Resolve current ERP functional and technological deficiencies, as to finally fulfill the initially over-hyped benefits in the past,<br /><br /><br /> 2) Expand software sales both within their existing and potential customer bases, particularly in the lower-end of the market, by allaying the ERP complexity and costs perceptions, or<br /><br /><br /> 3) Further harness the Internet, which has been reshaping the enterprise applications market by making possible unprecedented visibility and information sharing both within an enterprise and between business partners.<br /><br />This concludes Part Three of a six-part note.<br /><br />Parts One and Two covered developments from the 1960s through the 1990s.<br /><br />Parts Four and Five will discuss ERP evolution.<br /><br />Part Six will look at the future.<br /><br />Sources and Recommended Further Readings<br /><br /> 1. ERP: Tools, Techniques, and Applications for Integrating the Supply Chain. Second Edition; Carol A. Ptak, CFPIM, CIRM, and Eli Schragenheim; The St. Lucie Press/APICS Series on Resource Management; 2nd Edition, 2003<br /><br /> 2. Selected Readings in ERP; APICS Complex Industries SIG, 1999<br /><br /> 3. Maximizing Your ERP System: A Practical Guide for Managers; Dr. Scott Hamilton; McGraw-Hill Trade, 2002<br /><br /> 4. APICS Dictionary; 10th Edition<br /><br /><br /><br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/enterprise-applications-the-genesis-and-future-revisited-part-three-2000s-back-to-the-future-17230/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-14708021741413887342010-08-18T23:01:00.001-07:002010-08-18T23:01:48.184-07:00The Human Capital Management Market—Hot, but also Overpopulated?<div style="text-align: justify;">Tactical and administrative human resources (HR) management is morphing into strategic human capital management (HCR). In the US, we live in a litigation-happy society that makes any company more likely to be sued by an employee than to be audited by the Internal Revenue Service (IRS). US regulatory requirements and corporate governance issues thus certainly vouch for the modestly increased demand for transactional HR systems that provide tools to produce (for instance) W-2 and 1099-R forms, the maintenance of data in compliance with immigration laws, and Americans with Disabilities Act (ADA) disability information. Also, there will be an ongoing need for support for the Health Insurance Portability and Accountability Act (HIPAA), the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Occupational Health & Safety Administration (OSHA), and Sarbanes-Oxley Act (SOX) compliance. Another key driver, especially in large companies, is the need to consolidate multiple HR transactional systems for efficiency and global workforce visibility.<br /><br />Part Four of the series Thou Shalt Manage Human Capital Better.<br /><br />Still, enterprises will likely invest less in integrated complex suites, as a result of their customarily high upfront cost, lengthy implementation, and hard-to-achieve return on investment (ROI). Instead, many are now looking at hosted service models where companies pay per-employee-per-month fees, bear no responsibility for hardware and software upgrades, and have complete control over their own talent management processes. Additionally, they might want to invest in point solutions that target line of business (LOB) users, and that provide proven, short-term payback in the form of direct cost reduction, process improvement, and increased user satisfaction.<br /><br />Certainly, the latest technology advancements have also been a catalyst for a transformation in the way HR services are delivered to and adopted by employees and managers, allowing HR administrators to trade the largely transactional and administrative work they have been burdened with in the past, for more time to work on critical business-facing initiatives. To that end, a raft of best-of-breed solutions have automated HR workflows, reduced costs, and improved data quality.<br /><br />Many software tools and applications have recently been designed to align and heighten employee and corporate performance, making the emerging human capital management (HCM) software category (sometimes also called workforce productivity or workforce optimization) especially fertile and crowded. Vendors abound, from as many directions as there are HCM subcategories. Many more vendors try to cover most of the bases with broader product suites that address "employee life cycle management" in its entirety. However, while there have been noticeable consolidation moves, which vendors will dominate the space in the long run cannot be exactly stated at this time.<br /><br />Even long before being acquired by Oracle, former HCM leader PeopleSoft had methodically rounded out its HCM capabilities and reached critical mass with most of its capabilities, which has prompted many point solution providers to merge and marshal a broader HCM offering. But then, immediately after the PeopleSoft acquisition and the inevitable uncertainty about the product's direction under Oracle, the market has seen prosperity and higher profiles of several niche HR- and HCM-related special applications providers, although Oracle (including its original and PeopleSoft and JD Edwards HR products) remains an undisputed leader in all HCM software categories except for time and attendance (T&A), where Kronos rules.<br /><br />One should again note that T&A is a segment of broader strategic workforce/talent/human capital management suites, that in most definitions includes at its core the HR, payroll, and benefits modules, which have lately been bolstered with self-service for employees and managers, and similar intuitive applications like a centralized workforce portal that conducts on-boarding and other pertinent functions. Additional applications might include recruitment and staffing, performance and compensation management, appraisals and assessments, learning management, succession planning and career paths, workforce scheduling, and (sometimes) pension administration.<br /><br />For background information, see Thou Shalt Manage Human Capital Better, Tactical Human Resources Evolves into Strategic Human Capital Management, and Performance and Compensation Management at the Core of Human Capital Management?.<br /><br />The HCM Providers' Medley<br /><br />Thus, one can define three families of HCM solutions providers:<br /><br /> 1. traditional ERP vendors like SAP, Oracle, Lawson, Microsoft Dynamics, Agresso, Sage, Deltek, etc.;<br /><br /> 2. former best-of-breed niche human resource management systems (HRMS) vendors that are evolving into best-of-breed HCM suite providers, such as Hewitt Associates (including its recent acquisition Cyborg), Ultimate Software, Employease (recently acquired by its long-term partner, ADP), Extensity (formerly Geac HR, now part of Infor), Kronos, Meta4, Taleo, BrasRing, Czanne Software, Genesys, Workstream, and including traditional payroll or HR service providers like ADP and Ceridian, which have also encroached on the realm of HCM lately; and<br /><br /> 3. the plethora of niche HCM providers (most of which have been mentioned earlier) in areas like performance and compensation or incentive management, e-learning, employee development, competency modeling, succession planning, workforce scheduling and optimization, and so on.<br /><br />What may work in favor of the best-of-breed applications is their complementary nature to an installed enterprise resource planning (ERP) system, and increasing ease in integrating these and orchestrating processes via service-oriented architecture (SOA) and Web services developments (see Understanding SOA, Web Services, BPM, BPEL, and More).<br /><br />Some industry data and first-hand observations indicate that many enterprises which have deployed an HRMS system from one of the leading ERP providers might gain better results and increasingly deeper functionality by working with a best-of-breed provider, such as those for core workforce management functions like compensation planning or employee performance management. This is largely because many best-of-breed HCM vendors excel at delivering tools that are configurable to support a customer's existing business process, and that are highly intuitive and easy to use, ensuring high rates of adoption by the most important user communities: employees and managers. Additionally, the proliferation of merger and acquisition activity in the HR vendor community is helping best-of-breed suite providers gain additional functionality fairly quickly, a trend that makes them even more formidable competitors to the large enterprise vendors.<br /><br />Yet although pure-play vendors can sometimes provide more robust functionality, where they typically lack is in the integration with core HR employee data and back-office financial applications. ERP vendors tout the inherent strength of their comprehensive integration across the organization. For example, if a customer runs Oracle Financials and then implements the Oracle HRMS and Oracle CRM (customer relationship management) applications, it should get the added benefits of seamless integration and lower maintenance costs, and less downtime any time the company upgrades the software or installs dot-release enhancements. But if the customer chooses the cobbled approach and runs Oracle Financials along with Taleo, SumTotal, Callidus, ADP, Authoria, etc, one can imagine the inefficiencies, downtime, and strain on the information technology (IT) department created by the need to continuously make sure that all versions of the diverse niche software applications are integrated with the back-office financials applications.<br /><br />While ERP vendors will continue to move toward one-stop shopping, thereby adding a wide variety of applications to their suites, best-of-breed HCM providers will gain strength through consolidation and by focusing on meeting specialized client needs in certain industries. For that reason, the likes of Authoria, Workscape, and Kenexa have lately promoted themselves into broader HCM suite providers from mere niche players.<br /><br />The overall HR and HCM category is also experiencing a continuation of a shift to a subscription model, which is already well established in some segments, and often suitable for companies with variability in demand (see Software as a Service Is Gaining Ground. Some providers, like Ultimate Software, have lately reinvented their license businesses, and achieved stellar financial performance owing to the subscription-based model.<br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/the-human-capital-management-market-hot-but-also-overpopulated-18741/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-44900940566035688452010-08-18T23:00:00.000-07:002010-08-18T23:01:01.967-07:00Server Platform Situational Analysis: IBM AS/400<div style="text-align: justify;">Situational Analysis<br /><br />As outlined in The Blessing and Curse of Rejuvenating Legacy Systems, every independent software vendor (ISV) finds itself in a difficult position in terms of catering to existing and prospective customers. Existing customers seek updates in incremental and manageable sizes which will not disrupt current information technology (IT) processes. Potential customers want feature rich solutions that are rapidly implemented.<br /><br />For instance, customers typically want to stay on the IBM eServer iSeries server platform (formerly IBM AS/400), valuing its reliability (high availability due to clustering capabilities), stability, security, scalability, its price per performance value proposition, and ease of management. However, they also want to look beyond the traditional text character-based, a.k.a. 5250 "green screen" user interface (UI), to have a more modern, flexible way to use their software. They want to keep the rich functionality of the software, but want increased ease of integration to disparate applications, to, at least, better collaboration with trading partners.<br /><br />On the other hand, as to win new customers, every ISV has to be able to feature the latest and most modern technologies, featuring rich functionality and rapid implementation tracks. To bridge this gap, many leading vendors have embarked on providing next-generation development platforms (if not even more comprehensive infrastructure platforms, see SOA-based Applications and Infrastructure—The Next Frontier?). Ultimately, the ISV needs to consider product evolution rather than revolution. ISVs must continually make product functionality enhancements, and create custom extensions, so existing customers will not have to rip and replace their current systems to benefit from the new functionality. At the same time, the ISV needs to maintain feasible integration to other applications and to complementary products.<br /><br />This is Part One of a three-part note. Part Two will discuss IBM's response and detail challenges. Part Three will cover other ISV developments and make user recommendations.<br /><br />IBM eServer iSeries<br /><br />Nowhere is this imperative of sensible modernization so apparent as in the IBM eServer iSeries environments. The iSeries server, IBM's landmark product and a well-known successor of the AS/400 (standing for Application System/400) platform. It has been implemented on a large scale over the past twenty-five years in many small and medium businesses (SMB). This midrange minicomputer is still being praised because of its operational ease-of-use, reliability, flexibility, and scalability.<br /><br />In the beginning, AS/400 was originally going to be called AS/40, as it was an offshoot of IBM System/38,. However, purely for marketing purposes, IBM added an extra zero to the name to make it appear bigger, better, and smarter. To add substance and credibility to the additional zero, in mid-1988 the president of the AS/400 division at the time, Steve Schwartz, made a bold announcement, claiming that the AS/400 could support 400 concurrent users. Analysts bought the story, and IT decision makers have since bought the box en mass. There is an estimated 400,000+ units in use worldwide, with around 245,000 named customers. Thye run hundreds of millions of lines of old application code. IBM has shipped over 700,000 systems ever since the product's introduction; however, one should note that many customers have upgraded and replaced their systems over time, but this does not indicate that IBM has lost 300,000 user systems.<br /><br />Withstanding the trials and tribulations of new technology and sophisticated application reengineering, the platform has long deserved a medal for versatility and the ability to re-invent itself every few years in a an ever changing world of user requirements. One of the changes that the digital world and the iSeries must cope with in the 21st century is the onslaught of security intrusions. Not surprisingly, media is hard-pressed for security incident reports involving the platform, since attacking and exploiting an iSeries is much more difficult than attacking a UNIX or Microsoft Windows NT/XP box. That is because, unlike many other computing platforms where security is built-in as an afterthought, security was built into the AS/400 from the beginning, as part of the original design. For more information, see The AS/400 Takes You Securely Where You Want to Go.<br /><br />However, because the platform had initially lacked a native graphical user interface (GUI), portability, Internet-enablement, and poor integrated with other software products (especially non-iSeries based products), its use has significantly declined lately, and users have shifted towards more user-friendly Microsoft Windows and Intel microprocessor (so called "Wintel") based systems. While most of these issues have been addressed, the reasons for the AS/400's having these shortcomings in the first place unfortunately stem from its ancient (in computer years) origins. Way back in 1988, when AS/400 was launched, GUI, the Internet, and desktop productivity applications of today were only a figment of some innovator's imagination, and were, at best, only emerging in laboratories. Also, at that time, users deemed computers as mere repositories for transactional data, and generators of reports, which often led users to premise their selection on IT systems that enabled these services at the lowest cost, and with the greatest ease of use and efficiency.<br /><br />To that end, the AS/400 systems of the late 1980s and early 1990s came with a highly integrated, native programming environment that included procedural languages such as RPG. RPG, which stands for Report Program Generator, was a programming language created by IBM in the mid-1960s to develop business applications, and especially to generate reports from data. Its newest version, RPG IV, is still widely used on iSeries systems. RPG is a comprehensive toolset for designing and testing applications; it is a runtime engine, and an IBM DB2/400 universal database management system (DBMS). The tight integration between these components enabled developers to create new applications fairly quickly. These features also absolved developers from worrying about distracting, non-development issues, such as memory and storage management, which programmers on other systems typically had to consider.<br /><br />In fact, iSeries has long integrated freely with a variety of other products from both tool providers and ISVs, and, needless to say, with its sister WebSphere platform. Nowadays, there are a host of Windows tools that also integrate fairly smoothly with iSeries, since many customers using Windows have tightly integrated applications using Open Database Connectivity (ODBC) to access DB2 on the iSeries. iSeries Navigator GUI was also designed so that the product could integrate well with Windows, and the function is now also available (with iSeries Power5 Release 3) from a browser. However, these developments are not widespread, public knowledge.<br /><br />Customer Requirements Change<br /><br />Therefore, while the product's configuration has worked well for more than ten years, from the late 1990s on, customers' requirements for enterprise applications capabilities have changed dramatically. Among many, a particular one comes from enterprises expecting their applications not only to offer GUI, but to be accessible from different interfaces and devices, including Web browsers, portals, popular desktop applications, mobile phones, personal digital assistants (PDA) etc. (For more information, see Vendors Harness Excel (and Office) to Win the Lower-end of Business Intelligence Market).<br /><br />These call for a separate presentation (client) and back-end (server) business logic. To be fair, there have been a variety of tools for GUI-based solutions from iSeries tool partners since the early 1990s. Seagull's GUI 400 is one such example. IBM ships this product as a part of its iSeries Access (then known as Client Access), which also includes a wireless tool kit. However, while Seagull, and other IBM tool partners like LANSA, Advanced BusinessLink have provided wireless solutions for a long time now, this too has not been widespread knowledge.<br /><br />Consequently, for a long time now, iSeries has been experiencing waning ISV commitment in the enterprise applications realm, albeit it has remained the most suitable choice for some application users. There are strong indications that some industries, such as wholesale distribution, and some geographic regions, such as Italy, Germany, and Australia, still, almost religiously support the platform. Until the early 2000s, most enterprise resource planning (ERP) vendors with an iSeries heritage still managed to generate the majority of their revenues from the iSeries driven business, This was largely driven by Y2K compliance issues and the reticence of existing users to switch technologies. But as the Y2K crisis subsided and went away in 2000, the platform has since captured ever fewer new ERP and adjacent applications contracts.<br /><br />In addition to the technological shortcomings listed above, another primary cause of the platforms declining popularity was IBM's indolent marketing compared to those of its foes, Microsoft or Oracle. Namely, iSeries compares very well to Windows and Unix/Linux platforms in a number of important areas—it has long had an apparent advantage in reliability, ease of administration, and worldwide service and support. Indeed, the combination of availability, cost, and experience level of RPG skills had long been superior to that of Windows NT and about equal to UNIX skills.<br /><br />Also, while iSeries is typically initially priced higher than Windows box configurations, its simplicity delivers the three-year or so total costs of ownership (TCO) for the two platforms to be about on par. Yet, despite this and its significant ongoing technological advances, IBM has failed to change the (possibly unjust) market perception that iSeries is an aging technology. To combat this, IBM should at least work more actively with educational institutions to ensure that students receive training and develop an appreciation for its product architecture and capabilities. IBM has begun to enter this area through its Partners In Education (PIE) program, which has over 200 schools with iSeries programs. However, there is certainly a room for improvement, given that all that is required is a local customer, ISV or an IBM representative that will sign up to be the sponsor.<br /><br />Also, much of the users' move to Windows may not have had much to do with the GUI and AS/400's perceived shortcomings, but rather more to do with the price points of Wintel servers. In fact, IBM can boast a swath of ISV solutions, but, in many cases, these ISVs have trouble competing against Wintel because customers insists that Wintel is better because it costs less. IBM has been on full tilt on the latest iSeries Power5 platform explaining to the market that the iSeries is on the leading edge of computing technology with its virtualization engine and multi-operating systems (OS) deployment options. However, another challenge is that ironically, long time users of AS/400 many not want to hear this new pitch,<br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/server-platform-situational-analysis-ibm-as-400-18243/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-81527126784199072942010-08-18T22:59:00.002-07:002010-08-18T23:00:24.826-07:00PeopleSoft - Catching Its Second Wind From The Internet Part 1: About PeopleSoft<div style="text-align: justify;">Executive Summary<br /><br />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.<br /><br />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.<br /><br />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.<br /><br />This part of the note discusses how PeopleSoft accomplished all this change and how it intends to reap the benefits.<br /><br />About This Note<br /><br />This is a three part note:<br /><br /> 1. Part 1 contains the Vendor Summary, Trajectory and Strategy, and Major Developments during the past two years.<br /><br /> 2. Part 2 contains an Analysis of PeopleSoft's Strengths and Challenges.<br /><br /> 3. Part 3 contains the Bottom Line information with Predictions, and Recommendations for both PeopleSoft and users.<br /><br />Part 3 contains links to Parts 1 and 2.<br /><br />All three parts contain the Corporate Profile.<br /><br />Vendor Summary<br /><br />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.<br /><br />Early History<br /><br />Founded in 1987 by David Duffield and with headquarters in Pleasanton, CA, PeopleSoft is the third-ranked applications vendor with $1.74 billion in revenue in 2000 (approximately 8.5% of the global ERP market), behind SAP and Oracle. 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. Consequently, the company posted its first losing year in 1999 (see Figure 1).<br /><br />Figure 1.<br /><br />Figure 2.<br /><br />In 1988 PeopleSoft delivered the market's first network-based human resources management system (HRMS) software. The company has since significantly broadened its software offering. In 1992, it introduced the first of a series of financial management and accounting system software products, and, in 1994, it introduced the first of a series of distribution and SCM products. Since that time, PeopleSoft has introduced several additions to its existing product lines, plus industry specific software products. These industry specific applications include manufacturing products, public sector financial management products, public sector human resources management products, student administration products for the higher education market, and human resources and financial management products for the U.S. federal government market.<br /><br />In 1996 the company bought Red Pepper Software, a supply chain optimization solutions vendor, and began offering applications for discrete manufacturers. The buying spree continued with Campus Solutions (higher-education software), Salerno Manufacturing Systems (quality management software solutions), and TeamOne (implementation services for midsize businesses) in 1997.<br /><br />In 1998, facing an industry wide Y2K problem-caused slowdown in demand for ERP software, PeopleSoft laid off 6% of its workforce, the first layoff in its history. Later in 1998 PeopleSoft bought Intrepid Systems (retail management software), TriMark Technologies (life insurance software) and formed a new R&D unit, Momentum Business Applications, to develop e-commerce and industry-specific software. Revenue from services surpassed software license revenue for the first time in 1998 (See Figure 1).<br /><br />Recent History<br /><br />In 1999, to further enhance its product line, PeopleSoft acquired Distinction Software, a SCM software provider. In the same year, Duffield hired former Oracle marketing executive Craig Conway as president and CEO. Another restructuring that eliminated more positions contributed to a hefty loss in 1999 (See Figures 1 & 3). However, the company delivered a comprehensive analytic solution to support management decision making, PeopleSoft Enterprise Performance Management (EPM) and launched PeopleSoft eStore, the first in a series of its e-Business applications, enabling organizations to sell goods and services over the Internet. Additionally, the company introduced PeopleSoft eProcurement, which allows business-to-business (B2B) procurement over the Internet.<br /><br />Figure 3.<br /><br />In 2000, PeopleSoft acquired The Vantive Corporation, a leading CRM software provider, and Advance Planning Solutions, a business planning and modeling software company. PeopleSoft also launched its in-house application service provider (ASP) offering, eCenter, and an online trading exchange, PeopleSoft MarketPlace. The major development in 2000 was the delivery of PeopleSoft 8, which represented a generational shift to the Internet in its software architecture.<br /><br />Despite broadening its product portfolio, PeopleSoft generates more than 70% of its revenue from services that include software maintenance and support, customer education and training, and consulting. By the end of 2000 the Company had licensed system installations to over 4,500 customers in 107 countries. PeopleSoft has offices in 15 countries and over 8,000 employees. The Company's revenue primarily comes from US and Canadian markets (over 70%). The Company went public in 1992 and currently trades on NASDAQ.<br /><br />Vendor Trajectory and Strategy<br /><br />It is almost sensational how much has changed in PeopleSoft's business during the last two years. New and then unknown CEO Craig Conway came aboard in May 1999 and wasted no time changing it to a competitive, bite-the-bullet culture as opposed to the proverbial touchy-feely, informal culture. This change prompted a tide of defections by those employees averse to risk-taking. Conway also significantly increased the sales & marketing effort by hiring almost 50% more sales people and he also doubled the R & D budget. PeopleSoft believes it has recently been reaping the benefits from more than a yearlong excruciating effort to achieve the following six strategic goals the management had initially laid out:<br /><br /> 1. Deliver an Internet-based product<br /><br /> 2. Deliver collaborative e-business applications<br /><br /> 3. Enhance CRM product offering (through the acquisition of The Vantive Corporation)<br /><br /> 4. Expand internationally<br /><br /> 5. Increase its professional service capabilities<br /><br /> 6. Provide ASP services.<br /><br />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 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. Because it is purely Internet-based, it can be accessed through any standard Web browser, wireless phone, and personal digital assistant (PDA) without any code on the client side of applications including Java. The product also uses XML for communications between applications. For more information on the product release, see PeopleSoft 8 Launched. Anything to Write Home About?<br /><br />PeopleSoft 8 was the culmination of the company's effort to introduce the Internet-based software, from the Web-enabled traditional client/server release of PeopleSoft 7.0 in 1997 and a Java-based client in PeopleSoft 7.5 release in 1998. Biting the bullet and radically re-architecting the product was not an easy decision since internally, the debate raged over whether to completely rebuild the software for the Internet, to only add new features to a 7.5 release, or to opt for a new software that would neither be Internet-based nor compatible with earlier product releases.<br /><br />Like most of its competitors, PeopleSoft is hoping to thrive by focusing on Internet collaboration and extended-ERP applications. However, hoping to differ from its peers, the company embarked on the quest to provide a comprehensive suite of integrated applications that are also individually considered as 'best-of-breed' applications based on their standalone functional strengths. The company also values the openness and interconnectivity of its products by supporting main industry accepted middleware standards.<br /><br />PeopleSoft's current focus is the delivery of new generation of PeopleSoft 8 CRM applications starting in June 2001, while concurrently phasing out the Vantive brand. While PeopleSoft CRM Customer Interaction Center (CIC), a solution that manages customer interactions throughout the customer lifecycle, and PeopleSoft Mobile Sales for Wireless Access Protocol (WAP) Phones solution were delivered in April 2001, the unified data integration between PeopleSoft CRM and back-office products is only expected in the second half of 2001.<br /><br />The recent alliances with JustTalk and Witness Systems contribute to PeopleSoft's cutting edge endeavors in the CRM market. JustTalk is a provider of speech-interactive enterprise applications, that provides mobile professionals the ability to manage their personal and enterprise data - call management, to-do-list, memos, contact information and calendar management from anywhere, at anytime - through the telephone. Witness Systems, a quality assurance software vendor, aims to offer customers a way to measure and monitor their CRM software deployments.<br /><br />The company has also been making strides into supply chain management (SCM) and business-to-business (B2B) collaboration areas. PeopleSoft is seeking to make a bigger brand name in these markets where it traditionally had low market recognition. The PeopleSoft 8 Supplier Relationship Management (SRM) suite, which should allow business partners to communicate their inventory, design, and buying plans over the Web through a roles-based, collaborative portal, was announced as generally available on May 29, 2001. As a follow up to this product, PeopleSoft plans the release in Q1 2002 of a new sourcing application, which should let buyers search for suppliers and buy direct materials online over the Web.<br /><br />We also expect the company to pursue acquisitions and/or alliances for e-business infrastructure and manufacturing application providers; the acquisition of SkillsVillage, a supplier of contract service management software, being a tip of an iceberg. Additionally, PeopleSoft will invest more aggressively in sales and marketing, international business expansion through distributors, and will seek to become more vertically oriented, leveraging a number of alliances with major software/hardware providers (e.g., Sun Microsystems and IBM) and system integrators and consulting companies (e.g., CAP Gemini Ernst & Young).<br /><br /><br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/peoplesoft-catching-its-second-wind-from-the-internet-part-1-about-peoplesoft-16391/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-43322465079193748972010-08-18T22:59:00.001-07:002010-08-18T22:59:40.199-07:00Knowledge Based Selections<div style="text-align: justify;"> Performing a selection for a technology product requires a company to marry a myriad of internal business requirements, both present and future, with a myriad of vendor attributes that relate to both products performance as well as the ability to effectively provide long-term value to clients. In order to truly reach a "best" and "justifiable" decision that will stand up to the scrutiny of critics both inside and outside the organization, true business requirements, linked to long-term strategy must be distilled and hundreds, if not thousands, of vendor attributes must be evaluated.<br /><br />Whereas with enough hands, enough expertise and enough time, an organization could plow its way through the voluminous amount of information to reach a proper decision, a Selection Methodology that utilizes a Knowledge Base and decision support tool and expedites business requirements collection and the vetting of vendor claims, will enable a company to rapidly conduct its due diligence and select a technology vendor that best fits its requirements.<br /><br />Knowledge Based Selection has several unique characteristics:<br /><br /> 1. It leverages a pre-built knowledge base that covers:<br /><br /> * Typical User Requirements<br /><br /> * Product Technology<br /><br /> * Vendor Viability<br /><br /> * Service & Support<br /><br /> 2. It follows an explicit methodology that creates maximum leverage from people, process & technological tools.<br /><br /> 3. It has a consistent approach to evaluating Technology Providers see article "Do You Know How to Evaluate Your Strategic Technology Provider?"<br /><br /> 4. It enables the auditing of decisions through the use of scientific methods as are embedded in TEC's ERGO 2001 selection tool.<br /><br />Goals of Knowledge Based Selections <br /><br />It is important to determine whether or not your project and business goals, as they pertain to technology selection, are aligned with the goals of the Knowledge Based Selection Method. These goals are summarized below:<br /><br /> 1. Process objectivity<br /><br /> Objectivity is a high priority for Knowledge Based Selections. It is vital that internal needs assessment and technology evaluation be conducted without allowing individual group biases to enter. Although the company benefits from a good rapport among departments, even the suggestion of bias would greatly impair the validity of the results.<br /><br /> Companies who elect to conduct a technology selection project using only internal resources face numerous challenges. In large organizations, work groups are often distributed over large distances in terms of both physical distance and corporate role. This separation, perhaps efficient in some ways, creates a barrier to selection projects that require participation by these disparate groups. Also, internal project team members can be perceived as biased no matter how honorable their intentions. You need a means of maintaining objectivity in selections, thereby mitigating both bias and the influence of internal political agendas.<br /><br /> 2. Make as highly detailed a comparison as possible<br /><br /> Virtually all technology selection teams appreciate the importance of product functionality and product technology requirements in making the right decision. Too often, however, these are the only criteria that play a role in the decision-making process. Other factors can determine the eventual success or failure of a new system, including vendor corporate strategy, service and support capabilities, financial viability, cost and qualitative measures with regards to process fit, ease of use/navigation, market feedback, vendor diligence and product flexibility.<br /><br /> Your process must ensure validation of the product technology and functionality through detailed technical reviews of application architecture and design and by employing scripted vendor demonstrations. It should develop repositories of hierarchically arranged criteria that ensure the selection incorporates this breadth of criteria.<br /><br /> Another frequently forgotten, but important aspect in technology selections is detail. Selections that fail to consider requirements at a sufficient level of detail inevitably produce costly surprises during implementation. Your selection process must combine sufficient degrees of breadth and depth in order for project teams to make valid comparisons among vendor options.<br /><br /> The selection process should also have a methodology that facilitates a well-documented audit trail of the processes and each vendor's capability to support those processes. It also should provide a method to deliver a statistical best match between the your needs and each vendor's capabilities.<br /><br /> 3. Position the implementation for success<br /><br /> The selection process that gives the implementation the best possible chance to succeed will:<br /><br /> * Enable a comprehensive and detailed exploration of the organization's needs,<br /><br /> * Provide an automated decision support framework,<br /><br /> * Leverage deep expertise to manage the overall selection process, and<br /><br /> * Deliver a sound recommendation that supports the business strategy.<br /><br /> No organization can afford to embark on a system implementation that is predestined to fail. To that end, your process should include a readiness assessment through interviews with executive and senior managers. From an analysis of needs, concerns, attitudes, experience, knowledge and desired business architecture, you can constructs a Risk Profile for each selection to help guide the GO/NOGO decision and risk mitigation choices.<br /> 4. Mitigate ongoing costs<br /><br /> While there may be more than one product that satisfactorily addresses your requirements, differences in total solution cost can be significant. These costs are not restricted to license fees, implementation services, and user training fees. Years after the go-live date of the new system, the ongoing maintenance, training, and upgrade costs can reach totals that greatly overshadow the initial expenditure. Clearly, a thorough selection demands that initial and ongoing costs assume a prominent role in determining the one product that offers the greatest cost effectiveness.<br /><br /> You should include both initial and ongoing costs in the decision model. Cost effectiveness can be represented as criteria within the decision model hierarchy and compared to other feature/function criteria, strategy, viability, or service and support. Cost can also be represented as values, allowing other criteria, such as functionality and technology to be compared against it.<br /><br /> 5. Solve business needs<br /><br /> A strong mandate to adopt a new IT strategy and/or technical approach is critical if the company is to keep pace with current and future business developments. The selection process builds upon acquired knowledge to yield technology recommendations that solve day-to-day business objectives, while supporting its long-term goals<br /><br /> Your methodology should have potential suppliers prove that their solutions can work in the manner that you envision your company operating after the system is implemented. At the end of the process you should have detailed business scenarios based on your specific operations and be able to provide suppliers with a crystal clear picture of what is desired and what they are expected to demonstrate to the selection team.<br /><br />Conclusion <br /><br /><br /><br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/knowledge-based-selections-16331/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-80097565306716461532010-08-18T22:58:00.000-07:002010-08-18T22:59:00.704-07:00A Traditional "Local Touch" Leader Espouses a More Global Vision<div style="text-align: justify;">Introduction<br /><br />The response to our article series where we solicited vendors' input on a number of market trends has received much attention and reaction from readers and vendors alike. Infor and IFS were the first two to respond (see Two Stalwart Vendors Discuss Market Trends), followed by Progress Software (see Open Platform Provider Answers Questions about the State of the Market).<br /><br />Now another prominent market player has joined the discussion: Sage, a world leader in accounting and midmarket ERP. The Sage Group, PLC (www.sage.com) is a $2.55 billion (USD) organization and arguably the third largest business software vendor worldwide. It is the leading supplier of business management software and services with over 5.8 million customers worldwide. Globally, Sage has over 14,500 employees and a global network of over 25,000 reseller partners and 40,000 accountants that recommend its products. The vendor handles over 36,000 customer support service calls daily and over 1.7 million support service contracts. Sage also represents a strong cash generating business, which has consistently delivered strong operating margins earnings before interest, taxes, depreciation and amortization (EBITDA) of 23 percent and organic growth of 6 percent (excluding Sage Healthcare Division) for the financial year ending September 30, 2008. For details go to http://www.investors.sage.com/reports_presentations/results_presentations/.<br /><br />With North American operations located near Pittsburgh, Pennsylvania (US), Sage offers Sage ERP X3 (formerly Adonix X3, www.sageERPx3.us), an international enterprise resource planning (ERP) solution for midsized companies. The product targets midsized, competitive, and progressive companies that face the same business challenges as (and similar complexities to) Fortune 1000 ones, but that need more flexible and cost-effective, modern solutions to support their operations and growth. To that end, the Sage ERP X3 software suite integrates manufacturing, distribution, warehousing, customer relationship management (CRM), and finance functionality, while remaining competitive in terms of cost-effectiveness, implementation speed, and ease of use.<br /><br />Espousing an International Offering<br /><br />Sage ERP X3 is sold and implemented both directly by Sage and through a network of 150 value-added resellers (VARs). The product is also distributed by Sage branches and its international network of resellers throughout Europe, China, South East Asia, the Middle East, and Africa. With over 2,000 worldwide customers—ranging from 10 to more than 1,000 ERP users and representing over 5,000 sites—Sage ERP X3 has established itself as one of the fastest-growing enterprise systems for midsized companies.<br /><br />The latest product's version was recently released by the Sage Group under the new brand name, Sage ERP X3, to better reflect its potentially unique position within the vast Sage portfolio of ERP products. Namely, while Sage has traditionally offered well-attuned local and regional products, Sage ERP X3 might be Sage's first notable foray in offering a globally available enterprise-level product. A multi-audit and regulatory compliant system, Sage ERP X3 meets multisite, multicompany, and multicountry business requirements. It is available in eight languages and legislations, including the United States (US), France, Spain, Portugal, Italy, Germany, United Kingdom (UK), and China.<br /><br />In 2008, Sage issued a controlled-release Sage ERP X3, version, unveiling it in 35 countries across Europe, the Americas, Asia, Africa, and the Middle East. The system is represented in the US through Sage North America, a dedicated North American ERP mid-market player. Prior to version 5, Sage ERP X3 was distributed under different brand names depending on the country (Adonix X3 in the US, Canada, and Argentina; Diapason X in Italy; and Sage X3 Enterprise in other countries).<br /><br />Sage has reportedly invested 20 percent of X3's product line annual revenues into research and development (R&D), ensuring customers benefit from an ongoing release schedule and assuring them a return on investment (ROI) over the life of their Sage ERP X3 implementations.<br /><br />Zooming Into Sage ERP X3?<br /><br />Sage ERP X3 is an extended-ERP software suite designed to meet mid-to-large companies' deep manufacturing and distribution functional requirements in a relatively simple and cost-effective manner. The system offers integrated functionality in the areas of finance, sales, CRM, inventory management, purchasing, and manufacturing. The typical customer for Sage ERP X3 is a company of 50 to 2,000 employees with $20 million to $500 million (USD) in revenue.<br /><br />The versatile system comes in three configured offerings aimed at meeting the needs of 1) process manufacturers, 2) discrete manufacturers, and 3) wholesale distributors with a limited need for customization (due to a tight functional fit). In the US, Sage ERP X3's core industry targets include chemicals (see So What's the Big Deal with Chemicals?), food and beverage (see Food and Beverage "Delights"), life sciences, hard goods manufacturing, wholesale trade, and multichannel retail and direct marketing (see The Challenge of Fulfillment).<br /><br />Sage ERP X3 complements the existing Sage ERP portfolio in North America by providing the upper mid-market with mid-range to high-end ERP software capable of meeting more elaborate business processes. Scaling up to more than 1,000 concurrent users, it also provides current Sage customers in the lower end of the market with a viable path for growth for the future, and provides an opening to global expansion. In other words, Sage is positioning Sage ERP X3 into the Sage ERP family, which excludes stand-alone CRM packages, such as SalesLogix (which is another globally available product by Sage).<br /><br />Within that family, Sage ERP X3 tops the product line by targeting a worldwide upper mid-market, as the "high-end" Sage ERP solution (accommodating up to 1,500 users). Other ERP products in North America are Sage MAS 500 ERP, Sage MAS 200 ERP, Sage MAS 90 ERP, Sage PFW ERP, and Sage Accpac ERP, covering companies of 1 to 1,000 employees. Select Sage products can be found within the TEC Vendor Showcase. The full Sage ERP family—including Sage ERP X3—is listed on the Sage North American Web Site; www.sagenorthamerica.com.<br /><br />In North America, Sage MAS 500 and Sage ERP X3 may overlap in some cases, although Sage ERP X3 should be viewed as an upper-market product. Whether a business should evaluate one or the other product depends several organization-specific elements:<br /><br /> *<br /><br /> prospective growth (X3 has high scalability);<br /> *<br /><br /> activity worldwide (only X3 includes multi-audit functionality and may fit global business needs);<br /> *<br /><br /> industry (X3 focuses on distribution and manufacturing in chemicals, life sciences, food and beverage, and hard goods); and<br /> *<br /><br /> level of complexity and the agility of its business processes (X3 may be more easily customizable).<br /><br />There are also similar, potential overlaps with Accpac ERP, which has a good presence in several English-speaking markets (see Will Sage Group Cement Its SME Leadership with ACCPAC and Softline Acquisitions?) Organizations considering Accpac ERP should also perform a similar exercise to help pinpoint their needs.<br /><br />Asserting Technology Prowess<br /><br />To put the things into perspective, prior to being acquired by Sage in 2005, the privately held French vendor Adonix, had a number of its own acquisitions (see Adonix Expands X3 and Its "French Connection"). These products (e.g., Prodstar, CGI, etc.) were first integrated with the Adonix V3 product, the predecessor of Adonix X3, and have been rewritten in a Java-like and Unicode-compliant engine. As a result, a modern Adonix X3 product was first launched in France in 1999, and later in the US in 2000.<br /><br />First introduced in 2000 as Adonix X3, and now in its fifth major incarnation as Sage ERP X3, Sage ERP X3 was built on the Sage Application Framework for the Enterprise X3 platform (SAFE X3), a framework shared by a full set of Sage applications for mid-to-large enterprises (human resources [HR] and payroll, warehouse management system [WMS], etc.). This service oriented architecture (SOA)/Web-native platform provides users with collaboration capabilities in either client/server or Web mode, as well as an integrated business intelligence (BI) engine by Business Objects (an SAP company). It also provides a flexible second-generation workflow engine.<br /><br />Early in 2008 Adonix announced the availability of the latest version of its enterprise software suite Sage ERP X3. The latest Sage ERP X3, release, v5, focuses on<br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/a-traditional-local-touch-leader-espouses-a-more-global-vision-19523/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-70994116130091133402010-08-18T22:57:00.000-07:002010-08-18T22:58:17.083-07:00Is SSA GT Betting Infini(um)tely On Acquisitions? Part Three: Complementary Products<div style="text-align: justify;">Complementary Products<br /><br />On October 28, SSA Global Technologies, Inc. (SSA GT), www.ssagt.com, a worldwide enterprise solutions and services provider, announced it has entered into an agreement to acquire 100% of the common stock of Infinium Software (NASDAQ: INFM), www.infinium.com , another like provider, although mainly within different industry segments. In the agreement, each outstanding share of common stock will be converted into the right to receive $7.00 per share in cash. The agreement specifies that the transaction is subject to approval of Infinium's shareholders as well as regulatory and certain other customary conditions. The transaction is expected to close before January 1, 2003 at which time Infinium should become wholly owned by SSA GT. This is a continuation of the discussion of the Market Impact.<br /><br />At a first glance, one can even notice that the complementary nature of some SSA GT products and Infinium products may indeed provide a kick for a buck' proposition. Concurrently with interconnectivity and workflow enablement of its suite, Infinium has also developed strong back-office functionality, particularly HR/payroll and financial management suites, which have traditionally been SSA GT's quite weaker side. Infinium Financial Management was devised to help organization streamline the entire financial management chain, from budgeting expenses, to recording transactions and forecasting revenue, and was designed with strong internal controls to ensure accuracy and compliance while inherent flexibility should provide the ability to grow and adapt to business change. The suite includes the following modules: general ledger, accounts receivable, accounts payable, fixed assets, purchase management, project accounting, self service, global taxation, income reporting, and budgeting, while treasury management is offered through partnering.<br /><br />Infinium Human Resources is a comprehensive HR/Payroll solution devised to enable organizations to manage and motivate their workforce, minimize administrative tasks, and empower HR to play a strategic role in their overall success, which encroaches onto the Human Capital Management (HCM) realm. It offers many HR-related functional requirements, from compensation and benefits management and in-depth employee training and career-path tracking features, to workforce management and critical line-manager empowerment. The suite offers the following modules: HR administration, payroll, benefits administration, manager and employee self-service, training administration, and recruiting management. Also, Infinium Corporate Performance Manager (CPM), powered by Cognos, ensures effective data utilization, as only the necessary data is used during any transaction or update, and is put into the appropriate business context. Given SSA GT's reliance on partnering with Cognos within the similar area, one would discern yet another touching point.<br /><br />Also worth mentioning is Infinium CRM, a fully-integrated, flexible, Web-based solution, which the company gained through its acquisition in early 2000 of then Dutch CRM vendor Dexton Information Systems. The suite supports many aspects of business relationship management, through many functional modules for sales force automation (SFA) and marketing automation, and customer support services with a single, central market database. Although the product features integration to other ERP systems like SAP, J.D. Edwards, SSA GT and Geac (former JBA), it has had a very limited success as stand-alone offering after the acquisition, partly owing to process industries' lesser interest in certain CRM modules like call centers. However, likewise add-on to Infinium's original ERP modules, it might likely create a compelling value proposition for the rest of SSA GT's primarily discrete manufacturing products provided it is also tailored for specific vertical industries.<br /><br />As mentioned earlier, the Infinium Process Manufacturing product seems to be a good fit for certain areas within process manufacturing, which entails small-to-medium sized enterprises that run in the batch (vs. continuous) manufacturing mode. It features strengths in formula/recipe management and hazardous material control and regulatory compliance (e.g., MSDS, SARA Title III environmental regulations, and laboratory inspection management system (LIMS)) functions that make it a good solution particularly for some food and chemical industries (e.g., paints and coatings).<br /><br />The company has indicated intended delivery of functionality that is often required for food & beverage industry (e.g., catch weights' and potency) in the foreseeable future. The offering, however, lacks strong natively provided forecasting, supplier relationship management (SRM), and SCM including finite scheduling, warehouse management system (WMS) and transportation management. To that end, one could envision Warehouse BOSS, a rules-based stand-alone warehouse management system (WMS) and MK Logistics, an e-fulfillment distribution management package fitting the bill. Warehouse BOSS, as a matter of interest, exhibited functionality several years ago that many leading WHS vendors have only recently incorporated. MK Logistics has also been recently enhanced to provide functionality specific to Third Party Logistics (3PL) providers. Furthermore, the still relatively lower penetration and the smaller number of competitors in the process manufacturing market (compared to the discrete manufacturing) remain the company's opportunity, and it may have a fair shot at pursuing it given over 350 existing process manufacturing customers and the likely push from SSA GT's muscle.<br /><br />This is Part Three of a four-part article on recent developments at SSA GT.<br /><br />Part One covered the announcements.<br /><br />Part Two began the discussion of the Market Impact.<br /><br />Part Four will discuss Challenges and make User Recommendations.<br /><br />Global Markets<br /><br />Also, despite its fair global presence, which has somewhat diminished lately owing to some offices closure, Infinium remains largely established North American vendor, with over 80% revenues coming from this market. Consequently, very few practitioners are aware that, for example, Infinium financial and HR/Payroll modules often can go head to head against the likes of SAP, Oracle, PeopleSoft, J.D. Edwards and Lawson, with an additional benefit of flexibility and ease of use. The situation should also be mitigated with SSA GT's portal addition to Infinium, which has been remiss to a degree with its portal strategy, in addition to SSA GT's infrastructure and brand recognition boost.<br /><br />Thus, although mergers and/or acquisitions in the mid-market in the recent times are no surprise whatsoever, SSA GT's action might have an additional meaning. Although the acquisition of Infinium should have little impact on the global market in the short run, it might have an important psychological effect on existing aged AS/400 customer enclaves, that with this little empire in rebuilding, should obtain a further sigh of relief. The AS/400 platform is also getting a new lease of life from J2EE enhancement, providing a sound alternative to up and coming Microsoft .NET platform and to its army of proponents spearheaded by Microsoft Business Solutions (see Microsoft Lays Enforced-Concrete Foundation For Its Business Solutions).<br /><br />To be fair, the SSA GT's progenitor, former SSA, had suffered, over the past several years, a tremendous loss of market share and customer confidence, while its channel also dwindled during the same period of time. Revenues for SSA GT, which now owned by over a $7 billion high-tech venture capital firm Cerberus is still only a fraction of once SSA's over $450 million turnover in the mid 1990s, though. Therefore, SSA GT, having gone through its bankruptcy and rebirth initially under the Gores Technology in 2000, has been charging back within Top 10 ERP vendors' club, although still steeply down from once being neck to neck with J.D. Edwards. To that end, the acquisition should be a sign of SSA GT's continued commitment to regain its former glory and the clout in the sector. The combined company still projects revenues in fiscal 2003 to be around $330 million, which should entrench it within the Top 10 of the ERP rating list. In some individual markets like Japan or Brazil, though, the company even claims to be second to only SAP.<br /><br />Understanding Customers<br /><br />It appears that SSA GT understands and listens closely (via Global Guide Groups) to the needs of conservative ERP customers that are unwilling to ditch a good functional product even at a cost of its technological antiquity. Further, it has a track record of strong functional development that preserves the customer's current investment. Indeed, BPCS V8 is a scaleable ERP system extended beyond traditional ERP boundaries, with several manufacturing mode flavors such as discrete lean manufacturing, assemble-to-order (ATO) and make-to-order (MTO) operations, and even process manufacturing.<br /><br />Further, it even borders on a miracle the fact that SSA GT, which has had its own share of trouble, has even shown some success with managing such a seemingly unwieldy set of disparate products, considering that a vendor of CA's stature was not able to do much with almost a dozen products, some being of vintage '78 or '82 tag (which some may refer to the medieval era of computing). To that end, recent enhancements within the latest releases of PRMS 9.2, BPCS 8.2, KBM 2.2, and Warehouse BOSS 6.2 are ever more impressive given the market skepticism about the viability of these.<br /><br />Even the venerable MANMAN product has had some enhancements in its version 12, although this product faces the impending predicament of the HP e3000 hardware platform discontinuation in 2003. To that end, migration to MK Manufacturing or to SSA GT MAX+ might be a viable option for these customers, and might prove that it was not necessarily mere an impulse purchase, and that SSA GT might have some ideas as what to do with MAX after all. The mature but less-known product globally has a user base of around 100 in the UK with a further over 250 ever burgeoning customer base in certain European markets, such as the Czech and Polish markets for example.<br /><br />The product has not previously been marketed in the US and was only recently introduced to the Asia Pacific region. As for product scope, MAX has integrated ERP, BI, WMS, portals and basic CRM functionality crafted for its small-to-medium enterprise (SME) manufacturing, distribution and service markets. With support for platforms like Windows NT/2000, Unix, and SQL Server, and Microsoft Windows fat client and IE browser, all based on n-tier client/server architecture, the product could provide an alternative solution outside the IBM iSeries sphere.<br /><br />Therefore, current SSA GT's management seems to understand its charter, and has already shown that small miracles can happen. SSA GT's recent watchwords for customers are return on investment (ROI), total cost of ownership (TCO), and new product releases and versions included in the maintenance fee. To be fair, SSA GT has mostly achieved its most imminent and important goal of enticing existing customers to stay on their maintenance contracts. With several thousands accounts having signed up for continued support so far, SSA GT has secured a sound revenue base, although that might not sustain it while keeping BPCS and its several recently adopted brethren abreast of the latest technology and functionality scope. Therefore, the above product strategy blueprint is sound provided the new management team continues with an established good track record for on-time delivery of promised functionality.<br /><br />SSA GT plans to keep previous BPCS versions alive, making new functionality backward compatible and adding enterprise architecture to tie multiple product versions together with a common portal. It might be a compelling story to its target market if the company can execute on these ambitious plans that are pushing the right buttons: customer retention, industry verticals enhancements, and keeping older versions alive. Additionally, SSA GT's and interBiz' established global infrastructure and customer base, strong core-ERP functionality with a sharp industry focus and regulatory compliance, strong multinational product functionality (support for 20 languages), and a relative ease of implementing these are some of the company's bargaining chips in the game of keeping its customers from defecting and of giving other intruding competitors run for their money.<br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/is-ssa-gt-betting-infini-um-tely-on-acquisitions-part-three-complementary-products-16827/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-35839680707209392912010-08-18T22:55:00.002-07:002010-08-18T22:56:23.897-07:00Made2Manage Offers New Functionality And A VIP Treatment Part 2: Market Impact<div style="text-align: justify;">Event Summary<br /><br />On January 14, Made2Manage Systems Inc. (NASDAQ: MTMS), a provider of broad enterprise business systems for small and mid-market manufacturers, announced the release of the latest version of its Enterprise Business System suite running on the Microsoft SQL Server. The release tagged M2M ERP 5.0 SQL extends the capabilities of the company's flagship ERP product primarily through key new features that include support for multi-site manufacturing and enhanced financial capabilities.<br /><br />This Part Two of a two-part event note discusses the Market Impact and makes User Recommendations. Part One released the latest announcements.<br /><br />Market Impact<br /><br />Made2Manage might be proving that size does not always necessarily matter when it comes to attractiveness. Although not completely out of the woods, partly due to being smaller and having less resources than most of its competitors, Made2Manage' future seems to be much brighter than most of its peer vendors that have either been heavily bruised or eliminated during the recent crunching period. Its recent renewed revenue growth and marginal profitability could be attributed to several reasons.<br /><br />First of all, since its inception in 1986, the company has put all of its efforts solely into serving small-to-medium manufacturing enterprises (SMEs) in need of enterprise application solutions that are intuitive and, consequently, easy to use and implement. The company has long demonstrated a deep understanding of this market dynamic and its requirements of competitively priced, strong functionality products, well-designed implementations, and immaculate service and support. End users of smaller enterprises have indeed long been impressed with its intuitive user interface, which provides ease of system navigation (the "Navigator" feature) and of information retrieval (the "Locator" feature), and with underlying workflow & messaging system capabilities (the "Notifier" feature).<br /><br />During the late 1990s, however, Made2Manage, somewhat painfully like many others, realized that its target market needed more than an inexpensive and easy-to-use back office system. To that end, during last two years, Made2Manage had mobilized its resources to evolve from a vendor of traditional ERP software to a provider of one-stop-shop' enterprise business applications. The company has, gradually, either developed in-house, acquired or incorporated through partnerships a line of integrated collaborative e-business, customer relationship management (CRM), business intelligence (BI), and advanced planning and scheduling (APS) components within its core ERP solutions. In other words, the Made2Manage Enterprise Business System now offers a broadly integrated application solution for automating business processes from selling and design, finance and human resources (HR), customer service and support, through scheduling and distribution.<br /><br />Further, in addition to choosing the right focus and the appropriate accompanying functionality footprint, the company has concurrently been trailblazing the majority of its peers with regard to the technological aspect of its product. Made2Manage has long embraced concepts of component technology in designing its product. The object-oriented product architecture has been devised entirely from scratch in-house within the Microsoft context, which provides for flexibility and ongoing agility. With the release of Made2Manage for Windows in late 1995, Made2Manage became an early adopter of Windows NT and was reportedly the first manufacturing software application to receive the "Designed for Windows 95" endorsement.<br /><br />Today Made2Manage uses Microsoft's technology virtually for all aspects of its product development:<br /><br /> * Microsoft Visual Studio for product development<br /> * Microsoft Visual Basic for Applications (VBA) within M2M applications<br /> * Microsoft Sequel Server (SQL) as its database platform<br /> * Microsoft Windows Server as its preferred server platform<br /> * Microsoft Project as its scheduling tool<br /> * Microsoft Exchange Server as its messaging/workflow engine<br /> * Microsoft Office for office management<br /> * Microsoft .NET as its Internet platform<br /><br />The company's strategic relationship with Microsoft has proven to be of the utmost importance given its market segment's infatuation with the technology, whose performance, reliability and scalability has long been improving as well. By leveraging the capabilities of the Microsoft platform only, Made2Manage might be in a better position to be responsive to delivering new functional features that its customers may demand.<br /><br />In contrast, a smaller vendor that covers multiple platforms often spends more than a half of its R&D budget on porting issues; thus making a cross-platform solution the prerogative of only bigger vendors. Furthermore, the early adoption of the .NET platform has helped Made2Manage transition from a traditional two-tier client/server architecture (where the entire business logic resides at the client front end) to the one where the business logic resides in a set of business logic components that can be used by the user interface (UI), alternate UIs, or it can be integrated with other systems through Microsoft BizTalk, which bolsters the systems interconnectivity and flexibility.<br /><br />Other Technology Advantages<br /><br />More on the technology front, in addition to being entirely Microsoft-centric, the software is available in a multiplicity of ways from traditional license purchase, to rental and leasing options, with both client/server and web-based delivery. Web-enabled M2M Express is the Internet hosted version of the software. The company's proactive grasp of the hosting/application service providers (ASP) opportunity is commendable, particularly in light of its peers' tardiness and/or non-compelling value proposition in that regard.<br /><br />While manufacturers usually prefer to keep their critical information in-house, many may still opt to use Made2Manage hosted applications for collaborative commerce with the above-mentioned best of both worlds' hosting principle, which is available through M2M VIP portal. The company not only hosts its own offerings, but it also hosts e-business applications such as web sites and e-mail and collaborative tools.<br /><br />Possibly thought leading is the company's readiness to provide mid-sized discrete manufacturers with a number of portals that offer a broad range of collaborative, interactive applications including collaborative engineering design tools (e.g., AutoCAD and ProEngineer), on-line trading exchanges, with streamlined inter-business processes and workflow, and access to information resources via M2M VIP that offers trade partner-facing portal functions and thereby solidifies relationships with distributors, suppliers, employees, and customers (in other words, within the entire channel).<br /><br />M2M VIP functionality was enabled through the embracement of Microsoft's .NET technology, which is designed to support an interconnected network of web services that are invoked by web pages using open technologies like Simple Object Access Protocol (SOAP) and Extensible Markup Language (XML); these, in turn, might possibly become the standard for future Internet-based applications in the SME market.<br /><br />Made2Manage also offers a Web-based training and support program for its customers called M2M University. This subscription-based education program along with additional service and support functionality is available through a customer-facing portal called M2M Expert. Another example of Made2Manage's alertness in service and support cost reduction by harnessing the latest technology, like live Web-based training, to deliver inexpensive users' training. As a summary, by leveraging the above advanced technologies, the company has been agile enough to spar with a constantly morphing business environment, and to meet the latest customers expectations of 24/7/365 access availability to place and track orders, or to obtain any urgent system support.<br /><br />Given that M2M VIP does not necessarily require the hardware, software and maintenance investments that other solutions typically require, it may bode well for the new revenue stream despite the current difficult economic climate. The difficult economic conditions have, in fact, put additional pressures on manufacturers to streamline operations and increase efficiencies in the most pragmatic way. Made2Manage seems to have positioned itself well to capture their attention with its above offering.<br /><br />Channel Development<br /><br />Also, the company has been savvy in developing an indirect channel to supplement its direct sales force and to address the low international presence and recognition. Customers and VARs should benefit from the new "Team One" reseller program because it allows both internal and external sales groups to share consulting services, education and product configuration/customization services, as illustrated in the above Concord example cited in Part One.<br /><br />Likely the most crucial developments that increase the market opportunity are the recent extension of multi-site and supply-chain management (SCM) functionality footprint, and the protracted availability of Microsoft SQL Server edition of the package. With the addition of Multi-Site functionality, the M2M ERP product has possibly grown to meet the needs of the mid-market. Given it is also the third major release of M2M ERP on the SQL platform in the past 12 months, some scalability issues that have long plagued Made2Manages success in the higher end of the market might thereby be mitigated.<br /><br />Challenges<br /><br />Although the above-mentioned initiatives have, to our mind, contributed to creating increased demand and acceptance of the offering in the mid-market, nevertheless, Made2Manage will have to address certain challenges in order to continue to thrive in this cutthroat competitive environment. The competition is flying from all directions: its peers, the Tier 1 vendors coming down the market, and even its quintessential technological partner, Microsoft's intrusion into the discrete manufacturing market via its Great Plains' applications division.<br /><br />Made2Manage global market awareness and presence remain quite insignificant in spite of the recent expansion in the UK via a sole VAR agreement with MacroScope Ltd, where the company has localized the financial functionality for the market but still lacks the payroll functionality. This is further aggravated by the fact that the product continues to exhibit minimal multi-national capabilities and to support only the English language. This may result in missed opportunities as companies are increasingly seeking true global providers for its supply chain management and collaboration requirements.<br /><br />Further, M2M's functionality across the board, although broad and well balanced, has not been recognized as a differentiator in the market as the company does not exhibit much of a vertical focus; It basically exhibits a generic engineer-to-order (ETO), make-to-order (MTO), assemble-to-order (MTO), make-to-stock (MTS) and mixed-mode discrete manufacturing chunks of functionality. Given the fact that some of its competitors offer a sharp vertical focus even to the precision of six-digit Standard Industrial Classification (SIC) codes within an industry (e.g., Navision), Made2Manage's above-mentioned strengths may soon be emulated and loose its differentiation value. The company should, therefore, try to interest its VARs into industry specialization and provision of vertical extensions.<br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/made2manage-offers-new-functionality-and-a-vip-treatment-part-2-market-impact-16583/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-24268259664242942612010-08-18T22:55:00.001-07:002010-08-18T22:55:47.335-07:00New Dimensions in EC and SCM Part 5: E-Procurement for Process Improvement<div style="text-align: justify;">Executive Summary<br /><br />Every business is a purchaser as well as a supplier, with many routinely processing hundreds of buying activities daily. Typically, purchases represent 50 to 90% of a company's cost structure - making procurement strategy and execution a critical lever for effective supply chain operations and superior business profitability.<br /><br />Electronic commerce offers exciting new possibilities for businesses to improve their performance on this important "upstream" supply chain activity, both for indirect or support items and, increasingly, for materials that are direct components of the products and services that businesses make and sell.<br /><br />As in many areas of e-commerce, the wide variety of alternatives can be confusing. This article outlines some of the major recent developments in e-procurement and the important strategic and tactical choices that companies need to make in order to answer these questions and to take full advantage of new "buy" side e-commerce developments.<br /><br />This section deals with how e-procurement can lead to Process Improvement and How to Get Started.<br /><br />About This Article<br /><br />This article has appeared on this site in five parts. Each part contains links to the preceding parts.<br /><br />Part 1 discussed the Benefits of e-procurement and included examples of major corporations that are pursuing e-procurement.<br /><br />Part 2 discussed the potential Efficiency Gains of e-procurement, including relationships and processes that are necessary to obtain these gains.<br /><br />Part 3 discussed how e-procurement can Broaden the Supplier Pool, including the pros and cons of this approach to procurement.<br /><br />Part 4 discussed using e-procurement to Leverage Volume, including leveraging volume through outsourcing.<br /><br />Objective: Process Improvement<br /><br /> * New e-procurement providers can help you apply a full range of strategic sourcing "best practices" through the Internet<br /><br /> * Most comprehensive approach, but also requires greatest discipline and management support<br /><br /> * Does not replace working with suppliers the old fashioned way on continuous improvement and other key aspects of relationship<br /><br />Process Improvement Discussion<br /><br />While outsourcing is a broad business trend today and can be used effectively for procurement, as discussed in Part 4, many companies continue to be interested in improving their own internal capabilities to strategically manage their supply base and execute programs that drive down costs and increase service and quality levels. For them, the relationships with suppliers are considered to be an important element of their overall business success, and they are reluctant to hand them over to a third party - even if doing so would help them leverage volume or otherwise reduce costs.<br /><br />Historically, companies have turned extensively to management consulting firms to help them understand and apply best practices within their purchasing departments. Normally, the consulting team begins by assessing the company's situation and improvement potential, and develops a set of customized strategies and action plans. Subsequently, the consultants work jointly with purchasing staff on a set of "pilot" spending categories to execute the improvements and provide training in new techniques, which the client is expected to use on an ongoing basis without additional consulting support.<br /><br />While it sounds good in theory, and has often provided a strong short-term payback, many companies are finding that institutionalizing these improved strategies and purchasing techniques is a major challenge. Achieving the benefits typically involves applying a disciplined and complex methodology that includes substantial internal data gathering and external market research, extensive use of analytical and scenario modeling tools, in-depth strategy development and planning, and disciplined execution by a staff team that is devoted exclusively to the effort - what is typically called a "strategic sourcing" program.<br /><br />Since the level of effort and discipline required by strategic sourcing is often difficult to sustain once the consultants are gone, purchasing procedures sometimes revert back to traditional ways of doing business and the bottom line gains are not maintained, both reducing value to the client and undermining the reputation of the consultants.<br /><br />New Approaches Emerge<br /><br />New players in e-procurement have emerged to address this situation as well, offering Internet-based tools and processes that give users the ability to access and apply best practices tailored to their specific situations and that allow users to remain fully in control of their own procurement activities.<br /><br />For example, B2eMarkets, Inc., offers users a Strategic eSourcing Management solution that walks online users through each step of a consulting-type procurement methodology, including gathering data, analyzing requirements, and setting strategy, as well as executing e-procurement through shopping e-marketplaces, conducting reverse auctions, and using other methods that are built into the application. Based largely on the strategic sourcing approach used by Accenture (formerly Andersen Consulting), one of the largest firms in procurement consulting and an investor in the company, the subscription-based service includes industry and commodity templates, evaluation tools, "coaching" and related on-line support.<br /><br />Initial results from using this approach to e-procurement have been impressive. Across about $400 million in spending volume, B2eMarkets' customers have achieved cost reductions averaging 25%, and have achieved them in about half the time of traditional strategic sourcing processes.<br /><br />Evaluating Alternatives<br /><br />Whether this approach, like the others, is right for you depends on where you are today and what you are trying to achieve. A strategic sourcing oriented program is perhaps the most comprehensive approach to e-procurement, with the greatest potential long run benefits. For many companies, however, starting with the basics of increasing efficiency, accessing a more competitive supply base, and leveraging volume, as discussed earlier, may be the appropriate first steps, with more sophisticated solutions coming later.<br /><br />Any software-based solution is only effective if it is fully and correctly used, of course, and is only as good as what's programmed into it. Experience, diligence, and sound judgement are still required - especially in unique situations - and no electronic commerce system can take their place at least not yet. And even a sophisticated online solution can't replace meeting and working with suppliers the old fashioned way. These personal relationships have always been important for improving business practices, changing specifications, integrating information systems, and seeking win-win improvements in pricing, quality, and service levels - and will continue to be important in the future as well.<br /><br />The Potential of E-Procurement<br /><br />E-procurement is an exciting and rapidly evolving aspect of e-commerce and supply chain management that promises to yield significant improvements for the companies who buy trillions of dollars of goods and services today. But it is not a panacea.<br /><br />IBM, last year's winner of Purchasing magazine's top honor, bought over $12 billion per year over the Internet in 1999 and is rapidly making electronic procurement a requirement for all its suppliers. IBM estimates that electronic-commerce related procurement process improvements will save over $200 million annually, and believes that substantial further gains can be achieved. Yes, the numbers are staggering, and the potential of e-procurement as an element of business-to-business e-commerce is dramatic. But it is important to recognize that IBM's program has been 5 years in the making and has required a virtual transformation of its entire set of traditional procedures for contracting, ordering, payment, and overall supplier management.<br /><br />Going forward with e-procurement requires addressing a number of important questions about your organization and its needs, objectives, and capabilities. Some of the key questions that anyone getting started with e-procurement needs to ask follow.<br /><br />Getting Started with E-Procurement: Key Questions<br /><br /> * What are the strengths and weaknesses of your existing procurement processes and activities?<br /><br /> * What specific objective(s) are you trying to achieve through e-procurement, and why?<br /><br /> * What categories of goods and services need the most attention and would benefit most from new e-procurement approaches?<br /><br /> * Can you utilize existing horizontal or vertical exchanges to meet your needs?<br /><br /> * How willing are you to change suppliers, including adding new ones to your supply base, in order to achieve short-term or long-term benefits?<br /><br /> * How important is price compared to other factors in determining which suppliers to use?<br /><br /> * How willing are you to outsource parts of your procurement activity?<br /><br /> * How important is it for you to have a proprietary solution that's unique to your company alone?<br /><br /> * How will you ensure that buyers in your company embrace and use new techniques?<br /><br />How will you integrate new information systems requirements into your organization in a way that supports rapidly achieving e-procurement benefits?<br /><br />Conclusion<br /><br />Which type of e-procurement approach is right for you depends on the situation you face, the specific objectives you are trying to achieve, and the answers to the previous questions. E-procurement offers substantial bottom-line benefits, but don't expect a miracle overnight, and be aware of the limitations and pitfalls that can accompany dramatic changes in supply chain operations.<br /><br />This concludes a Five Part series on e-procurement. See "About This Article" on Page 2 for links to the preceding four parts.<br /><br />About the Author<br /><br />Scott A. Elliff is Founder and President of Capital Consulting & Management, Inc. (CCMI), offering high-quality analysis, practical advice, and fresh perspectives to help clients achieve bottom-line improvements in profitability, effectiveness, and market position.<br /><br />Mr. Elliff has sixteen years experience consulting to a wide range of Fortune 500 and other companies, with particular expertise in supply chain management, including product development, forecasting, procurement, scheduling, manufacturing, transportation, logistics, inventory management, and customer service. He has written and spoken widely about these topics in a number of industry conferences and publications.<br /><br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/new-dimensions-in-ec-and-scm-part-5-e-procurement-for-process-improvement-16316/<br /><br /><br /><br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-21962500252496618712010-08-18T22:54:00.000-07:002010-08-18T22:55:07.514-07:00On Demand Compensation Management Partnerships for Spiffed-up Success<div style="text-align: justify;">On Demand Compensation Management Partnerships for Spiffed-up Success<br /><br />As an early entrant in the enterprise incentive management (EIM) and on demand sales compensation software arena, Centive is committed to and focused on the software as a service (SaaS) delivery model only. The vendor remains determined to maintain its leadership position in this new market, as well as to expand its offerings in the on demand-sales compensation space. For more background, please see On Demand Delivery Compels a Compensation Management Vendor and The Compelling Capabilities of One Compensation Management Vendor's Solution.<br /><br />Partnering up for Spiffed-up Success<br /><br />As momentum for Centive's Compel continues to grow, the solution has sparked interest from a wide variety of business and technology partners. The most prominent result of this flurry of new interest was the May 2006 announcement of the availability of Compel for Salesforce.com's AppExchange—Centive Compel for AppExchange. With this development, Centive has become a certified solution partner of Salesforce.com, the leading on demand, customer relationship management (CRM) vendor.<br /><br />Salesforce.com customers can now deploy Compel within their Salesforce.com implementations. The solution will provide these users with an at-a-glance look at interactive dashboards that display quick summaries of key sales performance indicators with a single-click, drilldown capability. Built on the AppExchange on demand platform, Compel for AppExchange has since been available for test drives and deployment at http://www.salesforce.com/appexchange. More recently, Centive has become active within the Salesforce.com Incubator Program, which opened in January 2007 in San Mateo, California (US) for a number of selected independent software vendor (ISV) partners.<br /><br />Centive Compel for AppExchange is 1 of more than 430 applications created by Salesforce.com and its customers and partners that are now available on the Salesforce.com AppExchange—the world's first on demand application platform. AppExchange (renamed Apex and bolstered by its own namesake programming language) provides ease of customization and integration for Salesforce.com deployments, and enables a slew of on demand applications that go beyond the realm of CRM. Apex enables all of these on demand applications to be easily shared, exchanged, and installed with one or a few clicks into a customer's Salesforce.com account. For instance, Compel ensures a single sign-on with the Salesforce.com application, and is displayed as a commissions tab in the Salesforce.com interface.<br /><br />In addition to the Salesforce.com Apex certification, Compel features integration with other CRM systems (albeit via either comma-separated value [CSV] files or Web-service integration) to enable sales representatives and managers to forecast compensation based on opportunities within their pipelines. This integration provides customers with full automation of the sales life cycle. Branded as From Prospect to Paycheck, the following phases are involved: qualify, forecast, strategize, close, commission, and payroll (that is, from the point of pipeline initiation through to the commission paid to the sales person).<br /><br />This integration of opportunity-based earnings and actual commission earnings is aimed at ensuring sales representatives stay focused, aligned, and motivated to close the right business. While sales representatives should be able to more easily forecast their commissions and identify those deals that will maximize individual earnings in a given period, sales management becomes equipped with real-time access to key performance indicator (KPI) metrics to help them better manage their assigned teams.<br /><br />Through a much tighter integration with the Apex application programming interfaces (APIs), Compel imports pipeline opportunity data to enable sales associates to forecast commission and bonus earnings for current periods. Compel applies import filters, such as estimated probability, amount, seats, stage, completed milestones, and close dates, to allow users to select opportunities that meet specific pipeline criteria.<br /><br />For example, users can forecast opportunity-based earnings associated with a predicted opportunity close date in the current period, as well as a number of additional days, such as the current month plus sixty days. Compel then calculates projected participant earnings, and processes the associated commission value of these opportunities according to the plan rules, taking into account such factors as reaching higher ramped tiers or hitting accelerators. From their sales dashboards, sales folks can narrow the base filter with criteria specific to their needs. Once the filter is set, Compel automatically saves it, and applies this filter to future opportunity imports. The personal earnings forecast, which becomes more accurate, enables sales associates to better prioritize opportunities and maximize commissions; it motivates sales representatives to keep their pipeline records up to date.<br /><br />In October 2006, American Express Incentive Services (AEIS), a business-to-business (B2B), prepaid card industry leader, joined with Centive to offer prepaid AEIS cards as a special incentive reward, or sales performance incentive funding formula (SPIFF), option in Compel. AEIS, a joint venture between American Express Travel Related Services Company Inc. and Maritz Inc., provides B2B reward solutions, including prepaid cards, American Express Gift Cheques, and a Web-based reward management tool. Its products address a broad array of applications, such as employee reward and recognition, sales incentives, and consumer promotions, while helping clients drive consumer and employee behaviors, build loyalty, and increase brand awareness.<br /><br />AEIS's prepaid cards provide Compel customers with a SPIFF option that is distinctly separate from a standard cash reward. A SPIFF is a small, immediate bonus for a sale, and traditionally, SPIFFS are paid, either by a manufacturer or an employer, directly to a salesperson for selling a specific product. However, unlike cash, AEIS cards may be customized and personalized, and can direct recipients' spending options to ensure that the reward is memorable, and that it has some sentimental value, too. A couple of examples of customization options include the ability to control card spend through AEIS's DirectSpend filtering process, and the ability to design a card face to feature a company logo, program theme, and participants' names. With such customization options, reward earners are reminded how they earned the card and who gave it to them every time they open their wallets.<br /><br />Compel enables users to build SPIFF programs via the product's automated SPIFF Builder. With SPIFF Builder, users can quickly design their programs, choose an AEIS prepaid reward card as the reward option, and launch the program to the participants. The AEIS reward solution for Compel is seen as suitable for such sales incentive and dealer-distributor programs as sales contest SPIFFs, bonus payouts, dealer-distributor SPIFFs, training certifications, new business developments, sales lead referrals, salesperson performance recognition, etc. The idea here is to motivate sales people to deliver measurable results for the business.<br /><br />Will Centive's Momentum Allay the Concerns of the "Doubting Thomases"?<br /><br />Following the CompCentral divesture, some observers have rightfully assessed Centive's strategy as risky, given the fact that Compel alone now has to gain a sufficient subscription base to sustain Centive's business as well as any future product development or organizational expansion. The CompCentral business had previously produced most of Centive's revenue, and it even helped fund Compel. But only a minority of Centive's headcount was transferred to Incentive Technology Corporation (ITC). In other words, the staff and investment needed to market, service, and develop Compel will be relatively high initially in proportion to its revenue. The remaining Compel-based revenue streams will be relatively limited in the near future because of the nature of the SaaS market, which is subscription-based, and typically has smaller size deals than the on-premises counterparts.<br /><br />To allay those concerns somewhat, Centive announced in November 2006 that the number of subscribers to Compel had surpassed the 10,000 mark. As a true indicator of leadership status, Compel has been selected and deployed by more chief financial officers (CFOs) and vice presidents (VPs) of sales than any other on demand sales compensation management system.<br /><br />The vendor measures its on demand space leadership using many yardsticks, including product functionality, product maturity, number of customers, average customer size, awards, and coverage by the press and analysts. Namely, in addition to surpassing the 10,000 subscribers mark with about 50 corporate customers, Centive is also tracking up in terms of the average number of subscribers per Compel customer. In 2006, that number has reportedly increased by 26 percent, to an average of over 200 subscribers per customer. Compel is now deployed at companies ranging from those with as few as 20 sales representatives to those with over 1,000.<br /><br />In December 2006, Centive announced MoreMentum, a program designed to help companies gain sales momentum by getting more out of their sales incentive programs. To this end, Centive will provide new Compel customers with free, personalized AEIS cards for use with their SPIFF programs. The MoreMentum program was available to new customers through the end of February 2007. In addition, Centive announced its own "More-Mentum"—a series of real world measurements that should validate the vendor's leadership position in the sales compensation market.<br /><br />In November 2006, companies such as McData, UTStarcom, Flowserve, SPX, and BBUP completed deployment of Compel. Additionally, in the fourth quarter of 2006 alone, 17 companies, including IKON, ADIC, Knology, Cars.com, and Wolters Kluwer—representing more than 3,000 subscribers—selected Compel to automate their sales commission processes. The momentum continued into early 2007, with new customers that include well-known brands such as McKesson, ChoicePoint, and WebEx. At the same time, new "live" customers in February 2007 included Cars.com, Isymmetry, Intervoice, and the Asia-Pacific division of Quantum.<br /><br />Product Development and Deployment Partnerships<br /><br />For better performance and a richer user experience, Centive uses Flex technology from Adobe Macromedia for Compel's user interface (UI) instead of the more commonly used asynchronous JavaScript and XML (AJAX) technology in peer on demand applications. The technology's form elements (expandable and contractible, as required) in Centive Compel's UI, which business analysts use to build compensation plans, make it easy to arrange plan components and unnecessary to fill out a single, cumbersome form. Further, Centive uses technologies from Oracle, Microsoft, and BEA Systems for a strong and secure system performance.<br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/on-demand-compensation-management-partnerships-for-spiffed-up-success-18984/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0tag:blogger.com,1999:blog-1489218598027267131.post-35228112519315180062010-08-18T22:53:00.001-07:002010-08-18T22:53:55.562-07:00Supplier Relationship Management: Benefits and Challenges<div style="text-align: justify;">More and more companies are requesting their suppliers to integrate their business systems and share information online and in real time. Integrated business systems enable sourcing companies to plan and execute their supply schedules within minutes and receive confirmation almost immediately. Integrated systems effectively reduce the cost of purchasing, which may range from $30 to $170 (USD) per order, down to a few cents. In addition, they almost completely eliminate the need for expeditors and they improve compliance with shop floor schedules, resulting in better customer service. An added benefit of integrated systems is their performance tracking capability and its associated improvement in supplier relationships.<br /><br />Supplier Relationship Strategies<br /><br />Developments in information technology (IT) have required and enabled manufacturing companies to rethink and restructure their supply chain strategies. For example, customer focus strategies have led to the development of customer relationship management (CRM) tools, and back-office support strategies have helped develop enterprise resource planning (ERP). Other examples of integrated applications include electronic data interchange (EDI); manufacturing execution system (MES); computer aided design/computer aided manufacturing (CAD/CAM); Just-in-Time (JIT); vendor managed inventory (VMI); and warehouse management system (WMS). Finally, integrating suppliers' information systems beyond the EDI type connection has been necessary to shape this evolution into a more refined integration and relationship. Supply chain management (SCM) requires an outward view of company operations that extends to suppliers, customers, distributors, and beyond, as well as an understanding of the value of the contribution made by each element in the supply chain. A simple supply chain system includes three main elements: suppliers, a company, and customers, which are shown in figure 1.<br /><br />Figure 1. Simple supply chain structure and relationship.<br /><br />Complex supply chain models evolved from this simple model, with developments in management and technology adding components across the supply chain.<br /><br />Many companies have come to realize that although the ultimate goal of making profit remains the same, relationships with suppliers are completely different from relationships with customers.<br /><br />Supplier relationship management (SRM) includes information integration with respect to numerous areas: delivery schedules; inventory; capacity; commitment to schedules; delivery information; delivery; quality and financial performance of suppliers; quotation management or request for quotation (RFQ); credits; adjustment; and other related information in addition to its real-time tracking and monitoring.<br /><br />Unlike CRM, an SRM relationship generally evolves with each supplier over time based on the significance of the sourcing. An illustration of this relationship is shown in figures 2 and 3. SRM may place key suppliers at higher levels of integration, and perhaps even at strategic alliance levels, while keeping some suppliers at the procurement relationship level.<br /><br />Figure 2. Strategic relationships in SRM.<br /><br />At its basic level, a purchasing transaction involves buying a product or service from a seller one time only and without any expectation of a repeat transaction. Buying items from a department store or gas at a gas station are examples of this type of transaction. The next level is where an expectation of repeat transactions and a resultant business relationship starts. The vendor is recorded in the buyer's database, the buyer is checked for credit worthiness, and a purchase order (PO) or invoice may be issued for the transaction. Thereafter, the relationship becomes more complex, with the vendor and the buyer entering into binding, long-term contracts and agreements and joint deployments of business processes.<br /><br />Strategic drivers for SRM may include, but are not limited to, all of the following:<br /><br /> * Consolidation of suppliers where better supplier capabilities are favored<br /> * Expansion into global markets<br /> * Pressure on price and profit from customers and competition<br /> * Pressure on value generation in supply chain<br /> * Performance requirements of shareholders<br /><br />Changes in globalization and economic developments and significant improvements in quality, price, and delivery have directed many companies to shift their focus on suppliers that are located in other parts of the country and the world. In many cases, this has helped sourcing companies to develop new markets while sourcing from the same area. At the same time, however, increased global competition has placed enormous pressure on price and profit for products and services, as evidenced by global trade. Most companies are now faced with the challenge of sourcing and delivering the same products and services more quickly and at a lower cost. Coupled with the developments in IT and information management, some of these challenges are met by integrating the suppliers' information systems with customers' information systems, with improved visibility and timely decision support, while at the same time applying lean principles in order to improve their competitiveness.<br /><br />In these days of rapid change, deciding the level of relationship to develop with each supplier has become increasingly important. Depending on the structure of the supply chain, strategic drivers, strategic priorities, and operational objectives, a relationship with each supplier must be established. The level and the type of relationship (buy and sell, contractual, strategic alliance, etc.) must also be decided. For example, some current strategic supply chain alliances may include third- or fourth-party logistics, service and warranty management, exclusive distribution networks, etc. All of these can be controlled and managed by SRM.<br /><br />Establishing Supplier Relationship Management<br /><br />Setting up SRM starts with deciding which level of relationship your company will have with each of its suppliers. Then the rest of the steps will follow the sequence below.<br /><br /> * strategic approach and partnership level: Buying companies must identify which level of relationship they need to establish with each of their suppliers. Some suppliers will be of greater importance than others, and the development of strategic relationships with them may already be underway. Some suppliers may either be too large or too dominating, making it difficult to enter into a desirable relationship. Still others may not be significant at all. So, strategically speaking, positioning each supplier is key to the start of SRM. Negotiating a win-win proposition with each supplier is the next item to accomplish at this strategic level.<br /><br /> * supply chain preparation: It is essential to evaluate and establish a relationship with each significant supplier. At this stage, it is preferable to have a uniform business process already established. A company and its suppliers may be part of a larger chain, major suppliers may have their own business process, and smaller companies may not be willing to commit to the terms and conditions that are required. Evaluating and preparing the supply chain is a long process that may take a few years to accomplish. Once the objectives and strategic goals are established, appropriate business processes must be developed. Bringing each supplier on board one at a time may make the task easier. One must understand that this is a journey that requires time to learn and adapt to the changes in the business relationship.<br /><br /> * enabling technologies, IT, communication, and integration: There are literally thousands of technology solution providers out in the market. Companies (sometimes together with their suppliers) must decide which tools, platforms, software, etc. that they need to use. Some tools may only work in limited environments. Solution providers today are web-based, open systems and can connect with almost any other system. Considerations must also be made in relation to such integrations as level of automation, contractual obligations, real time versus frequent updates, and communication standards. The sourcing company must decide on the enabling IT to fit the needs of its supply chain strategy. The information tools must provide a necessary advantage for a successful SRM implementation.<br /><br /> * information visibility and level of sharing: After technology selection, the level, security, timing, frequency, and amount of information-sharing must be decided on and implemented. Some companies (especially those in the automotive industry) require automatic visibility into suppliers' systems and their capability to supply the requirements. For some suppliers, this may cause conflicts within their internal operations, business processes, confidentiality policies, or business culture. Issues like these must be addressed individually with each supplier.<br /><br /> * monitoring performance of operations and certification requirements: SRM software packages offer numerous tool sets to monitor the performance of suppliers. Supplier performance can be used to verify the agreed upon certification requirements.<br /><br /> * contractual obligations (such as rules, penalties, rewards, etc.): Because each supplier is different, rules and contract terms may vary from supplier to supplier. Although the goal is to bring everyone on board with the same business process, this may not always be possible. Therefore, penalties and rewards are useful in bringing suppliers in line during the process of SRM development.<br /><br /> * certification: Certification is a set of rules, business conditions, and performance requirements that is established as a general policy and defined specifically for each supplier. Certification may also be chosen to bring suppliers on board quickly. It requires extensive evaluation of a supplier's capability and ongoing performance. Based on the agreement with each supplier, contractual obligations and their related execution with rules, penalties, and rewards must be put in place. The conditions for certification must be satisfied by ongoing performance. As a resultant benefit, for example, incoming products (or services) become exempt from inspection, are delivered to point-of-use, and are paid upon use.<br /><br /> * implementation and continuous improvements: As SRM implementation begins, business processes and supplier performance must be constantly monitored, with improvements or adjustments made as required. Once business processes have been correctly established and are working properly, they become standard, as they will facilitate improvements to the SRM process.<br /><br />Most companies, unless they are start-up operations, already have established supplier bases, ongoing business relationships, and sourcing-related databases. Once a company decides to establish an SRM environment within its supply chain, the process described above should begin. Figure 3 shows development of strategic alliance relationships over time.<br /><br /><br /><br />SOURCE:<br />http://www.technologyevaluation.com/research/articles/supplier-relationship-management-benefits-and-challenges-18876/<br /></div>Harihttp://www.blogger.com/profile/05015983980847833541noreply@blogger.com0