HR Software Selection: It Ain’t Rocket Science

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So … you're either in the market for your company's first human resources management system (HRMS), or you're ready to move up to a more sophisticated system, and you're struggling with whether to bring in the consultants or tackle the evaluation process by yourself. Can you do it yourself? The answer is yes, and maybe. It all depends on whether or not you can commit the time and resources to doing it right.

Be prepared for a fairly time-consuming process, ranging from at least three to nine months or more. You'll also need to recognize that it will require a considerable outlay of capital and staff resources to bring the project to fruition. Your company will have to live with your decision for the next eight to ten years or more, so you want to make sure that you do it right—the first time.

For starters, it will be extremely helpful to begin with a clean slate and an open mind. The less biased you are regarding a specific software vendor or application (either “for” or “against”), the easier it will be to make an objective evaluation and decision. In the last five years or so, vendors, software applications, and hosting options have undergone significant changes. Making a decision based solely on past experiences (good or bad) may be a disservice to your organization. Try to remain unbiased throughout the evaluation process. Whether you use a consulting firm to help you in your quest, or decide to strike out on your own, following a rock-solid methodology is the key to success.

User-Needs Assessment

The process begins with a user-needs assessment (UNA) to develop a wish list of features and functionality you expect the new system to deliver. In this phase, brainstorming sessions with each group of functional and technical users are scheduled to discover what they like about the current system, what they dislike about the current system, and what they are looking for in a new system.

There are various ways to build this information. Some people use questionnaires and surveys to collect this information, and some use the tools that software evaluation companies like Technology Evaluation Centers (TEC) offers to help organizations build their requirements. In addition to these tools, the interactive nature of face-to-face meetings with small groups of users allows useful information to be exchanged to help the decision process along. Some users may know exactly what they want out of a new system, while others may have difficulty envisioning their future needs. You'll have to facilitate the discussions and prod the users by asking such questions as “What are you doing manually today that would save you time if it were automated?”

While you're conducting these sessions, be sure to ask how new features and functionality will affect efficiency and productivity. This information will help you later when you prepare a cost-benefit analysis to justify the expense of the new software.

Next, take a look at some of the software vendors present in the marketplace. In the mid-market, there are no less than 20 vendors that could be considered “players” (prominent in the industry), and there are many more that are trying to enter this market. There is no way that you can evaluate all of them in depth, but there are some shortcuts that you can use to narrow down the choices.
One option available is to see what the analysts have to say about the major players in the HRMS software arena. Gartner's Magic Quadrant for HRMS, Forrester's Wave, or TEC's eBestMatch™ are all effective decision support systems offered by software evaluation organizations that can help you evaluate different vendors.

Another option is to attend conferences, such as those held by the Society for Human Resource Management (SHRM) and the International Association for Human Resource Information Management (IHRIM). These conferences usually have an exhibit hall, and the major HRMS vendors will each have a booth and product specialists on hand to discuss their offerings and to provide demos of their solutions. Often they will arrange a vendor shoot-out, where each vendor demos its solution to the assembled attendees, and the attendees decide for themselves which offers the best solution.

You can also use the Internet to research the vendors, but beware: this could turn out to be the equivalent of looking for a needle in a haystack. On the day I wrote this article, I did an Internet search on “HRMS software vendors,” and it returned 728,000 hits. You are going to either have to narrow your search, or be prepared to do a lot of surfing.

One other way is to do some sleuthing and try to find out what your competition is using. There are several vendors that have carved out a niche in the marketplace, and that have specialized solutions tailored to specific market verticals (such as health care, professional services, manufacturing, etc.)—a case of “birds of a feather …” This research should allow you to narrow your choices down to a handful of promising vendors. Call each one to request a copy of its company's current product information, and see if it has an online demo to provide a high-level familiarity of its products. This should help you come up with a shortlist of perhaps three or four prospective vendors.

Breaking with Tradition

Traditionally, the next phase of the project would involve issuing a request for proposal (RFP), in which you would draw up a list of high-level requirements and submit it to a large list of HRMS software vendors. After reviewing your requirements, interested vendors would notify you if they were interested in competing for your business.

This approach is time-consuming because you have to wait for vendors to complete their reviews of your requirements and contact you with their intentions. The next step would be to draft a request for information (RFI) to send to those vendors that chose to compete. The RFI should describe your requirements in more detail, list your project goals and objectives, provide a high-level project timeline, and request background on the vendor (including information about its proposed solution, the technical architecture employed, implementation approach and methodology, hosting options or partners, references, testimonials, and pricing strategies).

I recommend skipping the RFP, and start contacting the three or four short-listed vendors that you feel may have the best solution for your needs (based on your research). Your goal is to determine their willingness to conduct a scripted demonstration (versus a canned sales demo). This requires the vendor to “script” (prepare with detail) the demo according to your specific needs and scenarios.

Once you have the vendors' commitments, you can then send them a detailed RFI, and schedule the scripted demos. By skipping the RFP process, you can reduce the project timeline by as much as a month.
The scripted demo is the heart and soul of the evaluation process. What's the difference between a sales presentation (a canned demo) and a scripted demo? In a canned sales demo, you typically see only what the salesperson wants you to see. Salespeople usually spend a significant amount of time focusing on what they feel are the product's strong points, glossing over any shortcomings. By requesting a scripted demo, you detail to them what functionality is important to you and what you want to see. This puts you in the driver's seat and evens the playing field. Since all of the vendors will be addressing all of the same scenarios in the script, it will be easier for your team to evaluate each vendor's ability to meet your company's needs.

Let's look at the scripted demo in some detail. In order for the vendor to provide an effective scripted demo, you need to develop an accurate script for them to follow. You will need to draft a scenario that describes your problem and your needs. You do this by examining the business functions you want to address. Next, you'll need to describe what these tasks are and how they are currently done, and then describe how you envision them in the desired state using the vendor's solut

Microsoft Business Network (MBN)—Coming of Age? Part Two: Market Impact

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During Convergence 2004, however, MBS announced its ongoing momentum and upcoming plans to expand the reach of Microsoft Business Network to a broader audience of trading partners and it also highlighted the solution's success thus far and road map for the future.

The Microsoft Business Network (MBN) product has certainly drawn most of our attention during the recent user conference. There are many reasons for that, but the major one would be its potential to possibly deliver on the never really (or hardly ever) realized benefits of early dot-com era Internet trading exchanges or networks that could reasonably effectively link customers to their trading partners., As the complexity grows, this network could possibly become part of many larger exchanges, connecting companies in the same vertical industry or horizontally, across various industries.

There is also a lucrative potential of selling software licenses to every participant and of generating recurring revenue from network membership fees (similar to popular Internet service providers [ISP], such as, well, Microsoft Service Network [MSN], EarthLink or America Online [AOL]) and even from specialized services (e.g., community building, performing request for quotes [RFQs], conducting auctions and reverse auctions, etc.), often without charging single transaction fees and unnecessarily repelling the customers wary of being "nickeled and dimed" till "blue in face".

To that end, MBN has been for some time (over two years) in live use in Mexico and Argentina as a part of Microsoft bCentral integrated on-line marketing services for small businesses, where it has been used to link 25 large retail trading hubs to some 4,000 trading partners. MBN allows trading partners to exchange business documents germane to supply chain management (SCM) transactions, such as price lists; purchase orders (POs); sales orders (SOs); acknowledgements; ASNs and shipping manifests; invoices; and so on, by using secure extensions to Outlook or Excel products. The intent is to automate the transactions and minimize (if not completely eliminate) phone calls, faxes, and the resultant errors that come from manual data entry and paper-based processes. Accordingly, as mentioned earlier on, MBN will facilitate system-to-system communications via XML, traditional value-added networks-based (VAN), electronic data-exchange (EDI), or Internet-based EDI (on the AS2 standard at first).

That MBN is not necessarily suitable only for retailers. Consumer packaged goods (CPG) suppliers, and other smaller manufacturing or distribution enterprises on MBS back-office systems might prove the example of Northrop Grumman, a large defense contractor and SAP user, which is using MBN to link with more than 800 suppliers to communicate and collaboratively share information on order status, delivery, and production scheduling. Thus, one should not be surprised with our interest in analyzing the product, which offers several compelling reasons to evaluate.

For one, it should help companies deal with approximately 80 percent of their trading partners that typically account only for an estimated 20 perrcent of revenues, and yet originate around 80 percent of the operational cost for administering them (due to the need to handle them manually, with pesky and dreaded error-prone re-keying exercises). Conversely, remaining 20 percent of trading partners that account for hefty 80 percent of the company's revenues, would originate only 20 percent of the operational cost to administer them, given their use of EDI or any other automated information exchange technology.

MBN Support for EDI

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EDI might likely be the original embodiment of B2B e-commerce, which had started with a lot of mainframes and minicomputers talking to other mainframes and minicomputers. To refresh our memory, EDI emerged in the 1960s when the railroad industry sought a way to speed up and automate business communications between remote computer systems, and to eliminate the high cost of sending paper documents by snail-mail. The concept did not fully take hold industry-wide until the 1980s though, when standards were introduced to define data exchange, and when it became apparent that B2B, computer-mediated communications would require all parties to adopt a common protocol for purchase orders, acknowledgements, ASNs, and other pertinent documents. As a result, several technical committees have developed protocols governing such exchanges, which, channeled through VANs carrying these exchanges, became collectively known as EDI.

Owing to those roots, the technology remains an expensive proposition with VANs functioning like sort of electronic toll roads, charging per document or kilo-characters of data. Amounts can quickly add up. Indeed, EDI has a reputation for being expensive to set up and run, given the companies had to deploy numerous VANs, which are essentially proprietary e-mail systems that store and deliver EDI-formatted documents. It drove their suppliers' network costs up and forced them to be proficient in various communications protocols.

Aside from the upfront cost of the EDI infrastructure software (such as, set-up fees and leased lines fees), companies choosing to go with a provider of VAN EDI networks, face additional costs in maintenance and transaction processing fees alone (i.e., interconnect costs). For the above reasons, one would expect companies to begin gravitating in droves toward extensible markup language (XML), Internet-based EDI, and related Web services for transaction communications. Therefore, MBS' intention with MBN has been to make the EDI process easier by removing at least one layer of the technical problem, so that its partners can then focus more on the business issues that the customer really cares about.

Accordingly, MBN will support generic EDI with XML standards, while it will also enable interoperability with other EDI standards and more traditional EDI data transports in future releases. MBN will support generic versions of American National Standards Institute (ANSI) X12-formatted documents such as the 810-invoice, 850-order request, and 856-ship notice, but MBS is committed to providing maps that translate any company-specific EDI implementations into the generic format. The product will also provide VAN-like functionality for direct XML-to-XML data exchange. However, Microsoft notes it has been in talks to provide a connection to at least one high-profile proprietary VAN, albeit which trading will involve additional customary charges (e.g., per document or per kilo-character of text) in addition to the purchase and subscription costs for MBN.

Besides traditional VAN support, MBN will also eventually provide support for emerging EDI Internet Integration standards, such as AS1 and AS2, as to meet the increasing demand for Internet delivery of EDI services rather than over proprietary VANs. Namely, while VAN-based EDI traffic has lately been flat by and large, Internet EDI transactions have been growing at an annual rate of over 50 percent. Specifically, during the past few years, a number of EDI suppliers have breathed new life into this old workhorse technology by developing offerings that use the Internet as the communications medium, eliminating the need for multiple VANs and driving the per-transaction cost downward.

Microsoft Business Network (MBN)

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MBN was designed to help businesses more easily and effectively work with their trading partners (suppliers and customers) through a fully automated Microsoft .NET-connected solution, thereby increasing efficiency with a deep degree of integration throughout their enterprise and desktop applications and lowering the total cost of business-to-business (B2B) collaboration. In other words, MBN uses the messaging and collaboration facilities of Microsoft Outlook and the integration facilities of BizTalk Server to solve the supply chain connectivity part of the overall supply chain management (SCM) puzzle. The product facilitates inter-company collaboration (through minimizing data capturing and paper-based processes) with several key software components, tools, and community-building services, which will eventually include connectivity options for trading partners of all sizes, a trustworthy Web services network, a library of business process templates, partner management tools, and support to help companies automate their network of trading partners.

Since its launch in October 2003, MBN has reportedly experienced early adopter customer success. Possibly the best example would be Mikimoto (America) Co. Ltd., a subsidiary of the world-renowned creator and distributor of cultured pearls, which has completed its first phase of deployment (a pilot project with ten customers, which are all small retailers) and has successfully integrated these multiple organizations into its community of trading partners, streamlining its connection with customers. These customers can place an order by sending a Microsoft Excel form via Microsoft Outlook directly into Mikimoto's MBS Great Plains back-office system. When the order is received, an order acknowledgement is automatically generated and sent via Outlook back to the customer. In a similar manner, advanced shipment notices (ASNs) and invoices too are generated and sent via Outlook.

Mikimoto America is therefore using MBN to automate its ordering processes, which have traditionally been manual and paper-based, with e-mail, electronic data interchange (EDI) or fax as communication means, and to raise customer satisfaction levels through increased responsiveness, flexibility, and availability of information. Since deploying the solution, Mikimoto America has reportedly realized a number of benefits. For one, by streamlining the ordering process to make it faster and easier for both Mikimoto America and its customers, MBN saves Mikimoto America employees the time they would previously spend on manual sales processes, enabling them to focus instead on building more personal and productive relationships with customers. The solution has also helped the company significantly reduce its order-to-cash cycle (to one week from two or more weeks), allowing the company to increase its customer service standards and minimize manual sales process inaccuracies, rework, and delays in order fulfillment. On the other hand, the retailers (customers in this case) should end up with more accurate orders and faster shipments, and they can also use only Outlook to store all of the transactions with Mikimoto.

Based on these positive results, Mikimoto America has recently further launched a broad community-building effort to connect to the rest of its customer base. It is hereby reaching out to 500 resellers, most of which are small, family-owned stores, and the company expects at least one hundred of those resellers to join within the next few months. On the other, suppliers' side, Mikimoto has also been talking to a luxury watch manufacturer about using MBN too, thereby encouraging even wider customer adoption.

In the future, the company will also leverage the MBN's upcoming connectivity with EDI value-added networks (VANs), enabling its users to send EDI documents to trading partners that do not currently subscribe to MBN and receive them in return.

Microsoft Business Network (MBN)—Coming of Age? Part One: Event Summary

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At the end of March, during its annual conference for North American customers, Convergence 2004, Microsoft Corporation's (NASDAQ: MSFT) Microsoft Business Solutions (MBS) division previewed upcoming versions of its enterprise resource planning (ERP) and customer relationship management (CRM) solutions: MBS Axapta, MBS Great Plains, MBS Navision, MBS Solomon, Microsoft CRM, and related services. The main takeaway from the conference was that MBS continues to invest in its current offerings to provide customers with the enriched functionality they need to remain competitive in today's evolving marketplace and to exploit their existing information technology (IT) investments by streamlining business processes, and by more easily accessing the information they need to make educated business decisions.

Given the immense ongoing development undertaking, which began at MBS even before its strategy was espoused in 2002 (see Microsoft Lays Enforced-Concrete Foundation for Its Business Solutions), the incremental approach towards building a more complete enterprise applications portfolio seems logical, if not the only possible option. MBS strives to not only retain the existing install base within the maturing ERP product lines, but also to stimulate the acceptance of recent ERP-adjacent product extensions, some of which are featuring parts of the latest Web services-based technology, and drive sales or upgrades of high-volume products like Microsoft Office 2003 within the MBS' large install base that is nearing the 300,000 mark.

Hence, one should not be surprised by MBS' recent, more upbeat results, in a great part due to up-selling so-called "surrounding" applications like Microsoft Business Network (MBN), Microsoft Demand Planner, or Microsoft Business Portal to its existing ERP users (see Microsoft Keeps on Rounding Up Its Business Solutions). Namely, late in 2003, as to enhance its current line of ERP business solutions and service offerings in terms of helping its small, mid-market segment and even certain large corporate customers improve the effectiveness of current ERP investments, MBS announced the general availability of MBN, and the upcoming delivery of two demand planning modules.

During Convergence 2004, however, MBS announced ongoing momentum and upcoming plans to expand the reach of Microsoft Business Network to a broader audience of trading partners, whereby it also highlighted the solution's success thus far and road map for the future. Microsoft Business Network (MBN) is a combination of on-premise software that is integrated with Microsoft Office, eventually with all MBS ERP applications (albeit currently only with MBS Great Plains) or with Microsoft BizTalk Server, and hosted Web services. MBN works with a set of Web services that facilitate connecting to and swapping information with trading partners. These Web services will be hosted by Microsoft, in part because smaller enterprises may not have a dedicated broadband Internet connection, and partly because some companies might not want to expose a Web service call outside their firewall. Future versions might nevertheless allow customers to manage the Web services on-site or to work with a third-party hosting partner.

SCO's Tarantella Offers Tools for Technology

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Tarantella ASP Edition introduces a utility-style, "pay-as-you-go" licensing and pricing model that provides ASPs a cost-effective way to manage dynamic environments which can vary by hundreds or thousands of users per day. The product also features usage monitoring and billing capabilities, developed specifically to allow ASPs to monitor, analyze, and report application usage to their customers.

The ASP Edition combines Tarantella's web-enabling software with a set of product training, support, automatic maintenance upgrades, and other services. It is designed to ensure ASPs are up-to-date with the most current features to centrally manage and deploy applications over the web.

Members from SCO's Professional Services team are available to help ASPs perform a needs analysis, and offer advice on datacenter design and optimization plus application integration and customization. These services allow SCO to offer a Tarantella solution for ASPs, and help service providers create offerings for their customers.

SCO also unveiled Tarantella ASP Connect, a resource program to help OEMs, ASPs, ISVs, and resellers become successful in the Application Service Provider (ASP) market. Members of the Tarantella ASP Connect program have access to password-protected web pages, can attend events, seminars and other activities designed to help them use the ASP business model to increase the value and content of their product offering.

Product Strengths

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* The B2B Collaborative Commerce Solutions for e-business Voyager XPS and XES have as perhaps their strongest feature the potential to integrate and collaborate with other planning engines. This allows suppliers to participate actively in planning inventory replenishments for a retailer, distributor, or manufacturer through merely a Web browser without needing other Logility applications. The retailer (or trading partner closest to the consumer demand) controls how the supplier and others access the planning environment. Though a strength for Logility, this paradigm is not unknown in the SCM software marketplace. J. D. Edwards' has put together a similar Web-based product incorporating elements of Numetrix xtr@ and others are sure to follow.

* Attractive user interface with consistent look and feel: Logility Voyager Solutions are soft on the eyes and place functions and graphics in intuitive locations within the GUI. Charts and graphs are accessible from many locations and allow interactive updates to inventories and schedules by "point-and-click." Exceptions are conveniently summarized within a single window and users are directed to them via multiple means, such as e-mail, page, and fax.

* Price is right: While it doesn't offer the cheapest licenses among best-of-breed SCM vendors, Logility on balance represents a lower total cost than i2 Technologies or Manugistics (for installations of comparable scope). Also, many users will find that Logility's highly configurable solutions can lessen implementation expenses provided they are willing to adopt standard business processes. Logility's hosted applications available via i-Connection or Internet-based exchanges via i-Community also offer a lower entry cost than traditional licenses.

Logility Collaborative Planning Solutions Offer Sound Proposition

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Atlanta-based Logility describes itself as the leader in B2B collaborative commerce solutions via the Internet. Though all vendors take great pains to position themselves as leaders in something, Logility's claim goes beyond a skillfully crafted marketing blurb. Logility traces its lineage as a provider of collaborative software to its work with Heineken, which purchased supply chain planning software from Logility (then wholly-owned by American Software) in 1996. Heineken received the VICS 1999 "Best in Logistics" award based in part on its Heineken Operational Planning System (HOPS), developed by Logility. HOPS helped Heineken improve communication with customers, correct irregular inventory management, and reduce lead-time from 12 to four weeks. The system is used by all of Heineken's 450 distributors.

Logility began its operation with a selection of software applications that collectively supported the major planning tasks characteristic of manufacturing and distribution enterprises. Today, although these planning applications (see Table 1 for a summary) account for the bulk of Logility's revenue, they have a revised role in the company's overall collaborative product strategy.

At the center of Logility's product suite lie its collaborative planning engines, Voyager XPS for CPFR (Collaborative Planning Forecasting and Replenishment) and Voyager XES for Collaborative Transportation Management (CTM), a set of logistics execution processes codified by the Voluntary Interindustry Commerce Standards organization (VICS) and defined in large part by Logility. The individual modules for inventory planning, demand planning, replenishment planning, etc., are brought together in the collaborative context created by XPS and XES, much like petals of a flower are joined in the center receptacle.
In keeping with its heritage, Logility still targets the process manufacturing and distribution industry verticals, especially consumer packaged goods, food & beverage, chemicals, and textiles. In addition it enjoys a growing base of clients in retail, both brick-and-mortar and Internet, a phenomenon due primarily to its collaborative planning products that are well-suited to managing the processes by which retailers communicate and collaborate with suppliers. Logility feels its early entry into collaborative planning (Heineken) and resulting expertise is a major source of competitive advantage. We expect Logility to continue emphasizing its B2B collaborative commerce solutions over the next 3-5 years as this sector is still at the beginning of its lifecycle.

Integration with disparate systems is accomplished with the aid of Voyager Commerce Corridor, a selection of partner Enterprise Application Integration (EAI) vendors that works with Logility and the client on a per-implementation basis to provide a true data link between XPS and third-party demand planning packages, such as i2 RHYTHM Demand Planner or SAP APO Demand Planning. Among these EAI companies is Mercator (formerly TSI Software, Inc.), which has a long history with Logility and provided the cement for the standard interface between Logility and SAP R/3 that was developed in 1997.

Although Logility Voyager Solutions are offered on both NT and Unix, the company now finds its Windows NT platform to be far more popular and sales of Unix systems are rare. American Software established Logility as a separate business unit in January 1997 focused solely on the Supply Chain market and moved every component of the suite to the Windows NT and Windows 2000 (as of February 2000) platform including WarehousePRO (originally OS/2 based) and Transportation Planning and Management (originally AS/400 based). To capitalize on what it describes as "a very under-serviced platform for supply chain management," Logility has partnered with IBM to develop its Voyager suite natively for the AS/400e and DB2.

Contrary to its expectations, Logility has found small to mid sized companies reluctant to sign up for application hosting, a result indicative of the marketplace as a whole. i-Connection, one part of the company's applications hosting services provided by partners AmQUEST (owned by American Software) and ebaseOne, has been slow to produce expected subscription revenue. Consequently, Logility has adopted a "wait-and-see" strategy for further development of its ASP alliance network and relies almost entirely on its traditional license business. i-Community, the other part of its Web-deployed solutions business, allows users to collaborate with trading partners using Voyager XPS and Voyager XES through a hosted service, which also provides access to Logility's core planning "engines." Unlike i-Connection, Logility is actively seeking alliance partners, such as pportals and other exchanges, with which to extend i-Community collaborative planning products.

Can 'Intuitive' And 'ERP' Words Be Associated?

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Also positively impacting the sales of Intuitive ERP into some dispersed markets worldwide, is its strong multi-site and multi-national product capabilities, which are atypically strong for a vendor of its stature and stronger than those of many more visible competitive products (e.g., Made2Manage, Lilly Software Associates, SoftBrands/Fourth Shift, ROI Systems, etc.). Fully multi-currency enabled, Intuitive ERP allows an unlimited number of currencies including the Euro, currency gains/losses, GL transactions, check writing and support of a Goods and Services Tax (GST) and Value Added Tax (VAT).

The system architecture provides a flexible personalization environment to easily modify language tables, reports and forms, while the Financial Analyst module provides report templates, multiple consolidation company structures, subsidiary data imports, inter-company reconciliation report and eliminations, adjustment entry and consolidation rule maintenance. Also, multi-language capabilities (currently supporting 13 languages) extend to the user, not just the customer.

Intuitive has long made a conscious decision not to target a direct presence in many foreign markets, and to go for product distribution mainly through partners/value added resellers (VARs). This has often proven to be advantageous to the SME's for keeping costs down, and, as selling through partners requires a higher quality of product support, and accompanying documentation. By deliberately steering clear of too ambitious expansionist policies that have hindered so many smaller software companies in the past, and by focusing on a handful of core markets, Intuitive has managed to keep itself on healthy track. Also, direct and indirect channel that have already been built in targeted countries has helped the company with product translation and localization issues, which has resulted with solid multi-national and/or localization capabilities of the product. As a good example, the company has already developed a strong market presence in the emerging China markets.

During the late 1990s, however, Intuitive, somewhat painfully like many others, realized that its target market needed more than an inexpensive and easy-to-use back office system. To that end, during the last few years, the company has, gradually, either developed in-house (primarily by web-enablement via Microsoft Terminal Server) or incorporated through the above Interact partnership a line of integrated collaborative e-business, and customer relationship management (CRM) components within its core ERP solutions.

That the depth and breadth of Intuitive ERP are on track for its target market is further indicated by SAP's Business One offering for SMEs, the result of SAP's move earlier this year when it acquired TopManage (see SAP Tries Another, Bifurcated Tack At A Small Guy). SAP Business One is targeted at companies with less than 250 employees, and includes financials, sales, procurement, banking, inventory management, costing, multi-national, and some basic CRM functionality. It also includes the impressive "drag and relate" functionality available in SAP Enterprise Portal though, but, otherwise, the resemblance of functionalities between Intuitive ERP and TopManage might be striking. SAP's co-CEO's lament over SAP R/3's complexity and functionality that has become a liability rather than an advantage in targeting (and appalling as well) SME's in the past was also noted at his SAPPHIRE keynote speech.

Although the initiatives covered above and in Part One have, to our mind, contributed to creating increased demand and acceptance of the offering in the SME market, nevertheless, Intuitive will have to address many challenges in order to continue to thrive in this cutthroat competitive environment. The competition is flying from all directions: its peers, the Tier 1 vendors storming down the market, and even its quintessential technological partner, Microsoft's intrusion into the discrete manufacturing market via its Great Plains/Navision applications division (see Microsoft 'The Great' Poised To Conquer Mid-Market, Once and Again). Therefore, much scarcer financial resources, still developing global channel and brand recognition, and formidable competition within the market will be the challenges for the company to fend.

Moreover, although Intuitive has a notable worldwide presence, it has no local market leadership in almost any individual country nor in certain vertical segments owing to the fierce channel competition from more aggressive, better known and wealthier competitors like Microsoft Great Plains, Navision, Sage/Best Software, ACCPAC, Exact Software, Epicor, and Scala to name some.

Although a young company, Intuitive ERP is installed at over 650 sites in the US, Canada, China, Mexico, UK, Australia, Thailand, South Africa and other countries around the world, and although it has customers in industries as diverse as aerospace, bicycle parts, circuit boards, software duplication, boat docks and furniture, these geographic and industrial diversities will have mainly been achieved in a more opportunistic manner during the ERP halcyon days rather than with a premeditated market targeting.

Intuitive ERP's functionality across the board, although broad and well balanced between manufacturing and financials, has not been one of the strongest in the market as the company does not exhibit much of a vertical focus. The product is well suited for general MTS/MTO/ATO jobbing manufacturing environments, with almost no support for complex/engineer-to-order (ETO) nor for lean/flow repetitive manufacturing. Given the fact that some of its competitors offer a sharp vertical focus even to the precision of six-digit Standard Industrial Classification (SIC) codes within an industry (e.g., Navision and Epicor), Intuitive's above-mentioned simplicity tune may soon be emulated and loose its differentiation value. The company should, therefore, try to interest its resellers in industry specialization and provision of vertical extensions, and/or should internally vertically incline its product offering and develop industry templates, wizards and implementation methodologies to further decrease the time and expense of implementation projects. Having acknowledged this shortcoming, the company has currently been developing its first two vertical solutions high-tech/electronics and metal stamping.

Moreover, except for some individual above-mentioned features, Intuitive ERP modules do not offer distinguishing (if any) intrinsic ERP functionality (although there have been a number of readily available interfaces to third-party specialist products) even within the "native" discrete manufacturing areas (e.g., complex project management & accounting, fixed assets, cost allocation, hazardous materials reporting, forecasting, distribution requirements planning (DRP), strategic-level planning, sales & purchase contracts, field repair, plant maintenance). The same holds for the human resources (HR) and payroll modules.

Also, while company supports well multi-site financial consolidation, it is not quite the case with multi-site advanced planning & scheduling (APS) and supply-chain optimization. Technologically, the product may not be the most suitable as a solution for complex enterprises, worldwide dispersed, with strong requirements on distributed infrastructure, security and so on. Intuitive also trails these competitors in its ASP/hosting, private trade exchange (PTX) and/or collaborative role-based portal solutions strategy and delivery.

The above functional shortcomings may result in missed opportunities for enterprises that may think in a more long-term manner rather than in achieving short-term but limited benefits, and, therefore may immediately want some significant intricate functionality outside of the basic manufacturing/accounting functionality, from a sole source. Also, as some customers may appreciate a dose of flamboyance and display of power from their prospective vendors, Intuitive's stealth operation below bigger vendors' radar screen might have run is course.


To SaaS or Not, Is That a Question? – SaaSy Discussions

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described the opportunities for software as a service (SaaS) or on-demand applications, especially in the current difficult economic milieu. Part IIa then analyzed the top five SaaS assumptions (misconceptions) recently outlined by Gartner.

Before any vendor can embark onto delivering a SaaS offering, it must thoroughly consider a number of harrowing SaaS technology choices and their implications. Thus, Part IIa also analyzed the decision’s impact on the functional footprint (scope) of the future SaaS product, after which the aspiring SaaS vendor must identify gaps within its in-house skill sets and define how to fill them.

This part continues with the other major remaining technical considerations before any vendor can embark on delivery of a SaaS offering.

The Tenancy Decision

While the true multi-tenant design approach for SaaS is the best in terms of highest scalability and lowest operational overhead (and it allows moderate to extensive software modifications), it also requires the highest initial investment. Thus, in some cases, the traditional single-tenant hosted/application service provider (ASP) model or partial/hybrid (something in between) solution may be appropriate. Namely, the application virtualization approach enables single-tenant solutions via tenant management (virtualization) tools from Wrapped Apps Corporation, Parallels, or Citrix Systems.

The major considerations here for independent software vendors (ISVs) (not necessarily end users per se, although everyone should be informed at least) are the following: whether there is legacy code that could be somehow leveraged (or that would be difficult to rewrite), how many new SaaS implementations per year are forecast, and whether the SaaS model has been proven in the target market. In any case, it is critically important to get the product’s architecture right up front, since making any corrections and rectifications along the way will be complex and expensive.

In addition to the tenancy considerations, one must address the questions of scalability (in terms of load balancing and routing), availability, performance, and configuration-driven customization (both to accommodate personalized look-and-feel and special functionality). Other architectural factors are system integration, information security (including identity management), usability, communications (e.g., via e-mail, short message service [SMS], instant messaging [IM]), global (multinational) capabilities, audit and compliance, and system backup and recovery.

The above overwhelming combination of factors influences not only the SaaS applications architecture but also the underlying infrastructure (platform) architecture. I would also add the cost of full time employees (FTEs) charged with handling all these issues.

While there are costs with multi-tenancy, over time the costs to handle each of these architectures can and probably will exceed multi-tenant design costs. Current macro-economic conditions are making one or the other approach seem cheaper right now, but as the economy rebounds, the question will come up about long-term strategy.

Finally, the costs for compliance are very high (and can be so high that it is out of reach for new entrants) to get enterprise-class services and certifications and audits, such as ISO/IEC 27001, SAS 70 Level II, Systrust, etc. Each part of the system must be audited and these audits can cast to the amount of US$100.000 and higher. Thus, multiple components in any architecture will lead to higher compliance costs, but that’s another blog topic.

Forget Not About the “SaaS Plumbing” Thingies, Either!

But even solving these multiple pieces of the architectural puzzle is only the beginning, since one also must include many SaaS-specific “must have” pieces of functionality, such as a pricing engine, a billing engine and payment processing, tenant and subscription management, service provisioning, system usage and performance (uptime) monitoring, and subscriber management and self-service. Creating all these “SaaS plumbing” components requires significant effort (in addition to the necessary “know-how”), and the company must thoroughly plan for it.

During the Webcast mentioned in Part IIa, Scio Consulting International claimed that this functionality takes from 20 to 50 percent of the research and development (R&D) effort for an entire SaaS application. The conventional wisdom is to leverage commercial SaaS components and services for time-to-market (TTM) reasons.

For example, commercial SaaS billing applications options would be OpSource Billing CLM (Customer Lifecycle Management), Zuora, or Vindicia, whereas SaaS customer management applications would be OpSource Billing CLM and Aria Systems. While PayPal has become the standard for online payment processing, uptime service level agreement (SLA) monitoring can be done via TrustSaaS, Absolute Performance, and the SaaSMonitor.com offering from MVP Systems. Last but not least, SaaS enterprise applications integration (EAI, including links to on-premise applications as well) is offered by Boomi’s AtomSphere suite, and Cast Iron Systems. Sonoa Systems provides analytics, management, and IT governance solutions for cloud services and application programming interfaces (APIs).

PaaS The Hosting, Please!

This brings us to the discussion about choosing the technology stack (with the following technical layers: application, deployment platform, and infrastructure) in a do-it-yourself (DIY) or other fashion. Namely, as ZDNet’s blogger and SaaS connoisseur Phil Wainewright explains well in his recent blog post, there is a plethora of platform choices for vendors, including commercially available platform as a service (PaaS) options.

Some examples of available PaaS offerings would be the following: SaaSGrid from Apprenda, Force.com from Salesforce.com, Google App Engine, Bungee Connect, Facebook’s Platform, Apple’s iPhone Platform, pieces of Microsoft’s still upcoming Azure Cloud Platform, and so on. In the case of Salesforce.com, there are three main ways that ISVs can partner with the vendor as a platform: build, market, or sell.

Force.com is designed for those that want to build applications (without bothering with porting, integration, security, hosting, infrastructure, etc.), while the AppExchange directory is for ISVs that already have an application of their own and are focused on marketing it. The upcoming Checkout service (currently in the pilot phase) will be for those who want to fulfill sales using Salesforce.com’s infrastructure.

Force.com is also flexible, so that developers can use Salesforce.com’s Visualforce presentation-layer development environment or other toolkits such as Eclipse (Salesforce.com has an Eclipse plug-in), or other third party development environments to create custom applications that do not look like the traditional Salesforce.com user interface (UI). In addition, Force.com has its own programming language, Apex, which can be used to create highly customized applications via the Java-like language.

Indeed, selecting the right PaaS may simplify the technical decision process, accelerate time-to-market, and reduce development and operating costs. A PaaS takes care of software components (services) creation (via managing metadata and portals), deployment (i.e., ordering, provisioning, and metering), and execution (via SLA management, billing, and subscription management).

In fact, the abovementioned necessary SaaS add-on plumbing applications (monitoring, billing, provisioning, etc.) also come bundled within a PaaS, and can save time and money while adding value to the vendor’s operations. Finally, a PaaS also provides the necessary components for reporting, alerts, and dashboards.

Two Force.com Endorsements by ERP Veterans

Salesforce.com’s Dreamforce 2008 user conference, which coincided with the historic US Elections, was marked by exuberance, confidence, and an overall upbeat feeling, in sharp contrast to the ongoing market sentiments. Ray Wang and Vinnie Mirchandani have described the event in their respective blog posts.

What really caught my eye there was seeing the two longstanding enterprise resource planning (ERP) players, CODA (now part of Unit 4 Agresso) and Fujitsu Glovia, opting to write brand-new products on Force.com. Salesforce.com’s blustery chief executive officer (CEO) Marc Benioff even (half-jokingly or not) taunted SAP (during his intellectual debate with SAP’s co-founder Hasso Plattner in early 2008) to rewrite the SAP Business ByDesign on-demand product on Force.com, rather than to “further torture and embarrass itself” (and the rest of the traditionally stodgy on-premise vendor community).

Even though this challenge might sound ridiculous for too-proud SAP to acknowledge and succumb to, that suggestion begins to make sense to me, in light of the giant’s initial faltering with SAP Business ByDesign. Well, maybe SAP could acquire Salesforce.com and solve its SaaS conundrum once for all, but that might be a bit difficult to pull off (at least during these days of limited spending)?

I concur with Dennis Howlett, who in his recent blog post on CODA wondered why a company with a 30-year history of writing world-class finance applications and with 2,600 renowned customers would entrust its on-demand future (i.e., the CODA 2go SaaS product) to a new, relatively untested platform. According to Jeremy Roche, CODA’s CEO, the attraction came in the following four distinct forms:

1. Access to a pre-built infrastructure that includes a security model, workflow, reporting, and multi-tenancy.
2. The ability to gain immediate access to Salesforce.com’s customer and partner ecosystem.
3. The ability to have the Coda 2go product run from Salesforce.com’s datacenters, reducing the need for infrastructure and gaining access to massive painless scaling.
4. The inheritance of Salesforce.com’s credibility in maintaining a world-class service since Coda 2go runs on the same servers and infrastructure as Salesforce.com’s.

For its part, Glovia had initially ported a cut-down on-demand version of its established glovia.com ERP product. The vendor named its erstwhile SaaS product GSinnovate, but has apparently not sold a single license since 2006. In our recent discussions, Glovia conceded the need for the SaaS channel (and more), and thus the decision to go for Salesforce.com’s AppExchange and Force.com. Glovia plans to deliver on-demand products that will address one business process at a time, starting with the generally available glovia.com Order Management product.

There Is No Such a Thing as a Free Lunch PaaS

At the end of the day, a PaaS platform is not a charity that is free of charge, but rather a significant cost item that will cut into the SaaS vendor’s bottom line ever after (as well as will all the other necessary individual SaaS plumbing components). Thus, many SaaS aspirants might still opt for the grueling DIY approach by using some free and open source software (FOSS) LAMP (Linux, Apache, MySQL, Perl/PHP) bundle or Ruby on Rails (RoR).

On the commercial software side, there is always Microsoft’s stack, which consists of Windows, Internet Information Services (IIS), ASP.NET, and SQL Server. Progress OpenEgde, Oracle SaaS Platform, various SaaS programs from IBM, and so on are other SaaS platform (but not necessarily all-inclusive PaaS) alternatives.

In any case, the DIY vs. PaaS dilemma should take into the account whether there is a match between the technology requirements with the SaaS vendor’s available in-house expertise. When leaning towards PaaS, the SaaS vendor should ascertain whether its target market is part of a particular PaaS marketplace (ecosystem), as well as the time-to-market and R&D cost savings vs. the costs of using the PaaS. Certainly, there is a trade-off between the abovementioned benefits of a PaaS and the dependence on the PaaS provider (i.e., what happens if the PaaS provider goes out of business?).

An Introduction to E-learning and Learning Management Systems

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Not so long ago (or, back in the early ’90s, when I was a first-year college student) there were two ways to get a post-secondary education: by attending classes at a university or college with hundreds of other coffee-stoked students, or by signing up for what used to be called “distance” learning (or even before that, “by correspondence,” as though courses consisted of a series of letters exchanged between the student and the professor, and delivered by the Pony Express). Distance courses still exist, of course, but increasingly, even these programs are undergoing drastic change because of their use of technology.

Over the past decade or more, a new style of education has been emerging for traditional in-class college and university programs as well, changing the ways instructors and professors teach and students learn. Humanism—the philosophy originally espoused by universities—has always held that technology could and should be used, along with rationality, ethical philosophy, and universal morality, towards improving the human condition. However, it seems that the balance is being tipped increasingly towards a privileging of technology over other means to that end.

Universities are jumping enthusiastically on the technology bandwagon, and it’s no longer uncommon for professors to supplement their lectures with PowerPoint presentations, or for students to take notes on their laptops (Acadia University, in Wolfville, Canada, has been offering “free” laptops to all first-year students for more than ten years). And an ever-growing number of professors set up course web sites that allow students additional opportunities to ask questions, or to access the course syllabus, should they have happened to lose that pesky, fly-away hardcopy version handed out the first day of class.

What does all this extra technology-based stimulation mean in practical terms (besides reducing the number of times the prof has to answer questions about when the term paper is due)? With PowerPoint replacing “old-school” photo slides and clunky overhead projectors, burnt-out bulbs interrupting lectures is no longer a concern. Students can use their laptops not only to take notes more speedily (most people type faster than they can write), but also to access dictionaries and other writing or reference tools in situ.

Course web sites can also offer students supplementary materials without the time-consuming hassle of going to the library (a decided benefit for students with physical disabilities). Graphic elements, such as art, diagrams, or photos, can help students who are visual rather than auditory learners. Chat rooms and other collaborative tools can help to maximize student participation in courses with ever-increasing enrollment caps.

The benefits of e-learning are not just for universities. Many elementary and high schools are also implementing learning management systems (LMS) in their classroom, for attendance tracking, creating and administering tests, e-mail, grade posting, and many other administrative and teaching tasks.

And certainly no less important—probably much more important to readers of this blog—is the fact that businesses of all sizes are changing the way they perform certain operations as a result of implementing e-learning and learning management (LMS) applications. Human resource managers are discovering how to optimize employee performance with e-learning or LMS software.

What Is a Learning Management System?

An LMS is a software technology that allows organizations, including corporations and educational institutions, to manage and schedule all aspects of teaching and training. An LMS can aid in creating course calendars and other material, in easing administration and communication, and improving tracking of student or trainee progress. An LMS can be implemented through the Internet with open source software, it can be licensed from a provider, or it can be purchased by an organization. The term e-learning refers to any training or learning that is done with an LMS application, or that is computer based.

Top Business Benefits of E-learning with an LMS

* Reduced costs associated with training fees, travel and accommodation expenses for workshop or course trainers, and lost employee work time
* Computer-based training can more effectively and actively engage the student and produce better test results and higher rates of retention, thereby improving on-the-job competency and efficiency
* Larger numbers of employees can receive training in shorter periods of time; employees can be exempt from certain courses or modules if they demonstrate competency by passing a pre-test
* Reduced administrative hassle for course registration, and course content, resulting in further reduced costs
* Greater volumes of employees can receive timely training, as a result of by-distance access to online training programs or courses
* Reduced employee turnover, as more efficient training and better test results can boosts employee confidence and performance
* Modules for employee training can assist organizations with compliance issues, partly due to more consistent or “centralized” course content

What Risks Do Business Managers Need to Consider before Implementing a Learning Management Solution?

* Align learning with business goals, as well as employees’ personal goals, to make sure time and resources are maximized.
* Develop a well-planned business case to win senior executives approve a proposed e-learning or LMS project.
* Identify the gap between actual or current training results and desired results, so that you can choose an e-learning or LMS solution that addresses your specific needs.
* Assess your company’s IT infrastructure to decide whether to implement a hosted or a licensed solution.
* Make sure you choose a solution that will integrate with your existing human resources (HR) or enterprise resource planning (ERP) solutions.

Mitigate Risk with Online Software Selection Tools (Or, How an Online Software Selection Process Can Help You)

* Compare vendors offering LMS solutions with those offering content management system (CMS) solutions, to find out which best meets your needs.
* Evaluate vendors that provide modules for competency and performance management.
* Examine functionality that supports course content authoring or publishing tools.
* Determine which solutions satisfy your requirements for classroom or e-learning facilities.

More LMS and E-learning Resources

* Get an overview of content management systems (CMS).
* Read articles by industry experts about learning management systems (LMS).
* Download a sample LMS request for proposal (RFP) template.
* Access white papers about the benefits of LMS and case studies about e-learning best practices and how specific vendors’ LMS solutions helped achieve e-learning goals.

Not all of your students or trainees may be geniuses, but their training results can be markedly improved with LMS-based training.

Think of this simple formula (slightly modified from the original), if you need further incentive to consider LMS:

e-learning = mc²

with “m” representing the mass number of employees you can train more effectively, the management of knowledge, as well as the money you’ll save, and with “c” representing the speed (Latin celeritas) at which you can train them, and get them back on the job and performing better than ever.

Are Spend Management (or SRM) Apps Suited for the Mid-market

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introduced some common supply chain challenges and resulting spend management opportunities for companies of all sizes. The article then went into the philosophical and functional differences (if any) between the “spend management” and “supplier relationship management (SRM)” monikers.

Further discussion was about what exact functional parts of this software category small and medium enterprises (SMEs) might need. To that end, Part 2 focused on typical Sourcing and Procurement capabilities that cover most of the spend control needs for mid-sized enterprises.

The third and final part of this blog series showcases one incumbent (and not so vocal) midmarket product, Epicor SRM.

One Tacit Midmarket SRM Provider

Epicor Software Corporation is a global company dedicated to providing integrated enterprise resource planning (ERP), customer relationship management (CRM), supply chain management (SCM), and professional service automation (PSA) software solutions to midmarket companies and divisions of the Global 1000. Founded in 1984 and headquartered in Irvine, California (US), Epicor serves over 20,000 customers in more than 140 countries, providing solutions in over 30 languages. For more details on the company’s offerings, see my blog series on Epicor in early 2008.

The Epicor SRM suite stems from Epicor’s acquisition of certain assets of formerly Atlanta, Georgia (US)-based Clarus Corporation in October 2002, as part of its strategic initiative to offer a comprehensive and integrated enterprise solution. For more information, see TEC’s 2002 article entitled “Epicor Picks Clarus’ Bargain At The Software Flea Market.”

The acquisition brought an initial set of SRM solutions covering Web-based procurement, sourcing, online invoice presentment and payment (settlement), and the ePortal Supplier Pack for secure supplier access to relevant information. Then there was View BI, a business intelligence (BI) module for spend analysis, and finally eTour, a training and reference application available 24/7 through a Web browser.

eTour has since been retired, since it was underused and too expensive to maintain. For its part, View BI has meanwhile been replaced with Epicor Enterprise DecisionStore for spend analytics. The invoice presentment and payment module was never really completed by Clarus, and Epicor chose not to invest in it because the company felt that procurement, sourcing, and spend analytics were the most important and most value-add midmarket SRM solutions. Indeed, electronic invoice presentment and payment (EIPP) solutions have long been offered by Ariba, Basware, and J.P. Morgan Xign.

Product Development Goes On

Since 2002, Epicor has delivered three major releases and several minor releases, especially of the Procurement module. These enhancements have all required internal development, since there have been no other SRM-related acquisitions. In late 2003, the vendor announced the release of Epicor eProcurement 7.3, a purchasing management solution that provided a connection between buyers and suppliers for the purchase of direct and indirect goods and services within the framework of defined business rules.

New in eProcurement 7.3 was the integration of inventory management and back-office purchasing modules (e.g., with the back-office purchase order approval routing and end-user requisition capabilities). Blanket purchase orders and releases was another major group of capabilities within the 7.3 release.

For example, permissions to create blanket purchase orders are configurable, and blanket orders can be used for either private or public consumption. Blanket orders’ characteristics (or specification of the goods or services that the order covers) can be specific items and quantities, a monetary amount of one or more product categories, or a general monetary amount, regardless of items or categories. Blanket orders also support effective dates and consumption priorities, while order releases can be done individually or on a schedule.

Furthermore, the proxy effective dates and organization requisition proxy group capabilities in Procurement 7.3 are associated with the ability of one user to assign another user as a proxy requisitioner or proxy approver for a specific date range. Other nifty features that were introduced at that time included one-click order copy capability, the ability to link e-mail approvals directly to the purchase order, the ability to approve from an order’s line detail, the ability to create a catalog item from a non-catalog item, and the ability to add attachments to extensible markup language (XML)-based purchase orders.

The most recent release, Epicor Procurement 7.3.6, was delivered in 2007 and featured major purchasing workflow improvements. For example, in the previous 7.3.5 release, any sourcing intent by the buyer would always come before management for approval, and also required a requisition review for non-catalog items.

However, the 7.3.6 release introduced the ability to set the pre-specified level of management approval required before sending a non-catalog order to a buyer for sourcing. Additionally, there is the ability for a buyer to submit a sourced requisition directly to management for approval within the workflow.

Moreover, line-item level approvals and disapprovals permit more granular decision making that keeps the process moving with reduced effort by all participants. Namely, approvers can change orders on the fly, while the workflow routing configuration can be based on what has changed (e.g., accounting methods, items, dates, etc.). Other noted functional enhancements were the following: a replenishment workbench, requisitions for stock transfers, ad hoc notes logs for suppliers and orders, advanced order search (by item level and keywords), and workflow configuration.

The Current State of Affairs

As with all Epicor solutions, the sweet spot for Epicor Procurement and Epicor Sourcing is the midmarket, where efficient management of corporate spend and automation of internal processes are significant competitive advantages. Epicor Procurement has been licensed by over 140 companies (not all of them have implemented it yet, though), while Epicor Sourcing has been licensed by about 20 companies. The number of Procurement users per customer ranges from 20 to 3,000.

Epicor’s SRM solutions are truly horizontal, and applicable across various industries. The majority of Epicor SRM customers are in North America, although each global sales region has Epicor SRM on its price list. Epicor Procurement is currently available in English, French, and Spanish, whereas Epicor Sourcing is available only in English.

Currently, Epicor does not actively market Procurement as a standalone solution, but has gotten a few deals that way anyway. The Epicor SRM sales pattern has shown a steady upward trend from 2003 right through to now. Since most of the low-hanging fruit in Epicor’s customer base have licensed Procurement in the 2003-2007 time frame, one could attribute the continued steady product sales to the vendor’s ongoing education of the midmarket about the importance and opportunity of spend management and related best practices.

Epicor SRM is most often sold as part of the complete Epicor solution. Thus, about 95 percent of customers that purchase Epicor SRM are buying it as part of the overall Epicor ecosystem. The fact that the vendor offers an end-to-end solution is one of the key value messages for its target market.

According to the vendor, in the midmarket the biggest competitor for Epicor Procurement is “doing nothing.” If a current customer is interested in procurement, the company almost never looks beyond Epicor. If Epicor is engaged with a prospect, then procurement is most often part of a bigger deal that includes a full ERP system.

In those cases, Epicor usually competes against Lawson Software, Oracle, SAP, and Microsoft. The Microsoft Dynamics ERP products do not have their own strong procurement capabilities. Thus, they have to bring in a third-party solution, and that plays to Epicor’s benefit. Lawson, Oracle, and SAP do have their own procurement capabilities, but feature-for-feature Epicor Procurement can win.

In general, Epicor plays Procurement as a strong differentiator for a total Epicor ERP decision. When Epicor is competing in standalone SRM/procurement deals it faces off Ariba and some vertical niche players. The company has also occasionally sold Procurement into accounts that are running SAP, Oracle, Microsoft Dynamics GP, and other ERP systems, where Epicor Procurement was evaluated to be a superior solution.

Product’s “Order Winner” Traits

Packaged integration to Epicor Financials and Epicor SCM solutions and to other ERP systems results in the inherent ability to handle internal inventory orders and perform three-way matching in accounts payable (A/P). Other differentiators include configurable, point-and-click purchasing workflow automation (with no programming required), a patently simple user interface (UI), the ability to approve orders from a mobile device, “Tap Outs,” “FreeForms,” and a “360-degree” budget and commitment checking process.

To explain some esoteric terminology, “Tap Out” is Epicor’s term for what Ariba and Oracle call “PunchOut” and SAP calls “Roundtrip.” It is the ability to leverage suppliers’ e-commerce sites during the search, select, and shop experience as an alternative to managing supplier catalogs locally.

The Tap Out feature sends requisitioners’ credentials to the supplier site and allows them to add items to a shopping basket there. But instead of going through the “check out” process on the supplier site, the basket/shopping cart is brought back to the procurement application (via XML) so that it can be submitted through the procurement approval workflow before placing the order with the supplier.

For their part, the “FreeForms” feature provides the ability for Epicor customers to create Hypertext Markup Language (HTML) forms that become part of a requisition. A common example is for ordering business cards. Namely, the catalog online shopping item might be for a box of 1,000 business cards for US$14.95, but additional specific information for printing on the business card is required to go along with the order (name, address, phone, etc.).

To that end, a procurement administrator can create a FreeForm for entering that additional information and require that the form must be completed whenever the business card item is requested. The form then gets transmitted to the supplier with the order.

FreeForms can also be used for internal requests (e.g., vacation requests to the human resource [HR] department) or for very simple requests for quotations (RFQs, e.g., today’s price on a commodity) in which a supplier fills in the required information on a form related to a specific request. A FreeForm can be created in any HTML authoring tool (including Microsoft Word, to make it really easy). When ready, a FreeForm is uploaded to Epicor Procurement and the module automatically creates the database tables necessary to manage the fields that are included on the form.

Thou Shalt Remain Under the Budget

The feature that also gets the attention of prospects and customers is Epicor’s capability around “budgets and commitments.” This feature, which was breifly mentioned in Part 1, captures commitments not only from the Procurement module, but also from other sources of spend, including A/P and general ledger entries.

The Budget and Commitment Checking feature may deserve an article on its own. In a nutshell, the capability continually accumulates commitments from multiple sources that come from (not necessarily Epicor’s) procurement, accounting and supply chain management (SCM) modules. An administrator can configure which sources to include as a commitment (against accounts) according to their business requirements.

The company can create business rules to define what exact transaction states constitute commitments. For some companies, perhaps a purchase order is not a commitment, but goods received but not yet invoiced are commitments. For others, perhaps only invoices are the first establishment of a commitment.

A raft of the budget control settings allow companies to specify what requisitioners are allowed to see in budget numbers. For their part, budget override authorities by title, similar to spending limits, determine “how high” in the hierarchy one has to route a requisition for approval based on how much a budget has been exceeded.

My intention in providing this level of detail is to point out how sophisticated and comprehensive this Epicor SRM capability is. The process is comprehensive, much more than a high-level integration between Procurement and GL/AP, and it is done in a way that allows for budgets or commitments to come from non-Epicor sources too.

To the end of the important premise of spend management (i.e., to stay under budget), the Budget View provides approvers with the opportunity to perform “what if” scenarios with all orders pending their approval to determine the optimal combination of approvals and disapprovals to meet budget control objectives. Last but not least, and also related here, Epicor SRM also features strong spend analytics capabilities.

What Is Not Quite as Impressive…

On the downside, if managed catalog service is a strong requirement, Epicor SRM not likely to win the deal. Epicor has customers who integrate Epicor Procurement to outside catalog services using the abovementioned Tap Out feature, but Epicor does not provide those services.

Epicor offers multiple supplier enablement options (including purchasing cards), but is not involved in creating supplier networks (hubs) like Ariba Supplier Network (ASN), Perfect Commerce’s Open Supplier Network (OSN), or Hubwoo’ Transactional Hub. Suppliers can be connected or “enabled” using a variety of means including Electronic Data Interchange (EDI), XML, Web forms, or other e-commerce tools. Typical benefits of supplier enablement include reduced supply chain costs, improved invoice tracking, reduced procurement costs, reduced or eliminated non-value added (manual) processes, and improved communications.

Furthermore, Epicor SRM includes only some basic contract management capabilities. The vendor has not pursued EIPP or supplier hubs mostly because it did not have full confidence that the investment would achieve a payback from the midmarket. Large corporations are there and ready, while the midmarket is not yet there according to Epicor’s findings. But the vendor claims to have a roadmap that will get it there and will continue to educate its customers toward those best practices after they have mastered the basics of spend management.

The recently unveiled Ariba SIM (Supplier Information Management) platform is a good example of why Epicor will gladly wait and see before joining the supplier hubs fray. Namely, the question is why it’s still only early days for Ariba’s SIM solution, although the vendor has been in the supplier network/directory business for well over a decade.

Epicor’s SRM experts have always contended that the ASN was important to Ariba and suppliers, but very light in content. Namely, it is an uphill battle to get suppliers to pick a single network where they keep information (including item and price catalogs) up to date. That costs a supplier money and time and there are no decent tools available to syndicate their data to multiple hubs.

Even though Ariba is the gorilla here, there are still many other bases a supplier needs to cover to transact with myriad buyers. Think of how many “supplier directory” publishers have come and gone over the years. To be honest, Ariba is doing what I think they should be doing as a leader in the space, and it might ultimately help its tier-one customers. If Ariba can figure out a way to democratize the data and monetize its delivery for the other over 90 percent of companies, Epicor will be listening and reacting.

In its response to Epicor’s assertion, Ariba points out that the reality is these are not early days with the Ariba SIM solution as the vendor has been doing this for years now. The solution is only now packaged differently.

“Ariba has a comprehensive Supplier Management Solution launched seven years back to address Supplier business processes around Transactional enablement and help buyers evaluate Supplier performance using Ariba Supplier Performance Management solution and has hundreds of customers who use this solution successfully. Ariba Supplier Information Management, though recently unveiled joins the Supplier Management family and is intended to unite both the Transactional and performance aspects of Supplier Management.

Companies like Epicor have no choice but wait, since developing comprehensive Supplier Management solutions are not about technology, but about an eco-system which includes a robust Supplier Network, flexible and scalable services to help buyers manage suppliers executed using leading Spend Management technology.”

SaaSy and Cloudy Dilemma?

Moreover, in light of the architectural prowess of some of its Epicor brethren solutions, Epicor SRM is not a technological trailblazer. Currently, the product supports Active Server Pages (ASP) and Dynamic HTML (DHTML) on the Web client-side, Visual Basic (VB) for the Web application server business logic (objects), and runs on Microsoft SQL Server database. There are packaged integrations to Epicor Enterprise and custom integration to the legacy Epicor Avanté product.

Epicor perviously worked with a third party that provided integration to Microsoft Dynamics GP. Now, Epicor Procurement comes with a set of Web services that can be used to integrate to the SAP, Oracle (including PeopleSoft), and GEAC (now Infor) back-office systems.

As for the recently unveiled converged and Web 2.0-enabled Epicor 9 suite (which already includes strong buyer workbench and advanced purchasing capabilities), initially, Epicor will provide SRM integration to the new Epicor 9 Financials and SCM modules. Later, it will migrate it to the latest Epicor TrueSOA™ technology platform. Epicor completed its second-generation service oriented architecture (SOA) platform with the release of the ICE (Internet Component Environment) 2.0 framework alongside Epicor 9. Additional modules are planned for development, including Procurement and Sourcing applications.

Currently, Epicor provides single-tenant on-demand SRM deployment via managed hosting service of Epicor Procurement for some customers. The vendor is exploring the midmarket opportunity for multi-tenant software as a service (SaaS), but it doesn’t have any firm plans there yet. It will likely have subscription-based, multi-tenant SaaS offerings within the next generation SRM product suite, and my guess is that Sourcing might precede Procurement in this regard.

In my mind, Epicor Sourcing is a logical candidate to be offered as a cloud computing-based subscription/pay-per-play application. In order to get traction, Epicor might not even want to call it Epicor Sourcing but rather something like “Epicor Buyer Connect” or so.

There is quite a bit to think about here, including the potential for an Enterprise 2.0 (enterprise social software) aspect to it to monetize via industry templates or even supplier advertising. But this is only me postulating and speculating; time will only tell what Epicor will do for real here.

A separate blog post will analyze the brand new Epicor 9 suite’s functional and technical traits. Until then, what are your views, comments, opinions, etc. about the current economic climate in your region/industry and about your approach to curbing spend?

What are your best sourcing and procurement practices as well as experiences with particular SRM/spend management applications? If you are an Epicor Sourcing and/or Epicor Procurement user, I would appreciate you sharing your experiences with the product and the company.

Epicor 9: Delivering What Oracle and Others Are Yet to Achieve

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Epicor Software’s next-generation converged product suite. A similar feat is yet to be accomplished even by mighty Oracle within Oracle Fusion Applications.

The article also discussed Epicor’s accompanying “protect, extend, and converge” strategy for providing customers with a migration path choice at their own timetable and convenience. The article then went on to dig deeper and explain a number of enabling technologies and concepts within Epicor 9, starting with Epicor BPM (Business Process Management).

Part 2 then analyzed the major enabling concepts and technologies within the product, such as Epicor ICE (Internet Component Environment) 2.0 Business Architecture, which is based on Epicor TrueSOA™ and includes the Epicor Everywhere Framework™. The article also dug deeper into the suite’s built-in business intelligence (BI) and enterprise performance management (EPM) capabilities.

Part 3 of this blog series analyzes further unconventional and nifty tools and technologies within Epicor 9, and concludes the series with some insights into the product’s future enhancements.

But Wait—There’s More…

This group of extra functionality starts with Epicor Enterprise Search, which is a ”Google”-like mechanism for searching for information. This search appliance of a sort delivers secure, role-based results and permits further actions to be taken upon those search results.

As explained in TEC’s previous article “Why Enterprise Application Search Is Crucial to Your ERP System,” since search engines are a de facto means for finding what users need on the Web, why should enterprise resource planning (ERP) systems be any different? Enterprise search should get users quickly to the information they need, in the context of what they are doing, without needing to know how an ERP system works.

Epicor Enterprise Search uses Microsoft’s technology to combine both structured data (i.e., fields from Epicor’s database) and unstructured data (e.g., Microsoft Word documents, Adobe Acrobat PDF documents, Web pages, etc.) in searches. The tool can be invoked from anywhere to find information. Users do not consume a license unless they elect to link to an Epicor application (a particular session).

Related to search is the integral Epicor ECM (enterprise content management) capability that provides the ability to store and manage all Epicor application attachments as documents in Microsoft SharePoint. The module adds a level of document management system capabilities to storing attached data elements, such as version control and check-in/check-out. Epicor ECM is not a mere Microsoft SharePoint repository, since it also ensures effective management of all content and easy access to it using Epicor Enterprise Search.

Additionally, Epicor RSS Support is a nice-to-have feature that allows subscriptions to syndicated information in a Real Simple Syndication (RSS) manner. The tool allows users to subscribe to any data and have the system pro-actively push information to the user about changes. We are all used to this syndication outside ERP systems for getting timely updates, and now Epicor users can use the same easy mechanism within the application suite.

“Cloudy” Future

While the enterprise search capability is already fully available with Epicor 9, the cloud computing-based version is not yet ready, as the Azure Services Platform is not yet officially commercially available from Microsoft. Epicor 9’s business architecture (Epicor ICE, explained in Part 2) was designed to support any deployment scenario, so the product can be installed as on-premises software, hosted in a single-tenant manner, or even delivered on-demand via multi-tenant installs.

As far as cloud computing goes, the entire Epicor 9 footprint is not yet Microsoft Azure-based, but might be over time. Epicor likes Azure as the platform as a service (PaaS) of choice, since it is based on the Microsoft .NET Framework. In other words, it should be reasonably easy to move the current Epicor 9 code to the cloud.

As of today, Epicor feels that more customers will want a hybrid combination (software plus services) approach and look for suitable cloud and software-as-a-service (SaaS) applications to add value to their vast premise-based ERP investments. The applications the vendor is currently enabling for Azure include the aforementioned Epicor Enterprise Search (to make use of the utility capacity of infrastructure as a service [IaaS]) and the Epicor Everywhere Framework that was explained in Part 2 (essentially with system performance benefits from hosting the Web server in the cloud). In my view, other likely candidates for the cloud could include Epicor’s supplier relationship management (SRM) applications as alluded to in my previous blog post on Epicor SRM.

Enabling and Running “Business Without Barriers”

Another major trait that Epicor 9 brings is the product’s global and multinational capabilities, which is in contrast to most of its brethren products’ regional focus. To that end, the Epicor Global Business Management module provides a means for creating a single virtual enterprise, as well as the essential tools needed to create and maintain a “single version of the truth.” Regardless of how the customer’s business is distributed or where the business goes in the world, Epicor 9 was designed to keep it all in synch for seamless operation and total visibility of the enterprise.

Thus, the Multicompany and Global Multisite Management capabilities provide support for centralized and distributed functions and processes across distributed operations, and transactions between them. The modules support intercompany trading, centralized purchasing, global credit checking, company-wide forecasting, local pricing, and more capabilities, all in real time. The idea here is to ensure that all business entities and operations can be handled appropriately and securely, and consolidated with ease, as required.

For its part, the Epicor MDM (Master Data Management) module establishes which data will be passed between the distributed enterprise and to external systems and businesses. The module ensures that master data meets regulatory requirements, and is secure and up-to-date, all of which leads to greater customer satisfaction, operational efficiency, and overall business performance. While the MDM capability is typically found within tier-one offerings at extra cost, Epicor 9 features the stewardship of master data as standard, keeping everything in synch automatically.

Furthermore, Epicor Distributed Deployment provides a complete logical and physical business distribution across hardware and networks. Customers have the choice of deploying either centrally on a single server/single database or on multiple databases/multiple servers around the world. The distributed deployment enables the system management capability of a highly distributed enterprise to act as a single logical entity regardless of its IT deployment choices.

Last but not least, the Epicor Multilingual Data Management feature enables simultaneous support within the application for users speaking different languages. The capability facilitates companies’ growth into new regions by supporting country-specific language needs. Languages are maintained in a separate layer, making them easy to migrate between versions.

It is worth noting that Epicor 9 is already available in 28 countries and in 16 languages, and those figures are expected to increase to 40 countries and 23 languages by end of 2009. That scale of adaptability (i.e., “virtualized, always on, run anywhere” regardless of country, industry, or access device) has reportedly been achieved by Epicor “drinking its own champagne” – i.e., the combination of service oriented architecture (SOA) components, abstraction layers, Web 2.0, and other Epicor ICE 2.0 features.

It is indeed unfortunate that this colossal investment and product delivery have coincided with the current economic downturn. Epicor 9 has thus far likely resulted in somewhat less revenue to Epicor’s top line than the vendor had initially hoped.

On the other hand, Epicor staffers keep telling me that they would much rather be facing this down market with Epicor 9 than without it. The vendor started that investment about five years ago. Although it’s no fun to launch a great product in a recession, it has really helped Epicor differentiate itself compared to other vendors that do not have much new and exciting to offer.

Back to Epicor SRM

In light of my recent blog series on the standalone Epicor SRM product and given Epicor 9’s best-of-everything functional footprint approach, I was a bit surprised that the Epicor Procurement module was not included (rewritten) in Epicor 9. Epicor believes that Epicor 9 has basic requisitioning features that suffice for many of its customers.

Namely, expense and general spend management is as important today as it has ever been and is a real focus area for Epicor customers. To that end, Epicor 9 has comprehensive request for quotation (RFQ), requisitioning, and buyer workbench capabilities built-in as standard. For many of Epicor’s customers, these capabilities help them manage their supply chain operations effectively.

What these features perhaps do not do so well is overtly support customers’ corporate social responsibility (CSR)/governance, risk management, and compliance (GRC) initiatives or advanced strategic sourcing plans. Epicor Advanced Quality Management (AQM), which is an add-on module coming from Epicor Vantage, is effective at supplier conformance/compliance management and is a key element of Epicor’s overall production management and GRC capabilities. Epicor Sourcing is already available as an add-on capability to Epicor 9, which can help buyers with CSR/GRC (i.e. requiring bidding suppliers to meet certain non-price related requirements such as quality certifications, use of recycled materials, efficient transportation routes, etc.)

However, many existing Epicor customers and prospects might still want something more from the add-on Epicor Procurement product. In one of the future planned major releases for Epicor 9, Epicor anticipates it will rewrite Procurement on the ICE 2.x platform. In the meantime, I expect that Epicor’s prospective or existing customers will have to perform a standard Epicor Service Connect integration between Epicor Procurement and Epicor 9. Both the Procurement and Epicor 9 products already use Epicor Service Connect for other integrations.

Epicor Service Connect is an application (part of the Epicor Productivity Pyramid mentioned in Part 1) that orchestrates processes (workflows) at a more macro level, usually between applications (instead of within applications, where Epicor BPM plays a role, as mentioned in Part 1). For example, Service Connect would be used to bring transactions from another system into Epicor 9 (or vice versa).

The integration solution supports input and output channels of extensible markup language (XML) and Web services as well as flat-file databases and e-mail messages. Epicor Service Connect has a comprehensive data transformation capability where users can map the fields in one data entity to another and transform it (i.e., truncate, append, calculate, lookup, etc.) as needed. On the Service Connect design canvas, users can drag and drop elements and tie them together in a workflow, including application parts, decision points, and human intervention, if desired.

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