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Wednesday, May 4, 2011
Tuesday, April 26, 2011
Exactly 6 weeks ago today (March 15th) I posted an entry highlighting Infor’s bid to acquire Lawson. At the time and for several weeks afterwards, there was much speculation about the price, whether or not there would be additional bidders, as well as the probability of Lawson staying independent. Shortly after this announcement, Harry Debes (CEO of Lawson) addressed a large flock of Lawson customers at CUE 2011 (CUE stands for customer user event) and acknowledged all the speculation as the “elephant in the room.” He said the company was considering all possible options, including staying independent.
I don’t think a lot of people put money on independence as the future outcome, but there did seem to be a lot that counted on other bids popping up… maybe not a real bidding war, but at least a second bid that might drive the proposed price higher. Why do I think this? Quite simply, the stock price went up. At the close on the Friday just before the weekend when the initial offer for $11.25 per share was made, the stock price had been $11.55. Instead of going down as a result of the bid, it continued to go up. Someone was betting they could turn a profit on prices between $11.55 and over $12 a share. I don’t profess to be a trading whiz, but I do know $11.25 is less than $12. And $11.25 will be what they get when the deal is sealed. There won’t be an opportunity to watch the stock go back up because it will no longer be on the market. Infor, at least for now, is a privately owned company. Indeed the offer is really being executed by GGC Software Holdings, Inc., an affiliate of Golden Gate Capital, which is one of Infor’s investors.
So, now that the deal is really going down, what does this mean to the customers and employees of both companies?
There is always a certain level of uncertainty concerning the workforce of any acquired company. Those in Lawson’s development organization should take heart in knowing that Infor already announced its intention to hire 400 additional software developers. So my guess would be that good developers are safe. Poor performers in any department should probably be looking over their shoulders as an acquisition is the perfect opportunity to clean house. Let’s just hope Infor is able to distinguish the good employees from the underperformers. No offense intended, but that distinction is often much harder to make than it would appear to be. And in any acquisition, there will be some level of redundancy, particularly in the back office.
What about the impact on customers? My initial take is that the customers from both camps will benefit directly from this move. There will be more innovation and I hope this provides some impetus for some rationalization and cross fertilization of product lines because Infor’s reputation and brand has suffered as a result of having too many.
In an open letter to Infor and Lawson customers, partners and employees, Charles Phillips, newly appointed CEO of Infor, highlighted several benefits to the deal, which also imply some plans. In fact he even starts out by saying, “Lawson customers can rest assured: Product investment, innovation and customer success will be our key areas of focus” and references Infor’s previously announced plans for accelerated innovation, including those 400 developers he intends to add.
In this letter he highlights the following points:
4 Complete ERP suite: As the boundaries of ERP continue to be stretched, the top ERP contenders continue to expand their footprints. Mr Phillips references Lawson’s enterprise financials and human resources products as standalone products, across multiple industries and the intent to integrate them with Infor’s manufacturing, supply chain, workforce, and asset management products. I “get” the reference to human resources as Lawson has developed this area further than Infor has, but Infor has financial management products that are available as stand-alone products as well, so the implication I see might be a rationalization of products, with Lawson’s S3 forming the basis over the SunSystems or Masterpiece product lines? But just cross-selling independent extensions to ERP without truly integrating them doesn’t get you a “complete suite.” So there is some real work to be done here.
4 Complementary products: Mr Phillips states, “The product lines are complementary, not overlapping.” Complementary yes, but I diagree...they are also overlapping. Consider the financial product I mention above and Lawson M3 competes directly with several of the Infor ERP solutions for manufacturing. But I will say that Lawson has stuck to its knitting in terms of declared verticals. This means there is less overlap, but there is still a lot. However, the example Mr Phillips uses: ”… Lawson’s expertise in the healthcare industry will be enhanced by Infor’s Enterprise Asset Management which will be targeted for large hospitals and Time & Attendance product, complementing Lawson’s Nurse Scheduling application. This is truly a scenario where 1+1=3.” But don’t forget Lawson also has an EAM solution.
4 Standards-based integration: Infor’s underlying architectural strategy has undergone some changes over the past year, and appears to still be transforming itself somewhat, but the path seems to be towards openness and a commitment to stay out of the middleware market. This will pave the way for integrating the two new product lines with other Infor product lines.
4 Re-inventing the applications experience: Both Infor Workspace and Lawson Mashup Designer have similar goals here. It will be interesting to see if and how these two separate products are rationalized.
The remaining points refer to expertise in key industries (of which neither company lacks in both complementary and overlapping industries), innovation and investment (as evidenced by prior announcements and growth plans for R&D) and scale. In terms of scale, Mr Phillips makes reference to 75,000 customers and concludes with, “Having more customers allows us to invest more, identify more requirements and develop a large partner ecosystem.” I agree with the premise, but Infor already claimed to have 70,000 customers, so I am a little puzzled by such a small (7%) increment.
I do believe Lawson customers in particular will benefit from the increased focus on innovation. While Lawson has indeed brought innovation to the table, even as revenues were down during the recession, its profitability stayed strong, which was commendable for a public company with an obligation to its shareholders. But it also limited its investment.
My conclusion… while I hate to see the number of distinct and competing ERP vendors shrink once again, I believe that if the combined companies are not afraid to make some bold steps to consolidate strategies, perhaps rationalizing product sets, the customers will be the clear winners.
Monday, April 25, 2011
Today I was reading Bruce Richardson’s View From the Inside. Bruce was one of the longest tenured analysts with AMR Research (and its Chief Research Officer) before AMR was acquired by Gartner at the end of 2009/beginning of 2010. Bruce and I really moved in opposite directions. While I spent 30 years working for software companies before joining the analyst ranks, at the time of the AMR acquisition by Gartner, Bruce moved to Infor and is now on the software side. So we’ve both seen the view from both sides now.
The subject of Bruce’s “View” today was “A Tour of the Distribution ERP Market with Infor’s Andy Berry.” It talked about roadmaps and growth of sales to this market. But what specifically caught my eye was the announcement that Infor would be consolidating its multiple distribution products down to two and eventually to one offering. This is definitely a new approach for Infor. Throughout its history of over 35 acquisitions, Infor has avoided the consolidation or rationalization of products, sometimes in sharp contrast to companies it acquired.
The one merger in particular that comes to mind is Infor’s acquisition of SSA Global (August 2006), which itself had been a product of serial acquisitions and had defined a path of rationalization. Having just left SSA myself about 6 months prior to the acquisition, I was intimately familiar with its consolidation strategy. With somewhere around 10 different product lines at the time, SSA’s plan had been to consolidate down to two ERP solutions (LX and LN) and one financial management product, which ultimately would provide the basis of the financial modules in the two ERP solutions. But the company wasn’t too far down the path of execution when the merger happened, and the consolidation message, quite frankly, had not been very well received by its customer base. So abandoning that strategy seemed like a no-brainer at the time.
Add to this a couple other similar situations in the ERP market. Oracle had acquired Peoplesoft and JD Edwards, and also had its own business suite. But its announcement of its Fusion product as a single consolidated product line also met with resistance from its installed base. This was also about the time of Microsoft’s Project Green, which was meant to rationalize the four acquired ERP products (AX, NAV, GP, SL) down to one. Same reaction. Boos from the crowd.
So the case seemed to be pretty solid against rationalization unless you wanted to seriously tick off your customers. And maintenance revenue streams are way too important to an ERP solution provider to risk. So why was one ERP that also grew by acquisition – Epicor - successful in doing exactly the opposite?
On October 21, 2008, Epicor Software Corporation announced Epicor 9, the culmination of an eight year effort to converge its nine different product lines. And along the way, it didn’t seem to alienate its customer base. In fact over the years I have spoken with numerous Epicor customers that perceived a reimplementation as an opportunity, rather than a hardship. What was the difference?
Of course there are a myriad of differences, but I think the one that really mattered was that Epicor made the new destination different enough to really matter. Many installed base customers faced with a reimplementation perceive it as a “rip and replace” only to spend lots of time and effort to get back to exactly where they started. Epicor took a staged approach to delivering on its goal of convergence and did not lose sight of its promise to protect investments along the way. But it also knew that it had to bite the bullet and do a complete re-write of its underlying base architecture. So first it built its Internet Component Environment (ICE) 2.0, a second-generation Service-Oriented Architecture (SOA) and Web 2.0 technologies. Then over the course of several years it converged from nine to four and then to one. Customers weren’t re-implementing on the promise of something new and different in the future. It was already there and they knew if they just tried to re-create their existing environment they would be cementing in place any restrictions they currently faced.
Oracle Fusion and Microsoft Green promised new architectures but they weren’t “there” yet. SSA had no new architecture to promise.
Infor always had the vision, but for several years got side-tracked through attempts to architect its own middleware. Infor has now decided to stick to what it does best – enterprise applications. By 2013 the two “destination” distribution products will share the same functional code base. Infor is already working on building identical user interfaces based on its new Infor Workspace and it is also working on integration with Infor ION, which it describes as “a new generation of business middleware that is lighter weight, less technically demanding to implement, and built on open standards.” I believe Infor ION will be a key factor if Infor is now successful in implementing a rationalization strategy here on the distribution side … and perhaps among its different ERP solutions for manufacturing? For its multiple financial management solutions? There are lots of opportunities for consolidation here and lots of work to be done. But then remember the 400 new developers Infor intends to hire?
And also don’t forget the two major acquisition announcements that emerged recently – that Infor intends to acquire Lawson and that APAX Partners intends to merge Epicor with Activant (ERP for distribution). Fortunately Lawson Mashup Designer and Infor Workspace have a lot in common, at least conceptually. This could help. And time will tell if Epicor 9 becomes Epicor 10.
Tuesday, April 19, 2011
I’ve been watching the buzz that followed the announcement of John Wookey’s departure from SAP. Others have come and gone with hardly a mention but this departure is getting a bit more attention. Quite frankly I think it has more to do with Twitter than it does with SAP or John Wookey himself. That’s how I first learned of his resignation and I would guess most industry observers learned about it the same way. The immediacy of social media, Twitter especially, seems to spur everyone to either weigh in on the matter, or at least pass along the news. I was no exception, even though I am hardly as prolific in tweeting as many of my industry counterparts.
Ordinarily I don’t write much about organizational changes unless I believe they are somehow game changing. In fact I haven’t written a real analysis of a departure since Shai Agassi’s departure in March 2007. I did post a brief entry to my Aberdeen blog when Leo Apotheker left, but even that did not have the potential impact that Shai’s departure had. And John Wookey’s doesn’t even come close. But that is actually to John’s and SAP’s credit.
Yes John Wookey was a voice of the on-demand strategy at SAP, but let’s not forget that initially the “line of business” (which was really the large enterprise) on-demand strategy, which John was in charge of, had nothing to do with the current strategy which uses the Business ByDesign architecture as the overall on-demand platform. But today the revamped on-demand strategy is firmly enough in place and execution has begun in earnest. I don’t believe John Wookey’s departure (or that of any SAP exec) has the potential of derailing the wheels that have been set in motion to carry through on that strategy.
Shai’s departure was much different. First of all, Shai had a far more influential position than John. Prior to his departure he oversaw the development of the SAP NetWeaver platform, SAP xApps packaged composite applications, mySAP SRM, SAP Business One, and the project that ultimately produced Business ByDesign (called the A1S mid-market initiative back then). And there was a massive reorganization when he left. I never really decided for sure whether his departure triggered the reorg or if the reorg triggered his departure. In the end, it didn’t matter all that much.
At the time, as an Aberdeen analyst I wrote, “SAP appears to be far enough down the path of its enterprise SOA strategy to not be derailed by the departure of a single executive, even one as charismatic as Shai. The migration to its new platform and mySAP ERP [which became the basis for the Business Suite] has begun although SAP still has a long way to go to meet the publicly stated goal of 100,000 customers by 2010 [the Business Objects acquisition gave that initiative a big shot in the arm]. And SAP is in the early stages of delivering against the newly announced A1S mid-market strategy [which was made available on a limited basis as Business ByDesign in September of that year].”
Since Shai’s departure there have been a lot of ups and downs, as well as sideways motion on all these initiatives. But all of these goals have since been achieved, in one way or another. At this point I would just wish John well and will keep an eye out for where he lands. I am sure someone I follow on Twitter will tell me as soon as they know.
Friday, April 15, 2011
I was talking to an SAP Business One customer today and came across an interesting use of mobile technology to help manage a workforce deployed to a remote site – think of a construction site perhaps or physical therapists that regularly go to a nursing home or assisted living facility, contract security, temporary locations. This is not a product the Business One customer uses in their own implementation, but rather a product they build and sell.
The name of the company is Advanced Ventilation in the UK and the product I’m talking about is made and sold by a spin-off called U-CLOCK which operates as a separate company. U-CLOCK makes use of mobile phones to manage time and attendance as well as project updates (including material requests), report health and safety issues and accidents and provide an audit trail of all of the above.
Here’s how it works: The U-CLOCK customer purchases a small device that it locates at the remote site. When the employee arrives, he or she enters the 8 digit number that is shown on the device. A free text message is then sent from the mobile phone (employees can use their own personal phones) to a secure online account to register the location and arrival time. The number changes every 30 seconds, so the time entered is precise within a 30 second window. Managers track this on a computer logged into the company’s U-CLOCK account, but aren’t tied to the console. Email notifications can also be sent to the managers’ mobile phones. If an employee doesn’t arrive as expected at the site, the manager knows immediately. They can also report health and safety incidents and requisition materials.
All this information can be exported to a .csv or .pdf file or can be integrated into back office systems for billing and reporting.
In addition- and this is the part I like best - the U-Locate feature is designed for the lone worker. U-Locate is designed to address the needs of people who can potentially find themselves in an "at risk" situation such as, accidents, physical or verbal abuse at work, or dangerous roles with a real and present risk of physical danger. The main issues for employers is to know (with accuracy) where the lone worker is at any time via the worker’s mobile phone. The U-Locate Software, also accessible through the U-Clock secure console, gives the employer complete insight into the current location and past whereabouts of lone workers.
But more importantly it helps the lone workers in reacting to a dangerous situation or an unexpected event and gives them peace of mind knowing they will be missed if they don’t show up where they are expected and in knowing there will be someone at the end of the line who will know what to do. The worker can activate an alert which will be received by a dedicated emergency response center that has the ability to listen in to events as they happen and contact the relevant emergency services to ensure the quickest response possible.
I guess I show my age when I shake my head over kids constantly texting – and some of my colleagues on Twitter and other social media sites aren’t much different from those kids. Not that I am surprised… many of them are half my age. But I honestly don’t care what my business colleagues had for lunch, when they go to bed or what the view is from their hotel room. This seems a much more pragmatic use of mobile technology.
Tuesday, April 12, 2011
I don’t use this blog to make political statements, but being a researcher at heart and using data every day, I couldn’t resist sharing a few data points from a short video a friend of mine sent me. The video was produced by an organization called Government Gone Wild and the title is, “Brother, Can You Spare a Trillion?” (As a registered Independent, I don’t subscribe to this or any political organization, but watch it here if you are interested http://governmentgonewild.org/brothercanyouspareatrillion ).
I’ve learned through my research efforts that specific numbers make much more of an impact on the psyche than generalities. So, per the video, did you know?
· The United States spent $413 billion in interest payments last year
· Since 1988 the total spent in interest payments has been $8 trillion. That’s a bigger number than many of us can comprehend. Just to put it in some context, it would be enough to buy every citizen in the US a Lotus Evora (luxury sports) car.
· The Congressional Budget Office predicts by 2021 (just 10 years away), interest payments will be $1.1 trillion a year, which is more than one and a half times what we spend on defence.
· If our Congress stopped ALL spending today and starting paying down the debt at a rate of $100 million per day, it would take 389 years to pay it off.
No, there is no easy answer.
Thursday, April 7, 2011
What got customers excited earlier this week at CUE 2011 (Lawson’s annual Customer User Event)? The announcement that seemed to cause the biggest stir amongst the M3 customers was Lawson Mashup Designer. It is a new tool that helps Lawson customers build their own composite applications from multiple data sources, on-screen views and business intelligence reports – all without having to write software code. Only having one (quite full and busy) day at CUE this year, I didn’t have a chance to see all I wanted to see. So for now this will be some initial observations, with more to follow.
Lawson Mashup Designer is based on Lawson Smart Office (LSO), which was released back in March 2008. The original goal of LSO was along the same lines of thought as Mashup Designer is today. It was meant to be an intuitive, personalized user interface that allows users to directly access Lawson and Microsoft applications and update data pervasively and instantly across the applications. But while the emphasis of LSO initially was on those Microsoft productivity tools such as Microsoft Excel, Outlook, Word and PowerPoint, Mashup Designer builds upon LSO and extends beyond the realm of Microsoft and has customers fired up about the possibilities. In fact in talking with the COO and CFO of JR Watkins, a Lawson M3 customer, the pair commented that Mashups were “what lit our fire. We can definitely visualize how they could be used in our environment.”
Matthew Allbee, product management director for Lawson describes Lawson Mashup Designer as, “a new way for our customers to build better applications that they can use every day. By combining forms, process flows, data views, reports and business intelligence content into a single user-created application, we're now offering a new level of user customization. But most important, this does not require advanced programming skills. Instead, people who use Lawson every day can quickly start to create their own task- or process-specific applications."
But the keyword here might be “advanced” programming skills. While the intent is to be a tool for line of business versus IT, it is primarily for Lawson power users, system administrators and programmers, not your casual user or users that spend their entire time performing one specific function using M3.
LSO, being the foundation for Mashup Designer, is a prerequisite. Although the Mashup Designer is only available with M3, Lawson also plans to make it available for S3. In the meantime, for a limited time (until the end of August) LSO is available at no charge to any S3 customer with Lawson System Foundation (LSF). Those that take the deal do have to pay maintenance on LSO. For those S3 customers that have already purchased LSO – contact your customer service rep. Sounds like you could get some added incentives.
Details aside, what struck me first and foremost about Lawson Mashup Designer was the similarity in concept to Infor’s recently announced Infor Workspace. This is particularly relevant if in fact the proposed acquisition of Lawson by Infor goes through. You’ve got two companies thinking very much along the same lines in terms of a role based user experience that blurs the boundaries between disparate enterprise applications and web-based tools and applications. It would be great to see this kind of synergy accelerate the feature/function and technology innovation that the combined company could deliver to its customers.
Tuesday, April 5, 2011
Yesterday Epicor announced it had agreed to be acquired by Apax Partners. While I am not personally familiar with Apax, its website tells me it is an independent global private equity advisory firm and holding company for the worldwide Apax partnership which is the lead investment adviser to the most recent Apax Funds. Apax Funds buy both majority and minority stakes in large companies that have strong, established market positions and the potential to expand. It has a strong heritage of technology investment.
At the same time, it was announced that Apax would also acquire Activant Solutions and merge the two companies. The combined entity will operate under the name of Epicor Software Corporation and become a privately held company. Of course it is too early to tell exactly how the merger will be executed, but Epicor itself has a history of acquisition and is the only ERP company that has grown through acquisition and successfully executed a product convergence/consolidation strategy. Epicor 9, released in December 2009, is built on Epicor Internet Component Environment (ICE) 2.0, a second-generation Service-Oriented Architecture (SOA) and Web 2.0 technologies and is generally recognized for its visionary architecture. But just as importantly, Epicor 9 merges capabilities of nine different products (hence the “9” in the name). If Epicor remains true to past strategies, I would expect it to treat the Activant products similarly.
But then again….maybe not. Activant serves some very specific vertical industries including:
· automotive aftermarket
· hardware and home centers
· heavy duty truck and trailer
· lawn, garden and nursery
· lumber and building materials
· painting and decorating
· pharmacy retail
· specialty retail
While Epicor also serves retail and distribution sectors, Epicor also has products which complement ERP in support of a retail environment, and has never been that “niche” oriented. It remains to be seen whether these industries are best served by separate product lines or whether Epicor will decide to continue the convergence and turn Epicor 9 into Epicor 10, or maybe even Epicor 11 or 12.
For now it is safe to assume the transaction will be good for Epicor and allow it to fuel more aggressive growth in the market. As for Activant, customers should take comfort in knowing that Epicor’s strategy has been very customer-centric with a motto of “Protect, Extend and Converge.” Whether convergence is in the future or not, I have a lot of confidence in the resultant management team preserving the part about protect and extend.
Sunday, April 3, 2011
For the past several years the lines have been blurring between Enterprise Resource Planning (ERP) and other enterprise applications to the extent that it has become very difficult to determine where ERP ends and these other applications begin. This is particularly significant in any discussion of Infor, due to the company’s voracious appetite for acquisition. Over the years Infor has collected quite a variety of ERP solutions as well as complementary products that expand its footprint beyond the usual confines of traditional ERP. These acquisitions have put applications such as Supply Chain Management (SCM), Product Lifecycle Management (PLM), Customer Relationship Management (CRM), Enterprise Asset Management (EAM) and others into the Infor portfolio.
While this provided Infor with a more complete solution along with up-sell and cross-sell opportunities, there is never a silver bullet that turns different applications into a single cohesive solution that allows data and processes to flow smoothly between applications. That takes time and effort.
Now these boundaries are blurring even further. Think about it. As a business professional you spend time in enterprise applications that run and support your business; you spend time using desktop tools, time on your own Intranet and you spend time out on the Internet. Lines between your business and personal life are also beginning to blur as the data and applications you use as a consumer also start to permeate your consciousness and re-set expectations, particularly those of younger folks fresh from college or business school.
While Infor Workspace gives a common look and feel and a single sign on to potentially a vast array of disparate applications, it is more than just a portal. While how an application looks and feels is more important than ever, the real value of tools such as Infor Workspace are in providing visibility and ease of use and in fueling productivity. While top of the list of goals for ERP (and many other enterprise applications) is providing added visibility to the business, most companies today still lack a clear line of sight from quote to cash, and many individuals in those companies waste precious time searching for data on a regular basis. In this quest for information and knowledge, it is less important to know exactly where the information is coming from and more important to be able to easily carry information from one of these applications to another. This is what is meant by “context.”
Let’s take one example. One of your sales representatives might be using sales force automation tools available from your Customer Relationship Management (CRM) solution. This is where he has all his contacts, including an address. Now he is preparing to visit the prospect or customer and needs to plan his day around this visit, so he needs to know how long it will take to get there; he needs directions and he might also want to determine if he might be able to combine this call with a visit to another prospect or customer. No problem, he just opens a browser where he probably has Yahoo!Maps or Mapquest or Google Maps bookmarked. Then he grabs the address from CRM and copies and pastes it into the navigational application to get driving directions. This probably takes two or three steps because the address is contained in several different fields in the application that must all be strung together in the navigation application. And he better not forget to put that appointment in his calendar.
Fast forward now to Infor Workspace. Instead of multiple copy and paste steps, right from the customer record, he can click on a button to open up Google Maps and the destination location is automatically filled in from the CRM application.
In this case the sales rep doesn’t know or care if his directions are coming from an internal business application or an application he is accessing via the Internet. What’s important is that the customer and address was carried over automatically without having to find, copy and paste.
Or what about when that prospect is not within driving distance? He will need to determine the closest airport, then visit the company’s approved travel site and then search for other prospects and customers in close range. And he also needs to get approval (online?) from his manager for his travel.
This may seem like a trivial example to those who operate on the bleeding edge of technology, but there are plenty of business professionals out there, including some Infor customers, who have yet to apply these efficiency and productivity steps to their everyday work experience. If one individual can save a few key strokes every day, how much time and effort can a sales force of 100 individuals, or 1000, save in a day, a month or a year? Then think of other ways to save time and key strokes. What about currency or time zone conversion? How many other small tasks are you doing every day that quickly and quietly suck up minutes that, when added together, turn into hours. How many different applications do you typically have open at any one time of the day?
In addition to the mapping, currency and time conversion tools that are available, Infor Workspace also provides automatic alert management tools that monitor the status of tasks in relation to promised completion or established service level agreements and alert users to exceptions. Event management tools that alert decision makers when conditions or activities occur or fail to occur have been around for more than a decade. Yet adoption rates and implementation of these types of tools are still very low. Building these tools into the application is certainly one way of encouraging more exception management.
But the real value of alerts is dependent on the level of intelligence available in the data. Infor has added certain charts and alerts as standard fare, but if the customer wants to build their own Business Intelligence they do need to buy those tools from Infor.
Another factor that impacts adoption of alerts and event management is the question of where and how these alerts are delivered. As the workforce becomes increasingly mobile, just delivering these on your standard desktop or laptop is not sufficient. An application running in a standard browser, which is a prerequisite for Infor Workspace, generally allows it to also run on an iPad. Today Infor Workspace is available on an iPad, but Infor admits it still needs to do some work on the touch and feel aspect of the interaction since some of the standard icons are quite small.
Infor has made use of its ION integration technology as well as Microsoft SharePoint and Microsoft Reporting Services. As noted above, applications will have to be browser-enabled in order to take advantage of Infor Workspace.
While most of Infor’s key go-forward products are browser-enabled, this will leave some of the legacy applications out of the picture. That is not necessarily a bad thing. While giving customers choice is good, encouraging them to stay on old, outdated technology is empowering them to remain underserved by technology and innovation. One of Infor’s goals is to get customers on the latest and greatest versions of their applications without having the customer incur a huge cost. For existing Infor customers Workspace is available through their annual maintenance agreement and Infor has tried to minimize the cost and impact of upgrading through means such as pre-built migration kits.
Infor Workspace provides a new paradigm and a new experience for Infor customers. It is more than a portal, it is a work space (hence the name), customizable by role and by individual, bringing together the power of internal and web-based applications. Existing Infor customers should explore the possibilities that unfold in implementing Infor Workspace along with applications they already own.
What about expanding beyond current products implemented? Because many of the solutions besides ERP have been acquired by Infor , current customers may not have perceived significant value in purchasing those complementary solutions from Infor. Now with a consistent look and feel, the benefits of a single sign on and “in context” business intelligence, they may want to think again.
For prospects of Infor currently considering a purchase, fully explore the application under consideration but also look carefully at how Infor Workspace can continue to expand the scope of the implementation, without adding extra cost.
Wednesday, March 30, 2011
When I first “met” NetSuite about 5 years ago I have to admit I didn’t really consider it an ERP vendor. Of course that was back when I had a more narrow view of ERP and thought that if a vendor didn’t have MRP then it didn’t have ERP. I’ve since gotten over that and for several years now I have defined ERP as an integrated suite of modules that provide the transactional system of record for a business. Not every type of business needs MRP to form that basis. Of course most ERP solutions offer much more than that, so this is really my base line definition.
Back in 2006 I viewed CRM and eCommerce as NetSuite’s strengths even though it did provide a suite that extended beyond these modules. But since then it has officially entered the realm of ERP in my book. Its Home page on its website (www.netsuite.com) labels it as “The #1 Cloud ERP / Financials Software Suite” and further describes its solution as “full-featured financials / accounting, CRM, inventory, and ecommerce software—all in a single system.” So in a way, it is still down-playing the ERP moniker in favour of “suite” and its historically strong suit: CRM and eCommerce, packaged with financials.
Also back in 2006, NetSuite did not target manufacturers. Without a true Bill of Material and MRP all it could address was some level of assembly or very light manufacturing. That has now changed, although not all as a result of organic development. Some of the manufacturing functionality NetSuite offers now comes from a partner, Rootstock. Rootstock Software is a certified NetSuite Solution Provider specializing in the manufacturing industry with heavy focus on the NetSuite Manufacturing Edition solution. While its website claims, “NetSuite Manufacturing Edition is the only cloud-based integrated business suite for manufacturing”, I think they are missing a few other players, with Plex Systems being at the top of that list. Plex has been offering a complete SaaS ERP solution for manufacturing for more than 10 years. Other more traditional ERP players (Epicor, Infor, QAD, SAP) also have cloud based offerings for manufacturers and even more have arrived on the scene with hosted cloud models.
But what I find very interesting is that some of NetSuite’s key customer successes were achieved without the use of Rootstock functionality. I just listened in to a webcast sponsored by NetSuite and featuring 2 manufacturers using NetSuite and both purchases pre-date the partnership with Rootstock.
Schaeffer Oil prides itself on being “the oldest oil company you never heard of.” With 30,000 customers, it processes 90,000 orders a year using NetSuite and has achieved the following results:
· Reduced its IT spend by $100,000 in the first 6 months
· Reduced cycle time of order processing from 3 days to 1.5
· Reduced backorders by 25%
· Processed 25% more orders with 15% less staff
· Improved communication and visibility
GLI Pool Products is a manufacturer and distributor of custom and specialty products for the swimming pool industry. It was founded in 2006 with the purchase of assets from a much larger Canadian company and in doing so inherited an ERP solution, but none of the influence over its continued development. Ultimately they replaced that inherited solution with NetSuite. GLI has bucked the downward trend in construction related businesses and attribute much of their success to the use of NetSuite. They achieved lower material and operational costs while improving flexibility – a key consideration as they no longer wanted to live in “used-ta-land.” They could no longer be productive and profitable doing things the way they used to do things.
So while the addition of Rootstock functionality really just took effect in mid-2010, NetSuite has been quietly amassing quite a collection of manufacturers in its installed base for quite some time. This is particularly notable since NetSuite is not known for its “quiet” marketing tactics. With the addition of a couple of relatively new names to the NetSuite roster (Roman Bukary and Ranga Bodla) charged with promoting NetSuite in Manufacturing and Distribution, perhaps this will change.
Thursday, March 24, 2011
Last week (March 15, 2011) Epicor announced the launch of a new university for its customers, partners and employees. Epicor University was created to address the challenge of delivering consistent high-quality training worldwide, and to expand the range of Epicor’s education deliverables. It also offers certification programs for Epicor’s partner channel. With the introduction of the university concept, all content, materials, and training is developed by a dedicated centralized team.
The primary objective is to provide customers with resources and tools to help them realize the greatest benefit from their enterprise software investment while allowing individuals to learn in the way they learn best. Epicor already offers a lot of resources, from embedded courses within their ERP system, to user guides, classroom courses and certifications, to an online help system that gets down to individual fields help and technical reference guides. According to Epicor, there are more than one hundred embedded courses associated with Epicor 9 and over 100 virtual or classroom courses available, 2,500 pages of content and graphics in Epicor technical guides, and 74,000 fields defined in Epicor 9 Field Help.
So why is a University needed? After all, user interfaces have become so much more intuitive and software has become easier to use. Navigation through an enterprise application is no longer cumbersome and confusing. And when was the last time you read the instructions for any kind of software anyway? If you can’t figure it out easily it just doesn’t get used.
Exactly! That’s one of the reasons that education and training often gets ignored. Sure the user interface is intuitive. Sure it is easy to navigate through the various functions. But these are potentially complex business processes that are being modeled through an ERP. Are those business processes efficient? Are they standardized and repeatable? Do they produce a clean audit trail? Can they be easily audited? Do they put you in a position of competitive strength or hold you back from realizing your full potential? Most importantly, are you getting the most value out of your investment? Why do you think one company fails miserably while another succeeds beyond all expectations while they both use the same software?
Most every software company on the planet is working to enable self-service training and support. That makes sense. Like any other type of company today, most are attempting to grow while also reducing or constraining costs. The software business itself is very scalable. Create one piece of software and sell it dozens or hundreds or thousands or hundreds of thousands of times. But services don’t necessarily scale as easily. Sure, you can make it more scalable by creating user guides and online on demand training courses. But there is a certain element of education and consulting that happens one person, one hour or day at a time. And even the very best software can be underutilized, used incorrectly or used to model inefficient and incomplete processes.
So kudos to Epicor for bringing education and training back into the spotlight. Are you getting the maximum value possible from your ERP?
Tuesday, March 22, 2011
While I mostly keep up with news online, once in a while I like to be nostalgic and watch world news on TV. Last night I managed to catch the news on ABC and learned a new term – the “he-recovery.” As Diane Sawyer said, “The race is on for jobs” and men are definitely winning over women. While during the recession men lost twice as many jobs as women, now the tables are turned. According to ABC, of the 1.3 million jobs gained in the recovery, 1.1 million (that’s 90%) have gone to men and 113,000 (10%) to women.
Why is that?
Some of it has to do with the kind of jobs that have been created through stimulus efforts… think construction and transportation in which women only make up a small percentage of the workforce (13% women in construction and 5% in transportation – also according to ABC). But even in retail, which has traditionally been dominated by female workers, men have gained 100,000 jobs while women have lost 100,000. Others that were interviewed in the segment last night also hypothesized that men were given more jobs because they needed them more as the traditional breadwinner of the family. Yet women are the chief breadwinners of 40% of households in the US. Hmmmm.
I’ve officially been in the workforce for 36 years, and I had summer and part time jobs (sometimes more than one) while I was in school for 7 years before that. During that time I would venture to say that I’ve seen it all. I’ve been associated with some male-dominated environments, and others that are not so much. My first job out of college was working for a manufacturing company. There were plenty of women, but one other woman and I were the only two that were salaried and managers. Later I worked for a software company started by a woman who was then the president and CEO. I had plenty of women peers but I carried the title of Manufacturing Consultant (or a Manager of that same position) and I looked about 18 years old (I was in my 30’s). I knew when I went into a company for the first time I had about 37 seconds to prove my credibility or they would write me off. Nobody wrote me off.
I went to college in the early 70’s, during the height of the feminist movement, but I have never been much of a feminist. I always just concentrated on getting the job done and expected to be paid fairly for it. But I have also worked for companies where I experienced a glass ceiling in spite of the fact that I am damn good at what I do. This tended to be where the “old boys’ network” was firmly in place, but I have experienced a “young boys’ network” as well. Same result, but it hurt more.
The bottom line is there is still a gender gap. A different ABC news segment also reported that the amount women earn (as compared to men) had increased by two cents over the past year. That’s the good news. The bad news is that means women (in aggregate) still earn $.81 for every $1 earned by men in similar positions in spite of the fact that women are now as well-educated as men. There is always speculation about why that is. Men tend not to interrupt careers for babies, but then fewer and fewer women today do any more. Some point to personality differences, but let’s face it, women are not all alike just as men are not all alike.
I do however think that women in general need to be assertive, not aggressive and younger women need more female role models and mentors. I’ve done my part through the years in working for corporations mentoring both men and women. As I start my own company, I start down a new and different path – one that by definition has no ceiling at all, glass or otherwise. Any women out there in need of coaching and support, give me a shout (firstname.lastname@example.org) .
For those that would like to listen to the ABC news segment….
Competing in the “Networked Normal” : A Pathway to Growth through Innovation and Collaboration
SAP EVP Richard Campione began his keynote this morning at the SAP Insider Event today with an interesting statistic: 85% of executives expect complexity to grow significantly. Interesting, but hardly surprising given the setting. This event co-locates several conferences: Logistics and Supply Chain Management 2011, Manufacturing 2011, PLM 2011 and Procurement and Materials Management 2011. Professionals in attendance are all focused on getting product to market and to customers. Given the global nature of business today, the speed of change and the proliferation of data and data sources, increased complexity is the natural result. And yet even with this growing complexity, customers’ expectation of speed and responsiveness is not diminished. In fact, it is only intensified.
Mr Campione also opened with a bit of history. Two years ago at this event there was talk of a recession and even a depression. Strategies were all about cash preservation and survival. A year ago, there was a fair amount of optimism and talk of recovery. Sentiment was … companies could once more invest, but the overriding theme was to invest in order to save. This year, 2011 is a “new beginning” and suggested that a good place to start was in looking at the problem as one of managing from “idea to delivery.” Again, nothing new or surprising, but the holistic approach to supporting this (complete) process was impressive.
Mr Campione also characterized 2011 as a year of crisis and hope. Crisis certainly needed no explanation given the recent uprisings and events in the Middle East, combined with the earthquake and tsunami in Japan. Given the disaster in the Pacific, it seemed quite apropos to show his audience the Chinese symbol for crisis, which is actually represented by combining the symbol for danger with that of opportunity. He encouraged his audience to seize the opportunity to learn from leaders. These leaders operate better within business networks. They innovate faster, capturing 25% of revenues from new products, compared to others who only generate 5%. They reduce inventory, citing instances of as much as 55% reduction in days’ supply. And they manage risk. What better backdrop for the need for proactive risk management than the efforts to avert a pending nuclear crisis?
All this is very relevant to the global environment, but how do we really relate this to how SAP products can help businesses “run better?” To summarize, it is all about operating better, collaborating better and deciding better. Given the proliferation of data bombarding us from all angles, it is about turning fast into real real-time. In SAP parlance, this means more (mobile) devices, more applications and more analytics.
More devices equate to more mobile devices, and this was the primary reason SAP bought Sybase – for its mobility platform. There are a lot of different applications along the path from idea to delivery and Mr Campione emphasized the need for these to be "consumable, ready to deploy, packaged applications." "Consumable" is a word I have been emphasizing to ERP vendors for the past several years, so this was music to my ears.
SAP brought an entertaining duo on stage to demonstrate a scenario that took us from
· consensus planning, to…
· the identification of “killer features,” to…
· engaging the right people, to…
· readying the supply chain, to…
· analysing the process and the results
This demo scenario started with SAP Event Insight, then turned to Stream Work, followed by SAP Sales On Demand and finally the BI element of Business Analytics. Implied behind the scenes were PLM, ERP and manufacturing execution including sourcing and procurement. It touched on ideation, sales and operations planning and on the innovation SAP had delivered within the last 12 months, including the following:
· Stream Work
· Business ByDesign
· BI 4.0
· Innovations 2010
· HANA (in memory)
· Netweaver 7.3
If you missed this keynote and yet feel the urgency to address many of these challenges, including the need to eliminate dual entry in multiple systems, the need for improved visibility, better integrated quality management, and lower inventory and operating costs, take the time to get a demo. If you are running solutions that are not using the latest and greatest technology, you may be pleasantly surprised. And remember how fast that technology is changing!
Wednesday, March 16, 2011
This morning Infor announced it will expand its engineering organization by hiring approximately 400 additional software developers and plans to add significantly more new features and releases this year than ever before. Reinforcing, the strategy shift away from building middleware, all these new hires will be focused on building business applications.
This signals an increase in investment in product development under the leadership of the new management team put in place by Charles Phillips who took over as CEO, bumping Jim Schaper to chairman of the board. Infor also announced license growth of 17% and increased cash operating margins of 24% (which includes Infor and Softbrands Q3FY11 results over Q3 of Fiscal Year 2010). Infor added 400 net new customers last quarter. This is an important statistic since we have witnessed slowed growth of ERP solution providers, coupled with the downturn in the economy over the last two plus years. Indeed, Infor’s customer count has hovered around 70,000 for the past five years, ever since the acquisition of SSA Global, Systems Union and Extensity in August 2006. Since then, new customer growth has compensated for attrition, but has not moved the needle significantly.
New releases, standards based integration through Infor’s new ION platform, and planned changes to a new and universal user interface are all necessary components in order for Infor to break out this year and grow that number, especially if it wants to grow organically, as well as through acquisition. This announcement comes just days after the new of the proposed bid to acquire Lawson by Infor and its major investor Golden Gate Capital. Clearly Infor management wants to send the message that while acquisitions are likely in the near future, organic growth is also important.
Tuesday, March 15, 2011
I sat in on a webcast hosted by Epicor today on Epicor Manufacturing Express Edition, complete with a demo of the product. Epicor had pre-briefed me on its Express Edition back in August 2009 and then again when it was released in May 2010. For those of you not familiar with this Express Edition, here’s a very quick summary….
Epicor Manufacturing Express Edition is a simplified version of Epicor 9, developed specifically for job shops and discrete manufacturers and delivered only using a SaaS model. But Epicor is quick to point out that SaaS is a delivery model, not a product. The product itself is Epicor 9, simplified. By “simplified” I mean that Epicor has hidden selected bits of functionality in order to remove some of the complexity inherent in a comprehensive enterprise-level ERP solution… hidden and not actually removed. Built-in best practices are also layered on top of the software and templates and even a chart of accounts can be delivered right out of the box. The target go-live date is 20-30 days after installation.
Epicor Express includes CRM, product management, production management, materials management, financial management and built in business intelligence. Data migration tools can be included in the Express Start package or not, including the ability to import data from QuickBooks. Customers also have the option of using Sage Peachtree for accounting and financials and Epicor Express for CRM and production management.
Because Epicor Express is derived from Epicor 9, as companies grow (needing more features and functions), there is a good chance the features are already included in Epicor 9. In some cases those hidden features can be turned back on, allowing the customer to remain in a SaaS environment. But generally speaking, if you outgrow the Express Edition, you will likely be moving to another edition of Epicor 9 (Standard Edition or Enterprise Edition) and an on-premise environment or a hosted environment. But this hosted environment can include managed services, allowing customers to continue to avoid investing in their own IT infrastructure and staff. It is an evolutionary (and not revolutionary) path.
While I was quite familiar with the strategy and Epicor’s roll-out, until today I had not seen a "public" demo of the product. There were a few thoughts that struck me as I watched.
1. The person doing the demo was a “Territory Manager,” which I interpreted it to be a sales function. This tells me two things: the Epicor sales folks know a thing or two about the needs of their prospects and clients (the demo was real and credible and did not appear to be “canned”) and you don’t need to be a product specialist to use the system. No offense to sales, but they typically have much more of a business development orientation than a deep product orientation.
2. The system is relatively easy to navigate, which lessens the need for training. There is just one potential downside to that. As solutions become easier to navigate, customers make the mistake of thinking they don’t need any training. My experience tells me that users of ERP solutions still need to be trained procedurally, as much from a business perspective as a system perspective. Without some level of training, business processes get mucked up and users never take full advantage of the solution.
3. And finally, I thought, “My, how far things have come since my days of doing demos.” In the mid-to-late 1980’s my best demos were the ones where my hands never touched the keyboard. Of course most of those demos were done in the ERP vendors’ offices or via a dial-up modem. But in those days, you really needed to memorize all the various codes (since there were few, if any lookups); you spent as much time navigating the hierarchical menu structure as you did demonstrating “real” work. You spent far more time putting data into the system than you did showing how to retrieve it. Because getting data out was pretty hard, and usually ugly. This demonstration featured a series of what Epicor called “minute of your day type features” and I would venture to say in the old days, those “minutes” would have been hours.
Part of Epicor’s “pitch” is the level of experience it brings to small manufacturers. Founded in 1984, Epicor’s been around since back when I was doing demos. Today they are a public company with about $440 million in annual revenue, 2700 employees and more than 20,000 customers. In defining the simplified version of Epicor 9 that forms the basis of Epicor Manufacturing Express Edition, of course the company will draw on the experience it has gained in dealing with small manufacturers, perhaps many of them still running older Epicor products such as Vista, which over time has merged with Vantage and then morphed into Epicor 9. The only question I have is, how many of those Vista customers are still operating back in the world I knew when I was doing demos? What will it take to get them to venture into the 21st century? Perhaps Epicor Manufacturing Express Edition will lead them out of the darkness.