Analyzing MAPICS' Further Steps After Frontstep Part Three: Market Impact

Dec 25, 2009

Analyzing MAPICS' Further Steps After Frontstep Part Three: Market Impact

For the last several months MAPICS has shown both the signs of significant changes and the persistence of a number of its historically recognizable invariant tenets of operation. Following the acquisition of its former competitor, Frontstep, (see MAPICS To Leap Forward In A Frontstep Way), MAPICS, Inc. (NASDAQ: MAPX) became possibly the largest global provider of extended enterprise applications for solving the challenges of discrete manufacturers.

MAPICS has never departed from its conservative approach of delivering practical innovations and bulletproof applications for its customers, nor from its proverbial fiscal discipline. The Frontstep acquisition has obviously provided MAPICS with a boost in terms of product choice, having solutions on both leading platforms—Microsoft and IBM. With MAPICS SyteLine 7, the vendor now boasts a notable application built on a .NET architecture. However, the loyal AS/400 install base should rest assured of MAPICS' continued support for the platform. The big news on the MAPICS ERP for iSeries product side is that version 7.3, which is slated for December, will feature Double Bytes support, and expanded Java 2 Enterprise Edition (J2EE)-based client technology.

Other developments detailed in this note are:

* MAPICS Field Service and Support (covered in Part One)

* A Global Partnership with Systems Union (covered in Part One)

* Primus Knowledge Solution Results
* Certified Partner Program

* Pacejet Logistics, Inc. is a Certified Partner

* A Revised Sales Strategy
As already sensed so far, much has changed, while also much has remained the same at MAPICS during 2003. First of all, with the February finalization of the Frontstep acquisition, MAPICS has become quite a large enterprise applications provider, with projected revenues of more than $210 million, and with over 800 employees across the globe, more than 10,000 manufacturing sites in 70 countries, and nearly 150 worldwide affiliates offering product service and support. The acquisition of Frontstep has positioned the vendor near (if not at) the top among vendors that focus on the mid-size discrete manufacturing market.

Moreover, the Frontstep acquisition also provided MAPICS with a much-enhanced choice of products. MAPICS ERP for iSeries (formerly MAPICS XA) has long been the company's sole ERP system for the IBM iSeries (formerly AS/400) platform. Thus, in the second half of the exuberant 1990s, MAPICS had already earned veteran status in the market, but its former IBM AS/400 platform confinement and its inability to rejuvenate its own mature product had given it a real negative "old and unexciting" perception. To make things worse, its attention to the bottom line during times of flat revenues often came at the expense of cutting into resellers' margins, which made some channel partners at least consider exploring other options.

Although the company had long sought to embrace new technologies while at the same time providing a smooth migration path for existing customers, it had suffered from continually being perceived as late to market with its new technology forays. Its protracted inability to deliver an all-the-rage Windows NT platform-based product made it struggle to sustain momentum in the then booming mid-market, which was increasingly intrigued with the low-cost and pervasive Microsoft technology. To that end, owing to the acquisition of its former struggling competitor Pivotpoint (see How Has MAPICS Been Extending?), MAPICS had delivered since early 2000 a number of new e-business modules and expanded its platform reach from its solely IBM iSeries and DB2 platforms to include Microsoft Windows NT, UNIX, and Linux operating systems and the Oracle database platform.

However, while expanding its offering and platform support bundled with the functionally strong former Pivotpoint Point.Man ERP product for high-tech industries, the company had also been burdened with an immense task of blending different corporate cultures (i.e., the less formal Pivotpoint's versus the more rigid and conservative MAPICS one) and with the inherited problems of Pivotpoint, which at the time of the acquisition was in a state of a flux—it had poor financial viability, channel erosion, employee exodus, and a poor service and support record. The management of dual flagship product lines had also initially and long after been awkward for MAPICS and its affiliate channel. One is to expect that, three years later, MAPICS will have learned important lessons, which it will have leveraged in the case of Frontstep's acquisition as another attempt at harnessing Microsoft's technology.

More importantly however, with the Frontstep acquisition MAPICS has inherited a technologically advanced and functionally strong product. Frontstep solved a big piece of its long-plaguing predicament of developing a next generation product and then migrating its large user base. Thus, newly enlarged MAPICS logically has become an active dual (i.e., both J2EE and Microsoft .NET compliant) platform vendor. To that end, the company will continue to sell and enhance its traditional breadwinning product for the IBM iSeries platform within that IBM world where the iSeries, J2EE, and WebSphere are important to users and prospects, along with the MAPICS SyteLine 7 product, which was relatively recently, albeit immediately before the Frontstep acquisition, completely rearchitected on Microsoft .NET (see Frontstep Ups The .NET Ante)
Consequently, MAPICS initially ended up with three key ERP offerings: 1) MAPICS SyteLine (formerly Frontstep SyteLine and Symix SyteLine), 2) MAPICS ERP for iSeries (the original venerable flagship MAPICS XA AS/400-based offering) and 3) MAPICS ERP for Extended Systems (derived from the acquired Point.Man).

Since its inception in 1978, the MAPICS ERP for iSeries product has evolved into a broad range of functionality for discrete manufacturing enterprises. Its strength remains largely in the discrete manufacturing arena, and until not long ago, its sweet spot has been within single plant installations. With features such as rate-based planning, serial number traceability, and product data management (PDM), the product can handle make-to-stock (MTS), assemble-to-order (ATO) and less intricate engineer-to-order (ETO) manufacturing environments. With the addition of its International Financial Management (IFM) module a few product releases back in the mid 1990s, its corporate financial management functionality became even more competitive. A payroll module has long been available, which always represents an attractive extra for its target market. The MAPICS focus has also long been on embedding workflow functionality designed to support business processes across many functional areas. MAPICS first delivered this capability for design and engineering functions, and recently expanded workflow throughout the entire product.

On the other hand, MAPICS ERP for Extended Systems has stronger MTS and repetitive manufacturing capabilities, including "pay point" processing, with the ability to report material, labor, and overhead costs from individual operations within the entire routing sequence. An important differentiator should be the product's ability to support virtual manufacturing enterprises that outsource manufacturing operations to third party subcontractors. An engineering change management (ECM) capability and actual costing have also been available. Contrary to its iSeries counterpart, the Extended Systems product (as the name suggests) has also long offered multisite interdependent functions, centralized sales, and purchase order management, but it has partnered with niche specialists to harness forecasting, quotation, payroll, tooling, and preventive maintenance functionality. Its financial modules are capable of consolidation and drill-down functions across multiple entities, although they have been best used and proven in US-based enterprises.

Like its new parent MAPICS, with its recently enhanced functionality to natively deliver solid SCM and CRM modules (see Mid-Market ERP Vendors Doing CRM & SCM In A DIY Fashion), former Frontstep had also positioned itself as a primary business systems provider that offers comprehensive enterprise solutions with integrated CRM and SCM capabilities, on top of a strong discrete manufacturing ERP capability and experience rather than as a mere ERP vendor. In that regard, the MAPICS SyteLine suite for mid-sized manufacturers, by and large offers support for customer service, order processing, inventory control and purchasing, manufacturing production management, production planning and scheduling, cost management, project control and financials, sophisticated product configuration for sales order management and manufacturing, advanced planning and scheduling (APS), business intelligence (BI), workflow automation, with business process definition and execution, and advanced forms. The traditional shortcomings in terms of multinational financial management modules will supposedly be overcome with the alliance with SunSystems.

As Microsoft-centric technology and the .NET initiative have become mainstream in the business applications mid-market, MAPICS has had to get over its traditional IBM platform preference and sentimental hang-ups, and to bow to its prospects' preference for Microsoft solutions that incorporate .NET and the SQL Server database technologies. To that end, SyteLine 7 is a solid solution for those Microsoft-oriented customers and prospects. Further, while the rearchitecture to .NET is important, it is the combination with new functional capabilities in areas like APS, flexible multi-site deployment, and flexible business process automation that position the product better going forward, particularly now as a part of a larger entity with a strong balance sheet and market clout.

User database preference was another driving factor for MAPICS in deciding which one of the two Microsoft-centric suites to actively market to Microsoft-oriented shops. MAPICS' products had long been deployed to a very narrow set of databases, i.e. former MAPICS XA could only run on an IBM DB2 database, whereas former Point.Man could only run on an Oracle database. Not providing support for Microsoft SQL Server has resulted in a number of missed opportunities within the cost conscious mid-market segment of MAPICS' focus. While SyteLine has had a long history of supporting both Windows and the UNIX OS, and Progress Software's database, the 7 release in 2002 solely took advantage of Microsoft technologies, as well as Microsoft's SQL Server database. Having surveyed the MAPICS ERP for Extended Systems users, MAPICS claims to have heard back from them that what they wanted were .NET and SQL Server-based solutions. Hence, MAPICS made a crucial decision to do that by providing a smooth migration path and conversion tools to SyteLine 7, rather than to embark on redevelopment of the Extended Systems product.
The Extended Systems suite will nevertheless continue to be supported for users that choose to stay on it. MAPICS maintains its product development teams have already mapped the functionality of the two products and the unique features of Extended Systems will be added to SyteLine during forthcoming future releases, which will be fleshed out shortly. Thereafter, the vendor pledges to work with customers in those industries to help them transition to SyteLine only when they are ready to make the change. Otherwise, SyteLine offers almost everything that the Extended Systems product has to offer, and more in both functional depth and breadth, so that one should anticipate incentives for users to migrate. At least, Frontstep should solve MAPICS ERP for Extended Systems' shortcomings in terms of limited multinational features and in terms of its dichotomy of running only on a higher-end of the market amenable Oracle database, while providing the functional features for the lower-end of the market.

Thus, given its highest prosperity in the market, the SyteLine product release schedule is the busiest amongst all the other products in the family. In June, the SyteLine 7.02 release, which includes the UK localization and translation toolset, was made available in the US, Canada, and the UK. The current release has 120 total implementations, whereby over 65 percent of these are the customers coming from North American affiliates, and over 20 percent are from the international markets. Then, the SyteLine 7.03 release that will feature the generic financial interface, and the updated Planner module based on additional APS capabilities, an update to core SyteLine for additional planning parameters, workflow security and data management enhancements, international enhancements, several new reports and report enhancements, complete FASB 52 compliance, and improved upgrade and custom code management, should "hit" China, Southeast Asia, Australia, and New Zealand in late 2003 (and still works for the US, UK, and Canada).

With dates yet to be determined (at the moment only projected for summer 2004), the SyteLine 7.04 release, featuring integrated SyteLine Enterprise Financials, more complete additions to the APS Planner and Scheduler functions, international enhancements including additional tax enhancements, final country packs for Mexico, Japan, and France, more workflow enhancements, user interface (UI) tuning and enhancements, and projects to support selected verticals and to support MAPICS ERP for Extended Systems to SyteLine conversions, will be released in Mexico, France, and Japan (and the other countries already mentioned). Finally, Germany, Italy, and Russia will only see the SyteLine 7.05 release some time in 2005. The release should complete the internationalization process; will have final country packs for Germany, Italy, and Russia; should complete the planner and scheduler functional improvements; and the integration of the ntelligent Sourcer, as well as the gap projects to support the selected verticals.

The integration between SyteLine 7.04 and SunSystems is planned for 2004 against the SyteLine 7.04 intended availability. The SyteLine Enterprise Financials module that leverages SunSystems is currently available in a stand alone mode (e.g. professional service level of integration) within the following modules: foundation, accounting, fixed assets, allocations, connect, etc. Two customers have reportedly purchased SyteLine Advanced Financials this way—Krone and Dornier Medtech. This should alleviate the conundrum for penetrating the higher-end of the market since MAPICS (and the former Frontstep alike) has never been at the forefront of providing native multinational financials/consolidation, budgeting, project accounting/management, and human resources (HR) functionality. Without these in hand, it is a tall order for any like vendor to penetrate the corporate management level competing against the likes of Oracle, SAP, and PeopleSoft. Production management remains MAPICS' strongest spot, and thus it has often been implemented only in manufacturing divisions of large global organizations that use a tier one ERP product for corporate financials or HR applications.
READ MORE - Analyzing MAPICS' Further Steps After Frontstep Part Three: Market Impact

Analyzing MAPICS' Further Steps After Frontstep Part Two: More Recent Events

Analyzing MAPICS' Further Steps After Frontstep Part Two: More Recent Events

For the last several months MAPICS has shown both the signs of significant changes and the persistence of a number of its historically recognizable invariant tenets of operation. Following the acquisition of its former competitor, Frontstep, (see MAPICS To Leap Forward In A Frontstep Way), MAPICS, Inc. (NASDAQ: MAPX) became possibly the largest global provider of extended enterprise applications for solving the challenges of discrete manufacturers.

MAPICS has never departed from its conservative approach of delivering practical innovations and bulletproof applications for its customers, nor from its proverbial fiscal discipline. The Frontstep acquisition has obviously provided MAPICS with a boost in terms of product choice, having solutions on both leading platforms—Microsoft and IBM. With MAPICS SyteLine 7, the vendor now boasts a notable application built on a .NET architecture. However, the loyal AS/400 install base should rest assured of MAPICS' continued support for the platform. The big news on the MAPICS ERP for iSeries product side is that version 7.3, which is slated for December, will feature Double Bytes support, and expanded Java 2 Enterprise Edition (J2EE)-based client technology.

Other developments detailed in this note are:

* MAPICS Field Service and Support (covered in Part One)

* A Global Partnership with Systems Union (covered in Part One)

* Primus Knowledge Solution Results
* Certified Partner Program

* Pacejet Logistics, Inc. is a Certified Partner

* A Revised Sales Strategy
What has not changed at MAPICS either is its traditional internal emphasis on providing top-notch customer satisfaction. To that end, in May, Primus Knowledge Solutions (NASDAQ: PKSI) announced that MAPICS has reported measurable return-on-investment (ROI) results from Primus technology after successfully implementing the Primus eServer knowledge base and Primus eSupport within its customer support organization and on its support web site. Since implementing Primus knowledge management software, MAPICS has reported a 10 percent increase in customer care specialist productivity, 40 percent reuse of documented solutions-reducing call escalations from level one customer care specialists, 70 percent usage of the knowledge base by customer care specialists on customers' calls, and rapid acceptance of the self-service option.

MAPICS solutions are in use today at more than 10,000 customer sites in 70 countries and available in 19 languages. These solutions include professional services and software implemented on the two industry-leading technology platforms—Microsoft and IBM—including extended ERP, customer relationship management (CRM) and supply chain management (SCM). The company claims it had three key business issues to solve when it selected Primus as its knowledge management partner:

1. Capture and easily manage knowledge in the workflow from every MAPICS customer care specialist

2. Empower MAPICS customer care specialists with the confidence to broaden their areas of expertise by enabling reuse of documented solutions

3. Create a foundation for MAPICS' self-service strategy by providing customers and affiliates 24x7 access to the knowledgebase

Further, in May, MAPICS announced its certified partner program as part of its enhanced strategic alliance and partner strategy. The program consists of application, hardware, and technology companies that have worked to develop offerings that are complementary to core MAPICS solutions. These partners will continue to offer selected products, interfaces, support, and services directly to MAPICS customers, while MAPICS and its certified partners will continue developing solutions that include industry-specific business processes, which leverage best practices gained from customers' experience. Through partnerships, MAPICS will attempt to make it possible to build complementary, targeted solutions and strategically bring them to market more quickly through multiple channels.

The certified partner relationship should provide value to the partners by giving them the ability to stay closely aligned with MAPICS and to differentiate themselves from other vendors looking to sell solutions to MAPICS customers and prospects. Companies will receive assistance from MAPICS including development, support, sales, and marketing—all coordinated by a dedicated program manager within the MAPICS partnering organization. In order to be considered a certified partner, vendors must demonstrate that their applications have an interface to or can integrate with MAPICS solutions on the IBM or Microsoft platforms. There are many companies already enrolled in the MAPICS certified partner program, providing offerings that complement the MAPICS solutions with advanced capabilities in areas such as electronic data interchange (EDI) transactions, document management, payroll, and personnel management.
The most recent to join the list was Pacejet Logistics, Inc., a provider of Web-based logistics resource management (LRM) software applications and services. Together, MAPICS' ERP solutions and Pacejet's LRM solutions will enable MAPICS' customers to accelerate and streamline outbound and inbound logistics and distribution business processes to lower operating costs while improving customer service. As a MAPICS Certified Partner, Pacejet will provide its Pacejet Transportation Management application to MAPICS' customers as an integrated extension to MAPICS' ERP solutions. Pacejet Transportation Management provides a Web-based solution for full truckload (TL), less-than-truckload (LTL), and parcel shipping with advanced capabilities such as load consolidation, route and rate optimization, and Web/EDI tendering that can help MAPICS' customers run their logistics operations efficiently. Pacejet also offers Pacejet Distribution and the Pacejet Advanced Commerce Catalog as part of its complete LRM solutions. Pacejet solutions include transportation management, distribution, and supply-chain event management (SCEM).
Furthermore, while having a broad functional footprint remains important, MAPICS has departed from its traditional practice of "pushing" sales of its plethora of components onto customers. Going forward, it will instead try to solve challenges for its customers and prospects in their quests for becoming world-class manufacturers. In other words, owing to its vast experience and knowledge of challenges and best practices within a specific set of selected industries of focus, MAPICS will try to reverse-engineer the user's objectives into obtaining an optimal set of needed applications to fulfill these. This crusade, which focuses on the customer's needs and tends to obfuscate any impending platform or product brand allegiances, has already been embraced by Frontstep's addition to the MAPICS fold.

As to further confirm that MAPICS remains a customer-focused organization with the mantra of helping customers in select verticals become world-class manufacturers, in March, the vendor announced that it has broadened its relationship with The Georgia Institute of Technology's Manufacturing Research Center (MARC) to include leading a series of pilot implementations of a next generation information exchange framework for electronics manufacturing. MAPICS has been involved with Georgia Tech's MARC for nearly three years and leads the Framework Implementation Project (FIP) as the only manufacturing-focused ERP solution provider involved. The purpose of the FIP program is to design, implement, and test industry standards that streamline information exchange for electronics assembly and link all aspects of a manufacturing enterprise in real time.

Georgia Tech's MARC, with the backing of major equipment manufacturers, electronics manufacturers, and software and hardware vendors, has established the FIP to build upon and implement the National Electronics Manufacturing Initiative (NEMI) Plug and Play Factory Project—an initiative created to standardize data syntax and semantics in electronics assembly, establishing rules for data exchange from the factory floor and across the enterprise. The coalition is implementing and testing a computer aided manufacturing exchange (CAMX), a series of standards that are based on extensible markup language (XML), and defining how and what information is exchanged on the factory floor and throughout a manufacturing organization. These standards, which electronics manufacturers know as the IPC 2500 series, are used to provide a common language that facilitates real time, efficient sharing of critical business data among shop floor equipment and business process applications—reducing costs and decreasing cycle time.
READ MORE - Analyzing MAPICS' Further Steps After Frontstep Part Two: More Recent Events

Analyzing MAPICS' Further Steps After Frontstep

Analyzing MAPICS' Further Steps After Frontstep

For the last several months, MAPICS, Inc. (NASDAQ: MAPX), possibly the largest global provider of extended enterprise applications for solving the challenges of discrete manufacturers following the acquisition of its former competitor Frontstep (see MAPICS To Leap Forward In A Frontstep Way), has shown both the signs of significant changes but also a persistence of a number of its historically recognizable invariant tenets of operation. The former steadfast IBM iSeries (formerly IBM AS/400)-based ERP supplier to mid-market manufacturing companies, MAPICS, has since indeed become quite a larger vendor and with a wider choice of products, having recently acquired a Microsoft .NET-based competitor. However, as the customers from both camps have been uncertain of their provider's strategy, given that bigger size brings about the need to rationalize multiple products in the same marketplace, after a few months period of buried heads and brainstorming sessions, MAPICS has lately been engaged in explaining its rationale, as to set many customers' minds at ease.

At the same time, the vendor has continued with a painstaking process of producing a strategy going forward that would pragmatically blend the company's traditional values and success factors with new approaches to stay in tune with market trends. The process had started well before the Frontstep's acquisition, during which time in early 2002 the company was energized with a new functional structure and an expanded executive management team. During the same period of time, MAPICS had evolved its marketing and revamped its solutions to focus on business issues and specific discrete manufacturing verticals and to thereby appeal to existing and prospective customers. Pre-Frontstep MAPICS, indeed, had not been sitting still, as the company had made every effort to avert the relegation to legacy Atlantis' as often speculated by some, and it has therefore lately rebuilt its technologies, reviewed its implementation partners, and thus shored up a notable customer base, and retained profitability and security while doing so (see MAPICS Moving On Pragmatically).

Therefore, MAPICS has never departed from its conservative approach of delivering practical innovations and bulletproof applications for its customers, and from its proverbial fiscal discipline. To that end, on July 31, MAPICS reported GAAP (Generally Accepted Accounting Practice) net income for its third fiscal quarter ended June 30, 2003, of $3.0 million, including an income tax benefit and restructuring costs, compared with GAAP net income of $7.5 million, for the same period in fiscal 2002. More importantly, this was the first quarter that included Frontstep revenues and costs, in which case the return to profitability and reduced and stabilized expenses bear even higher magnitude. Moreover, total revenue for Q3 2003 increased by 51% to $47.1 million versus $31.3 million a year ago, while license revenue was $13.6 million, up 44% from $9.4 million in Q3 2002 (see Figure 1). This was in a sharp contrast to previous MAPICS' quarterly reports featuring flat or often depressed revenues (see Figure 2).

* Primarily represents a goodwill write down of the PivotPoint acquisition

While the majority of revenue continues to come from the loyal existing customers, the vendor has processed nearly 400 license transaction during the quarter, which is threefold the average volume for MAPICS without Frontstep over its last four quarters. Nearly 60 new MAPICS SyteLine (formerly Frontstep SyteLine) customers have reportedly contributed $2.8 million in license revenues. The company still has a comfortable cash amount of nearly $22.6 million, and maintains its acquisitive stance.

The Frontstep acquisition has obviously provided MAPICS with a boost in terms of product choice, having solutions on both leading platforms -- Microsoft and IBM. With MAPICS SyteLine 7, the vendor now boasts a notable application built on a .NET architecture. However, the loyal AS/400 install base should rest assured of MAPICS' continued support for the platform. The big news on the MAPICS ERP for iSeries product side is that the version 7.3, which is slated for December, will feature Double Byte support, and expanded Java 2 Enterprise Edition (J2EE)-based client technology.

Other developments detailed in this note are:

* MAPICS Field Service & Support
* A global partnership with Systems Union
* Primus Knowledge Solution Results (to be covered in Part Two)
* Certified Partner Program (to be covered in Part Two)
* Pacejet Logistics, Inc is Certified Partner (to be covered in Part Two)
* A revised sales strategy (to be covered in Part Two)

Further proving its commitment to delivery of enhancements, in August, MAPICS announced the general availability of its new, integrated MAPICS Field Service & Support solution, aimed at helping manufacturers better manage after-market services personnel, materials, and information, as well as offer customers post-sale support that increases customer loyalty and retention. The new field service solution relies on critical business information resident in MAPICS ERP for iSeries to ensure that users have access to the single master source for order, product and customer information. Integrated to the MAPICS ERP for iSeries solution, Field Service & Support users should benefit from the current business processes associated with materials, resources, contracts, and financial information. The MAPICS Field Service & Support solution consolidates the management of service contracts, warranty claims, task assignment, technician scheduling, Return Material Authorizations (RMA), and service variance analysis.

Hence, this new offering extends the capabilities of the core MAPICS application suite, to encompass manufactured products throughout their life. MAPICS' new Field Service & Support solution creates a comprehensive after-sales service infrastructure to handle a number of service and customer management tasks with inherent benefits, including:

* Automating the administration of service contracts and warranty claims.

* Tracking time and materials contracts for equipment repair not under warranty or service contracts, providing more accurate data for invoicing.

* Integrating service-related material management, financial management, and billing processes, translating into faster service to the customer and maximized uptime on their equipment as well as better-cost control and analysis capabilities for the service provider.

* Providing integrated incident tracking, tech support, and RMA management, improving service efficiency for the customer and at the same time providing data to manufacturing engineering to drive product and process quality improvements.

* Initiating easy remote access capabilities to manage work order information flow to and from remote work locations, speeding repairs.

* Consolidating management of the services resources; people, tooling and parts, to speed the completion of work in the field.

As for bolstering the other part of its bifurcated offering going forward, in June, MAPICS announced a global partnership with Systems Union, provider of SunSystems, one of the leading international financial and business management solutions. The partnership will enable MAPICS to leverage SunSystems' infrastructure to integrate exclusively with the MAPICS SyteLine ERP solution, which should facilitate increasing global access to valuable financial information. SunSystems is the core product range of the Systems Union Group plc, which is quoted on the Alternative Investment Market (AIM) of the London Stock Exchange. The company is one of the largest business software houses in the world, with 21 offices worldwide and some 200 Channel Partners in 76 countries. Products within the SunSystems range are available in 30 languages with over 18,000 customer sites, and 250,000 customer seats in some 194 countries. The software solutions are used extensively by multinationals, whose offices worldwide require an international product with global support infrastructure.

MAPICS and Systems Union plan to integrate their technologies to deliver enhanced global financial management solutions for manufacturers in industries such as industrial equipment, electronics, fabricated metals, automotive, and furniture & fixtures. The integrated enterprise offering this partnership provides should allow MAPICS to better address the ever-increasing financial issues that large multi-national manufacturers face, while continuing to solve their complex manufacturing requirements.

Financial data flow throughout an organization is the livelihood of a company's success and has a direct effect on the bottom line. Large, multi-site and multi-national enterprises that capture financial data using SunSystems have reportedly been better able to make more informed decisions based on immediate access to information. Thus, integrating with SunSytems should allow MAPICS to add commonality and higher value to financial management processes such as accounting, corporate collections, invoicing, reporting and budget management across a manufacturers global operation, through the use of a single tightly integrated solution.
READ MORE - Analyzing MAPICS' Further Steps After Frontstep

Sizing the Enterprise Incentive Management Opportunity—And the Challenges Ahead

It's no wonder that in mid-2006, the results of a enterprise incentive management (EIM) market sizing study conducted by Evalueserve showed that the overall worldwide market for EIM solutions was estimated at $3 billion (USD) in 2005, although one has to note that this market mainly consisted of homegrown solutions (91 percent). The global third party packaged software market for EIM solutions is expected to grow at a compound annual growth rate (CAGR) of 30 percent, from $275 million (USD) in 2005 to $1 billion (USD) by 2010. The research suggests that pure-play EIM vendors which have focused on providing the capability to manage highly complex compensation systems will be well positioned to take advantage of the major growth projected in the EIM market. Indeed, prospects for this market outstrip those of other enterprise applications markets, such as customer relationship management (CRM) and enterprise resource planning (ERP).

Part Five of the series Thou Shalt Motivate and Reward Workforce Better.

For background information on incentives and compensation, see Thou Shalt Motivate and Reward Workforce Better, Are Sales Incentives Even in tune with the Corporate Strategy?, What Makes Incentives and Compensation So Tricky?, and Enter Enterprise Incentive Management and Incentive Compensation Management.

Evalueserve has examined EIM market growth rates by geography and industry, as well as industry fit. Highlights from the research of industry-specific projections show impressive growth rates and opportunities for leading industries using EIM solutions, but also show the need for EIM providers to show industry savvy. The industries examined in this note are insurance, retail banking, retail, high tech, telecommunications, and life sciences.

EIM For Insurance, Retail Banking, and Retail There is a 34 percent growth prediction in the insurance industry, where EIM solutions are primarily driven by bonus and commission payouts, but there is also a projected increase of insurance sales agents through 2014 that should boost EIM expenditures. Distribution channel management has become a key differentiator for insurance companies in the current difficult investment and claims environment.

Namely, the insurance industry has become increasingly focused on brokers and alternative distribution channels over the past twenty years, leading to complex and often convoluted distribution chain relationships. Insurers require channel flexibility and support for an ever-widening portfolio of products to meet broker and consumer expectations, while concurrently demanding process efficiency, data accuracy and transparency, and information technology (IT) cost savings. Recently, insurer broker relationships have come under close regulatory scrutiny, requiring insurance companies to provide detailed information about broker behavior and compensation. Unfortunately, most insurance companies are unable to show a consistent and consolidated view of the insurer broker relationship, due to the multiple roles brokers play in the insurance industry, and the legacy technology used to manage them.

As regulators continue to examine the insurer broker relationship, consolidated distribution information transparency becomes critically important, while the nature of the insurer broker relationship will likely evolve rapidly over the next several years. Insurance companies are thus expected to implement enterprise-level processes and technology to manage distribution information and incentives, thereby ensuring proper compliance with existing and new industry regulations. They seem to have several main business challenges:

* managing a shifting portfolio of traditional and alternative distribution channels covering a variety of markets;
* driving cross-selling initiatives within the existing customer base through both existing channels and multi-channel team structures;
* satisfying an increasingly stringent financial regulatory environment through accurate payments, transparent information, and clear, auditable processes; and
* reducing the operational and IT costs associated with distribution management, and reducing the risks associated with outdated, inaccurate and inflexible systems.

Consequently, an EIM package for insurance must be designed to meet the needs of today's insurance distribution management, supporting complex distribution channel hierarchies and the expansion of existing distribution channels, and more roles within in each channel (meaning brokers and consultants). Such a package must also support flexible, effective-dated compensation plans; detailed information about all incentive and fee-based payments; and multi-tiered compensation plans, including commission, incentives and management and wholesaler overrides. It must help distribution management respond to changing channel and market demands quickly and efficiently through user-configurable compensation plans and web-enabled, secure compensation reports, while remaining compatible with both current and legacy insurance architectures, and enabling easy integration with multiple policy administration systems, as well as downstream financial systems.

This combination of controlled processes (via auditable, accurate payment of incentives in compliance with established corporate guidelines); flexible modeling and implementation of plan changes (new incentive plans to meet the needs of a changing regulatory environment); and distribution information transparency, should help insurance companies meet the challenges of a rapidly changing insurance marketplace

Somewhat related to insurance (under the financial institutions segment), retail banking is widely regarded as the growth engine for the banking industry today, whereby branch offices are becoming more valuable as a prime face-to-face selling environment. In order to capitalize on this opportunity to maximize customer share of wallet (SOW), banks are paying incentive compensation to branch managers, tellers, and other customer-facing employees. In addition, mergers and acquisitions (M&As) offer their own challenges—as banks merge and offer a wider array of products and services to clients, the sales structure becomes more difficult to track, audit, and analyze. The pace of M&As within banking, and across all financial services businesses, demands a more focused view of sales strategies and their impact on corporate goals. Thus, a banking EIM package must help manage incentive compensation for branch and call center employees, successfully motivating them to raise the value of customer interactions. They must also integrate easily and quickly with other business process systems, smoothing the way for effective compensation plan management in a complex multi-product, multi-channel sales environment.

Evalueserve also reported a 26 percent expected growth in the retail industry for EIM solutions, owing to increasingly complex supply chains, a large number of transactions, and the growing number of retail salesperson jobs. Lately, big-box retailers such as Wal-Mart and Tesco have dramatically changed the business environment for all retail businesses. The ability of major chains to cut costs and improve distribution allows them to dominate multiple retail segments, making them a powerful competitive juggernaut that other retailers must contend with in the marketplace. In tandem with competitive pressures, retailers are also grappling with increasing rates of employee turnover—as high as 87 percent in some segments. At the same time, increased pressure to comply with labor regulations is complicating store operations for many retailers.

Retailers' common business challenges are to align store operations to achieve bottom-line results and improve store productivity, while concurrently focusing on customer experience and increasing transaction amounts. To that end, a retail-oriented EIM package has to help retail executives analyze real-time sales performance, and change compensation strategy in order to react quickly to changing market conditions. It should also automate many compensation management processes that drain away staff resources, allowing retail employees to focus more on selling, and less on administrative tasks. Forecasting tools also help sales executives perform what-if scenarios for labor dollars across the company.

The anticipated 25 percent growth in the high tech industry is supported by the implementation of EIM solutions in many companies, due to complex distribution structures and compensation plans, and growing sales forces. Thin profit margins, tough price competition, short product life cycles, and the need to optimize inventory require manufacturing companies to keep a close watch on ever-changing sales strategies and compensation expenses. In addition, frequent new-product deliveries and introductions create the need for fast-changing, short-term sales incentives, whereby the challenge is to carefully manage discount practices. The appropriate EIM solution has to take the guesswork out of launching compensation programs by allowing managers to model new plans before rollout, while sales and compensation staff should be able to see at a glance how well sales strategies are working via alerting and portal applications. The solution also has to be able to associate incentive pay to specific discount practices, product mix, or other profitability measures to help maximize sales performance.

A projection of 11 percent growth in the telecommunications industry is resulting from increased sales forces, retail outlets, and a variety of tariff plans complicating incentive payment management. As telecommunications companies have increased the number of products and services they offer to the market, competition has intensified, resulting in lower prices for the consumer. Given these declining prices for products and services, telecommunications companies must increase their total number of customers to drive revenue and profit growth. The value of each customer has risen, indicating that customer retention (reduced customer churn) is imperative. Sales teams and retail outlets are compensated not only for signing up new customers, but for signing customers who keep their services activated for at least six months or longer. In addition, sales representatives and distributors are rewarded for up-selling and cross-selling additional products and services to customers. Other notable business challenges include improving customer service capabilities to bolster customer satisfaction, developing new products and services and business models to protect against competitive threat from new technologies (such as voice over Internet protocol [VoIP]), and implementing strategic partnership models to expand distribution capabilities

An EIM solution for telecommunication should thus provide the flexibility such companies require to keep compensation plans in line with continually changing, competitive market conditions. Using the process model, telecommunications providers must be able to quickly and easily implement compensation plans with multiple performance measures to address business issues such as customer retention and product mix. Stepping-stair matrices can be used to reward sales teams for selling product bundles, where each additional product included results in a higher commission rate. The alerting and reporting applications should enable providers to share performance and compensation payment data with sales teams and retailers, securely and frequently via the web, thereby motivating the sales force and distribution channels to reduce service deactivations, and to up-sell additional products and services.

Last but not least are the life sciences industries, with great EIM growth projections of about 30 percent. Life sciences sales representatives are offering more products to their sales targets, but are spending less time with each physician. Sales representatives must continually sharpen their go-to-market strategies and product pitches to stay ahead of the competition, whereas sales teams have to deepen their knowledge of each medication or medical device, while learning how to communicate the benefits more crisply. In the future, life sciences companies may better use longitudinal data, such as patient demographics, in addition to traditional EIM data when devising sales and marketing plans. Incentive compensation programs are critical to the sales efforts in this industry, since rewards and contests are commonly used to supercharge a new product introduction and to drive competitive wins and market share gains. Territory management is vital to ensure the proper coverage models for categories of medications and groupings of physicians. Often, as many as seven different sales representatives from one company call on the same doctor, which makes managing territorial splits and account reassignments crucial. Another business challenge stems from the need to maintain an auditable record of drug sales to comply with government regulations.

With detailed visibility into business activities and sales performance, an EIM package should allow life sciences companies to create and implement compensation plans that meet their unique corporate goals. Sales and compensation staff should thereby also be able to drill down into performance for specific plans and sales sectors, customizing and refining strategies for precise target markets, while an automated rule-based system should allow compensation staff to easily manage programs for many product lines across complex territories, meeting the demands of fluid sales structures.i
READ MORE - Sizing the Enterprise Incentive Management Opportunity—And the Challenges Ahead

The Value Proposition and Strategy for an Agile Enterprise Systems Vendor

The Value Proposition and Strategy for an Agile Enterprise Systems Vendor

The final building blocks of the agility value proposition of Agresso, one of the world's top five providers of people-centric enterprise resource planning (ERP) solutions, are "business views," which are the result of combining attributes, relations, and rules. Such information delivery is quite user self-sufficient, since different users can define their own hierarchy for viewing information in the database. This is again in sharp contrast to many competitors' greater reliance on third party tools for business intelligence (BI) and reporting. Agresso's architecture and all of the associated embedded BI is maintained in the integrated data model, and is available via a wide variety of reporting and analytics tools.

Part Three of the series Enterprise Systems and Post-implementation Agility—No Longer an Oxymoron?

Background information on Agresso and its product Agresso Business World (ABW) 5.5 can be found in Enterprise System and Post-implementation Agility—No Longer Necessarily an Oxymoron?. How Agresso achieves this agility is covered in How One Vendor Supplies Agility to Post-implementation Enterprise Systems. For information on the opportunity Agresso is addressing, see The Post-implementation Agility of Enterprise Systems: An Analysis and The Modelling Approach to Post-implementation Agility in Enterprise Systems.

One of the most popular ways of accessing data within the Agresso system is by using the "balance table," allowing user-defined views that can aggregate information by specific parameters, time periods, and company divisions across any modules within ABW (users can combine data from Agresso and non-Agresso sources). In broad terms, the process of defining a balance table requires the user to define which attributes are to be used to view the data, together with which amounts are to be reported. The balance table enquiry is linked to the reporting hierarchy, and is generated rapidly. The user can then drill down through the enquiry, taking different paths as appropriate, by defining filter options "on the fly."

Thus, Agresso provides extensive role-based views (or reports, or analyses), increasing the efficiency of information retrieval and the correlating business actions. Users can drill through the integrated information warehouse to underlying transactions, but also to documents and images appended by the Agresso document management system. The integrated Document Archive provides the ability to link transactions or master file information to documents (scanned images, Microsoft Excel workbooks, Microsoft Word documents), and to make hyperlinks to Web pages or any number of other file formats. Document sources can be external to Agresso (such as vendor invoices), or created within Agresso itself (as with the user's own customer invoices), and users can track changes to documents and maintain version control through the "check in/check out" function.

Ad hoc reporting is supported in a variety of ways, including inquiries on transactions, balances, and master file information within the information warehouse. Simple "point and click" technology defines report formats and saves templates as menu options for repeated and shared use, while embedded alerting and drilldowns can be free-format, or guided via links between successive templates. These templates can be exposed in other reporting tools to take advantage of additional functionality. The information delivery framework provides a common reporting platform that consists of the data source (database) layer, the data extraction (query engine) layer, and the data presentation layer, which can render the user interface (UI) in multiple ways.

One way of handling these presentational issues in ABW is to use its reporting engine, called Excelerator, which allows the output to be dynamically surfaced in Excel (or Word), while retaining the underlying financial intelligence. This means that the Excel workbook the tool creates is "live" on the ABW database, so that drilldowns, queries, and modifications are supported and updated on demand, with the latest updated values and figures in the database.

Alternatively, for even more control over presentation, there is Analyzer, which provides a wide variety of graphing options, or "information pages" that allow groupings of favorite reports or inquiries to be displayed as executable options on a start-up page. More traditional production reporting is supported through tools such as Agresso Report Writer, a text-based reporting tool that is well suited for audit reports, or Agresso Report Creator, a graphical reporting tool that provides a Crystal Report-like interface.

This liberal offering of reporting choices aims at catering to all possible user needs and tastes. Namely, whereas casual users will often be happy with web views or template viewers, controllers and accountant will require other, more sophisticated data presentation and manipulation means. The tight integration between information delivery and the underlying data model means that changes to metadata within the model are immediately exposed in the information layer. Operational reporting can be realigned almost immediately with new responsibilities following management reorganization; and by retaining old and new hierarchies, the system can readily support matrix style management reporting.

Owing to this virtually unlimited possibility of reconfiguring system capabilities without having to re-architect the system, Agresso's mission of late has been to change the entrenched (and often false) assumptions of chief executive officers (CXOs), starting with the idea that legacy ERP systems do not have to be replaced or re-architected every five to seven years (and much more frequently in constant change environments). Other assumptions or behaviors that will not be so easy to dispel include a lemming-like predilection for the same, restrictive "usual suspect," "biggest few" ERP choices that currently may deliver some pre-implementation flexibility, but that stop short at post-implementation agility.

Agresso strongly believes—and wants to instill the belief—that this ERP "poison pill" option is an unnecessary and even irresponsible choice, from both a fiduciary and business strategy perspective. Quite to the contrary, post-implementation business agility should be the primary goal of most CXOs in their ERP selection process, and should also be the fundamental goal for fast-paced people- and service-centric businesses.

Consequently, Agresso is launching quite aggressively into North America around the trademarked theme "ERP with NO Expiration Date." The company is targeting professional services and public sector organizations that are characterized by dynamic levels of business change and that can leverage Agresso's experience achieved within its large installation base in the commercial services sector (financial, accounting, insurance, etc.); architecture, engineering, and construction (A/E/C) firms; IT services organizations; and not-for-profit (NFP) and public sector organizations.

As elaborated earlier, these are change-driven people-centric business environments with frequent rescheduling, reorganizations, project go/kill decisions, etc. They have to compete in the industry consolidation landscape (laden with mergers, acquisitions, divestments, etc.), with frequent changes of organizational direction due to compliance or new accounting rules (in other words, due to obsolescence of old practices), while some initial public offering (IPO) pursuers are requiring the "best margin" practice. Agresso's solution (which is based on a coherent architecture that combines the transaction, information, and business process realms without compromise) certainly comes in handy here over traditional ERP platforms. This is particularly true since the latter were architected merely around processing large volumes of transactions, with analytics and business processes being afterthoughts.

To be fair, Agresso is not the only vendor with such a novel and brave approach. In a Technology Evaluation Centers (TEC) article from 2003, some vendors like Ramco Systems were praised for a similar approach with resulting reductions in the time, effort, and cost in building applications (see What's Wrong with Application Software? - A Possible Solution?; What Is It, Why And How Does It Fit Into Your Future). Customizations, which have traditionally been viewed as an undesired practice, thereby become much more sustainable. Also, the high cost of rebuilding applications as technologies change is greatly reduced, since the business process and rules of the application are stored independently from the software code, and can be regenerated onto new architectures. Business changes are also thereby analyzed based on changes to business processes and business rules, and the impact on the application can be assessed; changes can then be incorporated and visualized by the business analysts. Once the business is satisfied with the new application, new application code can be automatically generated.

Furthermore, applications using model-based architectures are built on business processes and rules, which allows business analysts to understand and make customizations to the application without compromising the quality of the application. This also obviates complex switches and parameterized tables for configuring the application with simple changes to rules. Custom applications can be built rapidly for very unique businesses or business functions, and such architectures allow for less complexity in the code and significant automation of software code development, which promises significantly increased application quality.

Notable modifiability and agility has also been reported by the fellow North European vendors Jeeves and IFS (see The Formula for Product Success: Focus on Flexibility and Cooperation and Enterprise Applications Vendor Reverses Fortunes - But Will Perseverance and Agility Be Enough?), and possibly by some Microsoft .NET-centric ERP vendors (see Subtle [or Not-so-subtle] Nuances of Microsoft .NET Enablement). However, without getting into a discussion about which vendor's idea is the best and most revolutionary (allowing modifications via, say, the metadata layer; intuitive macro programming language development environment; and so on), it suffices to say that none of these vendors directly competes within Agresso's target markets, and they might in fact just validate each other's approaches. A bigger threat or hurdle comes from the fact that all these agility messages from intuitive vendors might possibly be diluted by the service-oriented architecture (SOA)-based "magic bullet" messages from larger direct competitors.

As seen in Architecture Evolution: From Mainframes to Service-oriented Architecture, the SOA concept should, in theory, be able to help businesses respond more quickly and cost-effectively to changing market conditions by reconfiguring business processes. It should eventually enable agility, flexibility, visibility, collaboration with trading partners (and between functional and IT departments), and so on, by promoting reuse at the coarser (software component) service level rather than more granular (and convoluted) object levels. In addition, SOA—again, in theory—should simplify "plug and play" interconnection and usage of existing IT assets, including legacy assets.

According to Forrester, from the vantage point of business drivers, the concept should in the long run enable users to adapt their system to processes (and not vice versa), improve system intuitiveness and usability; deliver relevant analytics; connect to external data and services; and leverage readily available best practices and industry knowledge within the vendor repositories. In the technology lingo, SOA should reduce custom coding through configuration; promote open standards to reduce integration costs; enable end user self-sufficiency (meaning no reliance on nerdy programmers); and provide more flexibility to use best-of-breed products (possibly within composite applications). Except for the very last benefit, all these benefits coincide with Agresso's value proposition tenets, which might leave prospective customers at least confused and undecided.

Ironically, although seen as helping heterogeneous and legacy environments rejuvenate themselves, SOA might best function within homogenous domains and contexts, where data and processes are well aware of each other, as in Agresso's case. Lawson has recently embarked on a major SOA-based product rewrite called Landmark, to automatically generate product code (and services) and to avoid the possible SOA traps mentioned above, since the code generator will have all the validation rules and constraints within the scope of the Lawson S3 product (see A New Platform to Battle Software Bloat?).

These provisos aside, we still have a ways to go before the post-implementation change process becomes a solid, controlled process with built-in management and quality, while providing the business user with visualization and evaluation of potential modifications.

To recap, while SOA does facilitate standardization, allow for loosely coupled software components (services) assembly and integration, accommodate customized portal-based presentation, and thus perhaps facilitate integration, it is not a panacea yet. Hence, it is a fallacy to expect that the mere concept will turn rigid products written in ancient code into flexible applications providing analytic information that has not been natively enabled, and similar benefits. To radically change, the underlying product has to be either properly architected from the ground up (as with Agresso, which likes to compare its agility to a chameleon's ability to adapt to the environment), or totally rewritten in new, modern languages and technologies. For more information, see Rewrite or Wrap-around Old Software. Without true modernization of underlying applications, the SOA embellishments will largely be analogous to "putting makeup on a pig."
READ MORE - The Value Proposition and Strategy for an Agile Enterprise Systems Vendor

How One Vendor Supplies Agility to Post-implementation Enterprise Systems

How One Vendor Supplies Agility to Post-implementation Enterprise Systems

We are aware that grandstanding slogans like "unlimited data capture, key performance indicators, and alerting capabilities for reporting and analysis"; "combined business process, workflow, and reporting into a single, unified model"; or "financial and non-financial intelligence move in a lockstep, in a Lego block-style" mean little without concrete examples. To that end, the best illustration of Agresso's ability to incorporate architectural flexibility—without encumbering ledger accounts and master data—is the possibility of creating a ledger account structure with no sub-ledgers at all. This is contrary to the conventional approach to financial analysis, which is to create complex ledger structures with several sub-ledgers (for instance, with an account structure looking like x/xx/xx/xx/xxx/xxxx/xxx) so as to accommodate all possible reporting and analysis data fields, with combinations like "fund," "committee," "cost center," "department," "balance sheet," "division," "subjective account," and so on. For instance, CODA offers a multiple dimensional capability supporting up to eight variable-length account code segments, which enable revenue and expense tracking at a highly detailed level, while the hierarchies and account groups features add virtually unlimited account rollups to meet inquiry, reporting, and drilldown needs (see Composing Collaborative Financial Applications).

Agresso's approach to analysis is rather that almost any financial information can be rolled up via key building blocks, starting with the "attributes" mentioned in Part One of this series. These are the basic building blocks of the ABW application suite, and shape the way in which the system can be customized to meet a variety of information needs. In broad terms, attributes define which analysis is to be captured on entering transactions, but they can also be organized into reporting hierarchies to allow information to be viewed in different dimensions. The out-of-the-box attribute definition covers all of the master data (in other words, fixed or static) within the application (such as cost category, asset type, directorate, location, employee, cost center, department, event, expense type, project, fund, payee type, and property).

However, users can add their own definitions as required to deliver the analysis most appropriate to their business. Thus, using only the standard functionality, the application can be tailored, since the validity of attributes can be limited to certain defined date ranges, or to certain user groups, whereas linkages defined between attributes enable one attribute to be "owned" by another. As a further refinement, each unique attribute or category of analysis can have multiple values. Using this facility, it is possible to analyze adjustments separately for each accounting standard, if desired, to provide another layer of analysis, accountability, and control. Additionally, attributes can be reserved to specific user groups or limited to different user-defined date ranges, in which way it is feasible to keep year-end adjustments, for instance, separate from interim adjustments.

The capability to define relationships between attributes is another key differentiator for Agresso, and a major reason why it is not necessary to employ an external multidimensional reporting tool. Essentially, the definition of relationships in the system allows the systems administrator to create reporting hierarchies which are generally equivalent to the dimensions in a data warehouse. For instance, "employee" gets rolled up into (or reports to) "budget holder," which gets rolled up into "manager," which gets rolled up into "division," which gets rolled up into "directorate," etc. Remarkably, the same hierarchy can be used in reporting and enquiries to examine different data.

Furthermore, any new data gets captured based on rules—for instance, a certain account rule may determine other required attributes. Account rules within the suite govern the way individual accounts are treated in the application, as well as which information attributes must be entered when users post transactions to accounts. For instance, a direct cost account might require a cost center (which in turn requires a service area and division), a work order (which in turn requires officer, job, and job type), an element, etc. In the financial reporting context, careful use of the account rules in concert with attributes is absolutely central to the handling of complex multiple generally accepted accounting practices (GAAP), and to the ability to analyze the major geographies and business segments that contribute to the group turnover. The built-in control mentioned above also accelerates data entry, reduces input errors, and sets the basis of flexible reporting and reconciliations around all possible differing financial reporting requirements.

Furthermore, in the latest release of ABW, which incorporates workflow functionality at the attribute level, it is possible to create a controlled, auditable, and efficient response to a wide range of user needs, which also enables the system to be aware of how any new data might affect business processes and reports, which is quite awkward (if not impossible to achieve) in heterogeneous environments with multiplied metadata. In such cases, this metadata requires constant replication, and complex and costly software systems like master data management [MDM] applications—see SAP Bolsters NetWeaver's MDM Capabilities). This is particularly true for the large competitive offerings where broad application sets have been enlarged through acquisition rather than organic in-house development.

It should now be clearer how the Agresso's information warehouse, business process, and reporting and analytics information delivery models are inextricably linked in a virtual cycle. A change in any of these three core competencies automatically informs a change in the other two, and it is thus not necessary to re-architect the system or instil business disruption. For example, a new business process automatically leverages the information warehouse and reporting. Similarly, the addition of new metadata is immediately available to processes and analytics.

Finally, changes to analyses are immediately set in the business process context. In other words, power users orchestrating a new business process will automatically leverage the information warehouse and reporting capabilities. Similarly, the addition of new data from an acquisition is immediately transferred to established business processes and analytics. Also, new analysis requirements are immediately propagated directly into the organization's business process context.

Conversely, most Agresso competitors have to rely on third party solutions or less tightly bound in-house approaches, whereby superficially, information may flow between them, but in practice a change to one aspect inevitably requires a change to the other two, which quite often has to be accompanied by skilled IT intervention and thereby negatively impacted bottom-line margins.

To be fair, most ERP products now include a workflow tool (or even go to a higher level, meaning business process management [BPM] tools—see Business Process Management: A Crash Course on What It Entails and Why to Use It). To that end, Agresso has come up with the Agresso IntellAgent alerting and notification tool, which was released within ABW 5.4 SP4, to automatically monitor data and events in the suite for critical or time-sensitive conditions, and to then proactively report on business situations. Being an analytics and reporting methodology (rather than a mere workflow tool), IntellAgent generates alerts through a variety of media and devices, and takes other "intelligent" actions. In other words, it is a "sense and respond" business activity monitoring (BAM) tool that looks for certain events (such as the addition of a new row to a table, a change of field, the existence of a file within a sub-directory, etc.) and then responds with pre-determined action plans to this information. It enables the user to set up events that cover any aspect of the business (such as notification of outstanding payments or orders, or the generation of e-mails to the budget holder when actual expenses are nearing the budgeted amount). The tool is quite configurable, allowing alerts and events to be designed and set up for users with differing needs. This kind of automation of events and notifications in any user's business information system positions the enterprise to increase the effectiveness of its staff and organization, since time spent exploring ABW data for relevant information is thereby reduced significantly.

Finally, it's important to note that the combination of Agresso's information, process, and delivery model not only impacts the bottom line, but it should also impact the corporate strategies deployed by organizational management. By postponing or avoiding change that might be painful and stressful for organizational performance, companies often cripple otherwise valuable strategic initiatives. Agresso believes it is challenging corporate management to consider business strategies involving change—strategies that they might previously have discarded as "too onerous" to the business.

Moreover, what is really needed—and this is where Agresso goes a mile further—is a way to embed deep, meaningful business rules and logic down to the data (or field, or attribute level). For example, a well-devised solution will not allow anyone to reconfigure a workflow that would disregard US Sarbanes-Oxley Act (SOX) or International Financial Reporting Standards (IFRS) compliance steps (see Joining the Sarbanes-Oxley Bandwagon: Meeting the Needs of Small and Medium Businesses). Likewise, an "aware" enterprise system would not permit someone to move the drag-and-drop of a specific field to a different screen if that information is required for some other critical processing.

To be fair, some ERP systems have certain built-in controls, but these have been hard-coded without an easy way to discern pesky interdependencies, which quickly become impediments to change. As admitted by SAP's former chief executive officer (CEO) Hasso Plattner a few years ago, SAP R/3 had so much unneeded hard-coded functionality (so as to accommodate customer requirements over decades) that it eventually become too "obese"; only time will tell how the service-oriented architecture (SOA)-based SAP NetWeaver and SAP Enterprise Service Architecture (ESA) rewrite will help in that regard (whenever that colossal undertaking ends).

Further along the line of enabling post-implementation modifications (agility), the Agresso data model is accessible, allowing precise tailoring of parameters, additional fields, extensions to applications, and integration with external data sources, all without extensive IT staff input. This is also in sharp contrast to the competitive offerings, where even basic tailoring is almost always reliant on extensive consulting and programming input and configuration.

The release of ABW 5.5 heralded Agresso Flexi-fields, which is a dynamic feature that gives users the ability to straightforwardly define additional tabs, validated fields, and tables that meet their needs, when and where they desire. Users define the validation, access, and data control for these flexi-fields, and information added through flexi-fields can be in the form of external data, user-defined input fields (to expand master tables and attributes), or output from a Web browser-based template. Flexi-fields also help with customization and enhanced visibility, since customized screens speed up quality entry (with maximum validation), while grouping relevant data (internal and external), information, and transactions per entity for maximum visibility.

Furthermore, using workflow functionality, a user-definable approval process can be established at the attribute level. For example, if multiple financial reporting adjustments are implemented using attributes (as explained above, to accommodate the reconciliation of differing accounting principles at a group level, or for various units), a separate workflow or process sequence can be defined for all adjustments or particular categories of adjustment. The workflow is then created in a flowcharting tool, which describes the activities, decisions, and actions to be taken at each stage of the process. The workflow engine is integrated with Microsoft Outlook and Novell GroupWise, so that e-mails seeking approval for financial reporting adjustments can be passed automatically along the "pecking order," showing the nature of the approval required, and the individual seeking permission. Reviewers can, depending on the setup of the system, approve the request, reject the request, or change the data before passing it on to the next person, while at each stage, relevant e-mails can be automatically generated to notify users of the actions taken and the status of the workflow. Using the system in this way, it is possible to build an audit trail of the changes that have taken place and of the authorizations given. Also, by limiting the process to certain types of adjustment journals (via attribute values), time need only be spent reviewing those transactions considered to represent a risk to the organization.

In this regard, Agresso cites the success of a large user engineering corporation in the UK. This corporation has 3,600 employees, 5 divisions, 30 entities, over 60 offices worldwide, projects in 70 countries, and nearly $500 million (USD) in revenues. Formerly a flat organization with sixteen divisions (but without regions and market sectors), the corporation was reportedly able to structure itself in a manner of days from one into four financial reporting dimensions (market sectors, regions, entities, and cost centers) with accurate performance management, and one-on-one reconciliation with the past reporting structures. Again, where Agresso goes the extra mile is in the unusually tight coupling of its information model, business process model, and reporting and analytics delivery methodology, which enables its customers to make changes like this on the fly, at relatively little cost, and without the usual IT re-architecting that characterizes most competing products.
READ MORE - How One Vendor Supplies Agility to Post-implementation Enterprise Systems

Will 2005 Validate Global Trade Management and Unify Financial and Physical Supply Chains

Will 2005 Validate Global Trade Management and Unify Financial and Physical Supply Chains

The Internet has enabled a networked apple creating a advice basement and after action applications, all which accept opened the aperture for all-around trade. This, in turn, demands multi-enterprise casework and software to automate the busline and Internet-based acumen administration needs of a all-around trading network. As the all-around barter administration (GTM) amplitude continues consolidating, it is acceptable bright that bazaar administration belongs to companies that accept that, to absolutely beforehand all-around trade, one accept to be able to administer both the concrete and cyberbanking accumulation chains.

Communications and busline networks accept bigger so badly over the endure few decades, that even the a lot of absent regions and nations are aural the ability through a simple Internet connection. As a result, abounding companies accept jumped into all-embracing markets, and accept outsourced their accomplishment or accretion operations to cheaper beyond manufacturers and suppliers, while some accept accustomed subsidiaries about the world. E-business promises to added compress the apple into a "global village" as people, collaboratively or not, research, offer, source, and annex articles globally via the all-over Web. They buy and advertise through altered e-commerce sites, storefronts, and marketplaces and administer all-embracing accumulation chains with alternate software and trading exchanges.

Logistics managers accept continued approved technology solutions that action a defended Internet arrangement for scheduling and planning and accommodate the best annual for multi-carrier, multimode, and multi-leg shipments in an cardinal business action system—one which can aswell handle calm and all-embracing affairs aural the acumen trading community. The Internet by itself acts as the agency of advice amid traders and customers, and they wish these systems to bear about real-time advice in a cost-effective manner, about anywhere in the world.

However, this affectionate of e-business has yet to best the claiming of all-around barter acquiescence and the altered needs of all-embracing barter and trading partners. Simply put, a lot of accumulation alternation administration (SCM), let abandoned action ability planning (ERP) vendors still about abridgement able all-embracing barter acumen (ITL) and all-around barter administration (GTM) capabilities. Simply put, while technology may cede a apple that appears a lot smaller, in reality, the apple is a lot added complicated. There are abounding barriers that abide to administering all-embracing business over the Internet, of which a lot of businesses are ill-prepared.

Few applications absolutely action multi-enterprise casework and software to automate the complex, multimodal busline and Internet-based acumen administration needs of a all-around trading network. A lot of modern, Web-based, buy- and sell-side applications abatement able-bodied abbreviate of accouterment automatic all-around barter management, and acceptable all-embracing barter logistics.

As declared in the article, All-embracing Barter or ITL Adoption, ITL and GTM are beheading systems advised to automate the import/export business process. Their basal anatomic apparatus are barter certificate bearing and transmission, and authoritative acquiescence validation, and includes a circuitous barter of advice amid altered entities, including suppliers, carriers, bales forwarders, community brokers, cyberbanking institutions, and added third-party busline and accumulator providers. A accurate ITL/GTM arrangement is an interenterprise ability administration system, and requires a abstracts archetypal that can annual for the beyond and abyss of advice that is exchanged amid this complication of commutual entities. Thus, ITL and GTM systems should abutment consign and acceptation borders-crossing processes; affidavit and acquiescence (which are incomprehensible to accustomed mortals); and accounting, and cyberbanking advertisement in a multicurrency, multilingual and multi-units of admeasurement (UOM) environment.

While abounding accept able and disconnected opinions about globalization and outsourcing articles and services, anybody will accede that these modes of business are actuality to stay. Some letters affirmation that about 30 percent of the world's gross calm artefact currently crosses borders, appropriately all-around barter is acceptable an basic and growing allotment of about every business. Yet, exporters and importers abide to attempt to alike old-fashioned, all-embracing freight, financial, and authoritative processes, and although they ability abstract assembly from entering acumen to abate this conundrum, accretion bazaar pressures abide to force bigger coordination. Help may appear from adopting a new crop of Web-based applications aimed at convalescent and automating intricate multiparty coordination. As a result, businesses accept created GTM to ascertain the challenges and opportunities altered to the new, awful all-around business environment. There are some acute trends that accept fabricated GTM (which has afresh amorphous accumulation ITL) a affair of absorption to beat businesses, including the actuality that all-around barter is substantial, and will alone access with time.

Nonetheless, while abounding may see the annual for sourcing appurtenances from extensive locations with cheaper activity and costs, not abounding acutely apprehend the intricacies and costs associated with such trading activities—a bulk which generally may abate the antecedent allowances of cheaper, nominal prices of alien items. Although abounding enterprises accept fabricated beforehand in convalescent aspects of their cyberbanking accumulation chains by implementing ERP or cyberbanking applications such as accounts receivable (AR), accepted balance (GL), and accounts payable (AP), all-around barter requires a bulk of additional, acute functions that are frequently absent from calm trade, including functions like letter of acclaim (LC) management, all-around barter financing, country and affair accident assessment, and transaction adaptation (settlement), to name a few. Proper administration of these specialized functions crave GTM-oriented cyberbanking administration solutions that should accord organizations greater afterimage and ascendancy over their all-embracing business partners, receivables, payables, alive basic needs, and all-embracing cyberbanking position.

Importing and exporting accept to be a part of the a lot of labor-intensive, paper-heavy business activities, and the alertness of export, import, and border/duty approval abstracts is no baby accomplishment for shippers and carriers. If one adds up all of the affidavit that accept to be complied, including addition and transaction documents, beforehand addition notices (ASN), licenses, certifications, and includes the inspections appropriate by the exporter, importer, bales forwarder, community broker, bounded and all-embracing carriers, banks, community authorities (at both the agent and destination) and altered government agencies, it is not hasty to see why a archetypal all-embracing barter transaction may absorb several dozens or added steps. On the added hand, taxes, tariffs, regulations, and acquiescence issues can bound construe into addition delays, bearding products, and cher acknowledgment if the assigned processes are not followed to the letter.

It is appropriately no abruptness that about 10 percent of apple barter is spent on authoritative costs, with a lot of of that money directed adjoin certificate preparation, handling, and transmission. A archetypal air-freight addition takes eight to twelve days. Of this, the accountability is en avenue alone 5 percent of the time. The blow is spent sitting in warehouses cat-and-mouse for the appropriate abstracts and acquiescence checks.

To administer such complexity, added and added shippers await on import/export software, which has acquired into a added absolute GTM category. If this software aboriginal came on the scene, vendors focused on automating the repetitive conception of barter documents, and after broadcast their products' capabilities to cover assessment classification, landed-cost calculations, community regulations, denied-party screening, and adjustment tracking, etc. Today, exporters and importers still accept a best to acquirement from bargain solutions that handle a alone task, such as certificate creation, to added expensive, about all-embracing GTM solutions that ascendancy and clue barter affairs from acquirement adjustment to final delivery.

Importers, exporters, forwarders, banks, and agnate institutions added see the address of GTM solutions. Assets from the top- and bottom-lines, acquired from a accumulated basement that takes advantage of globalization, ability far beat any domestic-focused projects, (except in the case of new artefact development for those who do not outsource). Allowances cover added revenues through new all-around sales markets; decreased operating costs through lower bulk abstracts sourcing, business action outsourcing (BPO), and globally broadcast organizations; lower costs through bigger alive basic management; new business strategies, such as accessible annual mechanisms affiliated to barter financing; and greater afterimage and ascendancy of all-embracing receivables and payables.

Further, clashing several years ago, if the alone advantage for deploying action software was with multimillion dollar, multiyear customized accomplishing projects, the current, added complete software bazaar gives companies a bulk of deployment options (for added information, see Trends in Accumulation and Pricing Models for Action Applications). Enterprises can now accompany pilot projects, arrange point solutions afore accretion to broad-based solutions, and accept amid hosted or behind-the-firewall, on-premise solutions.

However, while there are affecting operational and banknote breeze allowances to be acquired from implementing and calmly active all-around trade, as will be explained after in this series, all-around barter is a decidedly added circuitous and chancy business than calm trade, . Further, admitting the abeyant gains, there are authoritative obstacles preventing abounding companies from demography advantage of GTM solutions. Namely, companies are still structured in anatomic silos, which appulse decision-making, accustomed that alone a few companies accept their accumulated organization, technology, and processes appropriately accumbent for all-around business.

Most ample companies still run their businesses internationally rather than globally. In added words, ample companies usually accept an array of adopted subsidiaries that are independent businesses active their own systems that are out of accompany with anniversary other. Throughout the enterprise, anatomic silos added aggravate a seamless access to all-around acumen management. For instance, acquiescence departments address to legal, admitting purchasing drives import; consign is apprenticed by sales, while busline departments focus on accepting the best rates. No one absolutely questions whether or not the aggregation is addition calmly throughout the system, accustomed that the these silos often, aback accomplish assets or losses adjoin anniversary other.

Supply alternation planning (SCP), barter compliance, cardinal sourcing, and added cardinal tasks cannot be managed on a all-around calibration if key abstracts is inconsistent and is not calmly shared. Goods, in every footfall from raw actual until delivery, ability run acumen costs abutting to bisected of the absolute cost, and accounting can hardly accredit these to the alone items. An archetype is a aggregation that had seemingly, based alone on the assemblage price, adored dozens of actor by accretion its all-around supplier abject alone to after apprehend it had added absolute acumen costs by alert the bulk of their accumulation due to abounding non-economical less-than-truckload (LTL) shipments.

Successful accomplishing of GTM solutions requires companies to accommodate their concrete and cyberbanking accumulation chains in capricious degrees and elements. To do this, companies accept to allotment abstracts and coact beyond their anatomic silos and alien business partners. Of coursee, authoritative altered solutions plan seamlessly is a claiming for every aspect of SCM. All-around acumen is conceivably the a lot of difficult conduct to administer through one platform, because the cosmos of users is ample and advance about the world, whereby systems- and user-capabilities alter widely. On the added hand, mandates for added functionality abide to grow, such as the contempo barter aegis regulations from US Customs, as will be explained after in this series.

To advance in a awful aggressive all-around economy, area antagonism can appear from Arkansas or Argentina, enterprises accept to yield advantage of the bulk advantages afforded by the all-around availability of appurtenances and services. At least, if one does not demography advantage of the all-embracing availability of analytic high-quality goods, bargain activity ante and efficient, reliable transportation, again the antagonism acceptable will.

When we allocution about the risks of globalization, abounding are usually apropos to the blackmail of calm jobs affective overseas. All-around barter acquiescence is rarely discussed, even admitting it poses a accident that may affect about every architect that either imports or exports. Namely, accepting these appurtenances and locations alien from one country to addition is a alarming assignment and needs the abutment of GTM software and a annual provider with a aggregate of all-around barter area knowledge, accurate processes and all-embracing barter best practices.

All of the about 200 countries in the apple accept alone authoritative requirements for importing and exporting goods, area one has to annual for factors like tariffs and duties, country-to-country preferences, and anti-dumping laws, with the crisis of incurring hidden costs at every step. If that is not circuitous enough, the contest of September 11, 2001 accept added the analysis countries abode on all-around trade, which aswell impacts costs adversely. According to the Brookings Institution, the bulk of slowing the accumulation of alien appurtenances by just one day because of added aegis checks may bulk to $7 billion (USD) per year. Stringent new affidavit and citizenry aegis requirements are agreement austere acknowledged and cyberbanking after-effects on importers and exporters for actionable these consistently alteration barter regulations. The accountability is on the importer/exporter to apperceive absolutely what the regulations are and how to accede with them.
READ MORE - Will 2005 Validate Global Trade Management and Unify Financial and Physical Supply Chains

When Customer Relationships Meets Business Intelligence Marketing

When Customer Relationships Meets Business Intelligence Marketing

To compete with leading BI and data warehouse companies and enterprise resource planning (ERP) vendors that are moving into these markets, SAS needs to further open its products to make it easier to employ third-party tools. Also, like Cognos, Hyperion, and Business Objects, SAS should also exploit the current, weaker BI technology position of many ERP vendors to foster relationships with them, rather than viewing them as the adversaries.

SAS may also have to further adjust its business model. Currently, it still primarily provides its software on an outdated mainframe licensing model, deriving over half of its revenues from annual license fees that amount to about one-third of the initial licensing cost of its products. This provides SAS with a steady income, but may not be an attractive option for many prospective customers. SAS should consider moving to a more common enterprise software licensing model with annual support costs in the range of 15 percent of license costs. With its new product, SAS 9, SAS may be showing signs of recognizing that the old model of selling a complex tool kit, and then training its customers' internal staff on the tools, needs to be extended to many levels within the user enterprise. Strong vertical tailoring, more consultancy, and more out-of-the-box functionality to all areas in a business process are other positive signs that should be further exploited by SAS.
READ MORE - When Customer Relationships Meets Business Intelligence Marketing

SAS Enterprise Intelligence Platform

SAS Enterprise Intelligence Platform

These impressive analytics also include a diverse set of predictive, descriptive, and statistical analytics software to help decision makers anticipate how their actions will impact the future, and it turns almost every employee into a knowledge worker. SAS 9 also includes the SAS Enterprise Intelligence Platform as a foundation for future SAS horizontal and vertical BI solutions. Other main strands include a broad set of integrated software for data integration through the SAS Enterprise ETL Server; data warehousing through the SAS Intelligence Storage; and portal capabilities, and query, and reporting through the SAS Enterprise BI Server. These offer several UIs the opportunity to improve usability throughout all levels of the enterprise. SAS 9 data integration includes data quality and a common metadata repository for ensuring reliability of information across computing systems. SAS Enterprise ETL Server cleanses and integrates data into a common, usable data store that offers an available, consistent, and verifiable set of answers across the enterprise. In other words, the power behind the SAS 9 platform is tight integration, data quality, common metadata, and centralized management.

At the same time, SAS also announced plans to deliver seven software solutions that will take advantage of the SAS 9 Enterprise Intelligence Platform, to provide organizations with an integrated suite of solutions that addresses many key business challenges. Each of these solutions aims at helping user organizations go beyond BI as they know it, and ensure that more and more people within those companies—from the factory floor to the boardroom—can use the predictive analytics and data management capabilities of SAS. With SAS 9 and its new UIs and capabilities, SAS believes the group of potential users will expand so much that even more than 80 percent of the people in an organization will have access to BI solutions. The seven SAS solutions on the SAS 9 Enterprise Intelligence Platform are

* SAS Customer Intelligence address key areas such as marketing automation, marketing optimization, and customer retention. Designed to give organizations the insights they need to develop and implement smarter customer strategies and maximize customer profitability.

* SAS Risk Dimensions helps financial services firms and energy companies measure and analyze their risks, meet regulatory reporting requirements, and improve capital allocation. Risk Dimensions provide an open, flexible, and extensible environment for data management, risk analysis, and risk reporting. Additionally, SAS has aggressively pursued the opportunity to assist the banking and insurance industries in the pivotal area of risk management. In 2003, it acquired OpRisk Analytics, a provider of operational risk measurement and management solutions, to extend SAS' offerings for both corporate and consumer risk measurement and reporting. SAS also acquired RiskAdvisory, a provider of risk management and consulting software to energy companies. This acquisition has significantly enhanced SAS' ability to offer high-value energy risk management solutions to customers in industries such as oil, gas, and utilities. It also caters to financial services, as banks begin to sell energy into wholesale markets.

* SAS Strategic Performance Management translates company strategy into actions that can be measured and monitored throughout the entire organization. Results are then distributed via the Web to provide employees with the necessary information to analyze, collaborate, and implement strategy. SAS SPM helps executives improve performance while executing their strategic goals by focusing their entire organization on the initiatives and key performance indicators (KPI). KPIs are delivered via a Web browser and built-in filtering and alerts send out a call to action when performance is not meeting targets. Once notified, users can use SAS advanced analytics to discover why performance is not meeting targets, allowing users to take corrective action accordingly.

* SAS Supplier Relationship Management (SAS SRM) addresses procurement and purchasing as a vital link in the supply chain. Through data management and analytics, SAS SRM provides organizations with worldwide insight into suppliers, commodities, and procurement activities. With it, they can better understand their overall supplier landscape, minimize risks associated with suppliers, improve negotiation, and achieve substantial cost savings.

* SAS Activity-Based Management (ABM) integrates existing financial and operational systems to generate cost and profitability business models that support better overall decision-making. SAS ABM delivers advanced business modeling capabilities, a Web-enabled analysis and reporting interface, and data integration tools to retrieve and transform data from virtually any system. It enables strategic and operational decisions that maximize profit, reduce costs, and streamline processes by determining the cost of processes and the profitability of products, customers, and business segments. Built on a Web-based, multi-user, client-server architecture, the product goes beyond typical ABM tools by combining visual business modeling with advanced reporting and analysis, and data management, providing a more complete ABM solution.

* SAS IT Management Solutions helps companies better manage their IT organization and infrastructure and evaluate and control IT usage and costs. Combined with SAS' professional services organization and implementation partners network, these are the solutions that address the entire spectrum of IT services—systems, network, Web services, call centers and phone systems—from the data center to the desktop, across the enterprise and the Internet.
READ MORE - SAS Enterprise Intelligence Platform

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