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PeopleSoft - Catching Its Second Wind From The Internet Part 2: Strengths and Challenges

2010-08-01T21:29:00.002-07:00

PeopleSoft - Catching Its Second Wind From The Internet

Part 2: Strengths and Challenges

P.J. Jakovljevic - June 6, 2001

Executive Summary

PeopleSoft, Inc. is one of the leading developers of enterprise business applications, which helps governments, higher education institutions and large-to-medium sized corporations manage human resources (HR), financials, supply chain management (SCM), customer relationship management (CRM), e-Business and business intelligence data from a wide range of operating systems and hardware platforms.

From its founding in 1987 PeopleSoft grew at a breakneck pace with a number of consecutive years of doubled sales until 1998, when its sales all but stalled due to increased competition and a saturated market. 1999 and 2000 were years of changes and adjustment culminating in a company with a pure Internet platform, a new set of products, and a new assertive attitude.

Indisputably, the most prominent event and the turning point for the company was the delivery of PeopleSoft 8 in September 2000. The product is an Internet-based collection of 160 applications, with 59 new applications in the 8 release, that span well beyond PeopleSoft's HR stronghold into e-business collaborative applications, CRM, SCM, professional service automation (PSA), and analytics to name but a few.

PeopleSoft's announcement of pure Internet connectivity with the elimination of required client side software represents a new twist. Not only should it speed application deployment time (browsers are free and often pre-installed), it should also allow access to anyone with a cell phone, hand held or browser equipped machine, which is an attractive prospect for remote offices, sales teams, and business partners.

This part examines the strengths and challenges PeopleSoft now faces in today's cutthroat competitive environment.

About This Note

This is a three-part note:

* Part 1 contains the Vendor Summary, Trajectory and Strategy, and Major Developments during the past two years.

* Part 2 contains an Analysis of PeopleSof's Strengths and Challenges.

* Part 3 contains the Bottom Line information with Predictions, and Recommendations for both the PeopleSoft and users.

Part 3 contains links to Parts 1 and 2.

ANALYSIS

PeopleSoft Strengths

HRMS/Payroll Software Leadership: PeopleSoft is indisputably one of the best, the earliest-to-market and the most comprehensive human resource management system (HRMS) applications available. As it was the first application that the company developed, it drove the rest of development of PeopleSoft enterprise applications suite. This was in a sharp contrast to its ERP counterparts for which HR application was only a necessary add-on, and, subsequently, these competitive HR applications often display a financial and/or manufacturing approach to HRMS and use terminology that is not user-friendly to human resources and/or payroll staff. As a result, PeopleSoft can often compete with 'best-of-breed' HRMS applications with its product depth in areas such as performance reviews, benefits management, salary planning, complex payroll calculations (and transactions reversals if need be), pension administration, employee and managerial self-service, etc.

PeopleSoft HRMS is also delivered with a number of Business Process Graphical Maps for the users to easily navigate and process key functions (i.e., new hire process, termination process, performance review process), which include integration with email online alerts and automated work lists ('to do' lists) creation. Moreover, the PeopleSoft 8 product features architecture that may improve the ability to support internal and external enterprise processes, which will increase the need for employee and managerial self-service functionality and access to e-HR communities.

By delivering PeopleSoft MarketPay and PeopleSoft MarketPlace products, the company has extended its HR and financial systems expertise and taken a thought leadership over its direct competitors, which are currently only at early planning stages of developing these capabilities. Handling payment settlements and HR requirements are the next hot issues in the digital marketplaces frenzy, given the fact that ways of trading goods via Internet have mainly been resolved.

Also, PeopleSoft 8 Financials functionality is one of the strongest and broadest in the market. It features a high degree of flexibility (e.g., daily periods in the calendar, unlimited account key, etc.) and offers treasury management, as well as strong expense self-service module that is tightly integrated with Accounts Payable and Payroll modules. Having garnered strong HR/Payroll and recently financial functionality, PeopleSoft offers a strong and comprehensive vertical industry solution for non-manufacturing industries like government, utilities, financial, insurance, healthcare and higher education.

Sound Corporate Viability: PeopleSoft has restored a sound financial situation during the last 18 months (See Figures 1 - 2) in terms of growth and profitability, with exorbitant investment in R&D (27% of revenue, 26% of workforce), and a strong and efficient direct sales force (measured in revenue per sales employee ratio), and a traditionally congenial corporate culture that nurtures creativity and initiative of employees. In addition, having been able to provide a complete solution with a minimum reliance on 3rd-party products (and, consequently, with a lesser cost of software license), PeopleSoft should continue to post high margins and solid profits provided sustaining revenue stream. These impressive results coincide with the final phase of integrating the acquired Vantive CRM product within its flagship PeopleSoft 8 product suite and with the winding down of its ambitious and over two years long R&D endeavors.

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Further, PeopleSoft has a large and loyal HRMS (over 60% of global HRMS market share) and financial modules customer base, which could provide a significant recurring revenue stream through sales of new components and/or product upgrades. The blessing in disguise for the company is the stronghold within the service industries that have been much less affected by the current economic slowdown than their manufacturing or telecommunications counterparts.

Advanced Product Architecture and Technology: While we have strong reservations towards companies utilizing bombastic words like "technology leap", there may be a point in PeopleSoft's suggestion that its competitors' (read Oracle and SAP) products were initially (or currently) only Web-friendly, rather than an Internet-only application. Early Web enabled releases from both Oracle and SAP were a mere porting of client/server architecture to the Internet (in other words, basically rejuvenated versions of the existing, proprietary Windows-like screens and forms) through a number of Java applets and/or intermediary architectural layer.

Therefore, PeopleSoft's announcement of pure Internet connectivity with the elimination of required client side software represents a new twist. Not only should it speed application deployment time (browsers are free and often pre-installed), it should also allow access to anyone with a cell phone, hand held or browser equipped machine, which is an attractive prospect for remote offices, sales teams, and business partners. To that end, PeopleSoft currently offers an impressive range of mobile applications.

Also, PeopleSoft's architecture will challenge competitors' offerings with advanced XML messaging and application programming interfaces (APIs) options that promise to ease bi-directional integration. Other indisputable advantages of a browser are the ease of training and use, as well as a broad-scale deployability. The new architecture should also enable release independence, allowing upgrades of a single module without the need to upgrade the full suite.

Furthermore, PeopleSoft has possibly the strongest product technology in terms of support for almost all industry relevant OS and DB platforms and/or middleware standards and in terms of scalability & performance metrics, system monitoring & load balancing (e.g., by using BEA Systems' Tuxedo Monitor tool), backup & recovery issues, authentication, and authorization & transaction security issues.

Product Flexibility: Owing to an early modular approach of the design of PeopleSoft applications, its suite can be implemented in phases as required. This allows for critical functions to become operational without having to undergo a risky and harrowing big-bang approach. Also, given that PeopleSoft enterprise applications have been developed and added incrementally to the suite, the company has long had to rely on product flexibility and integration to 3rd-party products or tools. As an example, PeopleSoft features a set of embedded powerful and easy to use reporting tools like nVision, Crystal and Cognos Powerplay. Further, PeopleSoft Workflow integrates with any VIM, MAPI, or SMTP compliant email system.

Also, all PeopleSoft applications use effective dating and not only the applications where effective- and back-dating are generally accepted ways of doing business. In other words, it is not only limited to detailed transactions like journal entries or employee personnel transactions, but also to the supporting and edit tables (e.g., translate values). Also, with PeopleSoft 8, the Unicode language standard is supported which should grant the products strong global capabilities.

Product Horizontal Breadth: PeopleSoft 8, offering non-proprietary browser looking user interface, a completely redesigned Internet architecture, and notable additional functionality, places the company as one of the frontrunners in the next generation of e-business applications. It stands a chance to currently be the only vendor, other than SAP and Oracle, that can deliver a majority of the components of a complete e-business solution with its PeopleSoft 8 suite including CRM, SCM, HR, professional service automation (PSA), data warehousing, e-procurement applications, business intelligence, and enterprise resource planning (ERP) applications.

Consequently, PeopleSoft offers its integrated product suite as a solution that could bundle necessary application components within a single integrated product (a "one-stop shop"), thereby avoiding the middleware porting and connectivity standards issues. Avoiding the need for integration between disparate components reduces the cost and risk associated with implementation and maintenance and the product can be implemented more quickly. The approach can also lead to more effective customer relationship management since the customers should obtain the identical response from the business application regardless of which communication channel they use (Internet, call-center, direct mail, etc.).

Moreover, in some instances, PeopleSoft may be able to offer best of both worlds (one-stop shop and best-of-breed). In addition to a leading HRMS product, the company's pervasive Business Intelligence (Analytics) components are impressive, with dedicated complex analysis and reporting around almost all crucial business areas including several new CRM components. Although the marketing, so far, of its Vantive CRM product acquisition has not matched the efforts of rivals such as Oracle or Siebel, PeopleSoft's huge potential advantage is the integration of its Vantive product to the back-office ERP system that handles the vital internal processes so important to customers.

The new system should allow manufacturers to get a 360-degree view of all their customer relationships. It provides tracking and management of marketing campaigns, the entire sell cycle, the fulfillment cycle, and customer service. This kind of knowledge only comes from integrating CRM software with back-office systems. Additional advantages of the Vantive product are its ability to easily integrate with other 3rd-party ERP systems as well as improved scalability (the company claims to be the first vendor to support 20,000 CRM users).

Also, supplier-facing applications have long been a strength of PeopleSoft, with over 1,200 existing customers. With PeopleSoft 8, new additional collaborative applications have led to the launch of a supplier relationship management (SRM) solution. PeopleSoft 8 SRM is designed to help organizations effectively evaluate the strategic value of their suppliers and leverage their relationships accordingly. It is envisioned to integrate the design, sourcing, procurement, manufacturing, and replenishment processes within a company. Since the solution offers an array of both direct and indirect materials procurement processes, it might provide PeopleSoft with the opportunity to sell its SCM products into some non-manufacturing industries such as healthcare, telecommunications and utilities, where it already has a large user base.

Furthermore, integration of SCM and CRM products should result in a convergence of these traditionally disconnected business processes (e.g., campaign-to-order, order-to-cash, service-to-profit, design-to-acceptance, plan-to-service, request-to-resolve, agreement-to-profit, etc.) through information at every touch point, and every channel across the expanded enterprise. To enable effective collaborative commerce, PeopleSoft has delivered role-based portals that encompass business applications, transactional data, workflow and analytics to make employees more productive. This approach has also been extended out to address specific industry needs as in the example of the broker portal for the consumer goods industry.

Partnerships and Service & Support Infrastructure: PeopleSoft has been adept in forming alliances with industry leaders to deliver a full range of Internet based solutions. From ASP/hosting and infrastructure to joint development initiatives, continued strategic alliances will contribute to the company's success. PeopleSoft seems to understand the benefits of effective channel management and of limiting channel conflict, the importance of developing vertical, industry-specific products, and the integration of the ASP delivery model as an upfront option during the sales cycle.

PeopleSoft has positioned the ASP business in a right manner - rather as a viable option for delivering PeopleSoft products, as opposed to a cheap, deal-striking alternative. Owning all elements of ASP business and/or selectively partnering with viable, vertically focused ASP service providers, along with its readiness to accommodate some degree of customization have reduced customers' initial reticence to venture into the uncertain land of ASP.

PeopleSoft Challenges

Product Immaturity, Functional Holes and Integration Work-In-Progress: PeopleSoft 8, achieved through a radical rewrite of over 14,000 PeopleSoft 7.5 enterprise suite panels and/or program sessions and through acquisition of Vantive CRM product, is still an unproven product in its infancy and adopted mainly by a number of early adopters.

PeopleSoft has yet to resolve integration issues and reworking disparate CRM and ERP pieces into a unified data model. If one wants to be nit picking he/she may also notice that the entire PeopleSoft 8 product suite does not exhibit an identical look and feel across the board. Namely, its Vantive CRM suite still requires Java virtual machine and will supposedly be re-architected for the Internet and fully integrated within the suite in the 2nd half of 2001. This can prove to be a drawback at this stage, given that CRM is often the driving force behind e-business projects. In addition, while all PeopleSoft transactions are processed through the Web applications, part of its development tools, PeopleSoft Tools (e.g., administrative functions) are still WIN32 based.

In addition, SAP's recently renewed joint development alliance with Commerce One may derail PeopleSoft's own technology alliance with the same marketplace vendor. PeopleSoft MarketPlace is its e-procurement suite for which Commerce One's MarketSite technology is used to power content management, auctioning, and searching, with the initial target markets to be professional services, educational, and financial services. Future collaborative services are said to include direct procurement, travel, benefits, resource management and recruiting. PeopleSoft may now be forced to develop its own marketplace technology as a result of the SAP deal.

It also appears that Oracle and SAP have seriously closed the HR functionality gap with their latest product releases and have jeopardized PeopleSoft invincibility in the realm of HR. Both vendors have long provided better global features and integration to non-HR processes, which may be a decisive factor in some global selections within manufacturing industries. Furthermore, Lawson Software, Great Plains, Infinium, etc. are becoming ever more competitive in the HR mid-market, while the niche non-ERP HR vendors like Concur exhibit stronger vertical focus, alliances with major HR consultancies, and competitiveness for organizations that have older HR systems (e.g., Cyborg) or older versions of ERP HR packages.

Cutthroat Competition: PeopleSoft faces almost internecine wars from formidable competitors like SAP, Oracle, Siebel, and i2. Primarily service & maintenance revenues have driven PeopleSoft's revenue growth in the last two years (over 70% of total revenue), and one should note that PeopleSoft's license revenue in 2000 was still 25% less than the corresponding revenue in 1998 (See Figure 1), back when the company was only a mere ERP player. Therefore, one should not be too overly impressed with the magnitude of recent quarterly improvements that compare to the worst quarters in the company history during 1999/2000.

Despite a significant growth of PeopleSoft's license revenue in the last quarter, a more detailed look reveals things to not appear quite so rosy. Namely, Vantive CRM products have been the major license revenue contributor, which means that PeopleSoft traditional breadwinners' (HR and financial systems) revenues have shown below the market average growth year over year. Moreover, the overwhelming impression is that Vantive has not been utilized to its full potential either despite the fact that the CRM market has been experiencing stellar annual growth. PeopleSoft has recently recognized the issue though, and has taken the steps to address it by concentrating on delivering integrated CRM modules within its product suite and seeking acquisitions that would boost its CRM offering. However, replacing the Vantive brand with PeopleSoft CRM brand may disconcert current Vantive non-PeopleSoft users and may also confuse the marketplace.

The company has a reputation of squandering very promising acquisitions away - the Red Pepper purchase from a few years ago being one. A similar mistake with Vantive could be ruinous, particularly since CRM is part-and-parcel of the new IT trends giving PeopleSoft a golden opportunity. Its competitors will actively sow fear, uncertainty & doubt (FUD) in the market based on the above-mentioned PeopleSoft missteps and the lack of awareness about the enhancements of the Vantive product since the acquisition. One is to expect the likes of Siebel to counterattack users of Vantive products, particularly those that do not run on PeopleSoft back office, given that switching to PeopleSoft's next generation product would require spending more money and tinkering with the systems. In case PeopleSoft CRM 8 does not break any new ground, current Vantive users may opt to switch to still a deeper and broader leading CRM product.

While PeopleSoft now has strong management with an invigorated stance, and is running a profitable business, it may be short-lived without sustaining license revenue. PeopleSoft has lower license revenue (expressed both as a percentage of total revenue and in raw dollar amounts), market share, global presence, and resources compared to SAP, Oracle and, in part, Siebel Systems. Also, the great part of its revenue comes from its existing customer base, which may be reluctant to jump on a heavily involved product upgrade both because of current economic conditions and because of their contentment with the current product release in use. On the other hand, potential users that might be attracted to the new release, may postpone the software acquisition until economic conditions improve.

While PeopleSoft's international expansion has been impressive during the last few years, it still lags the international diversifications of its peers. There is also an indication that the most of its international accounts are the divisions of US-based corporations where the company already had an instance of its product. Given that these markets are likely to feel the economic slump echoed from the US, PeopleSoft's further international expansion efforts may be seriously hampered.

Low Mind Share within the Manufacturing Industries and Insignificant Number of Full-ERP Reference Sites: PeopleSoft is still not regarded as a full-fledged ERP solution provider, owing to lagging main competitors in complex manufacturing functionality and with only a few hundreds full-ERP reference sites overall. While the number of additionally released applications is impressive, the product portfolio still shows serious functional holes or unproven new functionality, particularly in its proverbial 'bogey' areas like manufacturing and supply chain management, where its competitive position is not going to improve dramatically very soon (see Vendor Predictions in Part 3).

While there is significant new supply chain execution (SCE) functionality (e.g., directed put away and/or picking, steamlined fulfillment, wedge-based parcel packing, available-to-promise (ATP) reservations, tolerance-based over picking, etc.) and in supply chain planning (SCP) functionality such as promotion planning and collaborative planning, forecasting, and replenishment (CPFR), vendor managed inventory (VMI), transportation management and warehouse management system (WMS), the company is still mainly doing the catch-up with the major SCM players. Also most industry-based templates have not been revised from the 7.5 release and will only be delivered with PeopleSoft 9 release.

Nonetheless, while PeopleSoft has so far failed to exploit its purchase of Red Pepper several years ago, its new tack of addressing manufacturers' needs may result in far greater success. Namely, for the last two and a half years, PeopleSoft has focused its manufacturing and SCM solutions on only consumer packaged goods (CPG), high tech/electronics, and wholesale distribution industries. It already has a strong customer base within these industries, primarily with its financial and HR applications, but also to a degree with its manufacturing and supply chain modules.

During the above mentioned period, the company has built out functionality specific to these industries and has become a competitive force therein. A good example in that regard would be its new promotions management module, which offers CPG manufacturers a flexible, comprehensive way to manage and optimize trade-spending funds. As a closed-loop solution, PeopleSoft promotions management integrates with existing supply chain management and financial systems for efficient promotions and forecasting, planning tracking, reporting, and execution. It is designed to capture information across the entire supply chain and to reveal both visible and hidden costs.

What may also help PeopleSoft in this particular endeavor is the change in both the business applications climate and the users' mindset. The times when features and functions (bells and whistles) were the order winners are over. The new selections fights are fought on the peripheries of ERP, in the CRM, the SCM and e-collaboration arenas, with very sharp vertical focus. Assuming solid flow manufacturing functionality, bundled with CRM capabilities and with traditionally strong analytic applications developed in house, PeopleSoft may turn out to be an adequate contender in future manufacturing and material management software selections.

The company's biggest challenge, without doubt, lies in creating marketing awareness, promoting its new products, and the Web architecture as well as in crisp sales execution.

Dubious Early Adoption of Pure Internet Architecture: Another impediment to PeopleSoft's short-term success may be the market's generally low awareness of the Internet-only architecture advantages. At this stage, users mainly require the look and feel of the Internet and, therefore, other only Web-enabled products may not be seriously disadvantaged while competing against Web-based PeopleSoft 8. Besides, Oracle, J.D. Edwards, Baan and SAP have already significantly improved their latest product releases and there is every reason to believe that they may eliminate the PeopleSoft architectural advantages very soon. And this is aside from Lawson Software that has long been acclaimed for its advanced product architecture and superior user interface.

Furthermore, the client/server architecture is still far from being dead. There is a great likelihood that client/server and Internet architectures will coexist for a long time until interruptions and Internet instability are tremendously curbed.

Moreover, PeopleSoft's decision to offer only an Internet browser look-and-feel interface has, in some instances, initially met the power-user resistance and resentment for not being given the choice. While the HTML-like interfaces are perfect for casual and task-specific users with minimum training requirements, power-users may still prefer the functionality and drill-around capability of Windows-like user interfaces (drop-down menus, right-click menu, etc.). Some power-users cite the awkwardness of conducting more complex transactions only via hyperlinks, jumping to and fro among a number of screens, which defeats the purpose of simplicity. In that regard, the Web-enabled user interfaces of its competitors (e.g., Oracle, SAP, J.D. Edwards, Lawson Software, etc.) that either still contain many Windows features or offer different interfaces for casual and power users, may be the better approach at this stage.

Some prospective customers who have seen the new Internet UI in demonstrations use words like "complicated", "flimsy", and even "tedious" to describe it. For starters, the browser-based client lacks the cohesiveness and predictability of the Windows-metaphor version. Users have become accustomed to Windows-like GUIs that respond to mouse clicks in a timely fashion, while the browser often fails to load quickly or accurately. Another complaint is the search feature that seems to wipe out the users' work environment while in use rather than appearing in a frame or separate dialog window.

Availability of Upgrades: Timeliness and availability of upgrades have always been a concern for PeopleSoft clients, but that is particularly true with migration to PeopleSoft 8, which might require a considerable effort, one that feels like a new implementation. As the system is responsible for a company's mission critical data, upgrades must be scheduled in advance and PeopleSoft will have to work closely with its customers to provide a detailed upgrade timeline.

Like SAP and Oracle, PeopleSoft should also carefully reevaluate its product migration strategy from current product instances (7.5 and earlier), in order not to alienate and disillusion its loyal customer base. PeopleSoft 8 has allegedly disconcerted some users because its licensing model requires that existing customers re-license its older software, rather than pay a lower upgrade charge as with previous updates. Some customers may see this as only another hefty investment with little added value other than improving the user interface. The competitors are only begging for a surge of similar news.

Sales and Consulting Force Orientation: The PeopleSoft sales and consulting force will need to embrace a "service" sales model as the company begins supporting hosted applications and Internet solutions. This is a departure from the license-based architecture the company has traditionally sold. Also, one should expect a significant effort to train the sales force in the new product and to change their mindset from a Windows-like to a browser-like metaphor. In either case, the fact remains that PeopleSoft is not simply a basic and easy-to-use enterprise application.

Perhaps more disappointing is that the PeopleSoft 8 Web interface seems to have lost the intuitiveness that was a hallmark of its past releases. The natively supplied menu is difficult to navigate for novices and even PeopleSoft presales representatives are reluctant to use it, preferring instead to streamline their demos by setting up Internet Explorer-like "favorites" in advance.

Performance: Dynamic pricing, Personalization, real-time Collaboration, Complex Product Configuration and Virtual Live Caching all require high bandwidth, efficient networks and hardware optimization. This challenge is not only PeopleSoft pertinent though. Any application run on a network or across the Internet is limited by its narrowest point. Additionally, by shifting much more processing power to the application server side, PeopleSoft 8 may require much more hardware processing power of the application server compared to its preceding releases. The company will have to work with each customer to establish appropriate performance benchmarks in an effort to set customer expectations.

SOURCE:
http://www.technologyevaluation.com/research/articles/peoplesoft-catching-its-second-wind-from-the-internet-part-2-strengths-and-challenges-16393/

The Best-kept Secret in the Product Lifecycle Management Mid-market

2010-08-01T21:29:00.001-07:00

In the past decade or so of our coverage of numerous topics in the enterprise applications space, every now and then, we come across a vendor whose value proposition, product offering, and install base deserve much more credit and awareness than IT pundits acknowledge. One example of this is privately-funded Omnify Software, the Andover, Massachusetts, (US)-based provider of product lifecycle management (PLM) solutions. The vendor’s product content management solutions have helped over 200 original equipment manufacturers (OEMs) and tier two and tier three electronic manufacturing services (EMS) providers shorten development cycles, accelerate product innovation, and improve profitability.

Most of Omnify’s customers are companies with less than $500 million (USD) in revenues. Some are even pre-revenue startups, with the Omnify Empower PLM suite being their very first system of record, given they have no need for a transactional back-office system yet. Given that the vendor’s solution currently supports only English, the Omnify’s primary geographic markets are North America and Europe (specifically the United Kingdom and the Nordic region), with the industries served being electronics, mechanical, medical devices, and defense.

Omnify’s PLM modules have been successfully deployed with over 1,000 installed individual user licenses (in a floating, concurrent user licensing manner) within various businesses, helping them to more efficiently develop products, including wireless network platforms, soft-switch gateways, enterprise border controllers, advanced voice services platforms, aerospace navigation and control systems, digital and sonar imaging products, patient monitoring technology, and semiconductor equipment. As mentioned, Omnify customers encompass an array of business types, from start-ups such as Pacific Biosciences, Rivulet Communications, Still River Systems, and Wavestream to well-established corporations that include L3 Communications, Astronics, Acme Packet, and Cynosure.

Besides its headquarters in Andover, Omnify has offices on the US East and West Coasts. In addition to providing direct sales, consulting, and support services, Omnify Software has established a network of partners to deliver its PLM solutions as business ready. Currently, the vendor has 10 value-added resellers (VARs), which cover the United States, Canada, the United Kingdom, and Nordic countries, which have the expertise and experience to help plan, install, and support the Omnify PLM solutions. Omnify assigns a channel sales representative to each reseller group, which, together with the direct sales force, adds up to over 100 sales and applications support personnel.

Omnify Software Genesis

Omnify Software evolved from Trilogic, Inc., the largest electronic design automation (EDA) VAR in the United States, and still a major Omnify reseller. In 1998, after many years of consulting with customers to help them create or define board-level design process flows and component information databases, Trilogic began to develop the Omnify Tool Suite. The result is today’s PLM system, which addresses the needs of companies seeking to improve their overall concept-to-design-to-manufacturing process.

The origin of Omnify technology is a universal bill of material (BOM) system developed in 1998 by the Omnify founders, and which is still in use by numerous OEMs today. OmniBOM is Omnify's BOM creation and processing tool for creating, editing and processing BOMs. With OmniBOM, users can import BOMs generated in other systems or formats (such as computer-aided design [CAD] and computer-aided engineering [CAE]), normalize, check, and analyze the data; and then automatically feed BOMs directly to other systems such as ERP/MRP or any downstream tool to easily integrate engineering BOMs with manufacturing systems.

According to one case study, OmniBOM provides a clear, concise view of all the changes to the initial BOM, and BOM comparisons are used to catch changes in the BOM from the customer, down to a single-digit change in the manufacturing part number. OmniBOM is lauded, by one customer, as its “most valued daily-use documentation tools [which also] ... enhances documentation communication with [its] customers ....” (For more commentary, visit http://www.omnifysoft.com/customers/Omnify-IMS-PLM-SuccessStory.pdf)

In any case, the PLM technology development began at Omnify in 2000 in earnest. In September of 2001, the Omnify product suite came to fruition with its first beta customer installations, while first customer shipments of the PLM system began in early 2002. Omnify Software was later incorporated in October of 2002. The solid electronic design and manufacturing process knowledge, and customer service-oriented background of the Omnify founders has given the company both a strong sensitivity to customer needs and a deep knowledge of what it takes to integrate engineering concepts, data management, and business systems.

Reflecting this customer-oriented philosophy, the company remains focused on allowing its customers to have a direct impact on the direction of the Omnify technology, ensuring a solution that truly meets their customers’ specific product development needs. To maintain this strategy, which has been in place since the company’s inception, Omnify technology provides an open-architecture PLM system that gives direct access for all groups involved in design and manufacturing processes and allows relatively easy integration to existing engineering and manufacturing systems.

Fast forward to early 2008 when Omnify Software announced exceptionally strong year-end results for 2007, exceeding revenue goals, increasing sales by 30 percent over 2006, and remaining profitable for another year. Omnify has reported steady growth, year after year, as the company continues to deliver comprehensive PLM solutions. The launch of Omnify's next-generation PLM solution, Empower PLM, was reportedly a key factor in the company's 2007 success.

Omnify recently transitioned its PLM technology platform to Microsoft .NET Framework in order to leverage advanced technology that provides a faster and more secure environment. The Framework enhances Omnify's existing open platform for third-party integrations and offers easier customization of user interfaces (UIs) and reports through Web services. This further supports Omnify's commitment to delivering a system that is easy to implement without disrupting existing processes.

While the product suite will be detailed shortly, for now, it suffices to highlight that project management, quality and corrective and preventive action (CAPA) management, and training record management are a few of the key new features or modules in Empower PLM. This new functionality has extended the capabilities of the system beyond traditional PLM to give users direct access to important product data that is often managed in separate systems. Empower PLM thus provides a mechanism to capture design, manufacturing, quality, service, and customer information and tie it back to the product record all within a single environment.

PLM’s Value Proposition, Revisited

Due to constantly changing product content information and shrinking product life cycles, electronics OEM and EMS providers need to enhance communications throughout the design-to-manufacturing process. Omnify Software offers a solution that streamlines the flow of product information among the design environment, both within the enterprise and its supply chain.

The drivers behind Omnify’s existence start with the typical (and yet unfortunate) disconnect between the engineering and manufacturing departments, where manufacturing is not aware of new product releases and revisions, while engineering is unaware of design issues impacting manufacturing and procurement processes. To make things worst, the traditional manual or paper-based processes mean no automated part request process and no electronic engineering change order (ECO) processing. As a result, everyone relies on ineffective (if not even counter-productive) means, like e-mails, faxes or phone calls, and spreadsheets to correct problems.

Last but not least, enterprise systems are still not integrated across all disciplines, so islands of information still exist. Enterprise resource planning (ERP) systems do not contain enough product data and are difficult to integrate into engineering tools. In other words, due to the inherent transactional purpose of an ERP system, most do not contain the detailed information that engineers need to drive design, including part specifications, design and test notes, and vendor-supplied documentation. In addition, ERP systems typically do not provide the security or capability to enable external manufacturing or supplying partners with direct access to product data or the ability to participate in development processes (for more information, see Can ERP Speak PLM?).

With no enabling technology to collaborate with external resources, the engineering department usually has no system to help manage “pre-release” product data. To that end, the PLM software enables companies to manage and support all the information surrounding their various products and parts—from the initial idea and subsequent design and engineering diagrams via BOMs, manufacturing documents, sourcing details, and maintenance data to product discontinuation, in other words, a “cradle to grave” cycle).

As its name suggests, PLM software was designed to manage product data throughout the entire product lifecycle, but is crucial during the design phase, where engineers need instant access to product data, including specifications, engineering parameters, and documentation. A sound PLM system centralizes all of this information for easy access by all team members by tracking and managing component data, BOMs, product documentation, engineering changes, and revisions, as well as compliance data. PLM systems should also offer the flexibility to support the many iterations of a design before it reaches the prototype and manufacturing phases.

A contemporary PLM system is composed of several elements, including foundational integration technologies like extensible markup language (XML)-based Web services (see Understanding SOA, Web Services, BPM, BPEL, and More) or more traditional enterprise application integration (EAI) tools. Its core functions typically entail data vaults; document and content management; workflow and program (portfolio) management; and information authoring tools and functional applications (see Critical Components of an E-PLM System).

The various sets of these PLM systems’ highly configurable software modules should be easily integrated with underlying engineering, design, and product data systems. Smaller companies often start with basic PDM to provide broader access and reliable documentation, but once the data is under control, more sophisticated workflow, collaborative design, and project portfolio management (PPM) or program management might follow (see The Many Faces of PLM).

Thus, one of the key components of a PLM system is that it provides an automated change management facility that allows dispersed team members to electronically propose product changes (so-called “redlines”) to BOMs, documents, and vendor or supplier information. By leveraging a workflow engine, these changes are then automatically routed to the appropriate resources for electronic signatures, and once all constituents have approved the change, the PLM system automatically updates the affected products with the suggested changes and then provides the updated information to the ERP system.

An electronic change process eliminates manual data entry errors, streamlines routing, and allows all involved resources to view and sign changes simultaneously. All of these factors should result in a significant time and errors reduction in the ECO process. Automating product design processes can enhance overall product development by shortening cycle times for engineering changes and new-part requests. It also improves data integrity by eliminating human error from hand-entering and re-keying data. By enabling data to be shared between engineering and manufacturing staff, an automated system ensures that all product data is accurate, by creating a single version of the truth.

Several macroeconomic trends seem to be helping the PLM market, starting with the rampant offshoring of facilities and the expansion of outsourcing and contract manufacturing overseas (see Global Product Development Seen as a Boon for Product Lifecycle Management Vendors). There are also escalating mergers and acquisitions (M&As) within multiple business sectors and the inexorable spate of regulatory and compliance mandates within many industries and geographic regions (see Thou Shalt Comply [and More], or Else). This dovetails into the relentless pressure to innovate and bring ever more functional (and even “cool”) products, that have shorter life cycles, more quickly to the market. This is the key differentiator, especially in the electronics and consumer packaged goods (CPG) sectors.

What distinguishes PLM from ERP is a tight focus on products rather than transactional business operations, respectively. Namely, PLM software is designed to handle the swiftly changing, unstructured data associated with product design, while ERP manages highly structural financial or inventory transactional data. What PLM software brings to the enterprise is the chance to enable company- and supply chain-wide collaboration to create whatever products are in play, by providing marketing, production, sales, services, and even external suppliers, with increased visibility and early engagement in product development decision-making.

In fact, a recent benchmark research report by Aberdeen Group indicated that best-in-class companies are at least twice as likely as industry average companies to capture and reuse product development knowledge; to have formalized change processes within design engineering; to integrate their product development data into their business processes; to have centralized their product data; and to have developed formal metrics to measure their product development process.

Enter Omnify Empower PLM

To fulfill these requirements, in mid-2007 Omnify Software announced Omnify Empower, its latest PLM solution based on the Microsoft .NET Framework (see Subtle [or Not-so-subtle] Nuances of Microsoft .NET Enablement). Omnify Empower leverages Web services to deliver the next level of open architecture for easier data sharing and customization of UIs and reports. The ability to tailor UIs creates a more familiar environment for users, assuring a simple transition from legacy practices, while custom reporting offers high-level views of key development data and key performance indicators (KPIs) to identify trends and issues early in the development cycle.

New functionality, such as Project Management, Quality Management, and Training Records Management extends the capability of the system to capture manufacturing, quality, and customer information, and tie it back to the product record. These capabilities also aim at further improving visibility into all aspects of product development for manufacturers and extending the current capabilities of the PLM solution to support better design practices, improve product quality, and shorten development cycles. As described in Omnify’s brochure, the product has key new modules and enhancements, including the following:

* Project Management Module. Automates the management of tasks and project schedules for a more accurate view of project progress and completion. The module also offers the Automated Tasks feature that allows external and system actions to automatically update project progress. Capturing all product and program data in Empower offers executive views for more accurate prediction of deliverables, and analysis features facilitate recognition of common problems that impact deadline-sensitive development activities.
* Quality Management Module. Automates capturing and routing of data related to product issues and defects (e.g., corrective action request [CAR], nonconforming material request [NCMR], supplier corrective action request [SCAR], field complaints, etc.) in a closed-loop CAPA system. This ability provides a mechanism to identify, classify and resolve quality issues. The system's Resolution Tasks feature help manufacturers identify the resources and actions required for closure on issues.
* Training Management Module. Tracks and documents all internal and external training, and provides a facility to associate required training or testing directly with events, such as new product launches, implementation of product changes, and internal process changes. The module assures regulatory compliance for manufacturers and, when combined with Quality Management, fulfills the specific needs of medical manufacturers required to meet the US Food and Drug Administration (FDA) 21 Code of Federal Regulations (CFR), Part 820, Quality System Regulation.

For more information, visit, http://www.omnifysoft.com/Omnify-PLM-Product-Brochure.pdf.

Additional enhancements included increased system performance, improved reporting, and extended vendor data and service objects management. A new Help Desk feature supports multiple formats including video, hypertext markup language (HTML), portable data files (PDFs), among others and allows users to incorporate their own help and guidance to ensure adherence to corporate guidelines.

As previously explained, a floating license model with concurrent user access licenses starts at an agreeable $1,000 (USD) in a tiered pricing manner, depending on the product offering. Term and perpetual licensing models are also available and will affect the price. In addition to the aforementioned OmniBOM product, the available PLM product offerings (see the product overview at http://www.omnifysoft.com/products/Default.aspx) start with the Engineering Suite that includes the Component Data Management, Document Management and Engineering Tools, and ERP/PLM Integration capabilities. Then comes the BOM Management Suite, a middle-range product that includes the Engineering Suite, plus the BOM Management module. Finally, the Enterprise Suite, logically, contains the BOM Management Suite, plus the Change/ECO Management module.

In summary, the upper range Enterprise PLM Suite offers Product Record Management, BOM Management, Documentation Management, Engineering Change Management, Project Management, Quality Management, Training Record Management, and Support for Quality Standards and Regulatory Requirements. From the aspect of automated business process flows, the suite enables new part requests (NPR), change or engineer change orders (ECO), routing, closed-loop CAPA, and ERP system uploads and updates.

Security and collaboration

It is, however, important to note that Omnify’s PLM product suite furnishes a single, secure environment for sharing product data among design groups and throughout the extended enterprise. Indeed, a customary concern about PLM is that many of the applications are inherently Web-based, which can then open the door to security breaches if these applications haven't been proofed for vulnerabilities like cross-site scripting, structured query language (SQL) injections, or cookie tampering.

Omnify’s Web-based architecture promotes secure collaboration with disparate design and manufacturing teams, whereby local area network (LAN) clients are intended for internal groups and users within the firewall (such as, engineering, operations, printed circuit board [PCB] design, etc.). On the other hand, via Web clients, the architecture provides a direct database connection for “external” (outside the firewall) team members, like design service bureaus, remote sites, and contract manufacturers. Based on authorization and authentication profiles, full user-level permissions control item views, BOMs, documents, and field data.

This enables a single environment for all parties to share information, so they are “on the same page” and for all team members to be automatically notified of new products, changes, revisions, configurations, etc. As a result, the all too common “built to the incorrect revision” issues can be eliminated.

Bridging the Integration Gap

Since its inception, Omnify’s philosophy has been to help customers create an integrated environment and make product data accessible to distributed product development teams. This is evident in its open integration technology platform and functionality that allows customers to associate all aspects of product development data to a single product record.

As this is absolutely necessary, Empower provides a single location for all members of the design and manufacturing teams to share essential information for designing, manufacturing, and supporting products. The system is designed to manage all product content information, such as BOMs, component attributes, design drawings, datasheets, and vendor (manufacturers and suppliers) information. It facilitates requests, tracking, and executes changes on product information and supplies electronic processing with new part requests and ECOs, with the aim of improving communication and eliminating redundant data entry.

Omnify uses a web-enabled technology designed to integrate with a customer's existing design and manufacturing systems, and with external design and manufacturing partners via the Internet. The idea here is to provide the benefits of PLM, while minimizing disruption to current processes and leveraging existing IT assets. For instance, Omnify provides direct connections to Mentor Graphics’ DXDataBook and Cadence’s OrCad Component Information System (CIS) for electrical engineering component search-and-selection tasks.

For a long time, Omnify integrated with existing enterprise tools via a flexible, language neutral programming environment with triggering and reporting capabilities that came standard with the product. However, the latest product release features industry standard communication protocols, multitiered technology options and, emerging technology focus. In other words, Omnify’s application programming interface (API) supports standard database protocols, such as open database connectivity (ODBC), Microsoft ActiveX Data Objects (ADO), and SQL views and procedures. There is also support for XML- and simple object access protocol (SOAP)-based .NET Web services (which can also be hosted, if necessary), and for standard programming languages like C++, Microsoft C#, Visual Basic (VB), and Java.

The platform enables integration with existing engineering and manufacturing systems via bi-directional data sharing and synchronization. Empower PLM integrates into an organization's existing environment offering bi-directional interfaces with a plethora of design (computer-aided design [CAD], computer-aided engineering [CAE], content management) and manufacturing (ERP or supply chain management [SCM]) systems, such as Mentor, Altium, Cadence, SolidWorks, Parametric Technology Corporation (PTC), Oracle, SAP, Consona, Sage Software, NetSuite, Infor, Epicor Software, Expandable Software, etc.

In that regard, Empower should house data, such as part data or specifications, BOMs, changes or ECOs, documentation, approved vendors list (AVL) or approved manufacturers list (AML), change history, where used, and so on. Engineering systems, on the other hand, provide data like schematics, attributes, printed circuit board (PCB) design, mechanical design, documents, datasheets, etc., while ERP systems cater the information on accounting, sales orders, inventory, purchase orders (PO), costs, lead times, status, suppliers, etc. While all these individual enterprise systems may bring unique value to their operations, only when combined do they provide a streamlined, collaborative environment that bridges the gap between manufacturing and engineering.

In late 2007, Consona ERP and Omnify announced a formal technology partnership. The companies, which were previously honored with a START-IT Power of Partnerships award based on the success of mutual customers, then solidified their relationship with a formal ERP-PLM alliance, as well as shared sales, services, and support for both existing and future customers. The partnership was seen as a natural fit due to the companies’ common technology platforms, target market, and success of mutual customers.

The integration between the Intuitive ERP and Omnify PLM solution allows small and midsize manufacturers to share and synchronize engineering and manufacturing data through an automated process. As part of the formal partnership, a PLM integration has also been developed for Consona ERP's other flagship software application, Made2Manage ERP, whose customer base is seeing the very same benefits that Intuitive users have seen, including reduced data duplication, faster product development life cycles, and an improved go-to-market process.

Generally speaking, potential benefits from Omnify’s open platform may come from providing multiple system integration options for any existing enterprise system (built to older or newer technology standards), while no third-party software or application program interface (API) and software development kit (SDK) licensing is required.

Listening to the Voice of Customers

In addition to the platform’s openness and direct data sharing with engineering and business systems (with no technology displacement required), Omnify believes that its technology is focused on the needs of mid-sized enterprises, thereby often competing with Agile Software (now part of Oracle), UGS (now part of Siemens), and MatrixOne (now part of Dassault Systemes). However, the appetizing price point and lower total cost of ownership (TCO) enables Omnify to work with small enterprises (and compete with Arena Solutions) on one hand, while the scalable technology allows it to provide solutions to large enterprises (and face off with PTC or Dasaualt Systemes’ Smarteam) on the other hand.

Given no venture capital (VC) and associated pressures, Omnify cites competitive advantages, including healthy organic growth and profitability since 2002, which allows the vendor to continue to let its customers drive the product direction rather than outside investors. Omnify prides itself on being a true partner with its customers, and for striving for the technology that addresses their needs “out of the box.” We could, in fact, say that Omnify has nearly 100 percent customer satisfaction, since the only time it has ever lost a customer was when the customer dissolved. The vendor even had a recent case of a customer not only keeping its PLM solution, but also upgrading to the new Empower system, even though the customer was purchased by a larger company whose multiple locations were all on another, better-known PLM system.

In late 2007, Omnify announced the results of its annual customer survey, which polled more than 100 Omnify customers, both new and legacy, in order to research and evaluate common product development challenges before and after their PLM implementation. The vendor reported that approximately 91 percent of respondents indicated they were able to overcome product development challenges using PLM software.

The following is an excerpt from Omnify’s press release:

Survey results showed that there is a significant need among manufacturers for more efficient engineering change, BOM, and component management, as well as ease when communicating product information to various departments. The survey confirmed that customers were able to resolve these product development challenges by implementing a PLM solution and were pleased with how they were able to streamline their operations and develop products much easier and faster.

Prior to implementing a PLM solution, the majority of respondents reported that managing product information in different locations and outgrowing Microsoft Excel or homegrown solutions were key issues. These practices could not support the growing amounts of data involved in designing and manufacturing a product. Employing PLM technology was a strategic initiative to create more efficient product design and development processes by managing product data in a single, secure location, and eliminating silos of information throughout the enterprise.

Ease of implementation and depth of capabilities, followed by ease of use, remain key factors when selecting a PLM system. According to the survey, customers selected Omnify over other PLM vendors mainly for the ease of implementation and use as well as its rich PLM feature set. The solution from Omnify allows customers to be trained and implemented within days due to its intuitive user interface (UI) and open technology platform.

(Source: PLM Survey Results Show a Need for More Efficient Engineering Change, Bill of Material, and Compliance Management.)

Indeed, Omnify is one of those rare software companies that quietly offers customers the best choice for functionality within a reasonable budget. Some customers are even gushing about how much they have been able to accomplish at a mere fraction of the cost of other PLM systems. They regard Omnify as accurate, reliable, dependable, and loyal to its customers, and genuine regarding the vendor claims ease of use (minimal customer resource requirements) and ease of implementation (rapid deployment, measured often in days).

Some customers tout achieving a rapid return on investment (ROI) in terms of a speedier time-to-market (product development times reduced by over 50 percent), increased product innovation (engineering cycle times reduced by over 50 percent) and improved product quality (product return rates cut in half). Now, other PLM vendors’ customers might cite similar stats and help with maintaining their competitive edge, but at much higher investment levels (such as, time, money, and human resources).

Compliance Savvy

The survey also uncovered that today, the most common market trend manufacturers are seeing the need to meet diverse compliance requirements such as Restriction of Hazardous Substances (RoHS), US Food and Drug Administration (FDA), and International Standards Organization (ISO). Respondents reported that they feel Omnify is in a strong position to support these trends with the system's ability to manage detailed product data, track change history, handle quality and CAPA information, and its strong reporting capabilities. Over 82 percent of customers stated that they are currently using or plan to use Omnify to manage their compliance processes.

In fact, Omnify has long been helping electronics manufacturing companies that do business globally, ensure their operations are RoHS compliant before and since the 2006 deadline imposed by European Union (EU) countries (see "Evergreen"—Environmental Regulations for High-tech and Electronics, Chemical, and Oil and Gas Industries). The RoHS directive applies to electrical and electronic products and their component parts and mandates a reduction in the amount of hazardous materials used in these products. It impacts the entire business strategy for manufacturers—from design and development to final output.

Omnify PLM supports companies with a solution that provides a means of identifying the complete material composition of a part. It can easily classify compliant and non-compliant parts, provide search and reporting features, and perform analysis at any level of a product's structure. The product also allows manufacturers to store all material declarations or certificates of compliance from suppliers. Among the companies that are using Omnify Software for compliance objectives are LuminentOIC (now Source Photonics), Crystal Technology, and Cognex.

In early 2006, EMA Design Automation, a full-service provider of Electronic Design Automation (EDA) solutions, integrated the Omnify product content and change management software into the EMA’s engineering data management (EDM) environment making its adherence to RoHS and Waste Electrical and Electronic Equipment (WEEE) compliance directives even easier. (For more information, see Off-loading Some Green Compliance Burdens: Can Enterprise Applications Meet the Challenge?)

Integrating Omnify into EMA’s EDM solution has provided the five key capabilities that bolstered the VAR’s compliance-by-design philosophy, which is described in the following excerpt from EMA’s press release:

1. Configuration Management. OEMs need to manage data related to all aspects of their products including electrical, mechanical, and software or firmware items. Due to the level of change and product configurability associated with RoHS compliance, companies need to be able to access and control revisions to all items throughout the entire product structure. EMA's EDM solution now encompasses managing data and controlling revision levels on the customer's entire product.
2. BOM Management. The RoHS and WEEE requirements affect the entire product. The BOM management function manages all revisions and understands the life cycle of a BOM. Since the BOM items link directly to active part data, customers can analyze and generate compliance reports from any level or from any version of their BOMs.
3. Document Management. It is critical for both RoHS and WEEE initiatives that due diligence is exercised in the collection and storage of supporting documentation. Items such as the component datasheet, Certificate of Compliance, Material Declaration, and testing information need to be stored at an individual vendor part number level. In case of an audit, these documents must be quickly and reliably accessible for at least four years. EMA's EDM solution now provides document versioning and vaulting for all documents associated with the product or vendor records. Changes made to documents are performed under a user-defined and controlled process.
4. Change Management. Changes made to product data usually require validation by all affected parties. EDM provides a controlled change management process that allows users to define product and documentation changes and allows them to vote on the suggested changes. The system handles the automatic routing to users (via e-mail) and updating of product records when changes are approved by all parties. RoHS and WEEE directives are causing many changes to products (part replacements, AVL changes, part number changes, availability, etc.). These changes must be captured and performed in an automated fashion.
5. Enhanced Reporting. When delivering reports to satisfy RoHS and WEEE requirements, the entire product structure must be considered. Reports and analysis must be available at any point in the product development process. With EMA's EDM solution customers can generate reports from any level of the product structure. The system can also automate the generation and packaging of these reports. Since EDM captures data during product development, these reports can be generated, products can be analyzed, and adjustments can be made at design time. (Source: EMA Adds Five Key Capabilities to EMA Engineering Data ManagementTM [EDM] to Facilitate RoHS/WEEE Compliance; New Capabilities Powered by Omnify Software).

Challenges Exist Notwithstanding

Despite Omnify's apparent customer loyalty (owing to the vendor delivering outstanding training, development, and support with a team of experienced technology professionals), it is too naive to believe that the company is without some outstanding challenges. The most apparent ones are the vendor’s low brand recognition due to its size and quiet, privately-held nature, and limited global opportunity, due to its English-only support. Its privately funded status has its advantages, however, such as allowing Omnify to decide about its own destiny and directions, but the downside is that it has less visibility and noise compared to much larger and public competitors.

Ironically, Omnify’s other challenge is often to allay misperceptions of PLM software being an overkill for midsized prospective customers, a courtesy of the pricey upper-range PLM products implemented at the likes of Boeing. Yet, not all midsize manufacturers have simpler operations; their operations are sometimes actually more complicated than much larger enterprises, because so much of the complex design stuff gets outsourced to them through the supply chain. Thus, Omnify will have to further refine its message to prospects, explaining the misperception that PLM is expensive (because these companies will have heard about some multimillion-dollar PLM deployments). Also, many companies are challenged by imagining how to implement PLM, or are unaware of what a PLM solution can do for them and their manufacturing partners.

Proving a tangible payback or ROI for PLM can also be tricky, since it is more likely that an enterprise will avoid incurring unnecessary costs with a PLM suite in place rather than see cost cutting results. In fact, it can be difficult to quantify people's time, which is mostly what PLM systems do, by, for example, reducing time, errors, duplication of work, etc. It can also, in some instances, be hard to argue that PLM is a mission-critical application when companies have long gotten by with a mishmash of point products and spreadsheets. As the aforementioned survey indicated, it is only when companies reach that critical point of dealing (and feeling overwhelmed) with too many product lines, parts, and too many issues that they need to automate.

Therefore, instances where Omnify might lose are when a prospective company already has a more prominent PLM system in place at a parent or sister company or, on occasion, a company only wants a hosted or on-demand solution, which the model Omnify currently does not offer. At the low-cost end, there are on-demand providers, which offer remote hosting and charge as little as several hundred dollars per viewing user, annually (and a bit more for power users). Often, taking the on-demand or software as a service (SaaS) route (see What Is Software as a Service?) to PLM will cost only a fraction of what traditional, on-premises software does. Arena Solutions, with over 300 customers, proves that point—and we do think that the SaaS model will only continue to grow and attract more vendors and customers.

However, Omnify still finds that many manufacturers are still reluctant to use a hosted PLM solution because the system holds their products’ intellectual property and there is a concern about security and the control and protection of data. The vendor has not experienced a strong demand in the market for it to change its strategy and deliver a hosted or on-demand PLM solution. Some of the larger vendors that created on-demand versions of their product are now pulling back.

In addition, some companies cannot use a hosted solution, such as those in the defense industry, while FDA compliance requirements are causing medical manufacturers to shy away from hosted solutions. Namely, these regulations call for adherence to specific processes and data sets when using automated or electronic systems. They also have an impact on how customers need to test and validate the software they use to help build their products.

Unfortunately, these validation processes add yet another layer of complexity to SaaS systems since customers will need to go through a validation process before they are allowed to install or use the system for day-to-day operations. In other words, a system that gets frequently updated (software revision changes) and is automatically made available to its users (such is the case with most SaaS products) is not acceptable here. Now, some of this “interpretation” of regulations is left up to the original equipment manufacturer (OEM), but Omnify claims to have had many cases where FDA regulated companies have told it that they simply cannot use SaaS applications since they need to validate all new revisions of software in a test environment (which could take days, weeks, or months) before rolling it out to their users. Again, with most SaaS systems, the software is updated and immediately made available to all users. Even if the SaaS provider maintains the old version of the code for customers, the fact that the new system is publicly available presents significant issues for validation.

Other PLM vendors have waded into the SaaS pool, but many have backed off simply due to insufficient demand and Arena’s first-to-market advantage. The typical concerns of customers are still valid: security, reliability (on both ends), ownership, usability, integrations with other systems, etc. With the maturity of the market and emergence of competition, the on-premise PLM price has been driven down to the point that the cost difference between traditional and SaaS systems are not enough of a factor for many customers. Still, the continued success of Arena and Oracle Agile PLM on-demand offerings might force Omnify to change its strategy later on, possibly when it becomes too late and too costly to do so

SOURCE:
http://www.technologyevaluation.com/research/articles/the-best-kept-secret-in-the-product-lifecycle-management-mid-market-19467/

Business Activity Monitoring - Watching The Store For You

2010-08-01T21:28:00.000-07:00

What Is Business Activity Monitoring?

The concept of Business Activity Monitoring (BAM) is simple. It watches business applications, detects things that need to be acted upon and takes the appropriate action, perhaps alerting us or taking action within the system. Since most applications have been accused of creating "too much data", Business Activity Monitoring can prevent things from slipping through the cracks.

Systems are continuously generating a variety of information that typically goes unnoticed until some later time, often when it is too late or has lost some of it's value. Often in real time, BAM software captures information, evaluates it and alerts us or takes some preplanned action if it meets the appropriate conditions.
Capture

Identifies critical, time-sensitive data from applications, files (including multiple data sources), E-mail, web sites, operating system, etc.

For example, when an inventory item is issued, the new balance on hand is captured. Alternatively, when a supplier updates their customer service portal with information on your open orders, BAM can capture the new shipping dates
Evaluate

Compares information to preset rules including using the data required for the rule from the same or other systems.

For example, has the new balance on hand fallen below the reorder point? Alternatively, do the new ship dates match your requested dates?
Alert

Notifies employees, partners, and customers via e-mail, fax, pager, PDA, and the web.

For example, the planner and buyer for that item receive an e-mail alerting of the situation.
Action

Updates applications, delivers reports, and takes corrective actions

For example, a requisition for that item is automatically created in the purchasing system.

BAM Is About Business

Vendors and IT often discuss BAM as a technology, the reality is that BAM is about "Business". The users of BAM are business people. BAM monitors business data and help make business decisions. BAM is about business. BAM can bring significant business value in the world of technical data, but its justification must be derived from business management improvements.

BAM has turned into a marketing term and therefore the definition is far from standard. The most important claim for BAM is that it can fundamentally alter the way businesses understand and act to threats and opportunities.

For decades, systems have incorporated the concept of "exception reporting". In many ways, BAM is an updating and extension of exception reporting. With exception reporting, the definition of an exception was defined within an application or, later a reporting or business intelligence system. In most cases, the identification of the exception was done periodically, running a stock status report, and MRP, etc.

BAM definition of an exception is not limited to the logic or information within a single application or program. With most BAM products, the definition of an exception is defined outside the business application and can include external sources of information needed to determine if an exception condition exists. The definition can be something happening (out-of-stock condition) or something not happening (an incoming shipment did not arrive on time). Therefore, BAM logic, external to applications can identify a low stock situation in inventory, look at open customer orders and open purchase orders in different applications and determine if an expedite e-mail should be sent to the vendor or a simple alert sent to the buyer. Likewise, BAM logic can detect that an "A Customer" has not ordered within the last 10 days, sending e-mail to the sales rep to make a call.

Many vendors tout that their products are "Real Time". Is real time good? Yes. Can it be justified? Maybe. The value of BAM is not dependent on being a real time system. A BAM solution that periodically analyses the business can also create significant value. The value of real time, versus frequent (hourly) versus periodic (daily) should be considered. For many situations, a system running in other than real time can be just as valuable and operate at a lower cost.

Many vendors are not adequately explaining their products or the value to the business users. Telling the average business executive that they are "Capturing an intranet transaction" is not very meaningful. These vendors need to focus on the business value and define their products more in terms of what it does and the value created, not the "how it does it".

Sample Vendors

A search of the internet and vendor briefings has identified many vendors who claim their products fit into the definition of BAM. Here is a sample, but not inclusive list:

SOURCE:
http://www.technologyevaluation.com/research/articles/business-activity-monitoring-watching-the-store-for-you-17147/

The Path to ERP for Small Businesses - Part 1: The Research

2010-08-01T21:27:00.000-07:00

Gabriel Gheorghiu - February 10, 2010
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When looking for business software, small companies might fall into the trap of being selected instead of selecting vendors. This usually happens because small companies do not allocate extensive time and resources to the process and do not have selection methodologies, which help decision makers select a product without further investigation.

Not every company takes advantage of a sound software selection methodology. The good news is that other companies have been through complex selection projects before, built sophisticated tools, and developed processes to make it solid, speedy, and successful. This article will broadly review the phases involved in a well-organized software selection methodology. Adhering to a sound methodology helps ensure that you select the right software rather than risk wasting money on all the problems that can arise down the road from a selection, which fails to meet the needs of your organization.

No matter which methodology you use, the process has three main phases: A) research, B) evaluation, and C) selection. We will describe the main activities for research in the following pages and two future articles will describe evaluation and selection.

Research: The First Essential Step in Finding the Right ERP Solution

The most important objective during this stage is to determine what the needs of your company are, which type of software will be best suited for it, and how to find it. It is also essential during this stage to have a better understanding of what’s going on in your company and why (besides helping you find the right ERP for your company, this will also make you (re)define business processes and workflows).

The initial research phase consists of preliminary study and defining your organizational strategy and tactics. Organizations at this stage should begin to understand what its overall strategy is regarding the software it’s looking to implement. In addition, an organization needs to know both its short- and long-term objectives and constraints with respect to its business processes. During this phase, it’s also important for you to review which systems are currently in place in order to gauge whether it’s worth upgrading the current software, as opposed to acquiring an entirely new system.

This phase includes actions related to defining your organization’s objectives, developing a business case, identifying and interviewing your employees, selecting your project team, achieving internal consensus and developing your list of requirements, and creating your long list of vendors.

What Does Your Company Do? (Main Activities)

To find the best compromise and to efficiently use internal resources, here’s what a small business can do when searching for an enterprise resource planning (ERP) system:

Establish who does what in your company. In order to do so, make a list of all your employees, write down their most important daily tasks, and make a note of how long each one takes. Here’s an example:

Figure 1: Matrix describing the main activities in a company.

Of course, there will be exceptions. There are things that people do just once a month or even less frequently, and it’s not always easy to approximate the exact time for each activity. Still, you and your employees should know what the main operations are and what the average time to accomplish them is. When you’re done with the list, summarize it, showing where you should have the most important activities, depending on duration, priority, and reoccurrence. You should decide what the priority is for each activity, based on its type, duration, and importance for the company. For instance, bank reconciliation can take an hour but might be more important than data entry, which may take a couple of hours each day.

What you have now is a high-level list of processes, which is the starting point for the selection process. Ideally, you should not base your decision on this list only. You should get into more detail, depending on the complexity of your business processes and the future growth of the company.

How Does your Company Function? (Business Processes)

You know what your main activities are; therefore you should have a pretty good idea which processes the best ERP system for your organization should support. But, since there are several ways to do the same thing (e.g., picking and shipping), do you know which way is easier and more efficient for your organization? Remember, just because a process or workflow works well, it does not mean it’s the best way to do it. You should always find ways to improve a process or workflow.

To make sure you find the best ERP system for you company, you must first understand what processes are the most appropriate for your organization. Appropriate, in this case, means suitable for your industry, but also efficient for your company (sometimes processes are defined along the way by people who try to make their life easier, not always including the others) Defining workflows for the major activities of your company will help you better define what you should expect an ERP solution to do for your organization. Here’s an example of a simple workflow for picking and shipping:

Figure 2: An example of workflow for sales, picking, and shipping.

The final step of the research process and the first one for the evaluation process is the search for business software vendors that might offer the right product that fits the needs of your company. The easiest way to do it is on the Internet, where you can find specialized Web sites describing the main vendors in specific industries or fields, and the products they’re offering.

Vendor directories contain lists of vendors that companies can use to compare different products on an apples-to-apples basis. With a little searching on your own, you'll also discover a variety of Web directories listing software vendors and products (for example, TEC's Vendor Showcase). Some will provide a high-level summary of the product’s functionality while others will allow you to drill down to the leaf level (very detailed functionality). Additionally, not all vendor directories have information on all the vendors that might be a good match for your needs. Therefore it is a good idea not to rely on only one source.

Analyst firms and consultants can offer precious advice that can help you select the software you need. Even though these companies charge for their services, most documents regarding software selection and evaluation can be downloaded free of charge here.

There are other online sources of information that can be used to give you an idea of what software can do (or not). You can also find a lot of useful information on user forums. You can also consult industry reports and white papers, which are sometimes offered free, but you’ll generally have to pay for them. Finally, blogs and personal Web sites of industry experts can provide valuable information that can be used in the software selection process.

At the end of the research stage, you should have a pretty good idea of your company’s software requirements and also have a comprehensive list of sources of information where you can find what you need for the next stage—comparable vendors and products best suite

SOURCE:
http://www.technologyevaluation.com/research/articles/the-path-to-erp-for-small-businesses-part-1-the-research-20527/

Fourth Shift's evolution Within SoftBrands' DemandStream

2010-08-01T21:26:00.002-07:00

P.J. Jakovljevic - September 30, 2002

Event Summary

Early in 2001 Fourth Shift Corporation, a former prominent mid-market ERP provider for manufacturers, became part of then AremisSoft, another diversified but somewhat obscure ERP provider (see The Mid-Market Is Consolidating, Lo And Behold), and has unfortunately all but fallen into oblivion due to the alleged criminal activities of its new parent company towards the end of 2001. Namely, AremisSoft, with the accusations of reporting fictitious revenues, the ensuing Security & Exchange Commission (SEC) investigation, a shareholders' lawsuit, and the company's consequent bankruptcy filling, became a harbinger of an Enron-like trend.

Amid the turmoil, a part of AremisSoft spun off from the old corporation with its clean books, and renamed itself into SoftBrands Inc. group (www.softbrands.com), which has been operating as a privately held holding company and has since taken over the responsibility of its products and customer base, hoping to shed its tainted past, to return to its enterprise software roots, and leverage its large installed base of more than 5,000 users in 60 countries. The company as a whole also now has over 700 employees and is projecting revenue for 2002 of ~$80 million, falling significantly down from $175 million of 2000's combined revenues for what was then AremisSoft and Fourth Shift, though (the magnitude of revenue shrinkage might not be that severe given AremisSoft's 2000 reported revenues are quite questionable from the hindsight). Softbrands' revenue comes mostly from its SoftBrands Manufacturing division (www.softbrands.com/mfg), but it also receives about 30% from sales and support of a mid-market hotel, property and leisure management systems (i.e., PORTfolio, IGS HOTEL, Medallion, RIO Grand and other respective products) within the SoftBrands Hospitality division (www.hospitality.softbrands.com). The manufacturing group of SoftBrands, on its hand, has three complementary product sets tailored for mid-sized manufacturers: Fourth Shift, evolution and DemandStream.

SoftBrands emphasizes the spin-off action has distanced it from AremisSoft's Chapter 11 filing (as of August 2, there is no any relationship between SoftBrands and AremisSoft, other than that SoftBrands is entitled, per the final agreement, to 10% of any proceeds from the ongoing actions against AremisSoft and its former executives), and has allowed it to move on unfettered by past difficulties, as it has spent the past year also sensibly re-aligning itself with significant changes in the overall IT market, such as the demands on enterprise applications providers to deliver better return on investment (ROI), their increasing need to balance skill shortages and the escalating costs of new product development between certain regions. The new organization seemingly has a strong vision, confidence and great enthusiasm, as it is seeking to advance its two flagship enterprise resource planning (ERP) products — Fourth Shift and evolution — as well as its new supply chain execution (SCE) DemandStream solution, which addresses lean manufacturing and execution .

To that end, as to send more positive vibes to the market, the company recently made its first major announcement since being acquired with the release of Fourth Shift 7.20, believed to be an important milestone in the advancement of its ERP scope, as it introduced several new features designed to benefit both the user and system administrator. Although it included over 40 functional enhancements most frequently requested by its current customers, it was largely a technology release rendering the product fully Web-enabled, browser-based with a configurable role-based portal front end. Thus, the 7.20 release offers the following enhancements:

* My Fourth Shift Workplace, a browser based User Interface (UI) for use locally on a local area network (LAN) or remotely over the Internet, has been enhanced as users can now access through it the entire suite of Fourth Shift's extended ERP modules, as well as virtually any Windows-based application. Role-based portals can be created for common positions or tasks, such as purchasing, shipping, production planning and accounts payable.

* The Connectivity Toolkit provides a doorway into a new realm of customization by featuring a library of customization tasks varied from simple to advanced, to make modifying UI easier. Customize using common web-based development tools like JavaScript, VBScript, and Active Server Pages (ASP) and Web-oriented customization tools for My Fourth Shift Workplace' should allow users to integrate fields from other web sites and other data sources directly into the Fourth Shift task-based screens, including customized lookups, cross-references, and data collection.

* The Electronic Data Interchange (EDI) module has been completely re-written to provide much faster performance. Speedy Advanced Shipping Notice (ASN) data entry with new screen customization should allow users to change labels or hide unused fields within screens.

* Fourth Shift 7.20 runs on a Microsoft Windows platform and features support for SQL Server 2000. Enhancements in this release for SQL Server include powerful information search features as well as automated full or incremental backup and restore capabilities.

The company also plans to harness Microsoft .NET technology within the release 7.30, slated for the first half of 2003, as well as another large group of user-requested functional enhancements.

This is Part One of a two-part analysis of recent announcements. Part Two will discuss Challenges and make User Recommendations.

Market Impact

"Down, but (certainly) not out" should describe the current SoftBrands' state of affairs. These have by no means been easy last several years for smaller applications vendors, but SoftBrands' predicament has been additionally magnified by the well-publicized extraneous trouble on top of the proverbial conundrum of how to expand the products offerings, deliver a modern, Web-based product architecture, and defend the turf from flagrantly intruding and succeeding bigger brethren and peers, while coping with thinning resources. If one could extricate at least one benefit gained from former AremisSoft, it could be its early astute moves in terms of rejuvenating acquired software largely by shifting its development offshore to India (and then to China owing to Fourth Shift's strong presence in the market), resulting in AremisSoft's alleged solid growth while erstwhile Fourth Shift company had been a sluggish at the same time.

The offshore development remains a significant part of the new company's strategy, since product development for evolution is done in India, and for Fourth Shift in China. SoftBrands is indeed one of a few rare vendors that fully incorporate offshore development into its R&D strategy in a more than a casual manner, the trend that has recently been taking hold market-wide. Even more, skilled programming resources in India and China, complementing their more expensive counterparts in the US and Europe, have recently been bolstered to ensure that constituent divisions will have all necessary wherewithal to develop new products and enhancements at a less cost for markets around the world.

This combination of similar offshore R&D philosophies could become even more of a driving force, given enough product development in the pipeline and on the company's platter in order to match the competitive offerings. Having long acquired a reputation for quick and inexpensive implementation and excellent service & support, and in an effort to expand up-market from its traditional small, single-site enterprise stronghold, erstwhile Fourth Shift embarked on harnessing advanced technology (i.e., object-oriented, Windows NT/SQL Server-based, and featuring productivity enhancing graphical user interface (GUI)) by introducing in 1997 OBJECTS Enterprise Software. This was its intended upgrade of its former outdated MSS product (which was written in 3GL C code, and featured a batch process architecture and non-relational proprietary database) that was supposed to enable users to link to multiple sites using the Internet or wireless technology. Disappointing sales sent the company back to the drawing board, where it combined OBJECTS with MSS, releasing MSS for OBJECTS in 1998, soon after to be renamed in Fourth Shift Software System.

Fourth Shift

In 1999, Fourth Shift began developing a further set of applications to enable its customers to conduct business-to-business (B2B) and business-to-customer (B2C) e-commerce. To that end, it acquired underlying technology for these applications through the purchase of Computer-Aided Business Systems (CABS), a Colorado-based developer of workflow-based e-Business solutions. The CABS' acquisition has much improved the company's plant execution and multi-site product functionality, which had been mediocre or non-existent before, by providing VisiBar and VisiWatch applications.

VisiBar is a data collection and workflow application that accepts input from multiple sources (e.g. bar code scanners, sensors, digital scales, relays, and other software applications) and allows users to create scripts to transfer, manipulate, analyze and act on the collected data, enabling thereby the organization to e.g., automate plant floor, materials transfer and warehouse operations.

VisiWatch is a transaction monitoring application that can be set up to "watch" for specified events and then take a predetermined action, such as sending an automated e-mail message, generating a report, making a change in another database, or synchronizing the info with another enterprise system. VisiWatch is a Visual Basic for Applications (VBA)-programmable software application, a sort of a "silent assistant" designed to monitor and react to any of the following seven kinds of events: Transaction Event, Time-based Event, Startup Event, File Event, E-mail Event, Transmission Control Protocol (TCP) Event, and Object Linking and Embedding (OLE) Events.

Response to Market Requirements

Although Fourth Shift had long grasped its target market's requirements of competitively priced functionally adequate products, ease of use and modification, short implementations, and strong service and support, during the late 1990s, however, it, somewhat painfully like many of its peers, realized that its target market needed more than an inexpensive and easy-to-use back office system. To that end, the company has gradually introduced or incorporated, in an "embedded approach" OEM fashion, a line of integrated e-business, customer relationship management (CRM), and advanced planning and scheduling (APS) components within its core ERP solutions. It has been known for adroit blending of third-party products with its own and delivering the combination as a tightly integrated unit, transparent to the user. By embracing concepts of component (modular) technology in designing its product, the company has been providing a great number of middleware application programming interfaces (APIs) for interconnectivity among its own and third-party components, also providing for flexibility and incremental deployment. Fourth Shift 7 provides connectivity to other applications based on the Microsoft standards like BizTalk and eXtensible Markup Language (XML), which is considered quite appropriate for its target niche.

This had promoted it as one of the first smaller ERP vendors with ability to embrace customer and supplier activities tied to core transactional back-office system. To that end, Fourth Shift offers very competitive e-commerce ability within its market niche, including but not limited to online catalogs, Internet storefronts, online credit checking, credit card validation, rules-based parametric product configurator, online procurement, and order fulfillment. All the major constituencies have been provided with e-Business applications while the above-mentioned My Fourth Shift Workplace takes care of employees, Fourth Shift's Customer Center application enables customers or channel partners to browse the user-enterprise's online catalog, configure products, place orders, view their own specific pricing, check product availability, and access the status of their order(s) by tracking shipping and viewing their account and payment information. Former Fourth Shift's Supplier Center application, which was originally designed to streamline purchasing and give suppliers visibility into the user-enterprise's production demands, has been discontinued and all of its functionality has been rolled into DemandStream. As mentioned earlier, the recent release of the Fourth Shift suite offers integration to DemandStream, and complete Web-browser enablement.

Consequently, Fourth Shift product remains a major breadwinner for the SoftBrands Manufacturing division (~65% of its revenue), being a web-enabled product for different manufacturing mid-markets (available in 17 languages) spanning across 60 countries with more than 4,000 customers (although only a half of them are actively paying for maintenance), some of which are the fastest growing manufacturers and global enterprises from the Global 2500 including Eastman Kodak, Unilever, Bosch, Gillette and Electrolux.

Fourth Shift product covers many bases with nearly 50 integrated application modules handling order entry, accounting/finance, inventory control, manufacturing, executive decision support/business intelligence (BI), engineering (in alliance with Agile Anywhere for collaborative product design), purchasing and shipping, along with the above-mentioned adaptable web-based supply chain visibility modules that communicate through portal technology. The product has traditionally been very strong in terms of transaction entry and reporting and tactical level production status visibility, lot traceability, cost control and work in progress (WIP) management, rendering it well suited for order-ship-bill operations within make-to-stock (MTS) and configure-to-order (CRM) manufacturing environments. CRM and HR are also integrated and through DemandStream integration there is support for lean manufacturing, while APS comes through alliance with Preactor, web-based product configuration through Eden Origin partnership, financials can be enhanced with Ledgersoft, and e-procurement comes from Biomni alliance.

The evolution Product

Another extended-ERP product named evolution (formerly Aremis Enterprise) is a highly configurable ERP and B2B solution, built on Windows NT and Unix server and Oracle, Informix and Microsoft SQL database platforms (i.e., Oracle and Informix on the Unix server platforms, Oracle and Informix on the Windows NT platform, and Oracle and SQL Server on the Windows 2000 platform), and therefore should be more amenable to larger mid-size manufacturers. Its deep functionality embraces applications for the Internet, information publishing, connectivity and multi-site operations, with core applications being production, planning, sales, inventory, purchasing and financials as approximately 6,000 loosely coupled, configurable components. The product is especially strong in dimensional and converter manufacturing environments such as textiles, apparel, food and metals, by featuring functionality for dimensional slitting, cutting and rolling, lot tracking, product configuration, plant maintenance, engineering change control (ECC), quality management, distribution and multi-plant planning and project control.

Like Fourth Shift, there are also integrated CRM and HR applications, and EDI support, and shop-floor data collection. A recently announced release tagged 10i allows a complete browser-based deployment of all applications and system administration tools, with a universal look-and-feel browser-based interface. As for implementation there is so called ensure' business process toolkit with a 1,000 strong library of default business processes and HTML-based drag and drop modification facilities.

DemandStream

DemandStream, on its hand, is a supply chain execution (SCE) solution whose purpose is to increase the velocity and decrease the cost of a manufacturer's supply chain. It achieves this by enabling a blend of lean methodologies and eliminating wasteful steps and processes. In doing so it allows companies with uneven demand patterns or high product mix environments to take advantage of "Lean" principles like Demand Pull scheduling. Available off the shelf, DemandStream is able to interact with most ERP systems including Fourth Shift and evolution and thereby bridge the chasm between companies that are heavy planners, and those that must respond to constantly changing demand on the fly. To that end, the Data Integration module is responsible for importing data using Import Wizards into the Shop Floor Module from a back-office system, and for inputting data using XML messages generated by the Shop Floor Module back into a business system. Applets are included that generate manufacturing orders and purchase orders, item changes, bill of material (BOM) changes, and non-replenishable Kanban.

The product delivers the following four important capabilities to manufacturers:

1. Dynamic Electronic Kanban or replenishment signals -The Material Replenishment Module uses multiple inputs, including demand patterns to determine the optimal Kanban quantity, which dynamically moves with the business' demand to ensure an efficient inventory level. Shop Floor Operations is an interactive application that uses the Web-based graphical Kanban Board to create and manage the work cell schedule. The individual work cells can make any necessary adjustments and then execute the schedule automatically. Purchase Orders are also automatically based on the Dynamic Kanban signal.

2. Demand Responsive Operations through Supply Chain Event Messaging

3. Supply Chain Planning & Scheduling - Supply Chain Execution is also an interactive Web-based application that enables the shop floor to interact with suppliers through the Supplier Kanban Board. Features include interactive shipping and an enhanced XML messaging system, while reports include material shortage reports and daily workload usage reports.

4. ERP System data translation and integration.

Consequently, the product should allow manufacturers to leverage their investment in ERP systems and at the same time embrace lean manufacturing methods, and thereby improve productivity, competitiveness and profitability, all being a must in current difficult economic times.

Therefore, the above broad product set, bundled with a reputation for quick and easy implementation, low start up and running costs, one of the speediest problem resolution in the industry and one of the highest ranking for the management of upgrades and excellent customer service should create at least cross-selling opportunity for SoftBrands to shore up its large customer base.

SOURCE:
http://www.technologyevaluation.com/research/articles/fourth-shift-s-evolution-within-softbrands-demandstream-16763/

PeopleSoft Building Muscles To Overcome The Rough Patch Part 3: Target Markets, Alliances, & Competition

2010-08-01T21:26:00.001-07:00

PeopleSoft Building Muscles To Overcome The Rough Patch

Part 3: Target Markets, Alliances, & Competition

P.J. Jakovljevic - June 24, 2002

Event Summary

At the beginning of 2001, PeopleSoft Inc. (NASDAQ: PSFT), one of the largest enterprise applications providers, ebulliently indicated its continued interest in rounding out its product portfolio through favorably priced acquisitions. Instead, the company recently unveiled a number of new products developed either internally or via alliances. It is likely its recently tamed new revenue generation has played a part in the company backpedaling its bullish attitude on acquisitions.

Recent announcements include:

New Products

* PeopleSoft eSettlements Part of PeopleSoft's Finanacial Management Solution

* General availability of PeopleSoft Enterprise Service Automation (ESA) 8.4

* Expansion of Human Capital Management (HCM) solutions

* Supply Chain Management Solutions Strategic Sourcing and Trading Partner Management (TPM)

* Next generation Enterprise Portal

* CRM solutions for Government, Insurance, Energy, and High Technology

Alliances

* Vigilance Supply Chain Event Management

* Agile Software Company Comprehensive Product Life Cycle Management

Financial Results

This is Part Three of a four-part report on recent PeopleSoft announcements. Part One detailed the announcements. Parts Two and Three discuss the Market Impact of these announcements and Part Four will make User Recommendations.

Target Markets

Looking at PeopleSoft's target markets, the company now globally targets all the way from multi-billion global corporations down to small-to-medium enterprises (SMEs) with only' over $50 million in revenues. As for the target sectors, these are very broad higher educational institutions, insurance, healthcare, financial services, government, high-tech/electronics, telecommunications and utilities, manufacturing associated with retail/consumer packaged goods (CPG), and the professional services organizations.

Although increasingly professing manufacturing interests, PeopleSoft in 2002 will still likely see the strongest focus on the financial services sector, followed by professional services, healthcare and high-education, and then manufacturing, distribution and retail. Nevertheless, the vendor does have manufacturing functional coverage within its ERP suite and is able to claim coverage of many common manufacturing styles. Looking at the high-tech sector, for example, it includes support for multi-mode manufacturing, global supply chain visibility and advanced planning and scheduling (APS) optimization. Then, the industrial products offering handles mixed-mode manufacturing dealing with make-to-order (MTO), private label, custom-made, original equipment manufacturer (OEM), and catalogue-standard components, whereas the utilities suite focuses more on the web-based solutions and analytics for distributed asset management and optimization.

Back to technology, the product is portal based and requires only a browser, it is scaleable, multi-lingual (with the support for Unicode, yet to be delivered by competitors en mass), with embedded security, and founded on open technology (e.g., XML, SOAP, UDDI, Java, etc), with PeopleSoft's wholehearted endorsement of Web services. Also, PeopleSoft's architecture should challenge competitors' offerings with advanced homegrown XML messaging hub middleware called PeopleSoft Integration Broker, and application programming interfaces (APIs) options that promise to ease bi-directional integration (either via application messaging, business component interlinks, application engine, and/or workflow).

The new architecture should also enable release independence, allowing upgrades of a single module without the need to upgrade the full suite. Furthermore, PeopleSoft has possibly the strongest product technology in terms of support for almost all industry relevant OS and DB platforms and/or middleware standards and in terms of scalability & performance metrics, system monitoring & load balancing (e.g., by using BEA Systems' Tuxedo Monitor tool), backup & recovery issues, authentication, and authorization & transaction security issues.

However, although the above offering is formidable, it may still not offer obvious differentiating, groundbreaking traits compared to competitive offering. While its above new product enhancements may likely offer a value proposition to its current customers, these will not necessarily help PeopleSoft leapfrog competitive offerings, at least not very soon. It appears that the Tier 1 vendors have lately been engaged in the game of outwitting competitors in functional tidbits in one area, while quickly trying to catch up with competitors' small advantage in other areas

In PeopleSoft's case, the fact remains that it is still the best-attuned offering (in terms of pricing, vertical extensions, customizability, professional service approach, etc.) to the needs of large, service-oriented enterprises, or for greenfield' sites. Beside HCM and ESA, PeopleSoft's impressive higher education solutions with applications for both the management and delivery of student administration, learning management and fundraising activities would be cases in point.

Also, PeopleSoft 8.4 Financial Management functionality is one of the strongest and broadest in the market. It features a high degree of flexibility (e.g., daily periods in the calendar, unlimited account key, etc.) and offers treasury management, as well as strong expense self-service module that is tightly integrated with Accounts Payable and Payroll modules. Having garnered strong HR/Payroll and more recently ESA and financial functionality, PeopleSoft offers a strong and comprehensive vertical industry solutions for non-manufacturing industries like government, utilities, financial, insurance, professional services, healthcare and higher education.

The enterprise portal solutions are another no-brainer offering during the economic slowdown as purported by PeopleSoft's success of nearly 500 installations since the initial release. If one takes the value proposition of a portal to deliver all pertinent information to an individual in fulfillment the tasks of his/her role, to a single point with the ability for workflow automation and self-service, and with the consequent reductions in cost and increase in productivity it is just the sort of technology one can more easily justify to invest in at the time of slump. Features such as knowledge management, document indexing, search, nomenclature management, and publishing, are being written into the core product rather than being regarded as additions, and portals are also being rewritten to ensure tighter integration to demonstrate they can embrace a wide variety of applications and content sources, still with faster performance.

Further illustration of integration is the ability to have elements of the portal delivered as Web services and the creation of a standard interface for the portlets (Pagelets in PeopleSoft's case) displayed in the portal window. PeopleSoft's focus on supporting the above trends and on delivering the portal as overlaying personalized user interface may prove to be a crucial bet. An intuitive portal might prove to be a simple and effective way to integrate process-centric information from disparate systems, and to possibly subtly hijack' the user base of other back-office systems in place, as elements of different vendors products should become interchangeable. Having garnered a deep set of integration capabilities, and many above features such as Intelligent Context Manager, might differentiate PeopleSoft within the enterprise portal market, where, together with SAP, it remains at the forefront of ERP vendors' portal offerings.

Other PeopleSoft's initiatives, although logical and required, have largely been small steps in the right direction, and it is questionable whether any individual feature should be a compelling order winner for new customers. Still, one should expect existing client base to find value proposition and incentive to implement them. For instance, by delivering PeopleSoft MarketPay, the company has extended its financial systems expertise and taken a temporary thought leadership over its direct ERP competitors, which are currently only at early planning stages of developing the capabilities of handling electronic payment settlements (EIPP).

Still, there is an impending but dubious PeopleSoft's effort in presenting the buy-side and sell-side users (and their superiors) a compelling value proposition like improvement of procure-to-pay' processes (e.g., invoice reconciliation, matching, workflow, payment, etc.) and consequent cost cutting before the product takes off for real. Although some other vendors like Clarus and Ariba offer similar products, the market awareness for the need has yet to be jump-started in earnest.

Alliances

The alliances with Agile Software and Vigilance also seem to be prudent moves to bolster PeopleSoft's offering, and fill the functional gaps in a quick-to-market fashion. The Agile alliance, bringing together PeopleSoft's SCM and CRM functionality with Agile's PCM software for complete lifecycle visibility and profitability of manufactured products, should round out each vendor's products and position PeopleSoft better itself against rivals, such as SAP, Baan or IFS, which natively provide similar functionality, and against Siebel and i2, which recently respectively partnered with PTC and EDS for similar purposes.

The arrangement should position PeopleSoft better in its tackling of the discrete manufacturing market, partly by possible penetration of Agile's accounts and by both parties' focus on high-tech OEM and contract manufacturers. The above spate of product lifecycle management (PLM) functionality blending with other enterprise applications should address the long crying need in the market to reduce traditional inefficiencies (silos) in the product development process, as manufacturers strive to reduce the time-to-market of new products, including the tighter control and involvement throughout the entire supply chain.

One of the more important prospects of PLM, other than the import/conversion of CAD drawings into ERP bills of materials (BOMs), should be its ability to allow better and secure collaboration (concurrent engineering) among members of virtual teams comprised of all trading partners, in addition to all involved internal employees (not only product designers). As a result, products should be designed faster, while suppliers are included early to offer cost savings or quality enhancing suggestions, whereas customers should provide a due feedback on their perception of price vs. value/features ratio, and all that should continue 24x7x365 around the world.

The same holds for the SCEM functionality that provides real-time visibility throughout the entire value chain at a granular, operational level outside the radar screen of traditional ERP/APS planning engines (i.e., events, both anticipated or unplanned exceptions), with workflow management and analytics to identify priorities and rules to resolve discrepancies. To that end, by using PeopleSoft SCM with Vigilance's SCEM, companies have the ability to recognize (sniff) events as they occur across an entire business process across many enterprises, and to pass that resulting information to the most appropriate persons. Furthermore, the partnership could well be extended to event management in the realm of CRM (e.g., to escalate customers' complaints or to act on an unfulfilled sales order). Likewise in the EIPP case, while some specialist companies like Categoric have long offered this functionality, big players like SAP and i2 are still at an early stage of incorporating the functionality within their suites.

CRM Solutions

PeopleSoft's intent to offer vertical CRM solutions is a prudent way to respond to Siebel that has early offered vertically relevant solutions in the CRM space. As the CRM market continues to mature with many ERP vendors' offerings, sophisticated vertical solutions have emerged as another way to differentiate. Given that business processes and rules differ much across industries, organizations increasingly expect CRM solutions to provide out-of-box, industry-specific functionality, in addition to flexible underlying technologies and data models to support their stringent business requirements. The caveat, as usual, is that the announced solutions are still in development, and that PeopleSoft will also have to ramp up strong relationships with system integrating (SI) partners to bring these solutions to the market. Still, there seems to be a notable opportunity for PeopleSoft within the government and insurance markets, which have not been very penetrated by CRM applications, and where PeopleSoft has long forged strong customer references and SI alliances.

Competition

However, to put things in the right perspective, one should bear in mind that PeopleSoft's license revenue in 2001 was still less than the corresponding revenue in 1998, back when the company was only a HRMS/ERP player. PeopleSoft's major recent success areas are still less in conventional manufacturing management and more in portals, e-procurement, CRM and SCM. It may be worth noting that only ~30% of PeopleSoft's sales come from manufacturing companies, and of those, possibly only a half are buying manufacturing ERP and SCM applications, while the rest are going for HR, CRM, financials and distribution suites. Consequently, SAP and Oracle still feature much broader functionality footprint as indicated by a number of acquisition and/or alliances PeopleSoft had to turn to recently, which, with their impending endeavors to complete re-architecting their products, may position them better than PeopleSoft in the future.

PeopleSoft's competition is also growing in direct proportionally to its product offering growth, which might become too much to cope with given PeopleSoft has lower license revenue (expressed both as a percentage of total revenue and in raw dollar amounts), market share, global presence, and resources compared to some (albeit not many) competitors. In a pure ERP sense, it competes against SAP, Oracle, and J.D. Edwards in the higher-end of the market, while in the Tier 2 range it faces Intentia, IFS, Baan, SSA GT, QAD, MAPICS, and Geac as some of just as fierce competition; and with its strong focus now at the SME level, it will face an army of competitors spearheaded by Microsoft's Great Plains and Navision offerings (see Microsoft 'The Great' Poised To Conquer Mid-Market, Once and Again), Epicor, Exact Software and Best Software to name only few.

Looking at the SCM market, PeopleSoft challenges SAP and J.D. Edwards and the pure player likes of i2, Logility, and Manugistics. On the e-procurement/SRM front PeopleSoft stacks itself again against SAP and against the pure players Ariba and CommerceOne. As mentioned earlier, PeopleSoft also has to be taken quite seriously in the CRM space against Siebel, SAP and Oracle, while these join IBM, Plumtree, Epicentric, BEA Systems, Sun/iPlanet, BroadVision, Hummingbird, Vignette and many others in the battle for the portal space. In the professional services automation (PSA), there are again Lawson, J.D. Edwards, Ariba, Siebel, SAP, Oracle, and a number of PSA specialists such as Deltek, Niku, Evolve, Novient and Changepoint. Thinking vertically, in the healthcare space, it particularly competes with Lawson Software and Infinium, whereas in the higher education, it faces SCT, Jenzabar, and Datatel, on top of ubiquitous SAP and Oracle nemeses in all markets.

This mind-boggling competition may remind the customers of the fact that PeopleSoft does not necessarily deliver the best value to everybody across the board. PeopleSoft 8, achieved through a radical rewrite of over 14,000 PeopleSoft 7.5 enterprise suite panels and/or program sessions and through acquisition of the Vantive CRM product, is still a relatively immature product, with an awful amount of work in progress, as can be inferred by the above announcements as well.

If one is to judge by the general industry benchmarks, it will take at least until late 2002, for only some of these product's initiatives to be fully integrated, while, it is very likely that a plethora of disparate products will for some time to come be connected via XML messaging only, since a huge pile of PeopleSoft's cash can speed R&D up only in a very limited way. Another caveat may be the longevity of partnerships given the likelihood of Agile merging with another vendor, as it had almost done it with Ariba last year (the deal was called off due to Ariba's abrupt financial difficulties in 2001).

The cost, time and effort to upgrade PeopleSoft to a newer version continue to be a concern to some users too, but that is particularly true with migration to PeopleSoft 8, which might require a considerable effort, one that feels like a new implementation. The fact is that PeopleSoft is one of more intricate and expensive products to deploy. Like SAP and Oracle, PeopleSoft should also carefully reevaluate its product migration strategy from current product instances (7.5 and earlier), in order not to alienate and disillusion its loyal customer base.

The overall ease of administration given that only a browser is needed to invoke any PeopleSoft 8 function, and the opportunity to eliminate (or partly reduce) the custom code needed for web-enablement of PeopleSoft 7 might in some instances be a valid reason to upgrade. Still, depending on the extent of customization and use of self-service in earlier product releases, customers will have to conduct a thorough cost/benefits weighing exercise in order to determine whether to attach the custom code to the new code in PeopleSoft 8 or to go for a straight porting to PeopleSoft 8. In other words, whether to conduct a technical upgrade first and then re-engineer to web-based processes, or whether the two should happen concurrently during the migration.

SOURCE:
http://www.technologyevaluation.com/research/articles/peoplesoft-building-muscles-to-overcome-the-rough-patch-part-3-target-markets-alliances-competition-16687/

How Some ERP Vendors Demonstrated - Warts and All Part 1

2010-08-01T21:25:00.000-07:00

How Some ERP Vendors Demonstrated - Warts And All

Part 1 - Scripted Scenario Process

P. Jakovljevic, L. Talarico & B. Spencer - December 12, 2001

Overview

The subject of this case study is the synopsis of a crucial step within every software selection process - finalist vendors' scripted scenarios software demonstrations; this particular series of events took place in February/March 2001. The importance of this milestone in any software selection undertaking has been widely publicized (for more information, see An Overview of the Knowledge Based Selection Process). Demonstrations can and should be grueling for both vendors and users, as they are the only way to discern how a software application behaves under real world expectations before any firm commitment and point of no return happens.

The customer in case was a predominantly engineer-to-order (ETO) manufacturing division of a large global corporation that, inter alia, operates within high-tech and aerospace industries; it needed to replace an over a decade-old, highly customized and disparate, islands of information, systems. The company had made considerable strides towards a Lean Manufacturing environment by acting on a number of initiatives, the upgrade and maintenance of the IT infrastructure being one. A lack of functionality and integration in these scattered operational systems were recognized obstacles to the company effectively transforming its business process to enable strategic initiatives such as B2B e-Business. To that end, it embarked on the selection of an ERP/business applications package that would satisfy its needs and return maximum business value. TEC was retained as a neutral process facilitator with an intimate knowledge of the market/vendors and no vested interest (e.g., future system integrating opportunity) in the outcome of the selection.

The finalist vendors were determined based on their responses to the request for proposal (RFP) document sent to eleven prospective candidates that TEC aligned with the customer's business requirements. The responses provided by each vendor and validated by TEC were used to assess the vendors' Product Functionality, Technology and Market Standing (Corporate Viability, Corporate Strategy, Corporate Service & Support, and Client Site Reference) criteria.

Figure 1 shows the initial standings of the four best responses and indicates a virtual tie for second place. Since the scores were so close, TEC recommended that all four vendors - Oracle, SAP, J.D. Edwards and IFS - be included in the scripted scenarios demonstration phase. Although we were aware that four detailed demonstrations might 'numb' the selection team, we also felt strongly that eliminating one vendor would only have done a disservice to both the client and the vendor.

Figure 1. Vendor Results From The RFP Responses

About this Note:

This is a two part note with Part 1 covering the Scripted Scenario Demonstrations. Part 2 discusses the specific results of the demonstrations with recommendations for users facing a similar selection process.

The Scripted Scenarios Process

The Scripted Scenarios process step was an opportunity to validate the Product Functionality portion of the RFP and the overall proof of concept through real world imitated business activities that need to be supported by the software. TEC coached the client in developing the scripted scenarios, which were a realization of business processes, either current, anticipated or improved, resulting from the Required Capabilities Assessment phase.

The completed scenarios were explained to the finalist vendors' teams during discovery sessions. The vendors were then given an equal period of time in which to prepare for the scenario demonstrations. TEC developed and provided score sheets to all selection team members in attendance for use in rating each vendor's performance. The scenario demonstrations spanned three days with the agreed average scores tabulated daily and entered into the customer-specific decision support model. ERGO 2001, TEC's decision support tool, was used to record and analyze the results of the scenarios (For more information on ERGO 2001 see ERGO 2001 IT Evaluation Tool)

The vendors presented the business scenarios on their live products using mock-up data - tailored to the way the organization does business as defined in the scenarios. The scenarios allowed the organization to see how the live product operated in its specific environment, according to the business processes outlined by the team. In addition, the selection team gained an understanding of the extent to which the vendor was willing to adjust the software to accommodate the customer's needs.

The candidate vendors and packages in order of demonstrations' sequence included the following:
Vendor Package
Oracle Oracle Applications 11i
J.D. Edwards OneWorld Xe
SAP MySAP.com R/3 v4.6
IFS IFS Applications 2000

The sequence of vendors' demonstrations was decided by a lottery. While the final vendor is always in a somewhat advantageous position, the team made sure that it did not have the chance to be in possession of the scripted scenario document any longer than its predecessors. In other words, the documents were released to all vendors exactly four weeks before the date of their presentations.

Although all were large, well-known ERP software providers that seemed to offer the type of capabilities our client required, we were determined to delve well beneath the marketing brochures to perform a thorough, statistically valid comparative evaluation of the options. TEC ensured that every vendor was focused on addressing the customer's actual needs, rather than to market its generic strengths. We also made every effort to prevent any vendor from obfuscating weaknesses and to allow that only questions to the point were asked and answered (or marked for a follow-up session).

Determining the Outcome

The main pitfalls during software demonstration are generally due to a lack of sufficient preparation by the vendor exemplified in a need for more time than allotted, an inability to strictly follow the requested bullet points of the scripted scenario document, and/or too much "tell" vs. "show" approach (for more information, see Demonstration Post-Mortem: Why Vendors Lose Deals).

Lack of preparation is utterly obvious to clients, who downgrade script performance execution scores for the vendors accordingly. Few things frustrate clients more than listening to presales consultants babble on and on about a 'killer' functionality without ever showing how it works. This is particularly true when the functionality was not even requested in the scripts. As for the case in point, the overall level of preparation by the four vendors during the demonstrations was satisfactory, what we expected given each vendor had four weeks to prepare. Part 2 summarizes the demonstration preparation and performance of each vendor.

TEC facilitated a scoring wrap up session with the selection team members at the end of each demonstration day and compiled the results into the decision support model (Figure 2). Each member of the selection team was asked to score vendors' script execution performance for every individual bullet point within the scenario (denoting a basic functional requirement, e.g., 'setup quantity price breaks' or 'release engineering data to production'). The following two qualitative aspects of software demonstrations, which were evaluated only at the entire scenario level, were also evaluated:

1. The Ease of Use/Navigation and
2. The Process Fit.

The Ease of Use/Navigation aspect deals with intuitiveness of the demonstrated software processes as well as the cumbersomeness of screen navigation. These factors are a representation of how adaptable the software will be throughout the live operation and the associated cost of the learning curve to get all users trained and proficient.

The Process Fit aspect deals with how well the product matches with either how the customer currently runs or plans to run the organization in the future. Should the demonstrated solution not fit the client's process, a gap was identified and the question " Is it a process improvement with value or a change not in keeping with projected improvements?" would be asked. A high score in this section indicates the solution that best matches the company's operational and strategic requirements with the fewest identified gaps.

Actual Results by Vendor

IFS

IFS had the highest overall score as well as the highest Ease of Use and Process Fit score. IFS holds a slight lead over SAP overall, whereas the other vendors had a gap greater than 5% behind SAP. IFS held a lead by greater than 3% in both Ease of Use and Process Fit. This is consistent with the project team's consensus that IFS' applications are flexible and intuitive. However, IFS also impressed the selection team with the functionality footprint.

While not necessarily the most robust functionality on paper, IFS Applications suite features quite uniformly solid functionality across the board, without serious ups and downs per modules. IFS team's confidence without arrogance and/or glitzy marketing collaterals as well as astute preparation and following the scripts to the letter, with only two all-rounder pre-sales consultants covering the entire range of product modules, left no one indifferent.

While being the last to perform the demo likely bears the unfair advantage ("halo effect") on one hand, on the other hand, IFS had to overcome the aura of an unknown vendor and, subsequently, the client's skepticism. In addition to ease of use (a user has only to learn five different screen forms, e.g., query, graph, etc. that are pervasive throughout the entire suite) and agility, the IFS' product features very deep, vertically focused functionality that is not overwhelmingly complex. IFS Applications encompasses Front Office, finite scheduling, E-Commerce, product data management (PDM), and plant maintenance management functionality, in addition to conventional ERP modules. Therefore, IFS is very competitive in mid-market manufacturing industries that require strong engineering, asset management and complex project manufacturing functionality.

J.D. Edwards

The client generally felt that both IFS and JD Edwards were flexible and easy to use and navigate. Besides the astute approach to conducting the demo, J.D. Edwards impressed with the product's agility, which is enabled in part by "category codes" - the soft coded database table fields that accommodate many of possible future changes (i.e., mergers & acquisitions or divestitures) within the customer's organization. Also impressive is OneWorld Xe release's wide interoperability options set that includes application access via COM, CORBA, and Java standards. J.D. Edwards' screens mimic both the windows and Internet Explorer (Java or HTML) metaphors.

On a downside, J.D. Edwards' functionality, while solid overall, was somewhat inferior in some important areas (e.g., product engineering/definition and sales order processing), whereas the product's native functionality was superior in areas that the customer did not consider as very important (e.g., warehousing & distribution, advanced planning & scheduling). Also, some functional bullet points were demonstrated through a number of 3rd-party products, which may have deterred some team members despite exceptional functionality and the company's support assurances through premier partnerships with these niche providers like Siebel and Microstrategy.

SAP

The client was impressed with the breadth and depth of SAP, which is still the most robust product in the market, and with the demo team's professional approach and preparation, but was dismayed by the cumbersome screen navigation and perceived steep learning curve. Some team members were overwhelmed with demonstrated functionality and commented that it would likely not be needed in their day-to-day operations ("Too much of a good thing").

The team expressed some high-level concerns with regards to R/3 intricacy and the need for a sophisticated end-user, which was also bolstered by a large number of SAP's presenters, each focusing on a relatively narrow area. The general feeling was that R/3 is a more rigid system than other products, which would demand a radical change of the client's current processes and people's mindset.

Further, while the answer to the client's question whether something could be done in a peculiar way in the shape of a condescending counter-question "Why would you want to do that this way?" may be valid, the client always prefers the answer "Sure, it can be done, but why would you want to do that this way, btw?"

Also, while SAP has done a notable job in improving its user interface looks with the release of mySAP.com, its hundreds of standard out-of-the-box reports, however to the point, often leave users unimpressed by their drab look, which has not improved much from older R/3 versions, and whose modification would require significant time and human resources.

Oracle

The audience felt that Oracle could have scored much higher, but the demonstration was a cry far from flowing smoothly, which may have impacted client scores. It was interesting, though, to notice that Oracle took the 2nd place regarding the Process Fit criterion, which may indicate a strong horizontal functionality that can often accommodate most of common business processes, with only some tweaking through alerts and workflow.

Oracle seems to have rounded up a formidable portfolio for almost all aspects of business, which should give even SAP a pause. While in general, functionality in financials and manufacturing is very strong, quality management, flow manufacturing and service modules were exceptionally advanced. Further, the tight integration with the native Oracle database where all configuration data, user fields' modifications, etc. are stored should facilitate future product upgrades. Also impressive is search capability throughout the entire suite and the availability of native business intelligence and data warehousing tools.

Oracle, like SAP, however, was perceived as being rigid applications with myriad modules' interdependencies, possibly requiring more implementation and product configuration time. There is also the proverbial confinement to Oracle database. Nevertheless, with its "one-stop-shop" offering and a diligent preparation for a demo, Oracle should be a formidable competitor feared by everybody, based on what its 11i product is seemingly able to support. Oracle should also attempt to be more accommodating towards potential customers in terms of providing them with 3rd-party and/or legacy applications integration and with certain levels of customization.

Scenario Scoring Results

Figure 2. Scripted Scenario Scoring Results

Although IFS took the overall lead, it did not win in every category within the Business Scenarios section of the decision model. The Advantages and Disadvantages of each vendor for each major category within the Business Scenarios is the topic of a separate TEC's case study note (see Selecting An ERP System: A "Facts And Figures" Case Study).

For a discussion of the results and user recommendations, see Part 2 of this not

SOURCE:
http://www.technologyevaluation.com/research/articles/how-some-erp-vendors-demonstrated-warts-and-all-part-1-16539/

Application Giants in Duel and Duet for Users’ Hearts, Minds … and Wallets

2010-08-01T21:24:00.000-07:00

pplication Giants in Duel—and Duet—for Users' Hearts, Minds … and Wallets

Situational Analysis

The relationship between the two software powerhouses, Microsoft and SAP, has been intriguing to put it mildly, at least since Microsoft's entry into the enterprise applications arena in late 2000 (see Microsoft 'The Great' Poised to Conquer Mid-market, Once and Again ). While the relationship has been depicted by many through a myriad of antonyms, such as "on-off", "hot-cold", or "love-hate", currently, it can best be described as "mutually civil". One can even find some uncanny similarities between the two, such as the occasional involvement in intellectual property lawsuits (whether as plaintiffs or defendants) or through the relatively recent, almost coinciding departures of technological visionaries, Satya Nadella and Shai Agassi, respectively (although Nadella was merely transferred within Microsoft, to the search and ad group that will hope to fend off Google's undeniable threat).

Microsoft and SAP then entered a "strange bedfellows" or co-opetion phase in their relationship, by dallying in business applications. Acting like two high-profile on-again, off-again celebrities, the two were dismissive about questions from the press and analysts about the inevitable competition this partnership would create (i.e., responding "We do target different sizes of companies"). Nonetheless, this stance become moot owing to SAP's forays into small business via SAP Business One and Microsoft's propping up of Microsoft Dynamics AX, as an upper mid-market solution. Then came a perceived snub by SAP for opting for Java 2 Enterprise Edition (J2EE) as a primary development environment for its infrastructure and development platform (while there is, nonetheless, some lesser valuable interface options for the counterpart Microsoft .NET Framework environment). However, SAP's move was quite logical given the still lingering perception of Java's better fit for larger enterprises (see Understand J2EE and .NET Environments Before You Choose ).

Any hard feelings between SAP and Microsoft were short lived, as we found out in 2004 when the two were engaged in secret (and startling) merger talks, which was quickly put ad acta before the news broke (whether for good remains to be seen). For most of that year, both vendors had to spend time explaining their separate forays into developing next-generation, service oriented architecture (SOA)-enabled products. Then 2005 seemed to be the year of bliss, where the two expressed mutual respect, and even worked jointly on a commercially available product featuring best of both worlds. Specifically, SAP and Microsoft joined together to leverage the openness of the SAP NetWeaver and Enterprise Service Architecture (ESA) blueprint (see Multipurpose SAP NetWeaver ) with the .NET-based architecture of Microsoft Office desktop applications suite (see Subtle [or Not-so-subtle] Nuances of Microsoft .NET Enablement ). The result was the joint product code-named Project Mendocino (the name of a town halfway between the companies' respective US headquarters) that promised to deliver familiar Microsoft Office desktop management and productivity tools as the façade for the heavy-duty lifting processes of SAP's enterprise applications. In other words, Project Mendocino extended and automated selected business processes from SAP ERP (Enterprise Resource Planning) through the familiar Microsoft Office user interface (UI), by providing role-relevant displays of information while retaining SAP applications' process context and the necessary collaboration and analytic tools.

The product is an extension to the SAP Enterprise Portal and other SAP entry points, such as SAP Web Dynpro or the recently unveiled NetWeaver Business Client, (formerly known as Project Muse), which is still needed for power users to gain full access to more advanced SAP business applications and processes. However, for casual information workers that require quick access to simple repetitive processes, such as billable time entry, leave request, or budget monitoring, Project Mendocino came in handy, because it eliminated the reliance on power users and business application experts. At the same time, it also connected business process applications with commonly used productivity applications more seamlessly. The product's capabilities included personalization, object synchronization, report distribution, alerts or notifications, a form-based approval process, and offline functionality. Through these capabilities employees and managers had the potential to realize greater efficiency and flexibility within a number of self-service processes. Other potential benefits revolved around higher productivity, better decision-making, audit traceability and transparency, and faster user adoption.

More information on the initial product's processes, capabilities, and benefit can be found in Major Vendors Adapting to User Requirements and in the book Enterprise SOA: Designing IT for Business Innovation, by Dan Woods and Thomas Mattern (2006 O'Reilly Media). For now, it suffices to say that Project Mendocino initially enabled information workers to perform tasks, such as time management, budget monitoring, organization management, and leave management via their desktops, using features like extended application menus, an SAP-specific smart panel, and business analytics delivered via Microsoft Excel, smart business documents in Microsoft Word, and synchronization Microsoft Outlook between Microsoft Exchange Server and SAP ERP processes.

Both Microsoft and SAP pledged to sell and support the product, which was first released to fifty pilot customers in late 2005 before it was made generally available (GA) in mid-2006 with its official name: Duet. At the time critics were quick to note that the product covered only a handful of simple business processes and that it was more "eye candy" than an "order winner". However, they did see that the product would also be a decisive factor for prospective customers to implement the entire SAP ERP suite (or, for existing SAP users to migrate to its latest release). Critics also expressed caveats of necessary technological prerequisites and hidden costs for Duet. Namely, the client machine runs on Microsoft Windows XP with Microsoft Office 2003 installed, while the Duet hub (which will be detailed later in this report) requires Microsoft Windows Server 2003 or higher and Microsoft Exchange Server 2003 or higher, including Microsoft Active Directory 2000 (however, there are no additional installation, software, or hardware requirements for existing Microsoft Exchange Server landscapes). Moreover, on the SAP side, users have to be on SAP ERP 2004 (including NetWeaver) or higher, while some most recent Duet implementations require additional SAP modules, such as Employee Self-Service, SAP CRM (Customer Relationship Management) 4.0, SAP SRM (Supplier Relationship Management) 5.0, or SAP BW (Business Warehouse) 3.5. The early product release also ran only in English and within Outlook (as opposed to Word or Excel).

More Than Meets the Eye

In addition to disseminating useful SAP data among knowledge workers (outside of its traditionally limited power-user dispatch list), Duet has been crucial for being a "proof of concept" model illustrating the potential development and adoption of composite applications, especially when the result of a joint collaboration between two software giants and market influencers.

Indeed, Duet is one of the first examples of a tangible SOA-based composite application product. While several tools use SOA conceptually, in ways that are sometimes hard to grasp, this tool is based on consuming services in concrete ways that benefits almost every information worker. Duet showed how SOA can be applied to the user experience through familiar desktop applications, and for some users, it will deliver functionality that supersedes the need to work directly with any line-of-business (functional department) or back-office enterprise applications. By exposing functionality and giving even the most casual users an easier way to update data that normally resides only in the back-office system, Duet embraced the innovative potential of SOA services. It exposes features from underlying ERP systems in new ways that create more value. And these services can be used together, even though they were probably written for a system that was designed before SOA was someone's figment of imagination.

This fulfills one of SAP's short-term goals for ESA (SAP's variant of the SOA blueprint) adoption—to create simple services (software components, if you will) that work on top of legacy applications already used by organizations. In the future, the entire stack which encompasses ERP, CRM, and all other SAP Business Suite solutions will eventually evolve to use business objects as their underlying application. Instead of having a rigid and unwieldy monolithic set of applications, SAP is creating a collection of business objects that can be applied in more flexible ways. By late 2007, there will be more services to choose from than the ones used to support Duet, since ESA follows the SOA format of "model once, run anywhere". Namely, instead of hard-coding multiple solutions that apply to different domains, ESA employs business objects or services that are modeled in a way that allows them to handle different solutions. Duet is just one of many client-side solutions that ESA will enable.

To understand how Duet is in tune with SOA, it is important to become familiar with the new stack defined by SAP ESA, and to understand what a composite application is. Webopedia defines a composite application as an application that consists of more than one type of service delivered from an SOA environment. It can range from functionality to entire applications. Services are generated through "local" application logic that controls how services interact with each other. For more information, see Understanding SOA, Web Services, BPM, and BPEL.

As a composite application, Duet overlaps with nearly every part of the new SOA stack:

*

User screens. Duet uses the familiar Microsoft Office desktop interface, which is achieved not by hard-coding the UI, but through backend modeling and deploying it to the client.
*

Process orchestration. Duet uses a communications hub referred to as the Duet Extensions to route data to and within the ERP system.
*

Process integration. Using the aforementioned extensions, Duet translates data from Microsoft Office applications such as Excel into a format that is easily understood by existing ERP tools and their respective enterprise services.
*

Process workflow. All of the usual workflow processes within SAP ERP take place within the context of Microsoft Office's desktop tools.
*

Distributed data. The ability to cache data for working online or offline also plays an important part in the functionality.

Other applications being created by SAP will use different parts of the stack to enable different solutions. However, other services created for Duet should indirectly benefit all SAP ESA users by increasing the total pool of objects in the SAP Enterprise Services Repository. Also, every service and application being created for Duet is designed so they can be used by other applications within the ESA environment. For instance, timesheet entry services are part of the Cross Application Time Sheet (CATS) feature that will be used by many applications that rely on timesheet recording and account assignment.

The Duet Architecture Outlined

Despite seemingly simple processes that Duet enables, the product exemplifies how serious an undertaking a commercially available composite application can be. When the goals of Project Mendocino (now Duet) were first formulated, it reportedly[1] became clear that two very different architectures needed to be brought together. On the one side was the ubiquitous client application, which required local data storage, while on the other side was the proverbially complex SAP ERP environment. The different technologies in this case reportedly made it quite easy to select Web services as the interface technology, since both camps added standards-based Web services support in their last releases. However, in this case, simply connecting these two worlds using Web services did not offer a comprehensive enough solution. Namely, the goals required more extensibility, because SAP wanted to enable a model-driven environment on the client side, which would allow Duet to push additional screens and updates to the user without the need to continuously run through an installation and reinstallation whenever business needs changed.

On top of that, Microsoft Office currently works in online as well as offline modes. This capability had to be maintained in Duet as well, since users had to be able to trigger activities while being offline which would later have to be automatically resynchronized once their machines went back online. At the time, Microsoft and SAP also realized that the involved disparate system components (i.e., Microsoft Exchange Servers, Microsoft Office, and SAP ERP systems) are of such a high value to customers that massively updating those environments (and exposing the existing system landscape to any unnecessary disruption) would be unacceptable. SAP and Microsoft weighed these requirements carefully and realized that there was a the need for a communications hub that would sit in the middle of the two existing environments and "mediate" communication and processes. The hub collects various configurations from the back-end system, determines the objects that should be exposed, and decides which activities the user can trigger and how all of that ties together within the user screen. The communications hub is also referred to as the Duet Extensions, which are connected with the Microsoft Office client and the SAP ERP system. The result is that there are three primary parts to Duet's architecture: 1) the Duet Extensions; 2) the Microsoft Office Add-On; and 3) SAP ERP foundation.

The Role of Duet Extensions (the Hub)

The Duet Extensions are implemented in the Microsoft .NET Framework and use the J2EE technology. They act as a hub between the client side and the SAP ERP systems on the server side and enable these two to talk with each other. They also include the application description in the form of metadata (or "data about data") and cater the metadata to the client side. The major components of the Duet Extensions include 1) metadata repository interface and storage; 2) Microsoft Exchange handler; and 3) service bundling.

The metadata repository stores metadata, authorizes access, and enforces the consistency of stored data, whereby the metadata storage component is a relational database built on top of Microsoft SQL Express 2005. This metadata describes objects that are exposed within Microsoft Office and their related UIs and associated actions, and is being pulled by the client, based on the user and his or her role(s) within the organization. The Microsoft Exchange handle, on the other had provides an application-friendly and user-friendly view of messages in Microsoft Exchange. It addresses the conversion of standardized messages from the backend server into Outlook objects, such as IPM.Note. The handler provides an independent layer to different versions and formats of messages, so that calling components do not have to address the versions and formats of Office objects or command messages for the client add-on. The Exchange handler provides interfaces to the most important objects within Microsoft Office, including e-mail (IPM.Note), e-mail attachments, the calendar, tasks, and contacts.

Last but not least, the service bundling component hides the implementation details and distributes incoming calls to Duet-specific Web services or SAP ESA services, or any combination thereof. The criteria that determine which component will be used during implementation is based on the method that can best support the respective use cases within the application. The service bundling component also implements a method to resolve any Duet-specific IDs toward SAP item IDs where necessary. It is anticipated that the vast majority of these services will be executed synchronously for functionality, such as data validation and displaying information in action panes. In case of asynchronous[2] calls, the service bundling component will always reply with an acknowledgment confirmation and then route the reply through the Exchange handler back to the client. An example of such an asynchronous call can be found in team management when requesting all organization contacts for a given user.

In addition to these components, Duet Extensions also include a number of so-called "pluggable services" that interact with existing technology to enable user roles, authentication, security, and reporting, and provide a set of tools for configuration and customization. The pluggable services enable integration with preexisting technologies and provide functionality, such as user roles, authentication, security, and reporting. Since these capabilities are not Duet-specific, customers should be able to deploy any of these services from different vendors that support these standardized interfaces. It should also be possible to reuse existing solutions already installed on site.

Apparently, Duet Extensions can handle all communication between the client and the underlying SAP ERP system, because Duet Extension can gather the context and define the objects that are exposed to the user. Thus, those extensions invoke the relevant underlying SAP ESA services to talk to the underlying applications within the SAP ERP environment. As described previously in some cases, the responses may be handled asynchronously. To accomplish this, Duet Extensions transmit the data back to the local client through the Exchange handler, which completes a simple round trip of data from the UI within an action pane to the SAP ERP system and back.

The metadata that is available on the client resides within Duet Extensions, whose server also acts as a consolidation engine. Most businesses have an IT landscape using a number of different SAP systems, such as an SAP BW, SAP ERP, SAP CRM, SAP SCM (Supply Chain Management), or any number of non-SAP solutions. The Duet Extensions server unites one or more of these backend systems, by taking the metadata from various underlying systems and combining them based on the user and the user's role within the organization, and pushing it down to the client. As the users might not always be online, Duet must be careful in the way it communicates information back to the client, and additional queuing and caching may be required in the Extensions. The data is communicated from SAP ERP into the Exchange handler, which properly formats the information into an extensible markup language (XML) document (or a format that the client can then understand).

If a report is needed, information needs to be converted into a hypertext markup language (HTML)-based email, maybe with some kind of attachment. It also requires flagging the report with specific metadata that is not visible to the end user, but is rather attached to the e-mail body. This enables certain kinds of processes once it reaches the client environment. The client then interprets the metadata and dynamically combines it into the UI screen before presenting the notification of the report to the user (e.g., the final budget status notification). The rules gathered from the back-end system are converted into metadata that the client can understand, and the gap between the two systems is bridged. Because Duet is role sensitive, information presented and executions available to the end user depend on the user's role within the organization (whether the user is an employee or a manager, for example).

The Role of Microsoft Office Add-On

Further, the Microsoft Office Add-On enables communication between the local Microsoft Office client with the Duet Extensions and the SAP system through a metadata portal and storage interface. In other words, the Office Add-On, also known as the Duet Client, represents the Office screen add-ons based on metadata, since it uses the master data for drop-down menus or business rules and then triggers activities in the principal SAP system through either synchronous or asynchronous Web services calls. Metadata descriptions of the various applications are interpreted through the engine, which supports integration with various kinds of host software. The engine also provides Outlook integration, personalization, Excel integration, InfoPath (recently renamed into Windows Workflow Foundation [WF]) integration, and metadata-defined forms. Duet also supports SAP Business Workflows through Microsoft Outlook.

In order to illustrate how data is routed through the Duet architecture, one needs to understand that a typical Microsoft Office user often creates status reports of one kind or another. Using Duet, this process is accelerated since the Office interface already shows which reports an information worker can subscribe to, and offers templates for creating new ones (e.g., a budget report needs to be delivered every Monday morning at 9 a.m., or the project manager wants an alert only after the project has reached 80 percent of total budget consumption). All of these kinds of activities can be done using the local client, in which case it is Microsoft Office combined with Duet.

The Client or Office Add-On is responsible for representing the UI, based on metadata and other kinds of desktop information. For this purpose, the Client/Add-On is separated into three major parts: 1) runtime engine; 2) cashing mechanism; and 3) output queue.

The runtime engine interprets metadata in order to understand which business object is being exposed (a budget report, leave request or time entry, for example). Through these exposed objects, the Office Add-On is able to create subclasses of the existing objects within Microsoft Office. For instance, a "time entry" would then be treated as a subclass of an "appointment" object, and these classes would be exposed through the UI within the action pane environment. In addition to describing objects, the metadata also describes the UI screen and actions that can be triggered from within the user screen. This additional metadata, available on the client side, includes both generalized personalization data and some master data. The generalized personalization data, for example, determines which fields become available in the action pane, whereas the master data, for example, determines which project's budget is being assessed or the default status report profile. The engine's metadata form definition component is the primary method used to customize Duet forms and dialogs, whereby administrator users, using a metadata definition, can customize the action pane, custom dialogs, or Outlook custom forms. This level of customization also enables easy text replacement and user screen fields localization.

The caching mechanism is responsible for maintaining the proper metadata on the client machine, and is based on the user's role and supplies the functionality to store a user's metadata based on user role and data instances. It also stores metadata in a secure manner, and provides access to metadata when disconnected from the Duet server. Furthermore, the cache includes deployment capabilities that deliver application assemblies proactively to a user's machine. Last but not least, the cache provides offline data retrieval for the Duet by switching between the offline store or to the online Duet server when accessing data by using hints from either metadata parameters or other configuration information. The cache component also provides the first-time provisioning and deployment of reference data, reference data expiration refresh rules, and local data storage. In summary, the caching component ensures that metadata, master data, and additional files and objects are kept available locally and are up-to-date. The component is able to store this data on the local client without the need to continuously synchronize and resynchronize with the backend SAP ESA services. And by inserting a validity period into that, Duet can always keep the data cache up-to-date with regards to changes from the back-office system. It is not so much a push for updated information, but rather a pull from it, which should also speed up the end-to-end communication by preloading some of the data that the underlying system will request.

The third component of the Client, the output queue, provides the functionality to enable users to initiate actions while being offline, which are then invoked whenever a connection becomes available. The output queue component is invoked when a user triggers an activity, such as saving a time entry. It then takes the selected business object and triggers activities in the underlying SAP ERP system through either synchronous, or asynchronous Web services calls, which then come into the SAP environment within the Duet Extensions, through the abovementioned service bundling component. This component allows the Duet to compose multiple underlying Web services into a single one for, say, performance improvement, or for using the result of a first call for a second call.

Queued actions are serviced as soon as possible. If online, these calls are serviced in short time intervals; if off-line, the calls are stored for invocation later. Logically, the output queue is used only for asynchronous calls, and to support this functionality, the output queue provides interfaces to be able to "flush the queue" when the backend server is available. Calls made by the output queue to the service bundling component in the backend system will generally respond synchronously with acknowledge confirmation. Duet supports the deployment of applications to the client machine as complete units containing the metadata, assemblies, additional required client components, and reference data required to execute the application. This will occur automatically through a deployment mechanism and includes upgrade control in the form of versioning.

Links to SAP Applications

The Web services calls from the Office Add-On are relayed into the SAP environment, which also occurs within the Duet Extensions through the service bundling component. The engine on the client loads assemblies and metadata from the cache and interprets the metadata descriptions of applications to execute service calls, execute business logic, and construct and display the UI screen based on metadata, and interact with host software. The runtime engine uses an Outlook services library (using the standard programming features of Outlook) to integrate the following features and services:

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Action pane. The Duet action pane will mimic the behavior of the Office programmable task pane.
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Toolbar buttons. Custom buttons can be added to the application-level toolbar, and these buttons will trigger the execution of metadata-based actions.
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Context menu items. Custom context menu items can be added to folder and item context menus to trigger the execution of metadata-based actions.
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Outlook events. Selected standard Outlook events and behaviors are extended to automatically activate metadata-defined actions.
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Custom calendar views. Outlook tabbed forms and action panes are defined via metadata.
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Contact management. Additional tabs are added to contact objects for server-maintained data.

As for the security issues, the challenge Duet faces with authentication is that authentication needs to be separated from the authentication within the system. For authentication within the system, Duet reuses the authentication of the local user in the Microsoft Windows environment. This is generally implemented using Windows NT LAN (Local Area Network) Manager or Microsoft Active Directory, which most users are familiar with. Within Duet, SAP security experts have developed a module that is able to take the user token from the Windows environment and map it to the proper SAP user. In doing so, Duet is able to issue a single sign-on ticket enabling the client to communicate in a with the web services on the SAP side in a secure manner.

Once authentication is secured, standard SAP guidelines and principles take effect and the access is granted based on authorization profiles associated with the user in the underlying SAP system. For example, each profile is associated with a only a few of the cost centers that exist in the underlying system. A user can have access only to his or her own personal information based on service scenarios, while a manager is granted access only to his or her organizational unit within the entire system, and so on.

The Recent Duet Uptake

In any case, Duet's highly involved collaborative architecture that has shown the major "pains and gains" of SOA. (For more information, see SOA from a Management Perspective ). And it has resulted in a commercial product that is unequivocally priced (approximately, $125 [USD] per user, though this price does not include Microsoft Office and SAP licenses, but only for Duet functionality), that is sold and supported under no uncertain terms. With the most recent Duet 1.5 release, some drawbacks of Duet 1.0 have also been addressed, such as the number of supported languages, which has been extended to 16: Simplified Chinese, Czech, Danish, Dutch, Finnish, Italian, Korean, Polish, Russian, Swedish, Hungarian, Norwegian, and Traditional Chinese. These are in addition to English, German, French, Japanese, Spanish, and Portuguese in Duet 1.0. A few more scenarios were added too (e.g., recruitment management, travel management, purchasing management, workflow approvals and reports and analytics), some of which run within a Excel UI screen too (as opposed to only within Outlook in the Duet 1.0 scenarios). One should imagine the inclusion of data from other back-end systems beside those of SAP, down the track.

In fact, the success of over 400,000 sold Duet licenses within 18 months has "shocked and awed" many competitors. The responses were numerous, as competitors began to trot out their own, comparable products. IBM cited its Project Harmony that features the integration of Lotus Notes and IBM Workplace (formerly Lotus Workplace) to SAP (and to many more SAP product releases than Duet), Google touted its no-brainer on-demand Google Enterprise applications, many other vendors said that they also have the Office-based (or Office-like) interface. Others flouted their Asynchronous JavaScript and XML (AJAX) programming. Adobe/Macromedia Flex or simply an Internet browser also flagged their products with their familiar and intuitive interfaces (ironically, MSN Hotmail was one of the best deployments of AJAX).

In a particularly peculiar position was Microsoft, which certainly could not complain about royalties from 400,000 deployments (or at least acknowledgements) of Office, Exchange or Windows Server. However, the Microsoft Dynamics business applications group and the accompanying partner ecosystem probably didn't share the same enthusiasm, by any respect. To appease these constituencies, Microsoft released Microsoft Dynamics Snap applications n mid-2006. Microsoft Dynamics Snap, which, beside UI familiarity and simplicity for users, also provided in-context business data lookup in Microsoft Office programs. At the time, Microsoft pointed out that Dynamics Snap was a "shared source" initiative, because the vendor wanted to encourage its partners to build and customize these solutions for their customers, either for specific roles and verticals or to contribute in helping Microsoft build more solutions that enhance productivity and empower information workers. Microsoft emphasized its approach of doing this in a community environment, by distributing the Snap programs under a shared source license to enable people from other companies to modify and extend the programs at no charge. Since then, there have been reported over 18,000 downloads of Snap along with nearly 1,500 individual developers and companies that have joined the Dynamics shared source community. Although this continues to be a great way for Microsoft to understand the dynamics of a Web 2.0-style community (social networks) environment as it applies to business management software, there has been confusion about licensing to customers and what other products customer need to make use of the MS Dynamics Snap.

Even the developers from SAP Labs often express their love for the idea of mash-ups, which, according to Webopedia, is a term derived from the hip-hop music practice of mixing songs together. Mash-ups refer to a new breed of Web-based applications created (unfortunately) by hackers and programmers (typically on a volunteer basis) to mix at least two different services from disparate, and even competing, Web sites. A mash-up, for example, could overlay traffic data from one source on the Internet over maps from Yahoo, Microsoft, Google, or any content provider. Creating a mash-up from multiple sources into one dynamic entity is considered by many to represent the promise of the Web service standard and of on-demand computing (see SaaS-ing the Manufacturing Opportunity ). However, this business model has yet to create viable intellectual property and revenue streams for participants (given the dynamic nature of new product releases and versions), and especially in terms of a structured support and maintenance, which seems to be well spelled out in case of Duet.

Microsoft—Making the Point of Sharing

However, hardly anyone's heart should be crying for Microsoft. As the old adage says, "still water runs deep" , and Microsoft has at least used the Duet and Snap experience to bide time to come up with an even more encompassing solution. Before that, the giant had to conduct some serious soul-searching, such as whether to conclude "Project Green", which sought synergy across its ERP product lines.. Considering this hindsight, it is no longer that important to know whether Microsoft merely toyed with the product convergence idea or if it was the wishful thinking of the news-hungry press and eager analysts (some of which are now gloating about the idea's abandonment). Most likely, the temptation was there (who, after all, wouldn't be tempted to deal with only one product line, as opposed to four?), but a deeper analysis of acquired products has likely caused Microsoft to conclude that each product line has some distinctive technical and functional aspects. This, in conjunction with the partner ecosystem, would make doing anything injudiciously and precipitously (such as imposing unfamiliar tools and technologies) result in the alienation of the existing customers and partners.

But, Microsoft certainly did not panic, and has meanwhile rather spent time on figuring out how it can parlay its desktop supremacy (with an estimated 400 million Office users worldwide) into attracting enterprise applications users, and possibly changing some enterprise applications paradigms. Microsoft operating systems and desktop products have traditionally defined the user experience for most types of applications (with some challenges coming from the simplicity and intuitiveness of Web browser and portals). But, from the vendor's perspective, there is much more to Office integration than the several simple scenarios enabled by Duet and Snap. As Office evolves into a system that supports deeper and contextual business intelligence (BI), workflow, search, document management, and enhanced collaboration through products like Microsoft SharePoint, Microsoft has come up with a composite architecture that quite exceeds the one of Duet. It builds on the long-espoused idea of providing users with more integrated and contextual working environment (see What Do Users Want and Need? ). Perhaps the best example is the successful Microsoft Dynamics CRM 4.0 product that features native Outlook UI and its accompanying, instantly familiar experience. Indeed, anyone who wants to see what comprehensive integration between a business management application and Office looks like, should check out the user experience of Microsoft Dynamics CRM, where the entire application "lives inside" of Microsoft Outlook. For more information, see War Looms in the On-demand CRM Market (and Beyond)—But Will You Profit from It?.

This would be the best embodiment of Microsoft's vision of connecting people across a company with the business processes and information they need to be successful within the context of the productivity tools they use every day. The idea is now is to determine how to extend similar capabilities and the same (or at least a similar) "look-and-feel" across all the ERP product lines. There is at least some virtual convergence of diverse product lines (if not necessarily the convergence at the server side). To that end, Microsoft touts "simplification" and "minimalism" as the guiding principles of evolving its applications and making them modern, in terms of user experience, runtime infrastructure, and design time tools. On the user experience side, the vendor has tailored the user experience to roles (thereby trying to reduce the user experience footprint per-role, as will be described later on). On the runtime infrastructure side, it has added several Microsoft technologies, ranging from reporting via analysis to portal capabilities. By doing so, the Microsoft Dynamics team has been able to get rid of a bunch of arcane code in its existing runtime environments that had duplicative middleware, since all Dynamics ERP products' portal presentation layers are now native in SharePoint, with reporting being in native Microsoft SQL Server Reporting Services (SSRS). The idea behind this was not just a simple case of substitution, but actually a reduction in code or abstractions that Microsoft had to maintain, and also the democratization of access to the data and business logic.

When it comes to design time, Microsoft Dynamics developers have been religious about keeping the development metadata driven. This was to mitigate the traditional difficulties within competitive development environments when it comes to enabling the extensibility of their products (e.g., adding entities, adding a couple of fields, relating these relationships, adding some form, writing some logic, exposing the underlying business logic as a Web service, creating a Really Simple Syndication [RSS] feed out of it, etc). Conversely, Microsoft touts its metadata driven modeling tools as a key to how to achieve and maintain simplicity (which is the key driver for the partners' productivity too) for the most complex of customization tasks, while still adding new runtime capability like workflows, process, role-tailored user experience, etc.

Such new easily deployed and reasonably priced packages are aimed at helping customers improve the situation they face today. On average 85 percent of employees do not have direct access to critical information, such as data on customers, costs, orders, and schedules, contained in their ERP application. Microsoft argues that many users want to work exclusively in one Office environment or the other, rather than in pesky proprietary ERP screens. To that end, in March 2007, during the Microsoft Convergence 2007 user conference, Microsoft announced the upcoming availability of a new offering that should help customers further extend the power, insights, and process control of their Microsoft Dynamics ERP applications to most of their employees via familiar business productivity tools in the Microsoft Office system. The new Office-based client is intended to make the ERP capabilities available to a vast majority of employees, in comparison to customarily only extending this to those employees who have purchased ERP seats.

This new package, was somewhat awkwardly named (compared to Duet) as Microsoft Dynamics Client for Microsoft Office and SharePoint Server (MOSS), and contains a collection of up to 12 self-service applications that are built into the Microsoft Office release and SharePoint products and technologies. It also has a license for the recently released Office SharePoint Server 2007. These applications, such as Time and Attendance for Microsoft Dynamics GP, Project Time and Expense for Microsoft Dynamics SL, Microsoft Dynamics Snap Business Data Lookup for Microsoft Dynamics AX, and FRx WebPort and DrillDown Viewer, are expected to simplify access to business information and help connect employees more closely with their company's business processes. Also included in this new offering are licensing rights for customers or industry partners to build their own Office Business Applications (OBA), a new category of programs where Microsoft Office becomes the front-end for accessing the back-end ERP functionality of Microsoft Dynamics. For more information, see Microsoft's Underlying Platform Parts for Enterprise Applications: Somewhat Explained.

This new package has been priced to facilitate companywide deployment, as the price for Microsoft Dynamics Client for Microsoft Office and Windows SharePoint Services is $195 (USD) per user and Microsoft Dynamics Client for Microsoft Office and SharePoint Server is $395 (USD) per user. Microsoft Dynamics Client for Microsoft Office is available to Microsoft Dynamics Business Ready Licensing Advanced Management customers for Microsoft Dynamics GP 10.0, Microsoft Dynamics AX 2009, Microsoft Dynamics NAV 2009 and Microsoft Dynamics SL 7.

SharePoint Does It?

Over the last few years, Microsoft Office has evolved from a suite of standalone personal productivity tools into a more tightly integrated set of programs, servers, and services. These new offerings contribute toward Microsoft's above-espoused OBA strategy, in which Microsoft Office becomes the front-end for a business process system and delivers data and process information in a format that is familiar to regular people. Although the best value proposition might come from using all of the components together, Microsoft's new business productivity infrastructure is certainly getting a great deal of attention in the corporate market—in fact, far more than that generated by the long-awaited Windows Vista. On the client side, familiar Microsoft Office applications, such as Word, Outlook, and Excel, have been updated with a new look-and-feel with the aim of unlocking more of the value contained within these desktop productivity tools. Early indicators based on users' feedback suggest that Microsoft's UI designers may have finally gotten these tools right with the nifty features like Banners (that obviate drop-down menus), contextual Action Panes and Action Tabs, FastTabs (for much easier traversing and navigating the system), Fact Boxes (with contextual key performance indicators [KPIs]), Quick Path (to enable commonly used processes), etc.

On the server side, Windows SharePoint Services version 3.0 technology upgraded the basic file-sharing capabilities of Windows Server 2003 to provide a platform for team and workgroup collaboration at small businesses and workgroups within larger businesses, including its recent capability to handle wikis and blogs and improved document versioning. With earlier versions, SharePoint client portals were like a central store, an extension to Office, merely reducing the need for sending information back and forth via e-mail multiple times and helping with version control. Moreover, this technology also provides the foundation services for Microsoft Office SharePoint Server 2007, the enterprise edition of Microsoft's corporate portal offering and the framework for its BI, business forms, enterprise content management (ECM), and enterprise search (within the corporate network) initiatives. Last fall Microsoft dropped the word "portal" from the Office SharePoint Server as it extended its collaboration and intranet capabilities beyond portal, document management, and enterprise search to include BI and business process management (BPM). SharePoint enables work groups to set up a protected repository of these shared resources with improved manageability and security. It also provides the ability to re-use spreadsheet models by using a scalable server-based calculation service and interactive Web-based user interface.

Time will only tell whether SharePoint is that future "killer application set" that will "nail it" for Microsoft, and nicely tie up the applications with infrastructure. The UI familiarity role is being used by Microsoft in the SharePoint Server, and the vendor also talks of using SharePoint to develop composite applications, where the portal will enable users to draw data from a variety of different applications, such as word processing, spreadsheets, and applications software. Taken as a sum of all the parts, SharePoint adds up to quite a competitive and compelling information worker technology stack, despite the fact that most of its individual parts are hardly outstanding or revolutionary. However, not only has it been used as a "good enough, poor man's groupware solution" (even at some renowned Java shops), but also the opportunities for third-party developers and independent software vendors (ISVs) are such that we may well see many astonishing offerings coming to market over the coming months. For instance, Microsoft Dynamics Client for Microsoft Office also provides Microsoft partners with a powerful set of tools to offer innovation for customers. The business productivity capabilities of Microsoft Office SharePoint Server 2007, combined with access rights to the ERP functionality of Microsoft Dynamics applications, promote partner development of their own OBA's to meet industry- or customer-specific needs. Given SAP Enterprise Portal or Oracle Portal's containment to mainly these vendors' install bases, and given IBM WebSphere Portal's price and complexity, one could definitely realize how, by leveraging SharePoint, Microsoft Dynamics Client for Office and partners' OBA's can go well beyond Duet's capabilities.

Even some Microsoft Dynamics' competitors like Epicor Software have nonetheless harnessed Microsoft's technologies for enhanced connectivity, collaboration, and productivity in and around its ERP systems. To that end, Epicor Portal is a SharePoint-based platform for building informational Web parts and sharing them inside and outside the organization in a personalized, secured portal environment (see Portal Strategy: One Vendor's Story and What It Means to You). Further, Epicor Information Worker is a new desktop productivity solution that will deliver Epicor's ERP applications on the 2007 Microsoft Office system, providing information workers improved access to business data. As to produce many more like examples, it will likely take Microsoft some time to penetrate this market and to overcome the lingering market perception that SharePoint is mainly suitable for low-end, departmental document sharing.

Role-based User Experience

In any case, to mitigate the estimates that as much as 85 percent of the employees in organizations that have deployed an ERP system are not licensed to use the data and information managed by these systems (AMR Research), Microsoft Dynamics is by unlocking data and information for everyone in an organization and helping people realize greater productivity by allowing employees easier access, by making it part of their "daily grind" jobs. Moreover, Microsoft has been quite keen on building more intimate and real-world connections between people and processes. Namely, the giant is strongly convinced that the entire discussion for the market segment is shifting away from "the cold, abstract world of pure business process automation to the human world of real people with real jobs who are trying to use computers and software to get their work done". In other (possibly blunt) words, for the last few decades, ERP vendors have largely ignored users' needs as people. And, most have paid the price in terms of their popularity, because many users simply do not particularly like their ERP software. In fact, many hate it, because the screens are complex, customization is costly, and the artificial "processes" within the software packages have little to do with the work that people actually do in their companies. Given this, Microsoft seems content with the fact that conversation about its market is shifting to the human factors of usability, desirability, accessibility, employee productivity, and personal confidence—because solving these types of problems is in its DNA. In other words, the fervent Microsoft Dynamics' hope is that the market is breaking in its direction and that Microsoft, with its latest endeavor is quick in pursuit.

Thus, another offering that should help people connect to their critical processes is RoleTailored Design, a new user-experience design approach that builds on the next-generation look-and-feel of Windows Vista and the 2007 Microsoft Office system. This new approach to the user experience aims at making business application navigation, collaboration, and insight an integrated and easy part of the software, thereby helping to increase the relevance of business applications for all employees in a company

The RoleTailored design approach involved in-depth research from the Microsoft Dynamics Research Team and its Global User Experience Group (with teams in the US and Denmark). The RoleTailored method is intended to cover the entire Microsoft Dynamics line, and to ensure the applications are tailored to the user-specific and company needs. The research team conducted hundreds of site visits and thousands of interviews and observations at a number of company locations. The team further leveraged lab studies, cognitive walk-throughs, and participatory design and experiential learning seminars at its North American and EMEA (Europe, Middle East, and Africa) Convergence Conferences to develop this product. A summary of Microsoft's process is available through its fact sheet.

Some Illustration, Please?

To satisfy the "show me", inquisitive, or doubtful minds, at Convergence, we witnessed the RoleTailored design process for the role of a sales and marketing executive within the Microsoft Dynamics AX product, whose tasks might include creating marketing plans, overseeing budgets and expenses, analyzing trends and product pricing, and interacting with vendors regarding contracts and services.

The user is first asked to take a look at the "Business Overview" section of the UI screen. The functionality in this area is designed to allow the user to compare amounts or record counts for a selected period of time (such as current month versus last month, or current week versus last week). Details are available by clicking on the value in the "current" or "previous" period columns, or by drilling down from the measure to an inquiry or list that will display the detailed records that make up the record count or total. The user is presented with a list of potential measures which will be available to add to the page, as he or she desires. Thus, the user is kindly asked to indicate (by marking a line through) which, if any, of the measure would not be of benefit to the role of sales and marketing executive (S&ME). The offered metrics are sales; average sales margin; average days to close; average service margin opportunity; Win Rate; Leads; Opportunities; Service Orders; Average Days To Close; Payables Lead Time; Product Returns; Opportunities Closed; Expenses ; New Customers; Receivables; Purchase Orders, etc. The user is also asked to list any other measures that the user would want or expect to be available for the role as S&ME.

Then, the UI area below the Business Overview labeled "My Links" reflects links to Dynamics AX forms or lists, making it easy to navigate to the tasks S&ME uses most frequently. The user is then asked to cross off any links that would not likely be required within the Role Center. The offered choice of hyperlinks are Customers; Sales Forecast; Vendors; Active Campaigns; Purchase Orders; Active Opportunities; Active Leads; Competitors; and On-Hand Item Stock Inquiry. Further, in addition or in place of the links defined in the sample, the user is asked to list any other areas that a S&ME would want quick access too. Afterwards, on the right side of the role UI is the "Key performance indicator (KPI) List" area, and the functionality in this section allows users to compare amounts or record actual values against goals and discern trends. Again, the user is offered a list of potential KPIs, which will be available to add to the page as required. The user is asked to indicate (by marking a line through) which, if any, of the measure would not be of benefit to the role of Sales and Marketing Executive. The offered KPIs are Active Leads; Opportunities Closed; Expenses; Average Sales per Campaign; New Customers; Average Sales Margin; Average Service Margin; Average Days to Close Opportunity; New Leads; Service Orders; Payables; Returns; Receivables; Win Rate; Active Opportunities; Average Days to Close Lead; Purchase Orders; etc. Like with the other areas, the user is again asked to list any other indicators that he of she would want or expect to be available for the role of S&M

SOURCE:
http://www.technologyevaluation.com/research/articles/application-giants-in-duel-and-duet-for-users-hearts-minds-and-wallets-19446/

Integrating Customer Relationship Management and Service Resolution Management

2010-08-01T21:23:00.000-07:00

Integrating Customer Relationship Management and Service Resolution Management

A customer relationship management (CRM) system that accommodates complex customer-facing processes requires four key factors to give the system a competitive advantage.

The first key factor lies in the application's ability to develop a complete customer profile that supports multiple business units and products. Service organizations need a wide range of customer data, including demographics, financial status, and current and anticipated lifestyle changes (for example, college-age children, retirement concerns, newborn kids, house or condo purchase, changing insurance requirements, etc). To gain a true understanding of customers' needs and wants, any interaction with them must be captured and analyzed.

For example, when a customer with a savings account inquires about a home loan, a full-service financial services company would want the customer-facing employee, whether in the branch or contact center (if not even an intelligent online software agent), to recognize that here lies an opportunity to cross-sell a home insurance policy to the client as well.

Having a complete customer profile enables users to quickly identify key attributes about a customer, such as whether the customer has multiple accounts with the bank, and therefore is a customer the bank would not want to lose. Naturally, customers are highly sensitive to how they are treated; they notice such things as whether their service institutions answer the phone quickly and recognize the customer when he or she calls, or whether the establishments answer questions astutely or resolve issues promptly. Also of importance is whether the institution provides rapid turnaround for specific offerings, such as new account origination, new loan origination, refinancing a home, and so on.

Most customer-serving institutions need software solutions that can deliver services that are personalized to the customer's needs. Take, for example, an insurance company that has many distinct lines of insurance products but no common customer database, leading to the disastrous result of several agents calling on the same accounts. Such disorganization is not only costly and inefficient, but it also creates a great deal of customer dissatisfaction, annoyance, and ultimately, defection. By implementing a unified solution to market more than one product to the right customers, the service company should be able to improve revenues while driving down the costs—and retaining customers.

The second key factor is that the CRM application should provide companies with the ability to customize their solution to address their unique business needs and evolving external requirements. In a dynamic business environment, the service enterprise must be able to sense and react, almost instantly, to changing market conditions. These conditions vary depending on whether they are caused by shifts in market structure, new competitive threats, micro- or macro-economic changes, or other factors. A company must also adapt to its users' needs, since not all users are alike; an adaptable system should provide a personalized interface for the user, based on his or her specific information needs. Ideally, the system should also be able to dynamically modify its behavior, depending on what the user is doing.

Financial industry enterprises—especially those competing with larger organizations—claim that they win and keep customers because they leverage their in-depth knowledge about the client to offer more personalized service. These clients do not want a cut-and-dried solution that looks and acts like the same CRM system that their next-door competitor uses. Rather, they want a flexible solution that they can tailor to their products, services, and business operations.

The third essential factor of a CRM system that accommodates customer-facing processes is that it should offer organizations the ability to adapt to customer and market changes, since most traditional enterprise CRM offerings require users to write lots of expensive, time-consuming custom code as part of their deployment. This often creates many problems, starting with most customers finding that by the time they have completed the development cycle and are ready to roll out the software, something in their business has yet again changed (such as a new, fierce competitor has entered the market; new legislation has been passed; the company is involved in a merger; management has decided to add or drop a new product line, etc.). Thus, these firms may find themselves stuck using their old model and needing to go through another long, expensive software development cycle to add the changes they need. On the other hand, customized environments can be very difficult to upgrade when the vendor comes out with a new release of its software.

The fourth factor is the CRM application's ability to integrate, in near real time, with other complex systems, and its adaptability to users' existing infrastructure. It is not at all uncommon to find dozens of systems in the service firm's back offices, all of which have data that needs to be integrated with the new CRM system. Some of these systems can even go back a decade or more. Many of these systems, although ancient in the IT timescale, still deliver mission-critical services reliably and effectively, day in and day out. Thus, a modern CRM solution must easily and seamlessly share data bi-directionally with these systems, using open industry standards.

As the first factor indicates, an adaptive service enterprise must be sensitive to ever changing customer requirements, and must foster an optimal customer experience by creating and delivering incremental services that customers want and are willing to pay for. This requires an IT infrastructure capable of seamlessly tracking and managing interactions across all customer touch points, such as the retail store, the Internet, e-mail, fax, the call center, etc.

Though CRM mega-vendors often want users to rip and replace their entire IT infrastructure with the mega-vendor's software stack, many clients view their legacy systems as mission-critical, and might prefer a CRM solution that will protect their investment by plugging into their existing infrastructure.

To be sure, services institutions live and die by the services and products they provide to fickle and demanding customers, and they need to be able to change direction quickly in order to meet competitive challenges or to take advantage of emerging opportunities. Only by deploying astute CRM technology will they be able to capture customer and market data, sense and understand how their customer segments want to be served, and be able to analyze and respond to changes in customer needs and wants.

Because CRM processes touch so many parts of a business, they can have a major impact on both cost and revenue. The improvement of sales and marketing processes can bring in new revenue, while call center productivity can drive down the costs of servicing customers, as well as present up-sell and cross-sell opportunities (and maintain customer satisfaction).

The business case for call center applications is becoming increasingly obvious, especially given the recently established National Do Not Call Registry in the US. The revenue driver will thus become inbound customer calls rather than companies trying to generate leads via outbound telemarketing efforts, which have too often proved to be annoying to customers, and ultimately counterproductive.

Contact and Call Centers Close the CRM Loop

Virtually all firms, therefore, have a strong need to share customer data across multiple business units, which can then enable them to deliver a wide variety of services to customers and enhance their ability to cross-sell or up-sell. Another driver is the need to enforce consistency across the enterprise. When a customer is talking with a bank, for example, the customer expects similar, consistent treatment, regardless of who he or she is interacting with (i.e., a call center person on the phone, via a Web chat, or face to face with a teller ), and regardless whether it is about a service complaint or a mere inquiry. The combination of customer information, dynamic scripting, and built-in process management must help to ensure this consistent customer treatment.

The contact or call center is constantly changing, and businesses need ever more powerful and flexible CRM tools that continually provide greater productivity, decreased costs, and enhanced service. Also, as many research and surveys report, companies have traditionally focused too heavily on technology in their contact centers, and have not paid enough attention to key customer service processes and performance measurement changes.

Service companies have been realizing more and more lately that there is a need to properly evaluate their customer-facing processes and to provide call center representatives with supporting technologies that allow them to execute processes that improve operational effectiveness. Only in this way can these companies increase customer satisfaction and generate new business opportunities. The integrated CRM and call center solutions have reportedly helped some service companies realize a remarkable return on investment (ROI), including a 45 percent increase in case volume (without increasing staff), a 35 percent decrease in time to resolve cases, and a 40 percent decrease in backlogged cases—all ultimately resulting in an 18 percent increase in overall customer satisfaction.

However, for various reasons, but especially because of the challenge of human resources, most call centers have yet to achieve this goal in earnest, and universally. This is because contact center agents' working conditions have traditionally been a far cry from ideal, as these employees typically need to “do more with less.” As the job requirements for agents increase, the challenge in meeting their performance goals also increases. To achieve these performance goals, call centers are increasingly harnessing technologies that have to track customer workflow, thereby providing more consistent and accurate answers to customer inquiries, seamlessly across all the channels.

Almost anyone reading this article has experienced frustration when an automated voice response system to which he or she has just dictated a lengthy account number (and plethora of other sensitive information) fails to transfer that information directly to the agent, who finally picks up the phone and asks the customer to repeat the information once again. This is not to mention the case of when a customer is (at long last) transferred to a specialist who, of course, wants to know the account number "before we get started." Also common is the case of the customer asking an agent to confirm if the information he or she has just read on the web site is correct, only to hear “Sorry, that's not right,” or worse yet, “Hmm … I am not sure. Sorry.” The chances of the agent solving the problem on the spot, and perhaps even upgrading the customer to a product or service that meets his or her needs, are then indeed slim.

Traditionally, agent turnover rates at call centers are fairly high, due in part to having to listen to customers' (justifiable or not) rants, complaints, and displeasure. As a result, call centers are constantly bringing new agents on board who need training before they are able to serve clients satisfactorily, creating a vicious circle of frustrated customers and frustrated agents. The pressures of dealing with furious customers, the need to do more with less, and dealing with rigid systems that are not even scalable or accurate, make the call center agent's life difficult. All these elements also impact the agent's ability to deliver on the call center's desired performance goals.

Implementing appropriate knowledge-based and intelligent search–backed solutions should enable the staff to share information more interactively. Such solutions can also allow staff to rank problem resolutions so that agents share not only knowledge, but experience too. The application should do this by itself, leaving agents the ability to effortlessly help one another and maintain a relevant, highly fluid body of information. When the root causes of problems change daily (for example, if a particular service application is down versus an entire server being down), an agent can see that several other agents have used one solution within the last hour that was the correct solution, which should increase the chances that it is the right answer for their customer call too

SOURCE:
http://www.technologyevaluation.com/research/articles/integrating-customer-relationship-management-and-service-resolution-management-19184/

Business Intelligence Status Report

2010-08-01T21:22:00.000-07:00

Featured Author - Olin Thompson & P.J. Jakovljevic

History and Current Status

Economic and regulatory pressures have made a broad set of technologies called business intelligence (BI), more important than ever for all enterprise application users. Users rarely feel satisfied with the amount of information they can extract, if they can extract any at all, from their enterprise applications. Enterprise resource planning (ERP) and BI (sometimes called analytics, which is specialized analytical software) are inseparable concepts, but they have taken different trajectories and evolved differently.

ERP systems have positively transformed many enterprises' business processes, yet many users feel oversold because ERP appears to inhibit access and lock up vital information. I In most traditional ERP systems operational activities are grouped together to form artificially created processes, which bear little resemblance to the actual business activities. For example, the focus of ERP has often been to get the correct figures into the general ledger (GL) and create a transactional glut (for more information on the genesis of enterprise applications, see Enterprise Applications—The Genesis and Future, Revisited.).

Conversely, BI, which has for few decades been called executive information systems (EIS), offers a new breed of similar, but more insightful and functional tools to help enterprises operate more efficiently and profitably. Many manufacturing and distribution enterprises of all sizes are amenable to leveraging software that would not only sense the daily pulse of the operations, but would also spot incongruities, analyze the performances of multiple areas, and initiate corrective adjustments. BI tools promise to help "rank and file" employees harness data too complicated for manual manipulation. For instance, few departments are as hard pressed for new tools as purchasing and sourcing, where rapid increases in materials costs, greater deviations in lead times, and supplier base growth and instability require ever increasing buyer dexterity. BI can provide this dexterity.

This is Part One of a seven-part note.

Part Two will detail contemporary BI tools.

Part Three will look at what is available.

Part Four will describe the BI/CPM market landscape.

Part Five will discuss Geac and Point Solution vendors.

Part Six will compare direct access to a data warehouse for the mid-market.

Part Seven will make recommendations.

The Transactional World

Enterprise software systems are designed as transaction processing tools and, nowadays the main job is to optimize an informed decision-making process for users at all levels of the organizational hierarchy. Recent trends seem indicate that access to key operational data is no longer under the purview of executives alone. Many manufacturing executives today are allowing (if not pushing and encouraging) access to operational performance data to the shop floor and in distribution centers to enable better and more timely decision-making by operators.

Most operational data in ERP systems—and in its younger siblings like supply chain management (SCM) or customer relationship management (CRM) is stored in what is referred to as an online transaction processing (OLTP) system, which is a type of computer processing where the computer responds immediately to user requests. Each request is considered to be a transaction, which is a computerized record of a discrete event, such as the receipt of inventory or a customer order. In other words, a transaction requires a set of two or more database updates that must be completed in an all-or-nothing fashion. The opposite of transaction processing is batch processing, in which a batch of requests is stored and then executed all at one time. In other words, transaction processing requires interaction with a user, whereas batch processing can take place without a user being present. Still, both approaches result with an immense number of records in the database.

To further refresh our memory, a database is a collection of structured data that is application-independent. This data processing file-management approach was designed to establish the independence of computer programs from data files, whereby redundancy is minimized, and data elements can be added to, changed, or deleted from the file structure without changing existing application programs.

Relational database are most commonly used in enterprise applications nowadays. A relational database is a software program that allows users to obtain information drawn from two or more databases that are made up of arrays of two-dimensional data (tables). Contrary to this, a hierarchical database is a method of constructing a database that requires that related record types be linked in tree-like structures. In this instance, no child record can have more than one physical parent record.

Relational databases are more powerful than the others because they require few assumptions about how data is related or how it will be extracted from the database. As a result, the same database can be viewed in many different ways. Another important feature is that a single database can be spread across several tables, which differs from, for example,, flat-file databases, where each database is self-contained in a single table. Accordingly, relational databases are prevalently deployed within enterprise applications.

Bundled with this are database management systems (DBMS) that access data stored in a database and present multiple data views to end users and application programmers. They are a collection of software programs designed for organizing data and providing the mechanism for storing; maintaining or modifying; and retrieving or extracting data on the database. A DBMS separates data from the application programs and people who use the data, and permits many different views of the data.

From a technical standpoint, DBMSs can differ widely, since terms such as relational, network, flat, and hierarchical all refer to the way a DBMS organizes information internally, which can affect how quickly and flexibly users can extract information. For example, a relational database management system (RDBMS) is a type of DBMS that stores data in the form of related tables, whose architecture is based on a formal method of constructing a database in rows and columns using rules that have formal mathematical proofs. In these systems, which originated in the work of EF Codd, relationships between files are created by comparing data, such as account numbers and names. In addition, an RDBMS has the flexibility to take any two or more files and generate a new file from the records that meet the matching criteria.

Requests for information from a database are made in the form of a query, which is a stylized question. For example, one query would request all records in which the "NAME" field is "JONES" and the "AGE" field is "greater than 32". The set of rules for constructing queries is known as a query language, and different DBMS's support different query languages, although there is a semi-standardized query language called structured query language or SQL (). SQL is a is a relational model database standardized query language for requesting information from a database.

Such language has an English vocabulary, is nonprocedural, and provides the ability to define tables, screen layouts, and indices, which, in database design, is a list of keys or keywords, each of which identifies a unique record. Indices make it faster to find specific records and to sort records by the index field, which is the field used to identify each record. Historically, SQL has been the favorite query language for DBMS's running on minicomputers and mainframes.

Increasingly, however, SQL is being supported by personal computer-based (PC) database systems because it supports distributed databases (databases that are spread out over several computer systems), which enables several users on a local-area network (LAN) to access the same database simultaneously. Such sophisticated languages for managing database systems are called fourth-generation languages (4GL), which are programming languages that are closer to human languages than typical high-level procedural programming languages like COBOL or C++.

The information from a database can be presented in a variety of formats, since most DBMS's include a report writer program that enables users to output data in the form of a report, while some DBMS's also include a graphics component that enables users to output information in the form of graphs and charts. However, these report writing programs have not typically been user-friendly nor efficient enough for regular enterprise software users to leverage en mass. Further, for most enterprise software systems, reporting has been a secondary objective and not usually a driving force when the system was originally designed. Instead, these systems were specifically designed for high levels of transaction volume with many concurrent users.

If the database is relational, it has probably been "normalized" (the process of organizing data in accordance with the rules of a relational database). Although less likely, if the database is non-relational, then even worse, custom programs have to be written to store and retrieve data from the database (which is often accomplished with the COBOL programming language).

Whether relational or non-relational, the very design that makes an OLTP system efficient for transaction processing makes it inefficient for end user queries. In the 1980s, many business users referred to their mainframes as "the black hole", because all the information went into it, but none ever came back out. Namely, all requests for reports had to be programmed by the IT staff, whereas only "pre-canned" reports could be generated on a scheduled basis, and ad-hoc real-time querying was virtually impossible. While the client/server-based ERP systems of the 1990s have been somewhat more report-friendly, it has still been a far cry from a desired usability by regular, non-technical, end users for, things such as operational reporting, interactive analysis, etc.

Enter Data Warehousing and Analytics

To resolve these issues, the notion of data warehousing was created, which is a collection of data designed to support management decision-making, whereby data warehouses (DW) contain a wide variety of data that present a coherent picture of business conditions at a single point in time. The theory was to create a database infrastructure that was always on-line, contained all the information from the OLTP systems, including historical data, but structured in such a way that it was fast and efficient for querying.

Generally speaking, a schema is the structure of a database system, described in a formal language (although the term is also often used to refer to a graphical depiction of the database structure) and supported by the DBMS. In a relational database, the schema, for example, defines the tables, the fields in each table, and the relationships between fields and tables. Schemas are generally stored in a data dictionary, which is a file in a DBMS that defines the basic organization of a database. It contains a list of all files in the database, the number of records in each file, and the names and types of each field. Data dictionaries do not contain any actual data from the database, only bookkeeping information for managing it. Without a data dictionary, however, a DBMS cannot access data from the database. On the other hand, most DBMS's keep the data dictionary hidden from users to prevent them from accidentally destroying its contents, since the data dictionary affects all data items throughout an organization, and explains the things like where the data comes from, how it has come into being, how it operates, where it resides, who uses it, and so on.

The most common of these schemas (logical and physical database designs) that is leveraged by data warehousing is known as the star schema, which consists of facts (actual business facts) and dimensions (ways of looking at the facts). One simple way to look at a star schema is that it is designed such that the maximum amount of information can be derived from the fewest number of table reads. Another way to reduce the amount of data being read is to pre-define aggregations (summaries of detail data, such as monthly total sales) within the star, since most queries ask questions like "how many widgets were sold last month?"

A DW would thus be a special database or repository of data that has been specially prepared to support decision-making applications for query and analysis, as opposed to a database for processing transactions (for more information, see A Definition of Data Warehousing). Separating these two functions has improved flexibility and performance, whereby the development of a DW includes the development of systems to extract data from underlying transactional operating systems. The DW also installs a warehouse database system that provides managers flexible access to the data. The term data warehousing generally refers to the combination of many different databases across an entire enterprise. This contrasts with a data mart, which is a database, or collection of databases, designed to help managers make strategic decisions about their business. Whereas a DW combines databases across an entire enterprise, data marts are usually smaller and focus on a particular subject or department, although some data marts, called dependent data marts, can be subsets of larger DW's.

This brings us to online analytical processing (OLAP), which is a category of software tools that provides analysis of data stored in a database, and which enable users to analyze different dimensions of multidimensional data, such as time series and trend analysis views. Hence, business users can on quickly and easily identify performance trends by uaing time-phased information analysis and graphing capabilities of products that support more sophisticated data analysis and have full calculated field capabilities integrated into reports. For instance, users quickly isolate and identify products, customers, regions, or other areas that are trending significantly up or down. Some solutions will also include a fully-integrated, powerful data graphing function that enables users to create detailed data visualizations. The graphing capability should, ideally, be entirely dynamic. In other words, users should be able to rapidly click through various report parameters and see graphical representations for each combination.

OLAP is often used in data mining, which is a class of database applications that look for hidden patterns in a group of data that can be used to predict future behavior. For example. ,it can help retail companies find customers with common interests. Yet, the term is commonly misused to describe software that presents data in new ways, since true data mining software does not just change the presentation, but actually discovers previously unknown relationships among the data; this knowledge is then applied to achieving specific business goals. These tools are used to replace or enhance human intelligence by scanning through massive storehouses of data to discover meaningful new correlations, pattern, and trends by using pattern recognition technologies and statistics. Hence, it is popular in the science and mathematical fields, but also is also increasingly being used by marketers trying to glean useful consumer data from their web sites.

Going one step further, predictive analytics is data mining uses pattern recognition, statistical, and mathematical techniques on large amounts of data to support decision-making by forecasting the outcomes of different scenarios. These programs search databases using techniques such as neural networks and decision trees, look for correlations and patterns that are virtually impossible for mortal humans to detect, and present the information to help management make the right corporate decisions. SAS Institute, the largest pure-play BI vendor (and the largest privately held software company, with $1.5 billion, USD in revenues), has been the leader in this area. It has been able to learn from the past, manage the present, and predict the future, and makes that intelligence available to all constituencies within the organization. Even a relatively small ERP provider, Relevant Business System, has recently developed a BI software tool, the Business Wizard with Predictive Analytics, which can sift through large amounts of data from an ERP system and aid decision makers in choosing between difficult to compare alternatives in a near real-time mode.

The main component of OLAP is the OLAP server, which sits between a client and user interface (UI) and a DBMS. It understands how data is organized in the database and has special functions for analyzing the data. There are OLAP servers available for nearly all the major commercial database systems. In the 1990s, OLAP systems were able to perform multidimensional analysis, with pre-built calculations, typically called cubes, providing much of the available, analytic functionality.

However, these early OLAP systems tended to be pricy, while the cubes were resource-intensive, impairing system performance. Consequently, lower-end analytical tools were reasonably priced but had limited flexibility, whereas the higher-end BI products from the likes of Cognos, Business Objects, or Hyperion Solutions were both expensive and intricate. Many solutions nowadays include more reasonably priced, less resource-intensive, intuitive, point-and-click features that enable business users to dynamically analyze business information from multiple perspectives. Users are able to perform multi-dimensional analysis, "slice-and-dice" data sets, and drill-down to additional detail, all using integrated OLAP technology, whose analytical functionality should ideally be available whether users are connected to the Internet, through a mobile, or are working off-line.

Data warehousing also led to the development of the concept of metadata management, whereby metadata is data about data, such as table and column names, and data-types. Managing metadata makes it possible to understand relationships between data elements and assists in the mapping of source to target fields. Metadata describes how and when and by whom a particular set of data was collected, and how the data is formatted. This is essential for understanding information stored in DWs and has become increasingly important in building extensible markup language-based (XML)-Web applications and Web services (for more information, see Metadata Standards in the Marketplace).

Next with the advent of DW came the creation of extract/transform/load (ETL) tools, which used the metadata to get information from the source systems into the DW. Just as the name suggests, the three database functions that combine into one ETL tool to pull data out of one database and place it into another database are logically called

1. Extract—the process of reading data from a database.

2. Transform—the process of converting the extracted data from its previous form into another form that can be placed into another database. Transformation occurs by using rules or lookup tables or by combining the data with other data.

3. Load—the process of writing the data into the target database or DW.

Thus, ETL tools are logically used to migrate data from one database to another, to form data marts and DW's or to convert databases from one format or type to another. Additional tools, which also make use of SQL, were also developed to give end users direct access to the data in the DW. As time went by, these query tools became more user-friendly, and many now have a parser (a program that dissects source code so that it can be translated into object code) that can turn plain English questions into valid SQL commands.

This concludes Part One of a seven-part note.

Part Two will detail contemporary BI tools.

Part Three will look at what is available.

Part Four will describe the BI/CPM market landscape.

Part Five will discuss Geac and Point Solution vendors.

Part Six will compare direct access to a data warehouse for the mid-market.

Part Seven will make recommendations

SOURCE:
http://www.technologyevaluation.com/research/articles/business-intelligence-status-report-18024/

Comparing Business Intelligence and Data Integration Best-of-breed Vendors' Extract Transform and Load Solutions

2010-08-01T21:21:00.000-07:00

Lyndsay Wise

Introduction

To understand the relevance of extract transform and load (ETL) components and how they fit into business intelligence (BI), one should first appreciate what data integration is and the significance of having clean, accurate data that enable successful business decisions. Within the BI industry, data integration is essential. By capturing the right information, organizations are able to perform analyses, create reports, and develop strategies that help them to not only survive, but, more importantly, to thrive.

Informatica, a leading provider of enterprise data integration software, defines data integration as "the process of combining two or more data sets together for sharing and analysis, in order to support information management inside a business". In BI terms, this means that data is extracted in its original form and stored in an interim location, where it is transformed into the format that will be used in the data warehouse. The transformation process includes validating data (e.g., filling in null zip code information in the customer database) and reformatting data fields (e.g., separating Last Name and First Name fields of customer records that are merged in one database but not others). The next step is to load the data into the data warehouse. The data is then used to create queries and data analysis builds, such as on-line analytical processing (OLAP) cubes and scorecard analyses. In a sense, extracting the proper data, transforming it by cleansing and merging records, and loading it into the target database is what allows BI solutions to build analytical tools successfully. It is also the essence of ETL functionality.

Data Integration Components

In order to determine the most suitable ETL solution for them, organizations should evaluate their needs in terms of the core components of the data integration process, as listed below.

* Data Identification. What data does the organization need to extract and where does it come from? What end result, in terms of the data, does the organization want to analyze? Essentially, answering these questions means identifying the origin of the data, and what the relationship is between the different data sources.

* Data Extraction. How frequently does the organization require the data? Is it monthly, weekly, daily, or hourly? Where should data storing and transformation activities occur (i.e., on a dedicated server or in the data warehouse, etc.)? Considering these factors identifies the data frequency needs of the organization. For example, analysis of sales data may require the organization to load data monthly or quarterly, whereas some other data transfers may be performed multiple times a day. In determining the frequency of the data loading and transformation in the data warehouse or on the dedicated server, the organization should also consider the amount of data to be transferred and its effect on product performance.

* Data Standardization. What is the format of the organization's data, and is it currently compatible with the same data elements in other systems? For example, if the organization wants to analyze customer information and to merge customer buying patterns with customer service data, it must know if the customer is identified in the same way in both places (e.g., by customer identification [ID], phone number, or first and last name). This is crucial for ensuring that the correct data is merged and that the data is attached to the right customer throughout the data standardization process. Another data standardization issue the organization should deal with is identifying how it will manage data cleansing and data integrity functions within the data warehouse over time.

* Data Transformation. The organization should consider data transformation requirements and the interaction between the transformed data components. The critical questions are how will the data be reflected in the new database, and how will that data be merged on a row by row basis? Answering these questions involves identifying the business and data rules associated with the data to ensure accuracy in data loads.

* Data Loading. Where will the data be loaded? What data monitoring activities are required? Other data loading concerns are failed data transfer identification, how failed transfers are handled, and how updates occur. For example, will each load involve re-loading the whole dataset, or will updates be made using only updated fields within the data sources?

Traditional ETL

After evaluating the core components of data integration, the organization should investigate its traditional BI needs throughout the organization, and assess how they will evolve or change.

Until recently, ETL involved uploading data at regular (i.e., monthly or weekly) time intervals to drive business performance decisions and identify business opportunities. However, as BI tools become more integrated with overall business functions, including business performance management (BPM) and reporting and analysis requirements, data needs have shifted from monthly or weekly intervals to real time updates. This means that it has become more important for data transfers to accurately reflect real time business transactions, and that there has been an increase in the amount of data transfers required.

Nonetheless, real time ETL doesn't necessarily refer to automatic data transfer as operational databases are updated. In terms of BI, real time may mean different things to different organizations or even different departments within these organizations. Take, for instance, an automotive manufacturer whose traditional data warehouse solutions (OLAP cubes, etc.) involved capturing data at a given point in time. The automotive manufacturer might, for example, have wanted to track and compare monthly sales with last year's sales during the same month by region, car model, and dealer size, thus requiring the data warehouse to be updated on a monthly basis. However, as the manufacturer's business decisions evolved based on this analysis, its data needs shifted from a monthly requirement to a weekly one, and on to an ever more frequent basis, eventually creating the demand for real time data. In the case of the automotive manufacturer, real time data may be useful for identifying the movement of car parts within a warehouse relative to their storage locations and comparing this information with the demand for these parts.

Such a shift in data requirements affects both the volume of data required and when the data loading occurs. The end result is that, in order to meet the changing needs of user organizations, ETL and BI vendors have concentrated on moving towards real time ETL and shifting their data loading functionality to accommodate higher volumes of data transfer.

How Do Vendors Handle ETL?

Once an organization has evaluated its BI and data integration needs, it is ready to investigate BI vendors and the type of ETL functionality that they offer. It is important to note that though, for many vendors, ETL is only a part of their offering, this article will focus strictly on the ETL functionality those vendors provide. When evaluating potential vendors and their ETL functionality, there are two types to choose from. Vendors such as Cognos, SAS, and Information Builders provide integrated ETL functionality built in to their overall BI framework. Data integration or data quality vendors such as DataFlux, Ascential, and Trillium, on the other hand, provide best-of-breed ETL solutions. Which sort of vendor an organization will favor will depend on its data requirements.

In general, BI vendors accommodate customers by providing embedded support for slowly changing data requirements, as well as by allowing users to choose the location of data loads. This helps increase the speed of data transfers, accommodating industry demands for increased data loading in the data warehouse and for a greater number of data loads within a given time period.

Cognos 8 BI Data Manager allows users to extract, merge, transform, and load data in a single pass, as well as to use Web services to construct and schedule process builds and jobs on any server located within the network. Additionally, processes such as hierarchy and data validation definitions are automated, allowing embedded support for slowly changing dimensions and late arriving data. Data Manager enables the data integration process within a simple drag-and-drop environment.

SAS's Data Integration uses a wizard-driven user interface to provide ease of use for end users. Included in its ETL functionality is the ability for processing to occur natively on any platform and within any database. The solution has built in data load balancing to optimize resources, as well as scalable deployment to take into account growing data transfer needs. This last functionality eliminates the need to redesign processes as data requirements change. In addition, SAS's product has an imbedded design, test, and production environment, which allow users to synchronize data transfers and conduct testing.

Information Builders' DataMigrator offers essential ETL functionality, such as the ability to aggregate, join, merge, and apply selection criteria to information from any combination of data sources. DataMigrator can also transform data from raw forms into structured formats based on individual business needs and automatically generated and managed file transfer protocol (FTP) scripts. Additionally, DataMigrator allows for either bulk-loading or row-at-time data inserts, and has a change data capture capability that allows only changed records to be loaded into the required database, making it easier to achieve near real time results.

The following data integration vendors provide the same functionality as the aforementioned BI vendors, but with an increased focus on data cleansing and integrity.

DataFlux, acquired by SAS in 2000 to extend its data warehousing capabilities, provides a product called dfPowerStudio that can identify data accuracy, validity, and patterns to standardize data. Moreover, dfPowerStudio can monitor and audit data by providing alerts to identify the state of organizational data over time. Alerts are also provided to identify data quality levels and business rule violations. Additionally, dfPowerStudio analyzes and corrects data inconsistencies. It matches data by clustering data into groups, merging duplicates into the best record choice through drag-and-drop functionality. Furthermore, dfPowerStudio's user friendly interface makes data profiling and data quality management easy.

IBM WebSphere Information Integration (formerly Ascential Software) is a data integration suite that enables organizations to use a single information integration platform to access, cleanse, integrate, transform, and deliver data, as well as to immediately identify data anomalies through an embedded source and target profiling and analysis system. IBM WebSphere software maintains data through the use of a single, open repository on DB2, Oracle, or SQL server platforms; validates business requirements to identify whether they are achievable or not; and ensures disparate data sources support target requirements

Trillium, a Harte-Hanks company, also provides users with a software solution suite that allows them to implement a total data quality solution. The suite, composed of Trillium Software Discovery and Trillium Software System, enables users to identify incorrect data formats, duplicates, misspellings, and redundant and missing values, and to create and define their own business rules to automatically monitor data standards. Also, Trillium software generates entity-relationship diagrams; creates a central repository of data, metadata, statistics, rules, and documentation; and has drill down capabilities down to individual rows of data. Additionally, continuous data profiling, cleansing, and monitoring activities, plus data filter and search capabilities are provided.

Conclusion

Depending on an organization's data requirements and its data integrity standards, the organization must determine whether BI vendors can provide all the appropriate functionality or whether the company should take advantage of the added data quality functionality that is built in to data integration and data quality vendors. In this regard, organizations should realize that "bad" data occurs over time when data is entered inconsistently across disparate systems within an organization. To optimize BI solutions, data must be clean and accurate, and this process needs to be maintained over time. Data quality vendors, such as DataFlux, place priority on data cleansing by providing end user features that allow data cleansing activities and monitoring to occur on a regular basis over time. With BI vendors offering integrated suites, this is not always the case. Using these integrated BI suites may require an organization to provide in-depth data cleansing functions at the end user level before data is brought into the data warehouse. This not only wastes time in man hours, but also places the burden of maintaining data standards on end user groups, where data inconsistencies are most likely to occur due to human error. Thus, for many organizations, it is advantageous to invest more money in order to integrate the solutions of both types of vendors, utilizing the enhanced analytical tools of a BI solution and the data integrity and management capabilities provided by best-of-breed data integration vendors.

SOURCE:

http://www.technologyevaluation.com/research/articles/comparing-business-intelligence-and-data-integration-best-of-breed-vendors-extract-transform-and-load-solutions-18442/

From Local to Hosted: The Story of One Company’s Migration to On-demand ERP

2010-08-01T21:20:00.002-07:00

Wayne Thompson - April 25, 2008
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From Local to Hosted: The Story of One Company’s Migration to On-demand ERP

Welcome to TEC radio. I’m your host, Wayne Thompson

Here’s a story to get you thinking if your organization has a traditional, local, ERP [enterprise resource planning] system running the business. It tells why Asahi Kasei Spandex America, a subsidiary of Asahi Kasei Group of Japan, made the transition from a locally hosted ERP solution to a remotely hosted, on-demand ERP system.

The company was searching for a solution that offered lower cost, simplicity, and greater transparency and flexibility. They looked at Sage, Microsoft, and SAP—whose system they were actually replacing—along with NetSuite. Find out how NetSuite offered them the functionality they needed, as well as the ability to speed up their decision-making process while reducing the costs of IT personnel and infrastructure at the same time.

In this podcast, I sit down with David Stover, chief financial officer of Asahi Kasei Spandex America, about the requirements, decision-making, and implementation considerations that went into the company’s unexpected move to an on-demand ERP system.

Wayne Thompson: So, David, what solutions did you consider in your evaluation?

David Stover: We looked at the Sage solution … Microsoft had just started talking about or coming out with a small to medium business solution, and we actually again considered SAP for a little bit. NetSuite really took the lead very quickly, so much so that the others dropped out probably within the first two months, although the Sage solution did hang on. It was really NetSuite's desire to work and to understand what we were trying to drive to, their desire to make the solution for us.

WT: What do you think were some of the key determining factors in the process of going through this evaluation, and what potentially may have caused some of these vendors to drop out because they could or could not meet those factors?

DS: Since we are a manufacturing [company], we prefer to operate on a standard basis. We were looking for a solution that would have standard costing, and again, SAP, that's their bread and butter, but they also have a fairly complicated standard costing system, something that we weren't in need of. And as well as it's fully back-integrated into production. Again, we have our own type of warehouse management production system. We didn't need to create another system to do that. The SAP solution we had was an integrated system into that, and a lot of people were having to manage that integration.

One of the things that we allowed for our driving point was that our system, which we were very happy with, drove and fed any other system, fed the data. Now, NetSuite understood that from the get-go, and they devised a type of an integration process that allowed our warehouse and our production system, which we call MHCS, to feed NetSuite, as opposed to trying to dictate exactly how I want that fed. Our integration flows—the data that passed—dropped tenfold. We essentially have about 30 fields that encompass all the data we need—obviously different flows—but that's all we did; and the SAP side had many more times that number of fields required to feed the system.

WT: Were there any vertical extensions that played a factor in your decision process, or was there something that you were looking [for] that was unique to your industry in terms of functionality that you required?

DS: The larger thing for us was to be able to integrate easily with our warehouse and production system. We didn't want a system that would step on it, which was our experience before, and NetSuite essentially had a way to plug right in. They don't have a very hungry type of inventory system, so it allowed our main inventory system to feed their inventory system easily, and we didn't want two hungry inventory systems like we had currently; there was no need for it. All we wanted to feed was one monster, not two.

WT: Switching over to the implementation side: who led the implementation project, and who all was on the implementation project team?

DS: The members were myself, who led that, I had my comptroller, and at that point what we decided was to break the system really down into four parts. Essentially we had the process of sales. So I have a head of treasury, a collections credit-type individual who ran that process in conjunction with the manager of customer service. Then I have the procurement process, which I brought the accounts payable supervisor in [for] that, as well as the manager of procurement, and those two shared in that pillar. We looked at, then, the inventory pillar, which the comptroller actually ran with an inventory control specialist, a production analyst, and a consultant who actually runs the MHCS system. Then we had an IT type pillar, an integration pillar, run by my IT manager.

WT: How long did the implementation take, both calendar time as well as man-hours?

DS: Two sides to that. Just the simple NetSuite implementation, to get the system up was, I would say, around three months. It was significant man-hours. I would say probably four people dedicating at least 50 percent of their time to it, and then calling in others as well, but not to the degree. Then the integration with the current inventory system—that was a little longer process. That's why we would have gone up on January 1st—[which] was our initial plan—but the integration process took a little longer. There was myself and the comptroller [who] were the main ones doing that, as well as the consultant from MHCS system. But we also had some customer service people, so that was probably another four people for three months, probably about 40 percent of our time.

WT: How did this implementation time frame meet your expectations, from both a time perspective and a budget perspective?

DS: Essentially the NetSuite, the ERP side, was actually very pleasant. It went very quickly. I would say it matched a great deal of my expectations. The integration standpoint was a little different. I think that was probably something that could have maybe been done better. [In] NetSuite's defense, I don't think they've ever done—or they told me they've never done—anything this complex. The understanding of the different type of flows or integrations was probably the main issue here, and I believe they grasped the motivation, or the need for each type of document flow or info flow, very quickly. It just took a little refining. There were little bugs beginning with it, and unfortunately in the amount of data that we pass, a little bug becomes a major one. So I'd rank that as somewhere about around a B.

And again, it was a fairly complex thing for us. We had very similar problems with our SAP side, but we had much more dedicated resources to accomplish that.

WT: Let's dig into those integration challenges. What types of integration challenges did you see that presented the greatest problems for you, and how did you overcome them?

DS: Well, we had one main integration. We produce a carton of goods, which is our sale unit, probably upwards of a thousand a day. We must maintain all the specifications for the goods in those cartons, and also their lab tests, [and] any quality information as well. So that all resides from our various production systems and quality testing systems. All of that information must feed into the NetSuite custom database that represents our cartons. The end result is that when we get an order from customer “x,” we know customer “x” has these types of parameters he's requiring that allow us to go in and use the search engine that NetSuite designed to say these are the parameters we want, or the range of parameters we want, and go find the cartons that would fill that need.

So it's a little bit of a complication as far as making sure again that our certain parameter that's important to the customer—he needs this within this range—that this customer gets this product exactly as he wants it. And from a warehouse of thousands of cartons, to find the ones that meet that were the challenge. Now, those characteristics change over time, and they're constantly tested, so it's a dynamic process. It's not just “OK, well, the good's produced and that's it.” There may be some effect of aging. In fact, ... our product—an aged product in some respects—has some more desirable characteristics. So those are retested, and the information is put back into the system. So, you have a dynamic data record that constantly changes, but those changes must be reflected quickly, accurately, so that it can then be placed in the right customer's hands.

WT: So, how did you overcome this challenge, of making sure that you had all the parameters and the right information?

DS: Well, the first thing was really design of the initial database, the carton database, which is a special record in NetSuite, which is actually fantastic in itself. We've used this a couple times. It's an ability to put a special, customized record that can be utilized in any other point, and [for] that design, we met with the production or warehouse people to make sure that was initially done.

We looked at all the potential goods movements, and essentially we took some of the work we had done with SAP and identified the goods transactions—not only the production, the retesting, inter-warehouse moves, things [of] that nature—and devised that scheme of “well, these are all the potential goods movements, these are the impacts of these,” and then turn that over to the NetSuite people to look at programming how that went.

It went back through a testing phase, usually had ... tweaks to be done, [was] retested, and then went into a live phase, where the quantity passed. We had a little bit of [an] issue with that because the throughput was much higher than I think was originally anticipated, and that was quickly adjusted.

WT: So, David, what benefits did you achieve by switching to NetSuite?

DS: Main thing is transparency; that was the most obvious, right off the bat. In the management side especially, the amount of data and the way to organize it was much easier. You saw everything right in front of you—no need to drill down, and drill down, and drill down. It was a way to also do very customized presentations [for] the management teams, and essentially give them their own menu path to accomplish these reports.

Also, NetSuite's very e-friendly, where you can e-mail reports out daily. And we do that quite a lot now, where the head of production—vice president of operations, [who] sits next to me—every morning, he gets his standard suite of five or six reports. He doesn't need to go into the system at all. They're there; he sees them—this is the activity of yesterday—and he can take its impact on him.

WT: Were there any unexpected benefits that you achieved?

DS: Another thing for us also was employee friendliness. Because this is an Internet-based system, if someone actually has to be out today, people feel much more comfortable because if there's an absolute pending issue they have to take care of, most people can take care of it from home. They don't have to run in [to the office] just to access the system at a workstation.

WT: If you had to do it all over again, what would you do differently?

DS: I think the good thing we had was the design of the implementation team. We did understand it was a financial solution, not an IT solution. What I would change is the sequencing of events during the implementation.

What typically happens is you go through a redesign process as the first thing. That, I believe, was a flaw. I think what should have happened is a training process: what can the system do, and then do a gap analysis, and let that gap analysis be your redesign process, rather than doing a redesign process, then see what the system can do, try to put it in place, and then “Oh, by the way, it can't do this” or “It does it this way,” and then go back into the redesign process.

A small issue, for instance, was a sales tax issue. Sales tax is a fairly common or easy process, but for us, we utilize a direct-pay permit in this state. So NetSuite had a traditional way of doing sales tax. You know, this is something we didn't think of in the design process, [so] when we actually saw this is how it operates, it was something we needed to go back to and address. So if I would do it different—up-front training, to really get the system, then the design process to match gaps or to fill gaps.

WT: David, thank you so much for sharing your insights and experiences with NetSuite.

SOURCE:
http://www.technologyevaluation.com/research/articles/from-local-to-hosted-the-story-of-one-company-s-migration-to-on-demand-erp-19297/

Can High Flying NetGravity Maintain Its Position?

2010-08-01T21:20:00.001-07:00

Vendor Genesis

NetGravity was founded in 1995 by Chairman John Danner as the first commercial provider of online advertising solutions. NetGravity had $11.6 million in revenues in 1998, with an 81.2% increase over 1997's $6.2 million. Revenues for the six months ending June 1999 were $10.5 million, a 136% increase over the same two quarters in 1998. The company lost $11.3 million in 1998, compared with a $6.9 million loss in 1997. The Q2 1999 loss was $2.1 million ($0.12 per share), an improvement over the Q1 loss of $3.7 million ($0.28 per share). Revenue growth from 1997 to 1998 was heavier in Service and Maintenance ($5M, representing growth of $2.8M or 220%) than in software licenses ($6.5M, representing growth of $2.5M or 163%). Both cost of sales and R&D have decreased as a percentage of revenues, the former from 97% in 1997 to 90% in 1998, and the latter from 47% to 40%. The company went public (NETG; NASDAQ) in June of 1998, and had a second public offering in April 1999. Recent prices have been in the high twenties to low thirties, with earnings per share of -$1.28. The number of NetGravity's customers increased from approximately 250 at June 30, 1998 to approximately 380 at June 30, 1999.

The company's initial and still core product (AdServer 3.5) is software that serves ads to website pages. The AdServer product is licensed to a company and runs on the licensing company's own servers. Ad serving to a web page is triggered by special tags that the web page designer inserts into the page. The tags describe characteristics of the ad to be served to that position. These characteristics correspond to the model against which ads are sold. Characteristics can take into account the page on which the ad appears, the time of day and other environmental factors, demographic information such as the user's zip code or company, search terms entered by a user, or information about the user that might have been previously captured by the website. (See TEC Technology Research Note: "How to Serve an Ad" October 23rd, 1999) Advertisers can view reports detailing the numbers of impressions and clickthroughs. Ad reports are accessed over the Internet.

The entire suite of NetGravity products includes:

*

AdServer 3.5: this is the core product. It is licensed in two varieties: The Enterprise model supports a single webserver; the Network model can support many servers. The two varieties have slightly different features and a site can run both simultaneously to take advantage of all the features, although few sites need to do this. (See Last Page: Two Models) AdServer runs on machines owned by the website publisher.

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AdCenter for Publishers: A transaction-based version of AdServer in which servers that run the NetGravity software are hosted by NetGravity.

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AdCenter for Agencies: A version of AdCenter for Publishers designed for advertising agencies, which sometimes wish to host their clients' ads themselves to get better control. The ad agency will buy space on various web sites and provide each with a pointer to the agency's AdCenter server. (The websites on which ads are purchased need not be using NetGravity ad servers.)

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Targeting solutions: The key product is GPS which allows websites to target ads by users' zip codes or by characteristics of the organization from which they are surfing. GPS is sold according to a transactional model.

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Professional Services: This group assists customers with installation and upgrades, with evaluating their successes using NetGravity products, and with developing custom solutions to particular ad serving problems.

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Education: NetGravity offers courses regularly on both coasts. Courses cover basic operations and custom tailoring of the reports or of the functionality of the AdServer itself.

On July 13, 1999 NetGravity announced a planned merger with DoubleClick Inc. (NASDAQ: DCLK). DoubleClick is an outsourcing service which differs from NetGravity's AdCenter in that DoubleClick accumulates information about ads served to particular users, regardless of which site the user had visited, and uses that information to target ads to users based on their past history. Under the terms of the merger, DoubleClick will issue 0.28 shares of DoubleClick common stock for each share of NetGravity common stock. DoubleClick stock hovered around 100 during the end of the summer and has been generally much more volatile that NetGravity's. The merger is expected to close during Q4 1999.

Vendor Strategy and Trajectory

Although estimates of the amount that advertisers will spend on the Internet, and the value that they get from advertising, fluctuate weekly there is no doubt that advertising will continue on the Internet, and that it will continue to become more complex. We believe that there are two areas in which companies involved with ad serving must evolve technologically. First, the technologies that are used to capture surfer attention (so called "rich media ads") will continue to evolve. Whereas most ads today are static images or contain simple animation, we expect to see banner positions becoming mini-entertainment centers, serving up sound, full-scale animation, and video. NetGravity expects that its customers will soon be able to offer their advertisers "transaction-enabled" banners, which will make it possible for users to complete transactions through the banner. Nothing that happens here should be a key differentiator between different products. Whatever capability one company announces another company should - and must - be able to announce soon after.

The second and more critical area of technology evolution is to serve the growing requirements from advertisers for micro-targeting of ads. Advertisers are coming to expect ever more sophisticated abilities for targeting those surfers who are most likely to convert from ad viewers to buyers. NetGravity sees targeting as a major piece of their future, and is preparing for it in two ways. The next version of the Ad Server (AdServer 4.0), announced for release in October 1999, allows the system to collect information about target audience segments to be used as the basis for daily forecasts into the future. Meanwhile, NetGravity maintains flexibility by allowing customers to choose any provider of targeting software and integrate it with the ad server. NetGravity has partnerships with vendors like Net.Genesis and Net Perceptions, both of which have capabilities for collecting, reporting on, and using information about the behavior of users.

There are two big questions about NetGravity's future. One is the effect of the merger into DoubleClick. We do not believe that DoubleClick will interfere with NetGravity's core software licensing business. The merger was made, at least in part, to give DoubleClick access to NetGravity's technology, so interference with the AdServer product would be self-defeating. The AdCenter product is more vulnerable. AdCenter could be seen as competing with DoubleClick; both serve customers who want ad serving capabilities but do not want to host their own servers. However, there are other ways in which the products differ. DoubleClick positions its DoubleClick Dart service as a network. For the purposes of comparison with AdCenter the salient difference is that DoubleClick merges information about user behavior across all the sites it serves. Thus if website A wants to serve car ads only to surfers who have previously shown interest by clicking through on car ads, website A will have access to information about whether a surfer has clicked through on car ads on any of the sites served by DoubleClick. This is a powerful capability for a website to be able to offer to an advertiser, but there are many website publishers who are unwilling to share their user data with other sites. Although DoubleClick Dart does offer its customers the opportunity to opt out of data sharing, the physical ownership of user behavior data resides with DoubleClick, and this had been unappealing to some publishers.

Logically, therefore, the merger should not affect the AdCenter product. However, the business story has some other considerations. Revenues from AdCenter were $1.1 million for the six months ending in June of 1999. The cost of providing transactional services (including GPS) was $2.2 million for the same period. This is hardly out of line for a new product line. However, given that additional expenses are expected for equipment and personnel, and that NetGravity will have to duplicate DoubleClick's expertise in managing outsourced services, we think it is quite likely (probability 85%) that AdCenter will be merged into DoubleClick Dart. We suspect that DoubleClick is prepared to make this move fairly swiftly, but think that reports from the field about customer concerns with both data privacy and performance may delay any announcement until DoubleClick has introduced NetGravity's technology into its Dart service.

Vendor Strengths

NetGravity is above average for both its features (including the ability to target ads, the administrative capabilities provided to the website managers, reporting and support for adding custom features) and, especially, its scalability. The software is fast and generally reliable: One of their major customers serves one billion ad impressions each month. It is easy and relatively inexpensive to scale up as the number of ad impressions grows, so a NetGravity customer can handle almost any imaginable volume of ad impressions. The software runs on both Unix and NT servers, and with the Netscape and Apache webservers. Version 3.5 does not work with the Microsoft Internet Information Server, a weakness that is expected to be repaired in AdServer 4.0. Users provide their own databases, which can be Oracle, SQL Server, or any ODBC compliant database. Operationally the software is relatively easy to use, although the basic Ad Master training is strongly recommended for new users. Bringing up a new ad is relatively easy, as is generating an ad hoc report. However, the standard reports are not presented in real time, and a site with many hundreds of advertisers (a rarity) can expect report generation to take up to a day The reporting package offers a number of different options and a customer can develop custom reports if needed. The courses presented in their education centers are useful, and on-site consultants are knowledgeable and helpful. All consulting engagements are documented carefully, and the company builds the cost of post-installation reviews into the license cost, ensuring customers that they will be set off on a strong footing. Post-installation customer service gets generally acceptable marks.

Vendor Challenges

Out-of-the box installation is painless, especially since a NetGravity consultant will be on-site to help. However, straying from the simplest case is not as easy as it should be. Customizations tend to be difficult, in part because detailed technical information is not always easily available to the customer or to the support staff. Also, uses that stray from the basic model, that of a site serving consumer ads, have caused difficult integration problems for at least one business-to-business customer.

The control software used by customers is powerful, but does not support the situation where different units within the customer want to handle managing their own ads; this is a promised feature in the next version, however. While reporting facilities are good, generating reports can be slow, and collecting additional data to report on targeting information that might be collected by the customer can strain the database and reports. The product does not offer real-time reporting, although ad hoc reports are fairly easy to generate. As the competition for ad dollars increases and advertisers look to maximize the effectiveness of their online campaigns, the lack of real-time reporting may become a significant issue. It will not be easy to add real-time reporting to the architecture used in AdServer 3.5, and the situation is as yet unknown for the 4.0 release.

NetGravity allows websites to take advantage of information they collect about individual customers, but does not integrate this information into its own database. This makes the process harder than it should be: The customer has to maintain its own database of information and, before a page is served to a known individual, derive from that database a code that will direct NetGravity to serve a particular kind of ad. There will be an explosion of precision targeting of this kind in the next few years, and NetGravity will be pressured to respond by making such targeting part of its basic offering. This will be a challenge to the current architecture.

The merger with DoubleClick should not prove a negative for NetGravity's customers. But NetGravity must be concerned with the response by its main rival, CMGI. (See TEC Technology Research Note: "'Ads Are Us', Boasts CMGI" October 7th, 1999). NetGravity's major weakness against CMGI's Engage subsidiary has been Engage's targeting capabilities. Engage's actual ad server, Accipiter, has not been a serious threat to NetGravity, but the integrated tracking and targeting capabilities of Engage, which were added to Accipiter when the latter was purchased by Engage, are very attractive. NetGravity does not have equivalent features, although it has partnerships with Net.Genesis and Net Perceptions, which fill in the gaps. Still, the capability would look a lot stronger if it were integral to AdServer.

We are concerned about the lack of attention that NetGravity has paid thus far to security issues. An advertiser's ad traffic reports can be important competive information, and in AdServer 3.5 these data, once an advertiser supplies a password, are sent of the Internet with no advanced for of security protection. Security is relatively easy to implement, and should be high on the feature list.

Vendor Predictions

NetGravity is well positioned to survive any shakeouts in this area due to its new relationship with DoubleClick, and will be one of the top two choices for licensed ad serving software for the foreseeable future. With the backing of DoubleClick and the aggressive moves by CMGI, enhancing the capabilities for intelligence gathering, and targeting are imperative. The probability is near 100% that NetGravity will make a significant announcement along these lines by early 2000.

As noted above, we expect (probability 85%) that DoubleClick will eventually phase out the AdCenter product line, hoping to convert most of its customers to DoubleClick's own service or to NetGravity's AdServer product.
n be delayed, or at least driven according to NetGravity's technical and service standards.

SOURCE:
http://www.technologyevaluation.com/research/articles/can-high-flying-netgravity-maintain-its-position-15217/

Business Intelligence Corporate Performance Management Market Landscape

2010-08-01T21:19:00.000-07:00

The BI/CPM Market Landscape

The vendor landscape remains diverse, with every vendor touting some or near total corporate performance management (CPM) capabilities. The abundance of astute vendors will prevent any single vendor from achieving leadership any time soon, while growth for all will be, in part, hampered by increasing pricing pressures. Thus, the "arms race" to marshal the most complete CPM platform has been intensified among major vendors, and many have a comprehensive set of business intelligence (BI) functionality, including online analytical processing (OLAP) analytics, ad hoc query, end user reporting, enterprise reporting, planning, and some type of analytic dashboards or balanced scorecards.

Part Five of the Business Intelligence Report Status Quo series. Parts One to Three were published June 27June 29

While 2003 saw a major onslaught of mergers and acquisitions (M&A) in the market involving large BI vendors like Cognos, Business Objects, SAS, Actuate, and Hyperion (see Has the BI Market Consolidation Been Crystal-Clearly Actuated?), 2004 and 2005 have also had their smaller share of M&A, with IBM acquiring AlphaBlox and Ascential, and Cognos acquiring Frango and Optima Analytic Solutions.

The pressure for these pure-play BI players also comes from large enterprise applications vendors like SAP, Microsoft, Oracle, or Siebel and their resources and business motivation to invest in their own BI solutions. This includes the underlying technology and the analytical applications, with their install base as the primary target.

This is Part Four of a seven-part note.

Part One detailed history and current status.

Part Two looked at contemporary BI tools.

Part Three described what is available.

Part Five will discuss Geac and Point Solutions vendors.

Part Six will compare direct access to a data warehouse for the mid-market.

Part Seven will make recommendations.

SAP Analytics

For example, SAP is changing the positioning of its business information warehouse, SAP BW, to become a part of SAP NetWeaver, a platform aimed at delivering infrastructural functionality like collaboration, portal, business process management (BPM), application integration, and BI across the entire enterprise applications landscape. (For more details, see SAP Bolsters NetWeaver's MDM Capabilities). It opted for this route instead of delivering a packaged standalone data warehouse (DW), as was initially marketed after its launch in 1998.

Building on the successes of SAP NetWeaver BI, and the Strategic Enterprise Management (SEM) suite, SAP, during its European SAPPHIRE '05 user conference, unveiled more than 100 industry-specific analytic applications built on the SAP NetWeaver platform. These applications should empower users with new ways to drive core processes and business decisions based on actionable business insight. Accordingly, SAP Analytics are a new breed of model-driven, composite applications across more than twenty-five industries. SAP Analytics aim at merging data from SAP and non-SAP applications with BI queries, to eliminate disparate islands of data. They will also combine transactional, analytic, and collaborative steps across multiple business functions, departments, and even organizational boundaries.

Unlike traditional after-the-fact reporting tools, SAP Analytics applications will aim at pulling all relevant information—whether historical or current—from across a wide variety of enterprise systems to deliver clear and broad business insight that should help users drive current processes and take the wisest possible steps. These will reportedly deliver data in the business context of the specific process—letting a business manager know, for example, not only the day's sales figures but also whether these figures are on target compared against past performance and the current year's revenue goals.

Reportedly, each SAP Analytics application will be designed to easily be combined and extended with other analytics applications, and will play a specific role across areas such as SCM, CRM, and product lifecycle management (PLM). Some examples include

* SAP Analytics for retail will help store managers better understand and predict the performance of core activities, such as trade-promotions, in order to make adjustments to processes and strategies while there is time to impact outcomes.

* SAP Analytics for credit management will allow financial service companies to display customers' credit information, buying behavior, past purchases, and credit lines in the historical context of data stored in SAP and non-SAP systems or syndicated data sources such as Dun & Bradstreet. From inside the same application, users can then increase or stop access to credit lines for a given customer or partner and even block or authorize individual purchases.

* SAP Analytics for tax management will complement the SAP for Public Sector solution. It will allow organizations to better monitor and understand the tax basis, where contributions are coming from in the context of historical tax collection, and take steps to reclaim amounts due using the same application.

* SAP Analytics for high-tech manufacturing will allow managers and other employees at production plants and warehouses to gain an insight into order status, plant utilization, order backlog and restock levels. Some SAP partners have consequently built SAP Analytics applications that unify manufacturing execution system (MES) data with order supply chain and production data from SAP systems in order to provide highly granular views down to individual machines' uptime status and throughput capacity.

* SAP Analytics for CRM will continue to complement the mySAP CRM solution by providing visualization across marketing, lead generation, pipeline visibility, sales effectiveness, and individual customer views. By unifying sales data with financial data, fulfillment data, and manufacturing inventory data, SAP Analytics for CRM will empower sales executives and corporate offices with a complete view of customer buying patterns and profitability allowing them to detect hidden opportunities for future business growth.

SAP touts that its model-driven, code-free, and services-enabled design environment, SAP Analytics, will allow business users and analysts to easily deploy, configure, and combine analytic applications to customize SAP Analytics to support evolving business requirements. Further, SAP Analytics leverage SAP NetWeaver Visual Composer, Macromedia Flex, and multiple platform capabilities including BI and enterprise portal, which should provide industry savvy system integrators (SI) with the applications and tools to support their clients' evolving business needs. Independent software vendors (ISV) and syndicated content providers will also likely benefit from these new applications and tools. They will be able to better help mutual customers, as both partners and ISVs will be able to build new analytic applications by becoming certified in the Powered by SAP NetWeaver program. SAP Analytics will be available toward the end of 2005 and sold as add-on products. One should note, however, that SAP currently has analytics that are sold with SAP BW, whereas SAP's new move mainly adds additional industry-specific analytics. In any case, both old and new capabilities still also require the implementation of SAP BW to get the analytics.

SAP Working With HP and Intel

In May, during SAPPHIRE '05 Boston, SAP's international customer conference, SAP announced the completion of a development project with HP and Intel. The project produced a low-cost, appliance-like offering designed to provide breakthroughs in both performance and flexibility for SAP NetWeaver BI. This offering combines the technologies of the three renowned companies to accelerate the performance of SAP's analytic applications that debuted at SAPPHIRE '05 Copenhagen and to enhance generic SAP NetWeaver queries. Developed in collaboration with Intel as an integral capability of the SAP NetWeaver platform, the "enterprise services-ready" technology is pre-loaded on highly flexible and scalable HP ProLiant servers running on 64-bit Intel Xeon processors and HP StorageWorks storage area network (SAN) systems. Intel is collaborating with SAP to drive development and to scale SAP Enterprise Services Architecture (ESA), including the development phase. Enhanced query performance is a key element on a technology road map that conforms to ESA, SAP's blueprint for a business-driven approach to service-oriented architecture (SOA).

The three vendors cite that in the past, companies could execute high-performance queries, but only by sacrificing query flexibility and thus worker productivity. Now companies should be able to gain instant access to valuable business information, such as inventory and profitability data to help them improve productivity, make more accurate sales forecasts, enhance supplier relationships, or increase the focus and effectiveness of marketing campaigns. The three industry leaders worked jointly to deliver this low-administration appliance, specifically designed to work with SAP NetWeaver BI installations, which might change the way BI is used within an organization.

Increasingly, today's companies are called upon to handle greater and greater stores of heterogeneous data, and in order to maintain efficiency and maximum customer satisfaction, companies must have the ability to query and access millions or even billions of records in minimal time. With the challenge of delivering response times in seconds and sub-seconds, it is difficult to balance good response times, acceptable maintenance effort, and process integration. The associated cost of delivering such high-end performance for BI has traditionally been tied to expensive hardware, considerable manual tuning efforts and stand-alone products disconnected from processes. Thus many companies may welcome the paradigm shift in boosting query performance, which is enabled by this new appliance offering, and is based on search functionality and in-memory processing, and is fully embedded into SAP NetWeaver.

SAP is taking advantage of HP's system and solution expertise to offer a high-performance analytics technology as a packaged offering that might easily integrate with customers' existing IT infrastructure. The technology is available to customers on 64-bit Intel Xeon processor-based HP ProLiant servers, including low-cost HP ProLiant BL20p blade servers, and the HP StorageWorks Enterprise Virtual Array 5000 (EVA5000) or HP StorageWorks Modular Smart Array 1000 (MSA1000) SAN storage systems. The HP ProLiant blade servers provide easily expandable computing power for growing analytical needs and the modular design of the HP StorageWorks EVA5000. The MSA1000 systems provide customers with highly available, high-performance SAN storage systems, with scalability to multi-terabytes. Shipment will start with the upcoming release of the SAP NetWeaver platform later in 2005. In addition to being the first and primary partner, HP also is the first customer using the technology internally to perform data analysis processes more intelligently, efficiently, and at a reduced cost.

Oracle

Also in March, Oracle announced the general availability of Oracle Business Intelligence 10g, a comprehensive, standalone product. Although customarily included with Oracle Application Server 10g Enterprise Edition, this first time offering is designed to address a spectrum of analytical requirements facing businesses including query, application development, reporting and analysis, data integration, and management. The release of this new unbundled product extends Oracle's opportunity in the BI market, and makes it easier for customers to purchase and deploy enterprise-level BI solutions, with a price tag of $20,000 (USD) per processor or $400 (USD) per named user. The vendor hopes to remove the costly and tedious process customers go through of piecing together point BI solutions by delivering a broad product. 10g comprises the following integrated components:

* Oracle Discoverer—query, reporting, and analysis with dashboard features;

* Oracle Spreadsheet Add-In—direct access to Oracle OLAP from within Microsoft Excel spreadsheets;

* Oracle Warehouse Builder—data quality and extract/transform/load (ETL) functionality; and

* Oracle BI Beans—custom BI application development.

Oracle's launch of standalone and customizable BI tools might best illustrate the trend of larger enterprise applications providers that are realizing the opportunity to directly serve the prosperous BI market. Market demand is forcing the need for sophisticated BI tools right into the organizational depths of even mid-sized companies. BI providers, who have, until recently, mainly targeted corporate strategists and statisticians, are now looking to the likes of vice president of operations as their future source of new opportunity.

The opportunity for Oracle is indisputable, at least based on the numerous users that already have an Oracle-based data infrastructure. Some well-established BI products like Oracle Daily Business Intelligence are designed to support day to day operational blocking and tackling. The products can run directly off transactional systems and do not require a data warehouse per se. This competitive differentiator is achieved by leveraging particular features of the Oracle database, which are not yet available from other database solutions.

Last but not least, while its overall business has been faltering lately, there may be some lighting in the tunnel for Siebel which appears to be coming from the CRM BI side. The vendor has designed Siebel Enterprise Analytics with enterprise information integration (EII) in mind, and in just two years, this product has grown from a few early adopters to one of the vendor's fastest-growing and possibly the largest product lines in 2004. These have all been significant steps and will make the use of these large enterprise vendors' BI solutions more pervasive, at least within their install bases.

All these large applications vendors have chosen this strategy because they

* Have the internal resources to build and maintain their own BI solution

* Can leverage their extensive product knowledge

* Feel they have a better understanding of their customers needs

* Have total control over the product development direction (enhancements, fixes, etc.)

* Find it more profitable (i.e., they control pricing and do not have to share license, support, and services revenues)

* Often tend to have a mind-set that products should "be invented here"

While for most of these vendors' customers this is probably a good choice for many of the reasons stated above, there are exceptions. There might be too high a price, because often, the vendor expects a premium over alternative options. Additionally, there may be a need to integrate other data sources into the BI solution (where the enterprise software vendor's solution might be weak in this area). For more information, see BI Approaches of Enterprise Software Vendors.

This concludes Part Four of a seven-part note.

Part One detailed history and current status.

Part Two looked at contemporary BI tools.

Part Three described what is available.

Part Five will discuss Geac and Point Solutions vendors.

Part Six will compare direct access to a data warehouse for the mid-market.

Part Seven will make recommendations.

SOURCE:
http://www.technologyevaluation.com/research/articles/business-intelligence-corporate-performance-management-market-landscape-18056/

Aspen Technology Evolves Into Digital Marketplace Provider

2010-08-01T21:18:00.002-07:00

Vendor Summary

Founded in 1981, Aspen has evolved over the years into a vendor of a broad array of applications for supply chain management, process design and control, and e-business. Aspen Technology takes its name from ASPEN (Advanced System for Process Engineering), a synthetic fuels research project begun by the Department of Energy in the mid 1970s. CEO Lawrence Evans, then a chemical engineering professor at MIT, was made the principal investigator for the project and later enlisted chemical engineers Joseph Boston and Herbert Britt. In 1981, the trio formed Aspen Technology to develop and market computer-aided chemical engineering software to process manufacturers.

Aspen's first applications supported simulation and design for the process manufacturing industry. In contrast to discrete manufacturing, process manufacturing involves a combination of complex chemical reactions and material transport operations that requires precisely designed production equipment.

The company used proceeds from its IPO in 1994 to embark on a series of acquisitions to expand its suite to cover other areas of process manufacturing. Acquisitions of Industrial Systems (1995) and Setpoint (1996) extended Aspen's suite with software for controlling and monitoring the daily operations of chemical processing plants. In 1998, Aspen acquired Chesapeake Decision Sciences, a maker of supply chain planning software and soon after reorganized its product offerings around the fast-growing area of supply chain management (SCM). In all, Aspen has made twenty material acquisitions of software and integration firms during the last decade.

In 1999, with revenues suffering under a downturn in its target markets and Y2K spending delays, Aspen implemented a restructuring program intended to reduce its operating costs and improve productivity. In connection with this restructuring, Aspen reduced its staff by approximately 200 employees, about 12 percent of the global workforce, closed offices, and streamlined operations. Following a brief respite, the company launched a focused hiring program to build staff in its supply chain management product areas, indicating a new emphasis on supply chain and digital marketplace applications.

The breadth and diversity of its applications has given Aspen a dominant presence in the chemical, petroleum and pharmaceutical industries with some penetration into semiconductors. The company reported total revenues of $268.1 million in fiscal 2000, compared with $226.5 million in the previous year. Revenue mix of products and services was almost 50:50 for fiscal 2000, and represents a shift toward licenses since last year (42:58) that indicates a revival of new license growth. For the quarter ended September 30, 2000, software license revenues were $32.6 million, while services revenues totaled $36.9 million. Net profit for the second fiscal quarter fell negative at $3.7 million compared with a net loss of $3.1 million for the same period in fiscal 1999.

Figure 1.

Figure 2.

Vendor Strategy and Trajectory

Demand for Aspen's SCM offerings has increased steadily since its acquisition of Chesapeake Decision Sciences' MIMI product suite, although the company continues to receive substantial revenues from sales of its process design and control software. Aspen estimated that revenues from supply chain applications made up 30% of total revenues for FY 2000 and projected the percentage would increase in subsequent quarters.

Aspen's long-term strategy is to continue integrating its higher-level supply chain management and Internet collaboration solutions to lower-level process plant control and operations monitoring applications. This commitment to process control will strengthen its already firm hold on the process industries (PI) but will make it difficult to extend its reach into other industry verticals. Because of the generally lower penetration of SCM technology into CPI, this strategy should represent no barrier to growth over the next 3-5 years.

Digital marketplaces are Aspen's latest product addition and the company is quickly establishing itself as an enabler of web-based buying and selling in its core process industry verticals. PetroVantage, a digital marketplace for the petroleum industry formed with technology partner IBM, will enable faster and more profitable trading and logistics decisions for crude oil and refined products. e-Catalysts.com, an on-line, collaborative marketplace for the $10 billion catalysts industry, will leverage Aspen's supply chain, collaboration and netmarket solutions to help companies make faster, more efficient decisions in the purchase and sale of catalysts and related products and services. ChemCross, the largest Asian chemicals exchange initiative, recently selected components of Aspen's Marketplace Solution. While digital marketplace related offerings comprised just 5% of Aspen's total revenues for FY 2000, the company expects this to double in FY 2001.

ANALYSIS

Vendor Strengths

* Flexibility: Aspen eSupply Chain Suite is highly flexible and can be tailored to fulfill virtually any business requirement a process manufacturer may have. eSupply Chain is based largely on Chesapeake's MIMI application and its feature-rich modeling language that enables users to address a large variety of industrial problems.

* Large, loyal customer base in the chemical process industries (CPI): Aspen's customers include 46 of the 50 largest chemical companies, 23 of the 25 largest petroleum refiners, and 18 of the 20 largest pharmaceutical companies. In fiscal 2000, 75% of its total revenues were derived from existing customers indicating a high level of satisfaction with Aspen products and support services.

* Experienced implementation and customer support personnel: Chesapeake has received high praise from consultants and clients for their staff of bright, experienced process engineers and modelers.

Vendor Challenges

* Making up for late start in e-business: Aspen announced it would develop applications for conducting business over the Internet in late 1999, placing it months behind other enterprise application vendors like SAP, J.D. Edwards, Manugistics, and i2. In recent months, the company has managed to take initial positions in e-business with PetroVantage, e-Catalysts.com, and the win at ChemCross. However, Aspen still needs to work hard to convince customers that its late entry into the e-business arena does not imply a lack of vision.

* Balancing packaged functionality and flexibility: Prospective clients are lured to Aspen by the flexibility of its solutions but often are disappointed upon discovering the amount of work required to customize a viable solution from the toolset. A shortage of experienced modelers adds to the concerns of users who fear becoming embroiled in what is essentially a joint development project. Although some templates and pre-configured modules exist, Aspen eSupply Chain is largely a toolkit that requires extensive training when experienced modelers cannot be found.

* A broad footprint that invites competition on multiple fronts: The Plantelligence, Engineering and eSupply Chain suites are almost ungainly in their variety of applications. Judicious pruning of all but the most profitable applications is needed to better focus corporate resources.

Vendor Predictions

* Moderate revenue growth (15-20% total revenue) during FY2001 fueled by market acceptance of Aspen's new digital marketplace offering, Aspen Market Solution, and its supply chain management applications. (70% probability)

* Aspen will review potential partnerships with an application service provider (ASP) to deploy its solutions via the web independently from its digital marketplace initiatives. Given its near stranglehold on the process industries and its conservative nature, the company will wait until the middle of calendar 2001 before actively pursuing an ASP model. (60% probability)

* ProcessCity.com, the information portal that marked Aspen's debut on the Internet, will slowly evolve into a portal offering collaborative planning capabilities and services for process industry participants in addition to news, forums, and job search features. (70% probability)

SOURCE:
http://www.technologyevaluation.com/research/articles/aspen-technology-evolves-into-digital-marketplace-provider-16230/

SouthWare Excellence Series: Making Excellence Easier Part Four: Application Analysis & Development Environmen

2010-08-01T21:18:00.001-07:00

Detailed Application Analysis (continued)

The process of selecting mid-market accounting software usually starts with products that have achieved some name recognition and that's fine as long as the search does not end there. SouthWare Innovations (http://www.southware.com) has created in its Excellence Series a worthy competitor, serving a number of industries and offering users a surprising array of functionality, either directly as SouthWare applications or through one of their independent sales vendors (ISV).

Service Management Series

This is a complete service management system that is comprised of four specific applications to help companies manage service contracts, track service histories and required preventive maintenance for each piece of equipment under service contract, daily planning and dispatch, and service invoicing.

* Contract Management: Tracks each service contract, including earned and unearned income, contract pricing, route scheduling, meter usage, renewal tracking, contract proposal, and addendum generation.

* Service Orders: Handles both recurring and on-demand service calls, technician scheduling, complete time and cost tracking, and all dispatch functions. This application also interfaces with SouthWare's Return Authorization application to track returns for credit, repair, exchange, and warranty work for both items sold as well as customer-owned equipment.

* Equipment Servicing: Maintains equipment service information including service histories, metered usage, location, status, preventive maintenance schedules, parts lists for each piece of equipment under service, skills required for servicing, and extensive warranty information, including on-line customer access for warranty inquiries, service requests, equipment service history, and notification of equipment relocation.

* Service Invoicing: Invoicing application for service management series. Includes recurring and contract billing as well as actual service calls.

This is Part Four of a five-part note.

Part One detailed the company background and the product overview.

Part Two looked at what makes SouthWare different.

Part Three began the discussion of the applications and development environment.

Part Five will provide a competitive analysis and make user recommendations.

SouthWare NetLink

NetLink is a comprehensive tool for developing browser-based access to corporate data and processes for customers (including shopping carts), vendors, and employees. Live or off-line access is supported. The following are standard SouthWare functions.

* Order shopping cart is saved until order is submitted.

* Provides default pricing as well as customer-specific pricing.

* Catalog lookup. This is where SouthWare's use of catalog technology makes it very easy to set up a storefront.

* Automatically create customer for new sale.

* Easy add, change, or delete line items.

* Numerous options to show item pictures, notes, and discount from list price.

* Optionally supports SSL encryption for secure transmission of data.

Since NetLink is a framework for building an on-line business community, virtually anything that is possible within standard SouthWare can be accomplished with a browser. Sample supported requests include

* Sales orders submitted from customers and employees.

* Customer request for account balance and related details.

* Employee request for customer-related information.

* Customer requests for service (resulting in the creation of a service order).

* Requests for marketing materials.

* Changes of address or phone number.

* Request for invoice or purchase order details.

* Review of product history.

* Vendor review of open purchase orders.

* Review of shipped status of open sales orders.

* Review of product catalog and pricing.

* Dispatch status of open service calls.

* Internal review of current financial statements.

* Access to employee personnel information.

ImportMate II

This is an import application with powerful filtering and validation. This powerful utility can be used to

* Convert accounting data when switching to SouthWare from another business system.

* Regularly update inventory pricing from vendor-supplied electronic catalogs.

* Create payroll exception hour entries from data captured in an electronic time clock.

* Add new stock items from a vendor price guide.

* Create physical inventory transactions from an electronic handheld count device.

* Import—create or change—trading partner documents, such as orders and invoices.

* Import a file of the checks that cleared your bank to automatically mark them cleared in cash flow.

* Create A/R transactions from invoice data generated by a special customized billing system.

* Create A/P transactions from invoices stored in a database package.

* Change the product category code for a group of stock items.

* Create G/L journal transactions from data in a customized non-SouthWare package.

* Assign an A/R account number based on customer type.

COBOL Development Environment

There are many programming languages available today and many advocates for each language. Since the language is simply a tool to create a program that performs a task, the best language to use varies depending on the task you need done. Data communications, Internet web pages, database analysis, and business applications are all software, but they are very different in nature. The SouthWare Excellence Series was developed in 1984 using COBOL, an industry standard at the time. While some people say that COBOL has outlived its usefulness, SouthWare and many others counter by saying that COBOL offers a robust set of features such as:

* Proven Reliability: 80 percent of all business applications exist in COBOL. COBOL technology has been in use since businesses first started to use computers, and Acucobol is running mission-critical applications in thousands of businesses today. There is not a more proven business language in existence.

* Flexible and Secure File Handling: COBOL was invented to write business applications, and its language contains a rich set of powerful I/O commands. The integrity and security of data has always been a focus of COBOL applications. Acucobol also offers significant flexibility in the structure of data files. Their Vision file structure format optimizes performance. However, if users so choose, they can use other structures such as Oracle, Informix, Sybase, ODBC, C-ISAM, Btrieve, or MINISAM. Users can even mix multiple structures on the same system, and with the same version of object code.

* Fast Performance: COBOL was designed for fast and reliable data handling. Data manipulation and throughput continue to be strengths of the COBOL language.

* Portability: Acucobol object code is fully portable across over 600 platforms without recompiling. Acucobol users can run the same object program on any platform Acucobol supports, and Acucobol supports more environments than any other language.

* Ability to Add New Features without Rewriting: Acucobol has implemented new features in its language by adding new optional syntax. This allows developers to utilize new features as they wish without being forced to rewrite code that is working. This is a critical element of SouthWare's S.M.A.R.T. methodology.

* Ease of Program Maintenance: COBOL is an easy language to develop in, and maintenance is simplified because its English-like syntax results in "self-documenting" source code. Any language can result in well-documented programs if the programmer takes the time to do it, but COBOL enforces this better than other languages.

* Scalability: COBOL programs can easily be scaled up or down and are currently performing vital work on mainframes, workstations, minicomputers, and micros.

* GUI Support: Acucorp has developed logical extensions to the ANSI COBOL syntax that allow developers to have access to the expected set of graphical interface tools while remaining in COBOL. This separates Acucorp from other COBOL vendors and results in a graphical language with the capabilities of other graphical languages. SouthWare uses these options in the various styles provided in the Excellence Series so users can utilize GUI as they like.

* Standards: There have been ANSI standards for COBOL since 1968. Every six to ten years these standards are extended to meet the requirements of the current operating environment. This type of standardization is not found in some newer languages and results in competing versions that are not necessarily compatible. The presence of COBOL standards helps ensure that business software written in COBOL conforms to internationally accepted minimums to help protect your investment in your system.

* Integration with Other Languages: When a business application needs to perform a task that is not best suited to COBOL, Acucobol lets users call out to programs written in other languages. This allows users to utilize the best language for a particular task.

* Business Process Orientation: COBOL is a procedural language that can readily duplicate the ordered procedures used by businesses.

* Applets or Web Based Computing: As the use of the Web by businesses increases in the future, users may need to download applications that would then run in their browser. Acucorp has provided a Web Browser Plug-In that provides this capability for programs written in Acucobol.

* Accuracy: COBOL defines the accuracy required during a calculation by using data types like COMPUTATIONAL-3. This guarantees that the same code and data will produce the same results on different systems. In other languages, such as Java, precision during calculation is not defined. This means that a program using floating point arithmetic can produce different answers on different systems.

SOURCE:
http://www.technologyevaluation.com/research/articles/southware-excellence-series-making-excellence-easier-part-four-application-analysis-development-environment-17713/

IT Project Risk Assessment

2010-08-01T21:17:00.000-07:00

Introduction

Information technology project risk often comes from non-technical aspects of the initiative. Assessing the impact of technology on people, management systems and other initiatives is essential to assure project success.

"We automate problems" This department slogan was posted on my office door (the inside) for several months while I and other managers in the department struggled to break out of a string of failed projects. It was apparent that we were not being successful because our clients and management told us exactly what they thought of our work and it wasn't good. We felt strongly that we were not a collection of dunces that had stumbled into IT management and we took no solace in studies that report typical project failure rates of seventy-two percent.

Note: This note first appeared in a column by James F. Dowling in Mid-Range Computing. Look for other previously published Mid-Range Computing columns by Mr. Dowling at this site or visit Midrange Showcase at www.midrangecomputing.com/showcase/.

Why Did The Projects Fail?

Being the technologists that we are, we embarked on a tedious and somewhat embarrassing self-examination of projects and skills. Projects were diagnosed with the clinical rigor of a post-mortem. We found solution design flaws, project task omissions, execution deficiencies and product choices that might have been more thoroughly considered. Perhaps led by facts and perhaps constrained by ego, we did not feel that project design and team skills accounted for the consistency with which we missed due dates and failed performance tests.

While we dissected our portfolio of recent projects, we came across a number of issues that were not related to the technical aspects of solutions design and project execution. We placed these into a "parking lot" for future examination. The list consisted of issues that the IT Teams had with other IT Departments, the client and with parties within the company that we felt should not have been involved.

* Late delivery of critical networking components was traced to a finance executive who wanted capital expenditures held up until he could challenge the project in an Executive Committee meeting.

* Protracted training was attributed to delays within the Human Resources department as they obtained approval of salary structure benchmarks for new jobs created by changed business process.

* A Data Warehouse and Executive Information Systems project disaster was attributed to a solution designed, built and tested for a client-specified sales force organization and compensation structure that were not executed or even approved before the system went live.

* A business process engineering project ran up significant costs creating a splendid design for a business unit that was sold shortly after implementation commenced.

Analysis and discussion with management within the business units who made up our client base made it clear that IT projects must consider much more than the technical aspects of projects to assess scope and risk. We knew this and we had already taken measures to makes all projects that we undertook business process improvement projects rather than thinking of them as information systems projects. We had also taken measures to have all such projects led by business management with executive approval.

The lesson that we learned however, is that we transferred the project risk associated with environmental to our business partners. We had avoided true project risk assessment and management.

Lessons Learned

Following are some of the lessons learned that we built into our Project Engineering Process:

What value will be derived from this solution?

* Increase Revenues?

* Cost Savings/Avoidance?

* Cost Reduction?

* Cycle Time Reduction?

* Improve Productivity?

* Labor Reduction?

* Head Count Reduction?

* Improved Performance?

* Improved Cash Flow?

* Improve Customer Satisfaction?

* Enable Teamwork?

* Enable Quality Improvement?

* Supplier Relationship?

* Establish Competitive Barrier?

* Establish Competitive Advantage?

* Create or Enable a New Product/Service/Capability?

* Improve Planning Effectiveness

What are the environmental impacts / requirements?

* Can failure interrupt or damage critical daily business operations?

* Can failure in this effort damage the company's reputation?

* Can this effort incur/cause significant other financial losses?

* Is this effort in search of a clear champion?

* Is this effort in search of a clear project leader/manager?

* Is this a large project effort? (> 6 months or $100,000)

* Will this effort be on an accelerated or tight time schedule?

* Does this address a longstanding difficult issue or problem?

* Has this problem/issue been unsuccessfully addressed in the past?

* Is more than one organization involved (not including I/S)?

* Will more than one organization be impacted by the outcome?

* Are any stakeholders opposed to/highly skeptical of this proposal?

* Is the outcome dependent on experimental technology?

* If so, will more than one supplier of critical components be involved?

* Is a high level of technical complexity involved?

* Is this a first time effort at this company for a project of this kind?

* Will outside contractors lead or provide key project deliverables?

* Will > 5 persons be on the project team or Steering Committee?

* Does a project plan/responsibilities still need to be established?

* Does the project team lack needed skills/related experience?

* Is the project team matrix managed/controlled by many managers?

* Do key team members reside in separate departments/buildings?

* Will implementation require significant formal user training?

* Will this require implementation and training at >1 site?

* Are there doubts about commitment/availability of key participants?

It is essential to have the entire enterprise know: why such projects are being undertaken, the breadth and depth of impact across the enterprise, the risks that will require diligent attention and management and what each department manager will be accountable for to result in a success for the enterprise, not just for the project team.

Change Produced Results

To obtain maximum benefit from this type of assessment, the Corporate Information Services Department had to change its organization structure, operational processes and even culture. Over a four year period, the teams saw project success rates climb to ninety-plus percent, operating costs reduce by more than thirty percent, client satisfaction reach new highs each year and a three-year, sixteen million dollar backlog shrink to nil. The transformation was certainly as stressful as it was productive. In fact, a Climate Assessment Survey reported that the department had the second highest levels of Stress and Employee Motivation level in the company but, that is a subject for another time.

This column will continue to explore the change/size paradox-big companies desiring speed and growing companies desiring stability. The author would appreciate feedback on material presented as well as suggestions for future study and reporting. The general theme is IT management and the goal is to make it easier to get clients what they want and what they need to succeed.

SOURCE:
http://www.technologyevaluation.com/research/articles/it-project-risk-assessment-16733/

19 Steps to Maintain an Accurate Inventory What You Must Know About Your Inventory

2010-08-01T21:16:00.002-07:00

Introduction

Peter Drucker, the foremost author and expert on enterprise and self-management, and one whom I am sure everyone reading this has probably heard of, stated, "We know little more about distribution today than Napoleon's contemporaries knew about the interior of Africa." I found out just how true this was when I was gathering information for this article. I began by searching to see what other experts had to say about maintaining an accurate inventory. About one week after beginning my search, I was no closer than when I started, so I decided to talk to people in the industry and ask them three simple questions:

1. What are your currently doing to maintain the accuracy of your inventory?

2. Is what you are currently doing working?

3. If what you are currently doing is not working then why haven't you changed?

You know what the interesting thing was? Everyone answered number 1 and number 2, but when it came to number 3, I ended up right back where I started: scratching my head and saying, "I can't believe since inventory is one of an organization's greatest asset, why do most companies do so little to maintain it?"

There are some interesting things about inventory that I am sure everyone knows, but before I get to the nineteen steps I'm going to reiterate some key points about inventory.

* Distribution inventory values range between 6 percent and 20 percent of the company's annual revenue.

* An inaccurate inventory causes several problems: lost sales, decreases in profitability, and lost productivity from searching for products.

* Companies use inventory as a security blanket to cover deficiencies in their warehouse.

Given all of this, the only thing you really need to know is that it takes $2,500 in new sales to make up $100 in lost inventory, assuming a 4 percent return. I don't think I am the only one in our industry who knows this, but if I am not, then why are so few people talking about how to control the accuracy of their inventory? Think about how much having an inaccurate inventory costing you and your organization.

Again, your inventory is one of the biggest, if not the largest investment you have in your company. The only thing that comes close to it is your people. But you know what I have learned over the years? People do what you inspect and not what you expect! Most leaders expect their people to know why inventory accuracy is important to the company, and it is with this assumption where the problems begin. It is also where I am going to begin the first step.

Step 1: Set Goals.

I know this is a sore subject for most business leaders because they feel goals in the warehouse is an oxymoron. However, I am not saying that by completing this article today you will have 100 percent accuracy on your next physical. It takes time for your warehouse personnel to internalize your warehouse goals. What I am saying is that to do this, you need to determine how many

* inventory adjustments your warehouse makes on a daily basis

* stock-outs you have on a daily basis

* backorders you have because the inventory was inaccurate

* items that were wrong during your last physical

From those numbers, you need to determine what will be acceptable and then you need to implement the remaining eighteen steps to get to that level of acceptability. I guarantee every department in your organization has goals except for your warehouse. Why is that? You know what Michelangelo said: "The greatest danger is not that our aim is too high and we miss it, but that it is too low and we reach it." You need to address your inventory issues by aiming higher than you have in the past.

Step 2: Document your processes.

Now even though this article is about your inventory, you have to document all of the processes that go on in your warehouse. How can you legitimately establish any type of inventory control program if your people are not sure about what they should be doing? The "follow Nancy around" approach to learn processes only works in the restaurant business. Your people need to know different picking (P) and receiving (R) functions: What to do when I go to pick an item and there is no product in the bin? (P) What do I do when the wrong product is in the bin? (P) What do I do when I am receiving and the vendor sends a replacement item? (R) What do I do if the item in the bin is damaged? and What do I do if the item is not in the bin, but I see the item in overstock? (inventory)

Even though some of the processes are picking and receiving-related, improper processes will cause inventory problems throughout the year and will lead to problems during the annual physical. Your people need to know what processes to follow; however, we know your people are not going to consult a training manual every time they encounter a problem so develop "Cheat Sheets" that are brief references showing how to troubleshoot problems.

SOURCE:
http://www.technologyevaluation.com/research/articles/19-steps-to-maintain-an-accurate-inventory-what-you-must-know-about-your-inventory-17954/

Project-oriented versus Generic GL-oriented ERP/Accounting Systems

2010-08-01T21:16:00.001-07:00

The unique business needs of project-oriented organizations, when addressed by large ERP vendors that offer general-purpose enterprise software, require heavy customization in order to work. On the other hand, when project-oriented organizations turn to small off-the-shelf project-management solutions, these solutions are soon outgrown by the user company. These organizations are looking for systems to support the project manager, who is responsible for sharing and tracking the revenue, expense, and profitability of a project. Most enterprise-wide business systems sold by software vendors are general purpose in design and without significant tweaking, they do not address many of the unique requirements of businesses engaged primarily in providing products and services under project-specific contracts and engagements.

Project-oriented organizations have many project-specific business and accounting requirements including the need to track costs and profitability on a project-by-project basis, to provide timely project information to managers and customers, and to submit accurate and detailed bills/invoices, often in compliance with complex industry-specific and regulatory requirements. Yet, traditional generic GL-oriented accounting systems have not been designed with project phases, work breakdowns or detailed time capturing in mind, and thus, they can merely report how much has been spent or collected, but not why a certain project is losing or winning money.

Not many enterprise products will support the following project-based processes: job costing, managing the sub-contactor, financial reporting, managing the workforce, process time and expense, winning new business, purchasing goods and services, managing the project, and building to order. If these high-level processes sound too ordinary, then digging to a level deeper might reveal their true intricacy and attention to detail such as employee time, billing rates, budgeting, collections, or project proposals, which are supported by only a few vendors.

For example, the job costing process can be broken down into the following steps: setup project work breakdown structure (WBS), pay suppliers, pay employees, accrue purchase orders, allocate indirect costs, calculate estimated time to completion, calculate contract ceilings, compute revenue, bill customer, and report the project status. The process time and expense cycle would have the following steps: create project, create project workforce, enter timesheets by project, enter labor adjustments, enter travel expenses, apply project business rules, approve time and expenses, pay expenses and payroll, bill expenses and payroll, revenue recognition, and project status reports (PSRs), which are used for period reporting on a project/task/phase level, and which can be regarded as the financial statement for the project.

The managing-the-project process would feature the following detailed steps: create opportunity plan, establish detailed scope of services, create project plan with work breakdown structure (WBS), establish task schedules, search and add resources to plan, establish budget at resource level, add consultant and expenses to project plan, add direct costs for plan, establish profit performance, save baseline budget, monitor time and expense costs, monitor schedule projected profit and revenue, and submit the project deliverables and closeout project. A build-to-order process would involve ERP materials management functionality through support for the following steps: customer demand, bills of materials (BOM)/routings, engineering change notice (ECN), materials requirement planning (MRP), capacity planning, purchase requisition/order, receiving and quality assurance, fill inventory, issue manufacturing orders, final subassembly and finished goods, customer delivery, billing, revenue recognition, and PSR.

Dealing with Government Contracts

Furthermore, many project-oriented organizations provide products and services under government contracts, and project accounting for these organizations often requires the use of sophisticated methodologies for allocating and computing project costs and revenues. There are many different types of contracts governments use and within each of those there are dozens or more variations, whereby each variation will drive its own type of billings, revenue recognition and requirements for reporting back to the government customer.

The US government requires its contractors to collect and allocate costs in certain ways; for example, according to the Defense Contract Audit Agency (DCAA) rules, labor costs must be recorded daily. Also, a contractor is required to keep track of several contracts simultaneously, meeting the rules for different types of contracts and being consistent in accounting for a number of indirect costs. According to the Small Business Administration Pro-NET sourcing service database, there are tens of thousands of small and minority-owned companies that are doing business with the federal government. With the new emphasis on improving homeland security and expanding anti-terrorism operations around the world, many of these firms will likely experience significantly greater demand for their services and grow rapidly over the next several years.

Expanding Market

Additionally, service business application software systems are expanding as a result of a number of economic trends. Service organizations traditionally have utilized project accounting more than manufacturing firms due to the need to customize services for each client and to properly allocate the associated revenues and costs. Therefore, as the shift from a manufacturing-based economy to a service-based economy continues, the market for project-oriented organizations is expanding. Furthermore, the trend towards outsourcing an increasing range of activities broadens the market for project-oriented organizations as both customers and vendors need to track the costs associated with their projects.

Finally, many organizations with significant internal development activities can benefit from the use of project accounting systems to closely monitor progress and costs. Also, although somewhat conversely, more progressive firms may even try to boost their marketing, advertising, and PR expenditures in order to gain more project contracts during the market contraction, where for example, a proposal automation capability can come in handy. While project management and resource planning software applications help service organizations deliver within a budget, in the long term, these organizations need to win a new stream of projects or customers, which involves pre-sales customer relationship management (CRM), marketing and proposal management, and post-sales elements like travel and expense (T&E) management.

As the number and type of project-oriented and professional service organizations increases, such businesses are demanding increasingly sophisticated tools to address their core information and accounting needs, including project accounting, employee time collection, project budgeting, project reporting, CRM, sales force automation (SFA), and proposal generation. At the same time, these organizations are recognizing that because most aspects of their businesses revolve around their customer project relationships, they can achieve efficiencies in a number of project accounting and core back-office business functions. These accounting and business functions such as general ledger, accounts payable, accounts receivable, materials management, and human resources, are supported through the use of software applications designed to address the special needs of project-oriented organizations. Like other businesses, project-oriented and professional services organizations are also demanding solutions that allow them to combine their business software applications into a single integrated, enterprise-wide system.

Time is of the essence for any business that bills for its services rather than sells a physical product, but the concept can be particularly tricky for design/construction firms that may need billing at different rates depending on, for example, project phase, task, client type, or escalation clause. At the same time, the industry is quite fragmented, with legions of specialist contractors, and it also has a long tradition of technophobia.

SOURCE:
http://www.technologyevaluation.com/research/articles/project-oriented-versus-generic-gl-oriented-erp-accounting-systems-19393/

Lawson Asserts Itself, Draws A Bead On Bigger Players

2010-08-01T21:15:00.000-07:00

Event Summary

On May 7, at CUE 2001, the company's annual user conference, Lawson Software, a privately-held provider of Internet-enabled business applications for service industries, announced the release of lawson.insight 8.0.2, the newest version of its flagship enterprise e-business solution line. Included are additional new products and enhancements that complete the automation of e-business processes for service sector industries so it will be a full 360-degrees of coverage. The lawson.insight 8.0.2 release is scheduled for general availability in August 2001.

The lawson.insight line offers the healthcare, retail, professional services, public sector and financial services markets new features for e-business process adoption and improvement. Lawson also announced delivery of new solutions and tools engineered to help service providers (SPs) quickly develop and deliver e-services powered by lawson.insight engines and extensions. With the new applications in the suite, Lawson has thrown a gauntlet to direct competitors, particularly PeopleSoft. New products and enhancements in the 8.0.2 release of lawson.insight include:

* Encumbrance Accounting - public sector. Provides early warning of spending commitments to reduce risk of overspending appropriations.

* Purchasing Analytics - all markets. Offers purchasing analytics including key performance indicators to drive new efficiencies and lower supply chain costs.

* Average Daily Balance - financial services. Determines average daily balance in all funds and cost of funds to determine available funds.

* XML e-Scorecard - all markets. Provides zero-client access to enterprise reporting and analytics.

* Connector for Siebel eBusiness Applications - professional services. Integrates enterprise relationship management processes through direct connection of lawson.insight with Siebel Systems applications.

* Project and Activity Accounting - professional services. Manages project accounting including tracking of daily project activity, valuing and recognizing revenue for ongoing projects and customer billing.

* Open Application Environment - all markets. An open, component-based application environment using industry-standard Java technology.

* Connector for PKI - all markets. An expanded security engine providing integration to Entrust public key infrastructure and digital certificate solutions.

* Knowledge Module for PATROL - all markets. Integrates Lawson engines with BMC Software's PATROL solution to provide enhanced enterprise management support.

* Connector for Tuxedo - all markets. Integrates BEA Tuxedo into the Lawson environment to support application load balancing and distributed transactions.

* Connector for Microsoft Application Center - all markets. Integrates Microsoft Application Center into the Lawson environment to support application load balancing and distributed transactions.

* e-Procurement Service - healthcare, professional services. An integrated connection to trading exchanges, marketplaces, purchasing organizations, suppliers and networks.

* e-Recruiting - all markets. Automates candidate application and selection processes with Internet-based system for online recruiting.

* e-Workforce Analytics - healthcare. Offers real-time analysis and reporting on workforce performance with comparative metrics from Saratoga Institute.

The lawson.insight 8 Series is devised to help service companies achieve competitive advantage through e-business operational improvement of financials, human resources, distribution, procurement and analytic processes. A core component of Lawson's software environment, XML, allows the enterprise to connect with a wide array of stakeholders, including suppliers, partners, customers, prospects, employees, consultants, influencers, decision-makers and anyone else with an impact on business, thereby going beyond the limitations of basic B2B and B2C transactions.

"Lawson's focus on vertical markets remains as sharp as ever, and this lawson.insight release again demonstrates its commitment to adding new functionality and solutions that address the needs of the industries it serves," said Dean Hager, executive vice president, Global Products Division, Lawson Software. "The potential savings from leveraging e-business efficiencies are very attractive. Lawson's proven e-business engines automate end-to-end processes to drive those efficiencies throughout the enterprise."

Market Impact

While Lawson has for some time tacitly been a thorn in the flesh of the bigger players, it has now decided to create a noticeably greater noise in the market. Having reached $313 million in revenues in 2000 and having achieved significant mind share in the service industries sector, the company believes the time has come for it to become a recognized competitive force. Lawson continues to be a leader in the mid-to-high end market for financial accounting, procurement and HR applications by continually betting on the following three tenets of success:

1. Early delivery of visionary, Web-addressable (with server-based application logic and a data structure that can be referenced and executed via a URL) and componentized products that exhibit an open architecture and a support for a wide range of platforms - even in advance of much larger and more visible publicly traded competitors. Lawson has long been promoting its Self-Evident Applications (SEA) initiative (since 1996), with the idea of simplifying the users' learning curve by featuring Web user interfaces and navigational tools.

Lawson's advantage also lies in its integrated, omnipresent Drill Around functionality and its tight integration with Microsoft Office applications. The drill around feature allows users to extend their knowledge search at every level of the application including reports for every data element within the database. This is a powerful tool that will enhance the user's ability to isolate data and rapidly extract specific information for reporting or analysis.

2. Very tight industry focus and an undisputed leadership position within the healthcare, retail, financial services, professional services, public sector and telecommunications segments of the market. Lawson will continue to concentrate its internal sales efforts on its traditional vertical markets and to rely on partners to address and develop a particular industry's needs. Look for Lawson's expansion into another service industry market (e.g., utilities) and for its abstaining from manufacturing in the foreseeable future.

3. Early involvement in ASP deployment (owing to its advanced product technology) and consequent securing of mind share and success in the ASP market - with more than 40 viable ASP partners and close to 500 ASP sites. Through its ASP program called Lawson Tone, the company insists on its ASP partners customizing and pre-packaging the Lawson product in order to provide particular value to the particular vertical industry and to also bring new business from the market segment. On its side, Lawson pledges to share revenue with ASPs and not to become an ASP itself, as opposed to its competitors that have their own ASP business on the side.

The recent announcements of vertically focused partnerships should bode well for the company's continued market success. These partnerships might be the sign that Lawson has begun to address its partnerships more strategically rather than opportunistically, which has often been the case in the past. Also, the partnerships with renowned EAI and applications management vendors will provide Lawson with readily available toolkits for making deeper functional adjustments and customizations as well as the better scalability, security and load balancing, where the company has traditionally trailed the bigger competitors.

Lawson, by adopting XML as its internal standard and providing appropriate connectors, claims to be able to integrate with other e-commerce systems either on the front end or on the back end so that its customers' systems can communicate smoothly with their business partners, whether via the Web, e-mail, or even Fax, EDI, and spreadsheets. This, bundled with the fact that its product will run on almost any platform or database and with the forthcoming product enhancements, prompts us to believe that its competitors, particularly mid-market ERP vendors, will face a tall order to match Lawson's value proposition.

While we believe that Lawson's product strategy is hitting the bull's eye, one should not discount fierce competition from much larger vendors, like SAP, Oracle, PeopleSoft, and ever more from J.D. Edwards and Microsoft Great Plains. These vendors, while possibly inferior regarding service industries focus, will try to influence customers purchase decisions by offering their more comprehensive horizontal product portfolios, by touting superior global presence and multi-national product capabilities, or by instilling FUD (fear, uncertainty, doubt) in more conservative CFOs who may cast a wary eye on Lawson's prolonged existence as a private company. The company has indicated a possibility of going public, but without any firm timeframe indication, probably the result of the current stock market slump.

While being privately held and independent of Wall Street volatility has allowed the company to direct its investments for development of its desired core competencies, going public might be necessary in order to keep up with the need for huge R&D investments. Lawson's competitors can garner these funds without the need to turn to venture capitalists (as Lawson recently did to obtain a $40 million VC investment). Further to retain its workforce, Lawson may need to offer them stock options.

Look for a particularly fierce duel between Lawson and PeopleSoft owing to the closeness of the companies' focus and product offering. The technological advantage that Lawson has had due to PeopleSoft's belated involvement in Web-enabling its products is now all but gone (see PeopleSoft - Catching Its Second Wind From The Internet). On the other hand, PeopleSoft's advantage due to a broader product foothold and better product scalability and monitoring/load balancing may be annulled by Lawson's new product release. Every selection war will be won by mere nuances.

While PeopleSoft's advantage is still its market recognition, positive turnaround momentum and bigger resources, these might not suffice for a discerning, savvy IT decision-maker. The use of a statistically valid decision-making tool along with careful determination 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 Lawson and PeopleSoft in terms of e.g., HR/payroll and financials functionality), the decision hierarchy provides the supporting material required to justify further investigations before the final decision. These include, inter alia, scripted scenario demonstrations and prodding client reference visits/conference calls.

SOURCE:
http://www.technologyevaluation.com/research/articles/lawson-asserts-itself-draws-a-bead-on-bigger-players-16397/

SAP Bolsters NetWeaver's MDM Capabilities Part Two: xCat and SAP MDM

2010-08-01T21:14:00.000-07:00

What xCat Offers

SAP NetWeaver, has become the main pillar of SAP AG's (NYSE: SAP) strategy to remake itself into a platform vendor. With this and mySAP Business Suite, the broadest suite of enterprise applications in the market, SAP will sell possibly everything from application servers via middleware to Web services (envisioned, in SAP's case, to orchestrate business processes by means of packaged composite applications across and atop existing systems). In mid-July, SAP announced that it has acquired substantially all of A2i, Inc. (www.a2i.com), a Los Angeles, California (US)-based an d privately held software company, which, since 1993 develops and markets xCat, the platform for enterprise-wide product content management (PCM) and cross-media catalog publishing, but with the touted simplicity and accessibility of desktop applications.

Therefore, SAP and A2i tout the following potent capabilities of xCat:

* Powerful product content aggregation and cleansing, management and product information editing. The proper PCM system should do more than store data that once resided in another system. Instead, it must include powerful and extensive capabilities for loading, restructuring, cleansing, normalizing, and transforming source data from a variety of electronic sources, including text, Microsoft Excel, Microsoft Access, Structured Query Language (SQL), and XML for both flat files and relational data.

* Classification into a taxonomy with category-specific attributes. Not only must the proper PCM systems have a completely flexible schema, it must also support multiple classification schemes, user-defined taxonomy hierarchies of arbitrary depth with category-specific attributes, multiple simultaneous taxonomies, and "drag-and-drop" taxonomy editing capabilities that allow the taxonomy of the fully populated repository to be completely restructured and refined over time.

* Intelligent image management. Any system can easily store an image as a binary large object (BLOB). By contrast, the proper PCM system must support intelligent image management with an understanding of all of the leading image formats, the ability to automatically transform images for different publishing purposes, and optimized high-performance image access and efficient image caching.

* Integrated high-performance product search engine. Search mechanisms offered by traditional systems are not precise enough for searching product information. The full-fledged PCM system must hence include a fully integrated multidimensional search engine that is optimized for product search, with support not only for drill-down, parametric, and keyword search, but also measurement search, partial/contains search, and other types of search. To that end, the ability to let customers search for goods without knowing product codes has become the A2i's Web slogan: "No part number, no problem".

* Performance acceleration, with scalability up to millions of products. Traditional enterprise applications, such as ERP or CRM, are not optimized for heavy search and access loads. Similarly, a traditional relational database management system (DBMS) is slow on typical searches against large repositories, so relying on the naked DBMS is also a problem. Therefore, a proper PCM system must have a self-optimizing performance acceleration layer that is able to quickly serve up product information to users and other enterprise applications.

Most catalog solutions are simple database applications that layer a thin veneer of functionality over SQL and they rely on SQL for all access to the data, whereby SQL works well with retrieving a single record from among thousands or even millions. Yet, to retrieve, for example, several thousand records from among a few million, and to limit across all of the different dimensions of the search for users to only see valid selections and valid values, that requires a multi-table join.

Also, to interactively browse and sort search results, requires cursors and temporary files, which can also cripples the performance of a SQL-based DBMS. An example is having thirty thousand bearings with very intricate relationships of which bearings can be sold with which other bearings. This requires a system to manage and automate those relationships. Thus, xCat uses SQL-based database—either Microsoft SQL Server, IBM DB2 or Oracle—only as a container to store the product information, but then xCat completely bypasses SQL for almost all access to the data—searching, sorting, querying, limiting, masking—and thus avoids the "four dirty words" of SQL: no cursors, no temporary files, no joins, and no views.

* Cross-media publishing (web and paper or CD ROM print). The appropriate PCM system must drive all product content initiatives, including tightly integrated functionality not only for internal PCM, but also multichannel syndication, deployment of searchable Web catalogs, and print solutions for catalogs and other printed publications. The things that people expect in a paper catalog in terms of layout, structure, and tabular orientation of product records, should also be deliverable to the Web. Additionally, xCat can reportedly slice-and-dice a single master catalog containing several million products into as many customized virtual private, personalized, subset catalogs as necessary. Each slice looks like a complete catalog, either to the user on the Web or when published to paper.

* Database-driven print catalogs. A full-fledged PCM system that supports print catalog publishing must do so in a way that is completely database-driven, meaning it "pushes" product information into the page layouts, rather than simply using the repository to store product information that was first entered directly into the page layout application.

* UCCnet synchronization. A proper PCM system must support UCCnet synchronization, and also be able to syndicate product information to multiple audiences, transforming it into a variety of industry-standard and user-defined XML and delimited text formats, on an ad hoc and scheduled basis.

* Integrated workflow engine. The system must have an integrated workflow engine that can provide a framework for managing product information in a collaborative environment, and can function standalone or in conjunction with external workflow applications and systems.

* Cross-platform compatibility as elaborated above; and

* Enterprise scalability. The appropriate PCM system must offer an n-tier architecture, capable of easily integrating with various deployment architectures, including a full suite of security and encryption services as well as ability to integrate with leading user directories, such as Lightweight Directory Access Protocol (LDAP). Finally, the PCM system must provide master/slave capabilities to enable a global 24/7 deployment consisting of both staging and publishing servers.

This is Part Two of a five-part note.

Part One began the event summary.

Part Three will cover the market impact.

Part Four will look at SAP and A2i.

Part Five will discuss challenges and make user recommendations.

SAP MDM

The A2i acquisition follows the late 2003 announcement of the release of SAP Master Data Management (SAP MDM), which, as mentioned previously, is an evolutionary new offering aimed at enabling companies to harmonize data across diverse applications and IT landscapes, solving the common problems generated by similar but different customer, product or vendor information stored across multiple systems. As the latest product addition to SAP NetWeaver, the component also aims at enabling large, geographically dispersed companies to manage master data in heterogeneous environments, across business units and the extended enterprise. As such, SAP MDM leverages SAP Enterprise Intelligence (SAP EI), SAP Business Intelligence (SAP BI), SAP Knowledge Management (SAP KM), and SAP EP components of SAP NetWeaver, which are all purportedly tightly integrated, eliminating the need for custom integration of various technologies at the customer's site.

SAP claims SAP MDM can be deployed on an evolutionary basis to minimize disruptions to the daily flow of business; it can also be reasonably quickly implemented without altering the existing system landscape; and it is flexible to adapt to established business processes and organizational structures. By improving the consistency of business-critical data, the new MDM offering should help companies across diverse industries accelerate collaborative business processes, reduce IT integration costs, and gain sound analytical insights to improve decision making and drive competitive advantage. Namely, deriving a common view of reference data—such as definitions of customers, suppliers, products and parts—should enable organizations to gain a long-term, strategic advantage.

To that end, SAP MDM integrates both the data as well as the applications necessary to support collaborative business processes, delivering analytical and search capabilities to identify identical or similar data objects across different systems and cleanse objects to keep master data consistent, whereby SAP MDM adapters receive all data from third-party systems and unify it into a common data format. For example, an aircraft landing wheel assembly may be identified by the manufacturer, its suppliers, and customers in a slightly different way—the manufacturer might identify the assembly as "assembly 85467", while a supplier's system tracks the same assembly as "a330 wheel assembly." Accordingly, SAP MDM provides a framework to define the reference master data and metadata associated with this assembly so that the aircraft manufacturer, customers such as airlines, and suppliers share a single definition that they can leverage in their business transactions.

To help companies avoid the complexity and costs of point-to-point connectivity, SAP MDM connects as a hub to multiple systems, enabling intersystem communication. It allows central data maintenance to group logically related objects and distribute these concurrently into designated systems. Automated publish and subscribe models ensure that the right information is easily and cost-effectively delivered to the right destination. Further, with its data consolidation, harmonization, maintenance, and distribution mechanisms for SAP and non-SAP solutions, SAP MDM aims at helping companies derive even more value from their existing technology investments in areas such as supplier management. For example, leveraging SAP MDM to harmonize data across supplier divisions, mySAP SRM should enable relatively effortless analysis to track spending by parts or materials sourced with suppliers across the globe. Empowered with consistent, reliable information, companies should better manage their bottom lines, reduce inventories, match prices, and streamline procurement processes. Companies operating various subsidiaries should more easily detect common suppliers, consolidate order contracts and negotiate higher discount rates.

SAP purports that SAP MDM also lays the foundation for efficient and accurate exchange of cross-business information. Consumer products companies, for instance, can exchange timely product information with retail distributors, avoid costly inaccuracies, enhance merchandizing, and improve supply chain operations. In the area of customer service, SAP MDM should help companies maintain consistent data even when customers are identified by different names or ID numbers. Last but not least, for companies involved in the manufacturing or assembly of physical goods, the storage, procurement and cataloging of parts requires tremendous enterprise resources, since redundant data can present a distorted picture of parts inventory, causing wide-reaching supply chain gaps. To that end, SAP MDM aims at helping manufacturers and suppliers to maintain accurate parts inventories, avoid gaps and redundancies in supply chain information, and smoothly execute collaborative processes in procurement, production, logistics and sales.

Most recently, on October 5, SAP announced a few new, immediately available capabilities to bolster SAP MDM's ability to manage customer, product and vendor information in heterogeneous IT systems. Accordingly, SAP NetWeaver now includes a reasonably flexible master data object modeling framework that should allow users to create and define their own master data objects with their own business-specific attributes. The user-defined object model works alongside the already available pre-built object models and leverages the same standard services, such as data normalization and sophisticated distribution, available with the SAP NetWeaver platform. SAP claims the concept of "user-defined objects" is offered exclusively by itself.

SAP also delivered out-of-the-box capabilities for administering master data through Web services. With an overarching goal of architecting all of its applications to be enterprise services enabled via the enterprise services architecture (EAS), SAP solutions should allow companies to create new business processes that orchestrate a collection of Web services into composite applications. In addition, new straight-through processing tackles the business challenge of loading millions of master data objects into a customer's information system from outside sources. The new optimized load process includes the flexibility to postpone the data normalization processes while making new incoming information available to other subscribing systems. SAP also announced it will soon add new standards-based GDS capabilities to SAP MDM.

This concludes Part Two of a five-part note.

Part One began the event summary.

Part Three will cover the market impact.

Part Four will look at SAP and A2i.

Part Five will discuss challenges and make user recommendations.

SOURCE:
http://www.technologyevaluation.com/research/articles/sap-bolsters-netweaver-s-mdm-capabilities-part-two-xcat-and-sap-mdm-17647/

SouthWare Excellence Series: Making Excellence Easier Part Three: Application Analysis

2010-08-01T21:13:00.000-07:00

Charles Chewning Jr. - January 6, 2005
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SouthWare Excellence Series: Making Excellence Easier Part Three: Application Analysis
Featured Author - Charles Chewning Jr.

Introduction

The process of selecting mid-market accounting software usually starts with products that have achieved some name recognition and that's fine as long as the search does not end there. SouthWare Innovations (http://www.southware.com) has created in its Excellence Series a worthy competitor serving a number of industries and offering users a surprising array of functionality, either directly as SouthWare applications or through one of their independent sales vendors (ISV).

Detailed Application Analysis

ExcelReport

This unique application allows users to establish both subjective and objective—financial—goals, grade progress toward achieving these goals, measures progress over time, and thereby help people do their jobs better.

The system supports a completely user-defined set of critical success factors for each business, business unit, or even individual employee. These success factors can be financial values or ratios that are then associated with specific grades or subjective factors that will be evaluated and assigned a grade. In addition to calculating and displaying grades on a period basis—with up to five years history—, the system will display both trend lines as well as a grade point average (GPA), just like in an educational setting.

Although there is any number of success factors that can be established and tracked, here are some questions that can be asked and answered.

* Which areas of the business need attention?

* Are we making progress toward our goals?

* Are we able to fulfill customers' orders?

* Are we shipping orders on time?

* What's the average approval rating on sales orders?

* Which items are returned the most due to poor quality?

* How much are errors and complaints costing us?

* What do our customers think about us?

* Are we hitting our financial goals?

* Which vendors are giving us good service?

* What are the recent events involving this customer?

* Have we responded to all the ideas and suggestions we've received lately?

* How solid are our vendor relationships?

* Are our employees satisfied with their careers?

* How well are we preparing for the future?

This is Part Three of a five-part note.

Part One detailed the company background and the product overview.

Part Two looked at what makes SouthWare different.

Part Four will continue to discuss the applications and development environment.

Part Five will provide a competitive analysis and make user recommendations.

TaskWise

TaskWise is SouthWare's vision of a completely integrated business management system that includes task management, relationship management, exception management, and information sharing or collaboration. Users can manage their daily work through one convenient portal that gives them access to both information and functions, all wrapped around a central task manager.

* Task Management: Users can define individual or linked tasks that can be text oriented, such as reminders or descriptions of issues that need to be addressed but are not tied to specific accounting functions. Other tasks can be tied directly to accounting functions such as approving purchase orders, invoices, or hyperlinks to specific SouthWare functions, such as order entry for an order clerk. In essence, SouthWare has taken the concept of user-defined menus, which it supports, to the next logical level whereby the concept of a menu has been replaced by a completely integrated task management system that presents those tasks the user should address.

* Relationship Management: TaskWise can function as a complete relationship management system. Since this is a task manager and not a CRM system, TaskWise can handle vendor and employee relations just as easily as it can handle customer relations. TaskWise can also integrate with Microsoft Outlook via SouthWare's OfficeLink application.

* Exception Management: TaskWise is tied into a robust Alert Driver application that identifies exceptions and assigns them to specific named individuals as one or more tasks. Standard tasks can be linked together to form a complete business process. User can also create new alert drivers as an integral part of their daily business functions. For example, they may be worried about the cost of specific items rising very quickly in the future. Rather than checking the prices every day, they can define a new alert driver and prompt the system to notify them if the price rises above a specified value or if the price is rising faster than a certain rate. Many products support alerts, but SouthWare is one of the very few products that provides users with a software-driven business management system that helps them address potential or actual problems. The key concept here is the notion of a system that incorporates what used to be manual control processes into a single software-driven and software-supported business methodology.

* Collaboration: By presenting a software-driven business management system, SouthWare by default supports collaboration. Alerts and tasks can be shared with anyone in the organization, together with supporting e-mails. While there will always be one person who is responsible for a particular exception as an example, that person can send that "file" to another person and ask that they handle it, but they can also ask that person to send them a confirmation that the task has been completed.

Collections Adapter

Although the collections process could be handled through an alert system—as it is with some other products—, collections is such an important function that it should be handled by a separate task-driven, contact management application. SouthWare has recognized this and created a full-featured collections management application that allows users to track and resolve past due invoices or customers who have exceeded their credit limit.

Specifically, users can

* Know who needs a collection call based on either days outstanding for a specific invoice or customers that have exceeded their credit limit.

* Review and record the status of each outstanding invoice during a collections call.

* Know what was said on past collection calls.

* Easily access the details of any overdue invoice.

* Record what was said and when the customer promised to pay.

* Create mail merge letters.

* Systematically follow up with every customer who needs attention.

* Know when to withhold further credit to a customer.

* Decide how frequently to follow up with each customer.

Cash Flow Ledger

Rather than just providing a bank reconciliation application, SouthWare has expanded this application to help users track and analyze cash flows. Specifically, users can

* Capture cash flow history as it happens without any extra work.

* Understand how today's cash balance got that way.

* Review daily cash balance fluctuations.

* Quickly reconcile G/L cash to a bank statement.

* Review each type of cash flow to look for trends.

* See the details behind any cash flow transaction.

* See the detail cash, check, and credit card payments in each day's deposit.

* Look at cash flows over any period of time.

* Easily identify accounting errors involving cash accounts.

* Track the cash for a single bank account using several G/L cash accounts.

Purchasing

SouthWare has created a comprehensive purchasing system that is significantly more robust than other mid-market accounting systems. Specifically, the purchasing application

* Auto-generates purchase orders with user confirmation of each purchase item and purchase quantity.

* Tracks seasonality and recent sales history to optimize inventory levels by dynamically changing the reorder points to reflect both historical and estimated sales volume.

* Supports vendor quantity discounts. For some reason most mid-market accounting products do not support buy-side volume pricing, only sell-side discounts.

* Also takes into consideration, when creating a purchase order, factors such as economic order quantity (EOQ), movement class, prior usage, minimum and maximum, and pricing from competing vendors.

* Takes into consideration when assigning a vendor requested delivery date factors such as a customer's requested ship date, the vendor's typical lead time, internal administrative lead times, and production lead times.

* Optionally moves purchase orders into an approval WorkFlow that is fully user-defined.

Warehouse Tracking

The management of a warehouse can become quite a complex operation and in many instances a bottleneck in the order-to-cash process. In addition, the "accounting" data records are being accessed by people who are definitely not accountants, much less accounting clerks. SouthWare has addressed both of these issues by releasing— in November 2004—a warehouse tracking application that supports sophisticated warehouse management techniques while at the same time separating the management and control functions of the warehouse from the accounting application itself.

The process of receiving, put away, storage, replenishment of picking bins, pick and pack, and finally shipping can generate a significant data flow. SouthWare does not completely separate the warehouse from accounting, but it limits when information needs to be shared.

The formal accounting system certainly needs to know when and in what quantity materials are received. The warehouse needs to know the details concerning each order (item, quantity to ship, and requested ship date). The accounting system needs to know when an order has been shipped. That basic information is shared between the accounting applications and the warehouse, but that's all. Everything that concerns the management and movement of materials within the warehouse is kept within the warehouse application. The accounting records are not updated because they do not have to be updated. By disconnecting some of the links between accounting and warehouse management, the management of both is actually improved significantly. The "official" records are maintained by the accounting system while the warehouse tracking system can be used to report and correct any discrepancies.

SouthWare's warehouse management features include

* Multilevel storage IDs (warehouse, zone, aisle, shelf, position, bin).

* Fixed as well as moveable locations (trailers, pallets, license plates, etc.).

* Location attributes (refrigerated, hazardous, secured, etc.) that are associated with item attributes.

* Location capacities (weight or volume).

* Location codes that map, for example, a bin to a specific level, shelf, aisle, and zone.

* Group storage IDs by zones or areas.

* Preassigned or variable storage locations for specific items.

* Restricted storage by customer or vendor.

* Direct putaway into bin or location or place into temporary receiving location with subsequent putaway.

* Identification of picking or storage bins so that orders are always picked from the picking bins that are subsequently resupplied from the storage bins.

* Wave or zone picking.

* Transactions are assigned to stations that are then associated by warehouse managers to individual employees. If the volume in a station only requires one person, then only one person can be assigned to pick all orders.

* Support for RF devices.

* Suggested picking locations based on age, location preference, or quantity stored. For example, if an order or orders call for 105 items, and there are 100 in ten cartons in one location, the picker will be directed to pick the ten cartons and then retrieve the other five from a bin where there are individual items stored loosely.

* Separate packing and shipping transactions.

SOURCE:
http://www.technologyevaluation.com/research/articles/southware-excellence-series-making-excellence-easier-part-three-application-analysis-17711/

Contemporary Business Intelligence and Its Main Components

2010-08-01T21:12:00.002-07:00

TEC Analysts - March 23, 2009
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Economic and regulatory pressures, along with the need to stay competitive in the marketplace, have made business intelligence (BI) more important than ever for enterprise application users. BI gives users the ability to extract, consolidate, change, and analyze data in ways that are not possible in other approaches to enterprise applications. BI also allows users to exploit subsets of data within disparate organizational systems, such as customer relationship management (CRM), enterprise resource planning (ERP), finance, and human resources (HR), to combine various dimensions of organizational data in order to create a single view.

For example, manufacturing and distribution enterprises of all sizes would benefit from leveraging software that not only senses the daily pulse of the operations, but that also spots incongruities, analyzes the performances of multiple areas, and initiates corrective adjustments. BI tools help employees harness data which might be too complicated for manual manipulation. For instance, in departments such as purchasing and sourcing, there are constant and rapid increases in materials costs, deviations in lead times, and growth and instability in the supplier base—all of which require ever increasing buyer dexterity. BI gives organizations the ability to manage these issues proactively.

To build BI solutions within an organization, data warehousing, data integration, analytics, scorecards, and dashboards must also be considered. Each organization has its own use for some (or all) of these tools, depending on how it chooses to use the available tools. We'll look at the main BI components, and at the way BI tools can be applied within an organization.

Contemporary BI Solutions

Contemporary BI solutions enable business users to author, publish, and distribute enterprise reports via a fully integrated report writer, with an easy-to-use report creation wizard. Users can also customize and tailor reports to specific information needs. Report writing and graphing capabilities should enable even nontechnical users to create and share clear representations of complex business conditions. In addition to being easy to use, report writers must also incorporate advanced features like exception filtering and highlighting, calculations with sub-queries, rankings, drill-throughs, and so on.

Nowadays, BI tools generally provide graphical analysis of business information in multidimensional views. Most companies collect a large amount of data from their business operations; to keep track of this information, users require a wide range of software programs, along with more sophisticated database applications for departments throughout their organization. However, using multiple software programs makes it difficult to retrieve information in a timely manner and to perform analysis of the data.

BI represents all the tools and systems that play a key role in the strategic planning process by allowing a company to gather, store, access, and analyze corporate data for decision-making. Generally, these systems assist organizations in customer profiling, customer support, market research, market segmentation, product profitability, statistical analysis, and inventory and distribution analysis, to name only a few.

Data Warehousing

Data warehousing is a collection of data designed to support management decision-making. A data warehouse (DW) contains a wide variety of data that presents a coherent picture of business conditions at a single point in time. Its purpose is to create a database infrastructure that is always online, that contains all the information from the online transaction processing (OLTP) systems (including historical data), but that is structured in such a way that it is fast and efficient for querying and analysis (as opposed to a database for processing transactions).

Separating these two functions may improve flexibility and performance. The development of a DW includes the development of systems to extract data from underlying transactional operating systems. The DW also installs a warehouse database system that provides managers flexible access to the data. The term data warehousing typically refers to the combination of many different databases across an entire enterprise. This is in contrast to a data mart, which is a database (or collection of databases) designed to help managers make strategic decisions about their business. While a DW combines databases across an entire enterprise, data marts are usually smaller and focus on a particular subject or department, although some data marts, called dependent data marts, can be subsets of larger DWs.

Dimensions of Data Integration

With the advent of data warehousing came the creation of extract, transform, and load (ETL) tools, which use metadata to transfer information from the source systems into the DW. The three functions of ETL combine to pull data out of one database and place it into another:

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Extract—the process of reading data from a database.
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Transform—the process of converting extracted data from its previous form into a form that can be placed into another database. Transformation relies on rules or lookup tables, or on the combination of data with other data. This allows disparate data sources to be merged, which creates a centralized view of organizational data.
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Load—the process of writing the data into the target database or DW.

Again, ETL tools are typically used to migrate data from one database to another, to form data marts and DWs, or to convert databases from one format or type to another. Additional tools, which also make use of structured query language (SQL), have also been developed to give users direct access to the data in the DW. With time, these query tools have become more user-friendly, and many such tools now have a parser (a program that dissects source code so that it can be translated into object code) which can turn natural language questions into valid SQL commands.

Enterprise information integration (EII) is a category of software that confronts the longstanding challenge of enterprise data integration over diverse data sources in scattered enterprise systems. Companies that have overcome the problem of scaling and managing data are now pondering how to unify their data sources and leverage them to solve near real-time business problems. To that end, EII aims to provide unified views of multiple, heterogeneous data through a distributed (“federated”) query. One way to think of EII is as a virtual database layer that allows user applications to access and query data as if it resided in a single database. In other words, the concept takes the existing database capability to merge a query across different tables, but on a virtual basis, shielding users from the underlying complexities of locating, querying, and joining data from varied data source systems.

EII is a fundamentally different approach to such data integration technologies as enterprise application integration (EAI), which provides data or process-level integration, or enterprise portals, which merely integrate data at the presentation level. EAI can be defined as the unrestricted sharing of data and business processes throughout networked applications or data sources.

EII is also different from conventional ETL tools for data warehousing because it neither moves data nor creates new data stores of integrated data. Rather, it leaves data where it is, leveraging metadata repositories across multiple foundation enterprise systems, and visibly pulls information into new applications. As a result, customers may be content to trade in expensive DWs for a data extraction and presentation layer that sits on top of existing transactional systems—but only on the condition that they receive unimpaired performance.

Analytics

Online analytical processing (OLAP) is a category of software tools that provides analysis of data stored in a database. This enables users to analyze different dimensions of multidimensional data, such as time series and trend analyses. Business users can thus quickly and easily identify performance trends by using time-phased information analysis and graphing capabilities of products that support more sophisticated data analysis and that have calculated field capabilities integrated into reports. For instance, users can quickly isolate and identify products, customers, regions, or other areas that are trending significantly (whether up or down). Some solutions also include a fully-integrated, powerful data-graphing function that enables users to create detailed data visualizations. The graphing capability should ideally be entirely dynamic. In other words, users should be able to rapidly click through various report parameters and see graphical representations for each combination.

OLAP is often used in data mining tools, which is a class of database applications that look in a group of data for hidden patterns that can be used to predict future behavior. For example, data mining can help retail companies find customers with common interests. However, the term is commonly misused to describe software that presents data in new ways. True data mining software does not just change the presentation, but actually discovers previously unknown relationships among the data; this knowledge is then applied to achieving specific business goals. These tools are used to replace or enhance human intelligence by scanning massive storehouses of data to discover meaningful new correlations, patterns, and trends by using pattern recognition technologies and statistics. They are popular in the scientific and mathematical fields, but are also increasingly being used by marketers trying to glean useful client data from their web sites.

Going one step further, predictive analytics is data mining through pattern recognition, along with statistical and mathematical techniques with respect to large amounts of data, in order to support decision-making by forecasting the outcomes of different scenarios. These programs search databases using techniques such as neural networks and decision trees. They look for correlations and patterns that are virtually impossible for humans to detect, and present the information to help management make the right decisions.

Dashboards and Scorecards

Dashboards provide a comprehensive, at-a-glance view of corporate performance thanks to graphical representations, which resemble the dashboard of a car. These graphical representations show performance measures, trends, and exceptions, and integrate information from multiple business areas. They are synonymous with measurements. The centerpiece of any dashboard design is captured metrics, as well as the performance indicators that are combined to form graphs reflecting the health of the business.

Typically, dashboards present a wide number of indicators and associated metrics, arranged in a consolidated view. The visual characteristics of a dashboard are simple intuitive displays, such as dials, gauges, stoplights, charts, and tables. In theory, they are instantly understandable to users, and provide immediate visibility into the well-being of a company's operations and performance. They provide snapshots of daily operations in a single desktop interface, allowing users to pinpoint such problems as inventory or sales levels that violate given thresholds.

Dashboards also enable users to manage their business by using sophisticated tools like key performance indicators (KPIs), scorecards, and other advanced analytics. While a dashboard typically presents an easy-to-understand picture of key metrics at a particular time, scorecards tend to be more dynamic, allowing the greater personalization that might be required by a user's role. Scorecards are lists of financial and operational measurements used to evaluate organizational or supply chain performance. The dimensions of a scorecard might include customer perspectives; business process perspectives; financial perspectives; and innovation and learning perspectives that formally connect overall objectives, strategies, and measurements (since each dimension may have goals and measurements).

To make a clear difference between dashboards and scorecards (the terms are often confused or used interchangeably), a dashboard is a digital cockpit that produces a snapshot of a moment in time, which can be drilled through. Scorecarding is the process of comparing actual results to target results, and of discerning trends over a period of time (which is done by drilling down to reports and operational data sources).

Modern BI Suites

Whether a scorecard or dashboard is implemented as a simple, graphical way to display KPIs, or as a pillar of a comprehensive performance management strategy, it can produce a quick benefit for any company. Thus, modern BI suites should be able to access and present key business measures for sales, customer service, the supply chain, financials, purchasing, inventory, and many other areas. They should also provide the ability to use these information building blocks as the basis for comparisons, calculations, ratios, and metrics. Users should be able to dynamically combine business measures to derive KPIs, such as product profitability, margin analysis, book-to-bill ratios, return on investment (ROI), and other vital metrics.

Typical data that manufacturing enterprises should know about on a daily basis include inventory situation, rejected items, throughput, booked sales, order status, on-time shipments, warranty levels, and so forth. In each of these categories, users might want to investigate numbers and trends to understand the root causes, or to find out what items, regions, channel partners, or customers are involved. In short, this is what BI allows organizations to do successfully.

To recap, BI is an umbrella term that denotes a combination of technologies and architectures. Some important BI tools allowing the storage, access, and analysis of data in DWs and data marts include executive information systems (EIS); ETL tools; reporting, query, and analysis tools; data visualization; balanced scorecards; dashboards; OLAP tools; data mining; and alert and notification systems. It also includes decision support systems (DSS), which is software designed to support groups in unstructured decision-making by supporting brainstorming, conflict resolution, voting, and other techniques. Under the BI umbrella, all these tools are combined, so that BI can transform transactional data into information, information into decisions, and decisions into action.

SOURCE:
http://www.technologyevaluation.com/research/articles/contemporary-business-intelligence-and-its-main-components-19486/

SouthWare Excellence Series: Making Excellence Easier Part One: Company Background and Product Overview

2010-08-01T21:12:00.001-07:00

Introduction

The process of selecting mid-market accounting software usually starts with products that have achieved some name recognition, and that's fine as long as the search does not end there. SouthWare Innovations (www.southware.com) has created in its Excellence Series a worthy competitor serving a number of industries and offering users a surprising array of functionality, either directly as SouthWare applications or through one of their independent sales vendors (ISV).

Founded in 1984 and based in Auburn, Alabama (US), SouthWare is a relatively small company of very dedicated people (80 percent of its employees have at least twelve years seniority), which has created what may be one of the best examples of a true business management system, not just an accounting system. What may be even more important to companies of all sizes is that the Excellence Series operates on many platforms and databases, giving users the option to select the environment that best suits their technology requirements rather than forcing them to accept a single option.

This is Part One of a five-part note.

Part Two will look at what makes SouthWare different.

Parts Three and Four will discuss the applications and development environment.

Part Five will provide a competitive analysis and make user recommendations.

Product Line Summary

The Excellence Series supports a significant number of applications, most of which complement its historical strengths in the distribution industry. However, users should not eliminate the Excellence Series simply because they are not in this single industry. In fact, the Excellence Series supports accounting, distribution, e-business, service management, rental management, and job costing out-of-the-box. Together with its third-party developers the Excellence Series also supports manufacturing and a whole host of other industry verticals.

Currently, SouthWare supports 6,000 sites in the US—it has no plans to expand internationally. The largest site supports 500 users—a cellular telephone company—with the next largest site supporting 300 users—high-end photographic equipment.

While we will discuss some of SouthWare's applications in more depth a little later, let's start by summarizing what's available out-of-the-box. I have elected to segregate this list into four categories

* Business Management Functions
* Accounting Applications
* Productivity Tools
* Technology Features

The Excellence Series, and every other business management system for that matter, is not all-powerful, but it does offer advanced functionality in several areas and outstanding business management support.

Business Management Functions

* ExecuMate II is a powerful executive information system that presents to executives and managers user-defined summary data (expressed numerically and graphically) that allows them to take the company's pulse. If more detailed information is required, extensive drill-down is available. The system even posts alarm warnings for key financial areas (Note: These same alarms could also generate a standard alert in TaskWise, SouthWare's unified task, relationship management, and exception management system).

* ExcelReport: This unique application helps users establish both subjective and financial goals and grades progress toward achieving them. We will discuss this in more detail later.

* TaskWise: Combines into one application business processes such as task management, relationship management, exception management, and information sharing (collaboration). SouthWare has taken the concept of user-defined menus, which it supports, to the next logical level whereby the concept of a menu has been replaced by a completely integrated task management system that helps users carry out their jobs both more efficiently (do it cheaper) and effectively (do it better). This will be discussed in more detail later.

* Collections Adapter: Full-featured collections management application. This will be discussed in more detail later.

* AnswerReady is a tool that lets users set up a searchable database of topics, instructions, company policies, documents (e.g., employee handbooks), as well as questions and answers. The system has but one purpose and that is to help people do their jobs better by giving them ready access to the information they need. Users can create a table of contents to form the basic framework of the information management system, and add or modify topics (with appropriate access controls) as required.

Accounting Applications

* General Ledger: Standard functionality.

* Cash Flow Ledger: Bank reconciliation and powerful cash flow monitor. This will be discussed in more detail later.

* Accounts Receivable: Standard functionality.

* A/R Invoicing Adapter: Simplifies the invoicing process rather than using the more comprehensive order entry screens.

* Accounts Payable: Payment processing that includes cash requirements reporting, invoice and vendor holds, and cash basis accounting. The application will support over 99 pay-to addresses per vendor. If there is any question about an invoice (questionable charges, total amount that exceeds a specified value, etc.), the invoice can be placed on hold automatically and handled by TaskWise, SouthWare's exception management application.

* Purchasing: SouthWare has created a comprehensive purchasing system that is significantly more robust than other middle market accounting systems. This will be discussed in more detail later.

* Order Entry: Standard functionality.

* Inventory Control: Comprehensive inventory control including substitute items, vendor part numbers, RF receipts, and landed cost tracking. Although SouthWare provides significant functionality that relates to inventory management, these more comprehensive controls are contained in separate applications. If users require only basic inventory control, that's all they have to purchase or see.

* Warehouse Tracking: SouthWare has adopted a unique approach to warehouse management by creating an application (November 2004 release) that offers sophisticated day-to-day controls that are actually outside the formal accounting process while at the same time maintaining full quantity and cost tracking. This will be discussed in more detail later.

* Browser-based Handheld Processing: To complement its Warehouse Tracking application, SouthWare supports RF processing using handheld devices. This will be discussed in more detail later.

* Item Group Matrix Adapter: Complete inventory matrix (row and column) support for clothing, lumber, landscape plants, and any other item that uses multiple units of measure per item. Users can assign their own part numbers or the system will automatically generate part numbers to fit the row and column combinations. The system will also generate different price multipliers per row or per column.

* Marketing Catalogs: This feature allows users to group items into logical categories that can then be used to improve lookup speed, create logical ordering systems on web sites, or to improve inquiries. As an example, users can post items on web sites using multiple categories (e.g. coats / boys' coats / winter coats / long sleeve / blue) that make the ordering process for users far easier. This same feature is available on the buy side to improve lookup of required items. Finally, Marketing Catalogs can be combined with a tree view of stock items to vastly improve the search and inquiry capabilities of the system.

* Point of Sale: Standard POS system plus a fast and efficient method by which sales transactions can be input without having to cope with the complexity of a more robust order entry application.

* Assembly Work Orders: Rather than having to rely only on bills of material in a sophisticated distribution environment or conversely forcing users to purchase and contend with full-blown manufacturing suites, SouthWare provides users with a middle ground. Assembly Work Orders allows users to record a customer's order (standard or created on-the-fly), note any special instructions, calculate a final price if optional items or processes are added to a standard assembly, check availability of all components, and create applicable work orders for a simplified make-to-stock or make-to-order environment. Fixed and variable costs can be allocated to each work order and profitability checked against the price quoted.

* Shipping Interface: Interface configurator for third-party shipping systems. Current integrations include StarShip and ClipperShip.

* Delivery Scheduler Board: This utility allows users to examine daily and monthly views of scheduled deliveries.

* Return Authorizations: Handles both customer and vendor returns, detailed warranty and problem descriptions, reimbursements due from vendors for labor charges, purchase orders (if required) for vendor returns, even vendor return label printing.

* Rental Department: Supports all rental activities, including availability and scheduling conflicts, overdue contracts, serialized equipment tracking, delivery and pick up scheduling, and long term contracts with periodic billing. Rental and normal sales transactions can be included on the same invoice. The Rental Department integrates with SouthWare's Service Management applications to provide complete maintenance for all equipment available for rent.

* Service Management Series: This is a complete service management system that is comprised of four specific applications to help companies manage service contracts, track service histories and required preventive maintenance for each piece of equipment under service contract, daily planning and dispatch, and service invoicing. This will be discussed in more detail later.

* Payroll: Standard functionality.

* Fixed Assets: Standard functionality.

* Job Cost: Standard job costing including revenue recognition, master jobs for grouping of related jobs, AIA code set up and invoicing, certified payroll reports, and time sequencing for job shops.

* International Transactions: Record, track and report multicurrency transactions. The Excellence Series is not fully multicurrency compliant in all applications, but it does support basic currency transactions.

Productivity Tools

* Tree View Menu: Allows users to create an Explorer style menu organized by business process, application, or user-defined, including user created reports.

* Tree View Inquiry: This applet helps users group and review key information according to rules they set. As an example users can review and manage open sales orders, open purchase orders, stock items, or any other aspect of a business by grouping information according to user-defined rules and then drilling down as far as necessary (e.g., sales orders can be viewed by location, billing operator, salesperson, order type and order status). This gives users the ability to zoom in on a small but important slice of all sales orders. One example of this technology would be a salesperson identifying and reviewing all sales orders waiting on back orders. As the user sifts through each layer, the system will display totals for reference purposes and at the last level will display each line item on a specific order. The same application could be used to examine specific stock items, their status, applicable vendor catalog pricing, cross-reference part numbers, substitute items, and even tracking or serial numbers.

* FileView: This applet provides users with a built-in lookup, query, reporting, and export function. Users can selectively build a list a records that meet specified criteria in a grid, sort that list, group the list by one or more fields, preview each record in an attached pane, export the data in Excel or HTML format, and create customized reports once the records have been selected and sorted.

* WebView: Resellers or knowledgeable users can create a complete browser'-based accounting and business management system with hyperlinks to call SouthWare programs and objects.

* Handheld Device Access: Through its NetLink technology, SouthWare gives users access to system data and processes using handheld devices. Specific support has been provided for customer account management, a service technician portal, TaskWise task management, lookup contact information, executive review portal, order entry, stock item status check, receiving entry, and physical count entry. One of the really nice things about this new tool is that the applications have been sized so that they display in the standard handheld screen (no scrolling).

* HTML and PDF Reporting: Grid views and reports can be exported or printed in either HTML format for posting to web sites, or in PDF format.

* OfficeLink Interface to Microsoft MapPoint: This link allows users to view and manage route deliveries, and create a map for customer locations, scheduled service work, and other data related to geographical location.

Technology Features

* SwiftMate: System manager.

* ReportMate: SouthWare's report writer. SouthWare also supports F9. New reports can be created and added to any menu, as well as preselected and sorted reports. At the time the report is launched, the system will prompt the user for date ranges and other constants that are used to select or calculate information. Report designers can even display information to assist people actually running the report. Information can also be exported in HTML and XML format or posted to ExecuMate II, SouthWare's executive information system.

* Extended Data: The Excellence Series allows users to easily add any number of user-defined fields and have those fields instantly accessible for reporting purposes. In addition users can add their own list boxes for fields, prompts, and defaults and even create simple stand-alone databases. When data fields are added the standard file definitions are not changed. This innovative concept allows users to customize their database while retaining compatibility with standard programs. At the same time it allows users instant access to new fields when creating reports.

* SouthWare Thin Client: This application allows the Excellence Series to be configured using thin client architecture. Acucorp's Thin Client does not require programs to be split into client and server components. This means that SouthWare uses the same programs on "fat clients", "thin clients", and server-side processing. The Acucorp runtime has been split so that the user-interface portion can be displayed on the client while the program is running on the server. Thin Client may be loaded on any Windows client or installed on the network that is locally accessible to the client.

* ProcessWise Manager: This innovative tool helps people review and manage processes within SouthWare, specifically implementation, daily and periodic processing, and upgrades. The ProcessWise Manager presents processes in a dependent list format and allows users to check each step as it is completed.

* SouthWare WorkFlow: Acts as a bridge between the core accounting applications and any customized programming to maintain update compatibility. SouthWare has identified a large number of workflow points in the system where programmers can attach their modifications. Since the original source code has been untouched, the system can be updated easily. The flow point will stay exactly where it is thus keeping the integrity of the modification as well.

* SouthWare NetLink: Complete system for providing browser-based access to corporate data and processes for customers (including shopping carts), vendors, and employees. This will be discussed in more detail later.

* ImportMate: Import utility with powerful filtering and validation. This will be discussed in more detail later.

* Remote Control Fields (RCF) Packets: Remote Control Field (RCF) Packets is a technology that automates the running of SouthWare programs (e.g., end-of-day, month processing, or any repetitive process). RCF Packets are similar to a keystroke macro but add considerably more control and versatility to the process.

* DocTransfer: Serves as the EDI interface between the Excellence Series and trading partners that send or receive information in flat file format.

* SouthWare CheckUp: This diagnostic tool runs tests on the system, particularly system and application setup options, and looks for possible errors and warning

SOURCE:
http://www.technologyevaluation.com/research/articles/southware-excellence-series-making-excellence-easier-part-one-company-background-and-product-overview-17707/

Stalled Oracle Fumbling For A Jump-Start Kit Part 3: Market Impact

2010-08-01T21:11:00.000-07:00

Stalled Oracle Fumbling For A Jump-Start Kit Part 3: Market Impact
P.J. Jakovljevic - April 17, 2002

Market Impact

Oracle may be getting very uncomfortable with how its protracted disappointing revenue results (possible the worst in a decade) jeopardizes its No. 2 position in the applications market. It seemed all but inconceivable over a year ago that PeopleSoft could be so close to snatching the No. 2 position from Oracle.

The sluggish economy is becoming a lame excuse for Oracle's revenue slump, as it also appears that many of Oracle's problems, particularly in the applications business, are attributable to self-inflicted wounds. Those include the initial poor quality of the 11i application suite (as reflected by an enormous number of bug fixes released so far), and problems with product service & support, muddled pricing models, and not very feasible integration to other products. Indeed, Oracle's third quarter sales and net income are down compared to the previous quarter, in contrast to many rivals (e.g., SAP, Siebel, PeopleSoft, J.D. Edwards, Baan, Manugistics, Intentia, IFS, etc.) that have not only stemmed sequential declines in sales (if they had it at all), but are also anticipating a more prosperous year of trading ahead.

It is likely that in part Oracle has become the victim of its own success of overselling its product over a year ago. Oracle cannot afford to gamble any longer with its customers' willingness to entrust it to support their complete applications, infrastructure and service requirements. The time for trustworthy leadership and spotless execution within Oracle is long overdue. It is apparent that having set its sights on transforming itself into a total e-business solution provider, Oracle has painfully realized that it takes much more commitment and execution than a well-espoused marketing lip service. Furthermore, Oracle's marketing is also out of sync with current buying patterns. Oracle still stubbornly emphasizes the "end-to-end" nature of its applications suite at a time when customers are more cautious about unwieldy monolithic applications, and many prefer instead to buy software that addresses specific, more digestible requirements.

This is Part 3 of a 4-part examination of recent Oracle announcements.

Part 1 and Part 2 detailed the announcements.
This Part begins a discussion of the Market Impact.
Part 4 makes User Recommendations.

Oracle Strengths

To be fair, Oracle still holds the worldwide No. 2 enterprise applications vendor position. There are nearly 12,000 customers in over 90 countries (on multiple languages and localized versions) and over 10,000 Oracle employees dedicated to the applications business, including approximately 4,000 developers and over $300 million applications-related R&D expense in 2001. Also, the company remains a leading provider within large corporations in the communications, financial services, manufacturing, pharmaceuticals, healthcare, transportation, and in high-tech sectors. Oracle remains a true IT powerhouse with fingers in many pies other than database, such as application servers, and development tools, which ranks it as an enterprise infrastructure provider, together with SAP, IBM at a higher and, and Microsoft at the lower end of the market.

Oracle's sweet spot, however, is still predominantly enterprises with over several dozens thousands of employees. Additionally, the company markets its E-Enterprise 11i suite direct into the original equipment manufacturers (OEMs) and Tier 1 automotive, high tech, aerospace and defense (A&D), general engineering and process industries, as well as complex project-driven sectors of engineering and construction. As for manufacturing styles, Oracle caters for almost every setup from engineer-to-order (ETO) to flow manufacturing and on to mixed mode and process industries.

The company has also been increasingly reaching to the mid-market lately. In the US, it has even introduced the Small Business Suite aimed at companies with only 10 employees up, and that version is anticipated for release elsewhere in the world some time during 2002.

As for its products and services arsenal, Oracle offers one of the broadest ranges of business applications and technology for almost the entire realm of e-business. Oracle Applications 11i e-business suite, launched over 18 months ago, exhibits not only a web-centric architecture built on standards with Java 2 Enterprise Edition (J2EE), but also the new functional scope of enterprise systems, far beyond traditional ERP. The suite, now at version 6, covers the buy side (e-procurement), inside the four walls enterprise operations (i.e., core ERP including financials, human resources (HR), business intelligence (BI), project management, manufacturing with advanced planning & scheduling (APS)), the sell side (CRM including call center, field sales, sales force automation (SFA), service & support, configuration management, order management, marketing campaigns, contract management, etc), and enterprise asset management (EAM).

There is also a considerable supply chain management (SCM) suite covering demand planning, supply chain planning (SCP), supply chain event management (SCEM), and inventory optimization. Moreover, the portfolio also caters for collaborative business-to-business (B2B) e-commerce, across the holistic supply chain for buying/selling and product development, all through Oracle Internet Exchange suite, which also includes aspects of product lifecycle management (PLM). Overall, it involves 135 totally integrated modules with still upcoming additional specific vertical functionality for a claimed 19 industries. All above have a potential for functional depth to the point of best, or one of the best, in many segments worldwide. Additionally, Oracle's strategy includes its own in-house developed mobile technologies, which it expects to see increasing use in the future.

However, although the above offering is formidable, it has lacked true differentiating, groundbreaking traits compared to competitive offering. The fact remains that it is still the best-attuned offering (in terms of pricing, vertical extensions, customizability, professional service approach, etc.) to the needs of large, Oracle-technology-religious enterprises, or for 'greenfield' sites. It appears that a real magic bullet to attract smaller enterprises or enterprises with a bundle of disparate technologies and partners is yet to be produced.

Weaknesses

Currently, one cannot find many compelling reasons for a midsize enterprise to go for Oracle as opposed to, e.g., Microsoft Great Plains, or Navision. Rarely, if ever, has any company been able to provide a product portfolio that is on the cutting edge in more than a limited number of applications. While Oracle has a stalwart database and application server and its back-office applications are also well respected in certain vertical markets, its above new product enhancements may offer some value to its current customers, but will not likely help Oracle leapfrog competitive offering.

The company seems to have long been in a hapless search for a 'magic touch' that would differentiate its product offering. Unfortunately to Oracle, its attempts in that regard have largely been small steps in the right direction, many of them been often revisited and/or revised in the process.

Its recently unveiled 'Daily Business Close' concept with the idea of total visibility of any line of business (LOB) parameters, with drill downs, 'no exceptions', and daily closure may represent a remarkable achievement, due to the company's ability to run all of the application modules with one unified data model and one database, which should vouch for one instance of 'the truth' for everything without inconvenient batch updates, integration and data synchronization issues. Still, it is questionable whether this feature should be a compelling order winner.

Oracle also continues to ring changes around its mantra of standard, pure vanilla, all-encompassing enterprise applications. Although it is not yet giving up on being a single vendor solution, it has at least recently modified advice to users is an incremental, 'slice-by-slice' phased approach to deployment. This may indicate Oracle's grasp of the reality that a vast majority of its customers are only upgrading some components of the suite. The idea to build out from core enterprise business process automation to other more sophisticated outward-facing processes would be generally attractive if the ultimate target was not to replace all current systems with Oracle's e-business suite. Although this may be a compelling proposition to 'greenfield' sites (and how many of these are still out there?), many enterprises might remain skeptical or unimpressed when faced with the complexities of integrating with multiple legacy enterprise systems and more recent third-party, best-of-breed applications investments.

Oracle will have repeatedly realized with a heavy heart that the vast majority of real-world IT departments are a concoction of all sorts of enterprise applications - trading exchanges, Supply Chain Management (SCM), e-collaboration with business partners, Product Lifecycle Management (PLM), Customer Relationship Management (CRM), and a number of other components of e-business require disparate systems to work together. Oracle, in its mission to conquer the B2B e-commerce and back office needs of the corporate world, has introduced a very large all-encompassing solution suite. While it may still hope to dominate the back office, not many companies will adopt such a broad solution platform solely from Oracle. Rather, they will adopt only those functionally strong components that readily integrate to other, legacy solutions. Therefore, Oracle's recent endorsement of open technologies such as Java may allow customers to readily adopt only those solutions that fit their needs and that quickly integrate with their existing infrastructure.

SOURCE:
http://www.technologyevaluation.com/research/articles/stalled-oracle-fumbling-for-a-jump-start-kit-part-3-market-impact-16636/

Agilisys Continues Agilely Post-SCT

2010-08-01T21:10:00.002-07:00

Event Summary

Agilisys, Inc., the former Process Manufacturing and Distribution division of SCT Corporation (see iProcess.sct Enters Golden Gate Opportunity), has been showing us lately that it has swiftly moved beyond expected spin-off tremors, by leveraging its legacy of a prominent pure-process industries enterprise applications provider to 1) gain new customers, and 2) release new products under its new brand name and as an independent company.

To that end, on September 9, Agilisys announced that Sun Chemical, a $3 billion global company, has licensed the Agilisys Supply Chain Management (SCM) solution for use at the Colors Group of Sun Chemical, headquartered in Cincinnati, OH. Sun Chemical Corporation's Colors Group, one of the world's leading producers of organic pigments and dispersions for use as colorants, will be implementing the Agilisys supply chain solution across its marketing and manufacturing organization which includes six pigment manufacturing sites in the US and Denmark. Faced with complex global supply chain issues, Sun Chemical began the search for a solution to improve its forecast accuracy and reduce overall inventory. The Colors Group reportedly evaluated and selected Agilisys not only because of its process industry focus, but also because of the company's global support, collaborative capabilities, implementation speed, user interface (UI) and overall strength of the supply chain product offering.

This is Part One of a three-part analysis of recent announcements by Agilisys.

Part Two will discuss the Market Impact.

Part Three will address the Challenges faced by Agilisys and make User Recommendations.

Other Announcements

Earlier in July, Agilisys announced that Bernard Matthews Limited licensed the Agilisys Advanced Planning solution for its six factories in the UK, while further expansion of the solution to facilities in Hungary is expected next year. Bernard Matthews Ltd. is the UK's leading producer and brand leader for fresh, chilled and frozen turkey products. Another July victory came from Coca-Cola Enterprises, which has licensed the Agilisys Demand Planning solution for their Belgium and Netherlands operations.

Coca-Cola Enterprises was reportedly looking for a flexible demand planning solution that not only had a high degree of functional fit but was also easy to implement, while other key requirements were the ability to handle a large variety of products and manage the many sales promotions (e.g. at the market region-product level or at the customer-product level.) In addition, Coca-Cola Enterprises also required that the solution would integrate well into the company's existing legacy systems. To that end, the web-based Agilisys Demand Planning solution should enable Coca-Cola Enterprises to reduce inventory costs and improve service performance through more accurate sales forecasts that will be generated centrally based on statistical analysis of historical data. The web-enabled collaborative planning capabilities should further allow key-account managers and regional distribution managers of Coca-Cola Enterprises to provide local knowledge and subjective input to assess and adjust the forecasts remotely, in order to come to the most accurate resultant forecast.

As for addressing the issue of new brand awareness and new product releases, on August 27, Agilisys announced the release of Agilisys ERP 4.0, its newest version of the ERP solution for process manufacturers, which includes an enhanced integration architecture, embedded Java technology, and new functionality for actual lot costing, commodity pricing and agreements, and multi-company and inter-company transactions, among other enhancements.

Furthermore, Agilisys believes it deploys a unique development methodology, which embraces collaboration with customers called "Concept to Customer", and which centers on collaborative requirements development, design reviews, customer testing of pre-release software, and an "Early Upgrade Program". The process is part of a three-point approach to strategic development that brings together customer requirements with technological evolution and market requirements, enabling Agilisys to best respond with solutions that address the unique challenges and competitive opportunities that are present in the process industry vertical markets.

As for the functional enhancements, the company believes the new actual costing technology should set its solution apart from its competition in its ability to enable the management and tracking of actual direct costs and allocations on a lot-by-lot basis. One of the key issues with actual costing prior to Agilisys ERP 4.0 is that manufacturers had to wait until the end of the fiscal period to accumulate and allocate costs. The new actual costing technology in Agilisys ERP uses the actual transaction costs to value the initial transaction on a perpetual basis, deploying a Java-based "costing engine" to automatically update lot costs with post-transaction adjustments such as freight bills or voucher price variances. Cost adjustments are automatically rolled through to every finished lot in which the material was consumed.

Another believed key piece of functionality would be the ability to separate inventory valuation from managerial cost analysis, allowing manufacturers to capture valuable operational insight while complying with financial guidelines. The new 4.0 release also addresses the highly complex sales order process for products composed of commodity ingredients whose price may vary on a daily basis, and, to that end, the Agilisys ERP system recalculates the product price to maintain sales margins.

Typically ERP systems cannot address the complexities of commodity-pricing forcing companies to manage agreements outside of their automated systems and preventing them from adequately tracking the agreements and measuring profitability. Agilisys ERP 4.0 executes sales orders using formula-based pricing functionality that accounts for fluctuations in futures market prices and adjusts product prices within the structure of comprehensive sales agreements.

Financials

Pursuant to the above events came the October 8 announcement of the company's first quarter results of fiscal year 2002, and first financial results as an independent, privately owned company. The quarter, which ended on August 31st, should therefore mark a profitable and exciting beginning with new client wins, existing client milestones, and a successful product launch. In addition to the above-mentioned new clients, the quarter was also marked by existing customers who expanded their use of the Agilisys solution through additional applications, such as Central Soya, Coca-Cola Fountain, Kroger, Solvay Pharmaceutical, Findus and Unimills. Also, in addition to the above-mentioned launch of Agilisys ERP 4.0, the company also announced joint milestones with clients marking the first go-lives of Business Analytics, Market Analytics and the Applied Relationship Technology (ART) template of Complaint Management.

From a financial perspective, the quarter reportedly surpassed all expectations, exceeding all management targets in cash flow, earnings, and total revenue. Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA) for the quarter was $760,000, compared to the previous year quarter EBITDA loss of ~$2 million (adjusted to match the new fiscal year cycle) and an EBITDA loss of $3 million from the previous quarter. License revenue increased 15.4% over last year and 163% over the previous quarter, while cash flow from operations for the quarter was $2,3 million

SOURCE:
http://www.technologyevaluation.com/research/articles/agilisys-continues-agilely-post-sct-16774/

The Lexicon of CRM - Part 2: From J to Q

2010-08-01T21:10:00.001-07:00

The Lexicon of CRM

Part 2: From J to Q

R. Garland - October 19, 2001

The Lexicon is divided into three parts, this being the second of three. This second section covers the alphabet from J to Q. For A to I, see Part One.

J

J2ME - Java 2 Micro Edition. A highly optimized Java runtime environment targeting a wide range of consumer products, including pagers, cellular phones, digital set-top boxes, and car navigation systems.

JDBC - Java Database Connectivity. JDBC technology is an API that lets you access virtually any tabular data source from the Java programming language. It provides cross-DBMS connectivity to a wide range of SQL databases. There is also a new JDBC API, which provides access to other tabular data sources, such as spreadsheets or flat files.

K

Kbps - Kilobits per second. Note that Kbps is NOT the same as KB (Kilobytes). There are 8 bits per kilobyte. Hence, for example, if you have a 56 Kbps modem, it actually transmits 56/8 = 7 KB per second, maximum. This is often a source of confusion when users are downloading software from the Internet, and they see download rates of less than 7KB. 4KB, which is equal to 32 Kbps, is a typical, actual download speed.

Knowledgebase - A database that is stocked with information that has been reviewed by technical staff, with notes added, to make the information within it true "knowledge." Knowledgebases are often accessible by customers via the web, and may contain such items as Frequently Asked Questions (FAQs), known bugs, answers to previously asked questions, white papers, and the like. Used intelligently, a knowledgebase can be a time saver for both users and Customer Support Representatives alike.

L

LDAP - Lightweight Directory Access Protocol. LDAP is a client-server protocol for accessing a directory service. It is most often used to identify corporate network users, and maintain their passwords, on a central server repository. Some CRM and other enterprise-application vendors are building access to LDAP services into their programs, so that two lists of users and passwords do not need to be maintained (one on an LDAP server, one in the application itself).

Lead Aging - A statistic used by marketing and sales professionals to give them an idea of how long leads may be outstanding. It can give the company an idea of how well certain marketing campaigns are working, which types of users to target more successfully in the future, and the like.

Lead Qualification - Automation that pre-qualifies leads according to pre-established business rules before they are entered into a system and passed from Marketing to Sales for pursuit of sale.

Live Chat - A Customer Support service where a Customer Support Representative conducts a live, online text chat session with a user. Usually initiated by a website user who wants immediate access to help, but doesn't want to disconnect from the Internet to call the company by phone.

M

Mbps - Megabits per second. Similar in concept to Kbps. There are 8 bits per byte. Hence, the rate of 8 Mbps actually represents 1 MB per second.

mCRM - Mobile Customer Relationship Management. A new term that covers the area of field force automation and remote access to corporate information in real time. Such access is becoming more and more critical as economies move towards the service sector, and there are more people in the field working at client company sites who need access to corporate data.

Metadata - Metadata is "data about data." It's often used when talking about XML (eXtensible Markup Language). In XML, two pieces of information are sent for one piece of data: one is the data itself, and the other is information about the type of data that is being sent (the metadata). For example, we may send Contact Name information via XML to another company. We would not only send the actual name (for example, "Joe Smith"), but we would also send information to tell the other company that "Joe Smith" represents a Contact Name.

Middleware - Software that sits in between two disparate applications and helps those applications "talk" to each other. Examples of middleware include IBM's MQSeries and Microsoft's MQMS. Middleware can operate on one of four different levels: the data level; the application interface level; the method (or messaging) level, and; the user interface level.

Multi-Channel Support - Provides customers the ability to access the company via multiple "channels," or methods of communications. Typical communication channels include web chat, web forms submission, email, phone, fax, Voice over IP (VoIP), and live chat.

N

Natural Language Search - This is a type of search against a knowledgebase or database that allows the user to ask questions in a natural way; i.e., as if they were asking a real-live person the question, as opposed to restricting their input to some less intuitive method such as keyword searches with Boolean (and/or) options. An example of a natural language question might be: "Why is it that when I am using my computer, at various times the keyboard input freezes, and I am no longer able to type anything into any application? I must use my mouse to shut applications down and reboot to regain keyboard input."

O

ODBC - Open DataBase Connectivity. This is a standard protocol that is used to run queries against databases that are not "natively" supported (supported directly, with their own language) by an application. Most databases support ODBC connections to front-end tools, in addition to supporting specific applications natively.

ODS - Operational Data Store. Part of the data warehouse; fed with scores, behaviors, and clusters in near real-time, to be able to react live to customer actions on the web site. The idea is to better serve the customer by reacting to his actions in real time.

OEM - Original Equipment Manufacturer. The term is typically used to identify the company that actually creates the hardware or writes the software that customers ultimately buy. They may use channel partners or Value-Added Resellers (VARs) for everything from Sales, to Marketing, to Implementation, but the original source of the saleable item is the OEM.

OLAP - OnLine Analytic Processing. In the business-intelligence world, OLAP represents a "live" report in which users can employ such devices as pivot tables, drill downs, and real-time calculations to derive much more information from one report than is typical with a static report. As an example, a report that shows sales per state, through OLAP technology, may allow the user to drill down on a specific state to see sales per city within that state, in real time.

OLTP - OnLine Transaction Processing. That portion of the software that enables daily business operations such as order entry.

Operational CRM - This is the heart of what we have traditionally just called CRM. It represents those pieces of CRM that automate functions internal to the company, such as Sales, Marketing, or Customer Support functions. It's that part of CRM packages that interact with ERP packages to get product moving, facilitate the flow of internal information between individuals and teams, and automate or facilitate daily tasks. For more on Operational CRM, see the Article CRM is Busting Out of Its Britches: Operational, Analytical, and Collaborative CRM are Born.

Opt-In Marketing - This is a type of marketing where users give a company their permission, either directly or indirectly, to market to them. You often see requests for Opt-in marketing when filling out User Profiles on web sites. They often ask at the end if it would be OK for them to send your information to related and relevant parties who might have offers that would be interesting to you. By saying 'Yes,' you have "Opted-in" to marketing from those associated companies.

P

PBX - Private Branch Exchange, which is a private telephone network used within an enterprise. Users of PBXs share a certain number of outside lines for making telephone calls external to the PBX. In conjunction with PBX's, Automated Call Distribution (ACD) software is often employed in call centers to enhance the function of PBX's, by providing such capabilities as rules-based routing of calls, call queuing, and the like.

PDA - Personal Digital Assistant. The short-hand term for the handheld devices currently on the market, such as Palm-OS-based units, Pocket PC-based units, and units based on the Symbian OS from Psion (Symbian is due to make a bigger splash in the U.S. as the OS of choice on so-called "smart" phones - cell phones with PDA features - in the near future).

POI - Point Of Interaction. An internal shorthand to indicate at what "touchpoint" a customer began his interaction with the company. Relevant to companies that want to know what channels of communication customers prefer and are most useful for the company to develop.

Portal - A web site that combines elements of targeted information relevant to a given audience. For example, a company might set up a supplier portal, including information only relevant to their suppliers (such as inventory levels, corporate contact information, instructions for shipping and invoicing the company for parts shipped, etc.).

Portlets - These are sub-areas, or windows, within a Portal, that contain different pieces of information. For example, in an Employee Portal, you might have Portlets that separately contain: HR information, Corporate Announcements, Industry information and news relevant to their position, and maybe a Portlet to their favorite web site.

PRM - Partner Relationship Management. Third-party sales channel automation capabilities, allowing companies to distribute Leads, perform web-based sales, conduct promotions and establish discounts, etc. It also provides a mechanism for the initial partner to analyze the performance of its partners via analytics.

PSA -Professional Services Automation. These are services, now associated with CRM packages, that help automate the tasks of, say, a consulting company that offers Professional Services to clients. A PSA package might contain Quoting tools, Project Management Tools, personal time and expense reporting, as well as personnel optimization schemes, matching the customer need to the employee who is both capable and available to fill that need.

Q

QBE - Query By Example. There are a lot of ways to search databases. You can submit keyword searches, conduct natural language searches, and you can perform a QBE. With a QBE, you use an existing screen to enter information into the various editable fields. The values you enter represent the criteria you want to use in your search. For example, if two fields contain a First Name and Last Name for a contact, and you wanted to find all the Joneses in the database, you would type 'Jones' in the Last Name field, and run the query. The query would return information on all the Joneses in the database.

QoE - Quality of Experience. It's no longer acceptable to simply produce a great product. Next year, the competition will have caught up, and maybe even surpassed you, on your features and functionality set. Instead, companies are now focusing on the more broad term Quality of Experience, which represents not only the strength of the product, but also the ease with which the customer can do business with the company, rounding out the customer's entire Experience with the company, from Sales, through Purchase, through Support. See the article CRM and Technological Solutions: Be the Customer for more in-depth information about customers' total experiences with companies.

QoS - Quality of Service. Not quite what you might think. It means, what level of network services are provided to each client on the network. Companies, having to deal with network and storage performance and capacity bottlenecks, are turning to this concept of QoS, where the level of service that is offered a user on the network may be prioritized, based on a certain set of criteria. For example, the CEO might demand the highest QoS at all times, and would be given preferential treatment at printer queues, storage devices, and network bandwidth.

Queues (Work Queues) - Repositories for work orders that one or more employees have access to. It's a collection of actionable items, from which employees select the items that they will personally work on, and move them to their WIP (Work in Process) bins, or personal queues (see definition of WIP bins, in Part 3 of this series).

SOURCE:
http://www.technologyevaluation.com/research/articles/the-lexicon-of-crm-part-2-from-j-to-q-16496/

Inflation’s Demise: The Impact on Business Informa

2010-08-01T21:09:00.001-07:00

Nelson M. Nones CPIM is the Director of Global Marketing for CIM Vision International, Inc. (www.cimvision.com)

Overview

Inflation occurs when an abundance of money exists in relation to goods. This creates artificial demand as consumers accelerate their purchases to avoid future price increases. Suppliers, competing to meet this demand, confront temporary capacity shortages that they alleviate by shifting resources to higher-margin goods and raising the prices of lower-margin goods. In addition, they accelerate purchases of material to avert shortages and avoid future price increases. These actions create additional demand for goods, perpetuating the inflationary cycle.

Today's ERP systems originated from Material Requirements Planning (MRP) and Manufacturing Resources Planning (MRP-II) techniques developed in the 1970s and early 1980s. They focus on improving the accuracy, speed and visibility of short- to medium-term resource planning and allocation decisions, thereby improving management's ability to confidently make profitable commercial decisions. They also focus on minimizing operating costs, and maximizing short- to medium-term revenues, through improved coordination and execution of daily sales, engineering, procurement, production, logistics, maintenance and accounting activities. In short, they are designed to maximize profits by timing business events so exactly that productive resources are committed as late as possible, but never too late to miss profitable sales opportunities.

These are very important business problems during inflationary times, because one or two avoidable, critical resource shortages could mean a missed sale and reduced ability to recover fixed costs. For example, accidental over-commitment of a bottleneck work-center or shipping vessel may delay the arrival of finished goods and cause upstream work-centers to shut down until the backlog is cleared. The cost of underutilized upstream capacity is still incurred, even if production or shipping delays cause lost or delayed revenues.

Prices stabilize or fall when an abundance of goods exists in relation to money. This artificially reduces demand as consumers postpone their purchases in anticipation of even lower prices. Suppliers, challenged to recover their fixed costs, now have excess capacity. They respond by cutting the prices of goods, especially their high-margin products, in order to stimulate sales. In addition, they decelerate their own purchases of material to use-up existing stocks, and await future price decreases. These actions further postpone the demand for goods, setting the stage for a deflationary cycle.

At this writing, Asia and other developing regions are slowly recovering from an acute recession and strong deflationary pressure, while other regions (notably, the United States) continue to enjoy robust growth and modest inflation. This disequilibrium has created a combination of inflationary as well as deflationary pressures throughout the world. For instance, demand for goods remains strong in the United States because buyers there still have inflationary expectations. Asian suppliers have cut prices in order to boost export sales and utilize excess capacity.

If, as many believe, the world is in transition from inflation to price stability or perhaps deflation, how will business priorities be affected before, during, and after the transition? How will changes in business priorities affect ERP system requirements?

Trading

Just-in-time (JIT) principles became standard business practice during inflationary times. In essence, repetitive purchasing and JIT delivery are tactics for hedging against price increases while minimizing inventory-carrying costs. Buyers negotiate fixed-price repetitive-supply contracts that are fulfilled and paid for over the life of the contract through periodic shipments timed to meet the actual need for goods.

Price stability makes such hedging unnecessary, and deflation makes it highly unprofitable. But buyers will be under even greater pressure to keep inventories low, since the value of inventories remains the same or depreciates in relation to cash. As a result, buyers will insist upon immediate delivery of small quantities whenever they can, at spot prices, although some suppliers will succeed in selling large quantities for immediate delivery by offering "temporary" price reductions, especially during the transitional period. For all these reasons, discrete (order-based) procurement and fulfillment systems can be expected to regain popularity lost to repetitive (schedule-based) systems during inflationary times.

At the same time, buyers and sellers can be expected to monitor competitive spot prices more vigilantly than before. The growing popularity of reverse auctions, data warehousing and data mining testify to the increasing demand for such market intelligence. Demand will increase rapidly for powerful search engines and business-to-business electronic commerce technology to solicit and extract the right information at top speed.

The importance of forecasting systems for short- to medium-term planning is likely to diminish. During inflationary times, suppliers used forecasts, customer orders and future repetitive schedule commitments to anticipate capacity as well as material shortages. Forecast accuracy is critical to the proper timing of business events when capacity shortages exist, but becomes irrelevant when unused capacity is abundant.

Inflation made it profitable for suppliers to be selective about what they sold, and to whom. When persistent capacity shortages exist, profits are maximized by discontinuing low-margin products and rewarding high-margin customers. Performance measures such as Economic Value-Add (EVA), employed in sophisticated sales, product profitability and customer profitability reporting systems, evolved to address this requirement. Suppliers are likely to abandon these tactics when confronted with excess capacity, the sooner the better, and "hunt" instead for as many new customers as they can.

Demand will grow for data warehousing, search engines, opportunity management (OMS), customer relationship management (CRM) and collaborative electronic commerce systems to help the sales force identify and qualify new customers fast. Improved sales incentive, sales engineering and product configuration tools will also be needed to find and close new customer business faster than the competition.

During inflationary periods, non-interest-bearing money owed by trade debtors should be collected as soon as possible in order to maximize its purchasing power, and non-interest-bearing money owed to trade creditors should be paid out as late as possible. In between, this money can be invested in short-term financial instruments or commodities bearing relatively high rates of return, since inflation goes hand-in-hand with higher interest rates and commodity values. Over time, many sophisticated remittance processing, money-management and hedging tools have evolved to meet this requirement.

In periods of steady or declining prices, there is no particular incentive to collect any more money from solvent trade debtors than is needed to meet current obligations. The relative benefits of sophisticated remittance processing, money-management and hedging tools are further diminished on account of the lower interest rates typically associated with price stability. But demand for improved credit management tools and up-to-date creditworthiness data is likely to increase, because of the risk that more customers will be in financial difficulties. Strong demand for sophisticated financial hedging tools can also be expected during the transition, because of arbitrage and currency instability caused by inter-regional disequilibria.

Logistics

Demand for logistics systems grew rapidly during inflationary times, in support of JIT business practices. These systems cut shipping costs and minimize in-transit inventory investment by coordinating available shipping capacity with production schedules and procurement requirements, improving management's visibility of current shipping schedules and freight rates, and automatically raising and tracking the necessary paperwork. The value of all these benefits is likely to increase during periods of steady or falling prices.

Persistent excess capacity rewards suppliers who can deliver goods faster than the competition, on short notice. Earlier, it was demonstrated that buyers would insist upon immediate delivery of small quantities, at spot prices inclusive of freight, instead of negotiating long-term repetitive supply contracts. In markets characterized by steady or declining prices, a supplier who is able to deliver the goods exactly when they are needed will win the sale at today's spot price that in no event will be lower, and perhaps will be higher, than tomorrow's.

The supplier's ability to honor such commitments profitably, however, requires immediate knowledge of material availability, production status, shipping schedules, best available freight rates and available shipping capacities. Thus, in addition to conventional supply-chain management (SCM) systems, suppliers are likely to demand collaborative electronic commerce systems to help locate the best available means of transportation, carriers and rates. They will also require improved manufacturing execution (MES) and warehouse management (WMS) systems to get an up-to-the-minute picture of their internal production and logistics operations, and to further reduce inventory investment.

As prices stabilize or fall, suppliers will face increasing pressure to minimize logistics costs. This is best done through a combination of advance planning and solicitation of competitive spot-market bids for shipping services. Thus, demand for logistics planning and cost accounting systems can be expected to remain strong.

Overhead Cost Control

Overhead costs are distorted immediately, and dramatically, by surplus capacity. Labor-intensive producers can adjust fairly rapidly through labor-force reductions, but capital-intensive producers cannot. Liquidating properties or fixed assets can eliminate the cost of persistent surplus capacity, but the assets may be difficult or impossible to sell. Manufacturers can be expected to implement a variety of short- to medium-term accounting tactics and longer-term financial tactics in order to minimize the adverse consequences.

Tactical accounting changes can be anticipated in the areas of fixed asset accounting, overhead cost allocation and inventory valuation. Possible financial tactics include restructuring of operations to minimize fixed costs, asset liquidation and, worst case, asset write-offs.

Fixed overhead costs are typically governed by original acquisition costs and pre-determined amortization schedules. The periodic amortization cost thus accrued is divided by production volumes to determine overhead costs per unit. Excess capacity drives these costs up as ever-smaller production volumes absorb constant amortization costs. In markets experiencing falling prices, real overhead costs will constantly increase over the long run because deflation increases the purchasing power of the original investment.

Businesses tend to amortize their fixed assets as rapidly as allowed during periods of inflation and high capacity utilization. This minimizes short-term tax liabilities by reducing pre-tax profits, and reflects the tendency of equipment to wear-out faster the more it is used. But businesses competing in markets characterized by stable or falling prices can be expected to lengthen the amortization schedules of their existing fixed assets as much as allowed, because equipment is not being utilized as much and because there are smaller pre-tax profits to shelter. This tactic has the salutary effect of reducing overhead cost per unit, reducing cost of sales, boosting short-term profits and strengthening the balance sheet, thereby improving apparent business performance. Many of today's fixed asset accounting and cost-allocation systems, however, lack the flexibility to implement such changes quickly. Strong demand for flexible replacement systems can therefore be anticipated.

Related inventory valuations and the resulting cost of sales per unit will be affected, too. During inflationary periods, businesses tend to maximize cost of sales as much as allowed, chiefly to minimize pre-tax profits and the value-added tax base. In the future, however, financial controllers will be pressured to change their inventory valuation methods by whatever means necessary, and allowable, to minimize cost of sales, in order to further boost short-term profits and strengthen the balance sheet. As with fixed assets, many of today's inventory management systems lack such flexibility. Replacement systems will be needed to the extent that surplus inventories are being cleared in the short- to medium-term, and to whatever extent a minimum inventory investment is required to operate the business over the long run.

During inflationary times, automation of plant, warehouse and office operations became an important tactic for minimizing ever-increasing labor costs. Capital resources could be substituted for labor, and written-off in constant, periodic amounts that declined in real value over time as inflation eroded the purchasing power of money.

This approach is unnecessary during periods of price stability, and downright unprofitable during a deflation, because the purchasing power of money will stay the same or increase over time while the cost of labor stays the same or declines. Further, replacing fixed assets with variable labor resources gives manufacturers far greater ability to control operating costs in the short- to medium-term. Thus, it is probable that labor's proportion of total operating cost will increase, even if the total labor-force is smaller than before. This trend would likely accelerate as existing fixed assets are retired, liquidated or written-off. As a result, steady or declining demand for plant, warehouse and engineering automation systems can be anticipated. This includes robotic, programmable logic controller (PLC), automated storage and retrieval (ASRS), computer-assisted design (CAD), computer-assisted manufacturing (CAM), statistical process control (SPC) and integrated laboratory management (LMS) systems.

Were a prolonged worldwide deflation to occur, demand may shrink so much that suppliers are forced to shut down parts of their operations, or shutter entire facilities. Attempts will be made to sell the idle properties and equipment for the best-possible price, with attendant capital losses written-off immediately.

Sale of assets is most likely to occur while inflation is subsiding, and before the onset of widespread deflationary pressure, because the assets will appear cheap to investors who continue to have long-term inflationary expectations. Liquidations and write-offs will have an immediate, and beneficial, effect on cost of sales, to the extent that periodic amortization costs are significantly reduced in relation to production volumes.

These tactics would not require any significant changes to existing business information system capabilities, but the number of general business systems in-use can be expected to decline as operations are scaled back and facilities closed. These include functions such as general ledger, accounts payable, accounts receivable, inventory control, production control and cost accounting.

Reduction of overhead costs at remaining operations is likely to be a key priority, as well. Older general business systems tend to incur relatively high operating and maintenance costs. Meanwhile, information technology costs have fallen dramatically. As a result, some manufacturers will replace their older general business systems with newer, less-expensive versions, especially if doing so will enable the other tactical changes described in this article to be implemented faster. But many older business systems have already been replaced to address recent Y2K concerns, so the ongoing need for replacement systems is likely to be limited, at best.

Labor Cost Control

During periods of persistent surplus capacity, manufacturers can be expected to reduce their variable labor costs as much as possible. This may be done through elimination of overtime, shift reductions, work-hour reductions, temporary or permanent pay cuts, temporary or permanent layoffs, and reduction of employee benefits. Further, operations may be scaled back or eliminated at high-cost union shops, as well as within high-cost or restrictive labor markets such Germany and labor markets characterized by low unemployment such as the United States.

These effects will be moderated by substitution of variable labor for fixed assets in the drive to control overhead costs, as previously demonstrated. In doing so, however, manufacturers are likely to accelerate the redeployment of productive capacity from high-cost, capital-intensive locales such as the United States to low-cost, labor-intensive regions such as Asia or Central and South America.

These actions may have adverse and increasing social effects, as dramatized by recent protests in Seattle and Washington, D.C. against the International Monetary Fund and World Trade Organization. Worker demands for improved economic security may lead to renewal of isolationist policies in some locales, which would effectively reverse the economic liberalization and globalization trends of recent years.

Business models designed to optimize performance in the previous climate of unrestricted free trade will have to be adjusted to take account of the artificial incentives and penalties created by any new government regulations. This is likely to create new demand for localized regulatory compliance systems that address taxes, duties, tariffs, prohibited goods and foreign exchange controls. At the same time, reduced demand can be expected for general business and supply-chain management systems designed to integrate the unrestricted operations of multinational enterprises.

Business Planning and Improvement

A variety of tools and techniques evolved during inflationary times to improve productivity and maximize profits. These include material requirements planning integrated with capacity requirements planning (MRP-II), advanced planning and scheduling (APS), activity-based costing (ABC) and total quality management (TQM). All of these techniques address business problems created by limited capacities. MRP-II and APS tools are designed to maximize the utilization of existing capacity through improved coordination of individual production and procurement activities, without necessarily improving efficiencies or yields. ABC and TQM are essentially diagnostic tools for identifying the root-causes of inefficiencies and defects, and enable management to monitor the effectiveness of corrective actions. Used together, these tools allow management to wring maximum productivity from its existing capital investment, before additional long-term capacity investments are considered.

In a period characterized by stable or falling prices, fewer new long-term capacity investments will be considered. Instead, gradual disinvestment of existing capacity may occur. Before disinvestment, there will be little or no real benefit from using capacity requirements planning, APS, ABC or TQM tools except to improve the coordination and efficiencies of a smaller labor force. But even in so far as labor utilization is concerned, greater business benefits will accrue from short- to medium-term adjustments to the number of resources employed, rather than continuous long-term improvement of labor efficiencies.

Materials management is likely to remain a top priority, for reasons demonstrated earlier. After clearing excess stock, suppliers will be under intense pressure to keep inventories to an absolute minimum, since their value will remain the same or depreciate relative to cash in the event of a deflation. Expanded use of discrete (order-based) master scheduling (MPS), material requirements planning (MRP), manufacturing execution (MES) and warehouse management (WMS) tools can be expected in order to properly schedule and manage materials in small quantities, on a JIT basis. Continued deployment of quality assurance and control tools for the purpose of improving finished product yields and minimizing waste can also be expected.

SOURCE:
http://www.technologyevaluation.com/research/articles/inflation-s-demise-the-impact-on-business-informa-15910/