Archive for the 'Trends in ERP' Category
New Challenges for Enterprise Resource Planning (ERP)
Many of the big players of enterprise software like SAP, originated as niche solutions for large corporations, focused on manufacturing, financial management, HR and the like. It has been 30 years since the inception of ERP and now they are defined by their ability to manage every internal and external resource of an organization.
Since this market is controlled by a relatively few global players, implementing and maintaining ERP is an expensive business. With IT budgets being reduced in order to save costs, only financial services, the public sector and service industries are continuing to invest.
Even markets that are expected to hold, pharmaceutical companies for example, went in for serious cost cutting. There is heavy pressure for ERP vendors to face the challenge of possible stalled growth.
An important factor for ERP decision-making is that the application is user-friendly for all levels of users. The user interface is what matters as customers are keen to drive out costs of what they see as burdensome legacy systems. Traditionally, retailers looked to ERP vendors to provide core transactional systems for strategic solutions such as supply chain and BI tools. More recently they look for ERP systems for most core functionality and point-providers for unique or strategic applications to solve specific ERP challenges. There may be a split in business flow from ERP and SaaS in the future, thus HR, payroll and the like could be outsourced as web, cloud computing or SaaS; but always on the basis that the customer owns and controls them.
For new entrants in the ERP market, cloud computing is a route for many of them. Even established players are also taking advantage of the way this market is opening up. But don’t expect ERP to be the next big thing in the cloud; you will see a lot of attractive services integrated in the ERP platform but everything can still be orchestrated from your platform.
No commentsOn-Premise ERP Vendors: Your partners are moving to cloudier pastures
Recently at the SuiteCloud 2010 event, NetSuite made a number of announcements regarding a number of deals they’ve recently linked with major SI, accounting and outsourcing firms.
Genpact, the GE spinoff, has made a big splash over the years bringing back office BPO (business process outsourcing) to the world. It was announced that Genpact will create a new BPO practice solution around NetSuite cloud applications that will cater to mid-market and larger firms.
Wipro, one of the world’s largest outsourcers announced that they were building a NetSuite practice focused on NetSuite technologies.
Hein & Associates LLP, a top 50 accounting and tax firm, announced that they too were building out service offerings around NetSuite applications.
Why is this shift to web-based ERP solutions occurring? System integrators and outsourcers understand that they need to find lower cost solutions for their clients. These same firms are also watching their clients move to web-based ERP solutions and want to not only cash in on this trend, but to also be perceived as potential market leaders in the space. Similarly, these service providers get the economic advantage true web-based ERP solutions possess over on-premise applications, signaling a shift in the market preferences of clients.
On-premise providers that previously dismissed cloud applications as a phase or fad should rethink their mindset. The service firms that support and enlarged the markets for those on-premise solutions are now moving on to something web-based which is more market revelant and more economically attractive to clients/customers. The service ecosystem is changing and the on-premise solution providers won’t be able to stop it.
No commentsERP and Cloud-Computing: Making Upgrades and Innovation Easier
The traditional sentiment of what it takes to implement enterprise resource planning (ERP) and similar large, complex packaged applications is that it’s a big, lumbering, exhaustive process. Standard procedures such as installation, configuration, testing new systems and then moving them into production can take enormous time and effort, and software changes often just layer on more complexity.
Could cloud-computing change that reputation? Cloud-computing lifts the perspective of software as a service (SaaS) to the business level where concerns about scale, performance and availability are seen through the lens of business processes and user requirements.
Recent user reactions from the CUE-10 conference in San Antonio made it clear that cloud computing will have a significant impact on ERP. The primary reason is obvious: greater deployment flexibility, enabling organizations to tighten the alignment between business strategy and the technology needed to achieve it.
With cloud-based ERP, customers have the option to subscribe to applications through the cloud and then if they wish, take their investment in both money and experience and apply it to a standard perpetual license, while remaining on the cloud platform. Organizations can easily test new application services; if it works, they keep using it, if not they can just switch over to another vendor.
Rather than offering a brand new but limited SaaS system, Lawson Software is providing its full existing suite of enterprise applications in the cloud, including M3 for process management, S3 for service management and its Talent Management application. Lawson’s External Cloud Services run exclusively on the Amazon Web Services’ Elastic Compute Cloud (EC2) platform.
By providing a single point of management for working with all virtual appliances, Lawson Software’s “Cloud Console” is critical to their desire to steer clear of the debate about SaaS and the use of a multi-tenancy model.
Lawson is demonstrating how cloud computing, virtualization and innovative management tools can help loosen up ERP’s infamous inflexibility allowing organizations move closer to the goal of letting business requirements and strategies guide decisions about the size and make-up of enterprise applications.
No commentsMicrosoft Office/SharePoint 2010 and Google Apps: Skinning The Same Cat?
Microsoft would love for us to believe that SharePoint 2010 and Office 2010 are so completely superior to Google’s Apps offerings that businesses would be foolish to adopt Apps over a Microsoft-centric solution. In the past, Microsoft users haven’t really been compelled to take on their desktop offerings, and while Office 2007 was excellent, many organizations didn’t feel the upgrade from 2003 was a must-have. But now with Windows 7, Office 2010 and SharePoint 2010 there seem to be more reasons to upgrade or potentially adopt/grow a Microsoft ecosystem.
Google, on the other hand, has a platform for development around enterprise collaboration and has opened all of its APIs to Google Apps, allowing developers to create a variety of applications that leverage the cloud-based, collaborative features of Apps. Developers are provided with sophisticated tools to extend the capabilities of Apps, suggesting that organizations could build their own powerful applications within the framework of Google Apps (just as Microsoft shops can within the framework of SharePoint).
There are definitely things that Google needs to do better to meet the needs of more complex organizations. More granular rights, roles and permissions for groups and individuals is an absolute must and needs to happen ASAP if Google wants to counter many of Microsoft’s Google-isn’t-ready-for-the-enterprise arguments.
Ultimately, whether Microsoft Office and SharePoint 2010 or Google Apps works best for your organization, you have to see which platform works best for your processes and business rules. Google Apps and Microsoft SharePoint 2010 may be taking two different approaches, but they are about the same thing: getting work done.
No commentsCDC Supply Chain Software Vendor Acquires TradeBeam
After following business software news for a while, we’ve noticed a predominant trend. Business solutions providers have their ‘heads in the clouds’. Meaning, software companies are focusing their attention on cloud-computing, on-demand solutions. Recent acquisitions in the ERP industry show that companies are realizing the value of expanding their cloud-based solutions.
CDC Software Corporation recently acquired TradeBeam for an undisclosed amount. CDC is an enterprise solution and supply chain management software provider that has both on-premise and on-demand solutions. TradeBeam is a San Mateo based on-demand global trade management and supply chain visibility software vendor. The acquisition serves to expand CDC’s supply chain software portfolio of cloud-based solutions by leveraging TradeBeam’s software-as-a-service (SaaS) technology.
CDC plans to integrate TradeBeam’s SaaS supply chain visibility software into its own CDC supply chain product line. The merging of technologies will help CDC users improve supply chain visibility and automate their trade management processes. TradeBeam and CDC have several common customers who will benefit from the acquisition and CDC’s product portfolio expansion.
TradeBeam offers cross-sell opportunities for CDC users who source and sell globally. TradeBeam customers will enjoy access to the CDC Ross ERP and CDC Factory’s manufacturing software solutions, CDC Activ Plant’s enterprise manufacturing operations management solutions, and CDC eCommerce platform. TradeBeam offers CDC users SaaS solutions for import and export compliance, global sourcing, forecasts and inventory visibility, global trade finance, and supply chain management.
The supply chain software vendor will also benefit from the acquisition by using TradeBeam to become a relevant solutions provider in the global trade industry. Global trade management is a growing field due to economic globalization, increasing trade volumes worldwide, and new markets in developing countries that offer low cost material and labor resources. Recent ERP research found that global trade practices accompanied by automation will result in increased profitability by 10-40 percent.
“This is a very synergistic combination on many fronts,” said TradeBeam’s CEO, Edward Flaherty. “Our solutions are a great fit for CDC Software’s growing installed base, especially with its CDC Supply Chain and CDC eCommerce products and their market presence in complementary vertical industries such as automotive, medical device and retail industries. We expect that TradeBeam and its customers will benefit immensely from the global breadth of CDC Sotware’s technology and business infrastructure, especially their extensive operations in China, and the company’s broad portfolio of complementary solutions.”
“We believe the global trade management market will continue to see strong growth and offer us numerous revenue opportunities since companies are selling more and more of their products globally and increasingly moving their manufacturing and sourcing offshore,” said CEO of CDC Software, Bruce Cameron. “Like many of our past acquisitions, TradeBeam fits into CDC Software’s disciplined acquisition criteria and is expected to be earnings accretive immediately.”
The acquisition highlights two important trends in the ERP world. ERP vendors, like supply chain software company CDC, are turning towards on-demand solutions as well as focusing their attention on expanding into the global trade market. These two ERP trends are exemplified by the CDC-TradeBeam acquisition.
No commentsEpicor 9, Offsite Is On The Mark With Cloud-Based ERP
Machine shops and other small- and mid-sized manufacturers have much to gain and learn about information management. Considering that many of these shops have a small number of employees and only a few who may need to keep track of orders and process data, it is understandable that their focus is more on their products and not fine tuning their enterprise resource planning (ERP) solutions.
But with the changes in the manufacturing landscape, it matters now. Smaller manufacturers are consolidating, meaning there are more opportunities to line up new business. Also, OEMs in many industrial segments (automotive, aerospace, energy) are streamlining their in-house manufacturing to cut costs, but at the same time expect to improve their supply chain effectiveness. Even offshore manufacturers are seeking to line up regional product sources to quickly elevate themselves to becoming global suppliers if they have the right systems in place.
Epicor is betting on the confluence of these trends with the introduction of its first cloud-based ERP, Epicor Express. Like the circuit box in your basement, all the generating, storage, transforming and delivery of resources are done offsite; and that’s how Epicor will allow manufacturers to adopt its latest enterprise resource planning “solution”, Epicor 9. Offsite, unseen, powerful.
Cloud-based ERP is a credible delivery model for smaller manufacturers because of the advantages it brings for their operations and the opportunities it creates for their businesses, but also because subscription-based licensing – Software as a Service (SaaS) – suits their economic circumstances. Other advantages of cloud-based ERP include lower entry costs, shorter deployment time, elimination of hardware and software maintenance, vendor-managed upgrades, global availability and seamless integration.
The monthly fee for the subscription-based licensing model covers everything: software, hardware, operating system, support, training resources and on-going system maintenance and upgrades. With all these efforts streamlined, subscribers can focus more on their core business operations than managing IT. Cloud-based ERP is going to make manufacturers and machine shops’ lives a lot easier.
No commentsApple Pushes iPad and Mobile ERP
The iPad is an undeniably sexy device for constant connectivity and amazing fun and useful apps. Many developers are looking to the iPad as the next great player in the enterprise resource planning (ERP) segment.
The enterprise resource planning segment spans across the management of an enterprise’s physical and software assets, fiscal and human resources and inventory. With its server-based architecture, everyone inside and outside the enterprise can easily connect with each other and the application.
Workers don’t just want to be stuck in front of a terminal nowadays. With the expanding capabilities of Smartphones, iPhones and other mobile devices, enterprise developers are given more opportunities for a more mobile direction for ERP clients.
In particular, the medical market is already seeing growth in mobile ERP adoption. Doctors and nurses are adopting the iPhone, voting with their feet and now jumping on the iPad too. They’re using these tools for significant daily work, real patient and medical data management. The mobile tools are solving enterprise data entry problems. Thanks to Apple’s design and effortless user interface, we can now take a new approach to computing on a corporate scale with massive and enthusiastic user participation.
While the hardware in exam rooms now is elegant and high quality and probably costs millions in integration, the success of an enterprise resource planning solution really boils down to everyone using it and using it efficiently. With its impressive usability and speedy touch screen response, the iPad with a running mobile ERP solution might just be what the doctor ordered.
To view more iPad business apps.
No commentsWhat Vendors Think About Moving Legacy Enterprise Resource Planning Solutions to Cloud Platforms
While many vendors are moving their enterprise resource planning applications to the cloud to capitalize on press opportunities, EMC, Lawson and Epicor repeat the same message – don’t upgrade your application, upgrade your infrastructure.
EMC CEO Joe Tucci explained that businesses won’t be willing to give up their existing investments in custom enterprise resource planning applications or they may be reluctant to invest in solutions which could potentially lock them into a particular vendor or cloud provider. For these reasons, he concludes that the best way to the cloud is via a virtualized data center.
According to David Stodder, Lawson Software uses Amazon Web Services to run its suite of enterprise resource planning applications so customers can benefit from the cloud. The idea is to have your current existing enterprise resource planning applications run on a cloud services provider which is then managed through virtual private servers.
Epicor launched a new multi-tenant SaaS enterprise resource planning application based on its existing Epicor 9 software. The Epicor SaaS version of the enterprise resource planning software contains a subset of features available via the on-premise offering in order to simplify implementation.
So do we want to move legacy enterprise resource planning solutions to the cloud or use new web-based and cloud-engineered application on the cloud to reap more benefits?
Here are some of the benefits when enterprise resource planning applications are written for the cloud. (Click to enlarge)
Changing the infrastructure alone without updating the application is not enough to reap the most optimal benefits of enterprise resource planning solutions. Ultimately, enterprise resource planning applications and data center improvements need to occur together.
No commentsCloud ERP News: NetSuite Is Forcing Everyone into The Future
NetSuite has done a good job of establishing their reputation as the go-to cloud-ERP providers, and last week they announced a plan to help more businesses enjoy cloud-based ERP platforms, dubbed the NetSuite SP100 Program. With a new channel sales program that includes a 100% margin offer, NetSuite is allowing channel businesses to easily migrate their current business models to the cloud.
NetSuite makes no bones about wanting to the model for VARs and solution providers, and SP100 will allow those parties to receive commissions not only for new sales, but also for customer renewals. And while NetSuite has long been at the forefront of the SaaS-ERP game, the SP100 Program is an aggressive challenge to their major competitors (Microsoft, SAP, Sage, etc.), who are slowly but surely bringing more cloud offerings to their ERP stables. And it’s definitely a smart move on NetSuite’s part, to enable the value-added resellers (VARs) whose revenues are declining because they primarily offer legacy ERP systems.
The idea seems to be that those ERP providers offering legacy solutions must bring in cloud components in order to compete with NetSuite, and NetSuite seems to assume that the competition can’t quickly produce cloud-ERP solutions that are as polished—and they might not be wrong. It’ll certainly be interesting to see how those other ERP heavyweights respond, but more than that, it’s good to see a major push to bring ERP platforms into the future and proliferate enterprise cloud services.
No commentsNetSuite Poaches from SAP, Boast Big Q4 Earnings
Late last week, NetSuite announced their fourth quarter earnings, and their overall success in 2009 is undoubtedly a harbinger of widespread SaaS ERP uptake within the next few years. And if those numbers weren’t enough, they also announced that RedBuilt LLC switched to their product from SAP—NetSuite has successfully poached SAP customers before, but RedBuilt is the largest one yet.
NetSuite’s annual revenue was up 9% and Q4 revenues were at a record $43 million. Their sales increased as on-premise vendors experienced downward sales trends. SAP’s SaaS sales went up marginally, but their overall software revenues were down 27%, and their biggest boost came from the increase in support sales—typically SAP’s biggest source of income—which increased 11%. Oracle’s numbers fall somewhere in between.
So SaaS sales are on the up and up, but on-premise ERP products are not slipping entirely into obscurity. SAP’s Business Objects line does very well, despite the heavy fire they’ve endured for less effective cloud offerings. Still, RedBuilt’s switch to NetSuite is a good sign for SaaS ERP delivery. RedBuilt is an innovator and supplier of engineered wood products for the commercial and multi-family construction industry, and they’ve switched to NetSuite for managing their corporate offices and four production plants, and perhaps most importantly, the NetSuite deployment means RedBuilt no longer has to pay the $275,000 annual salary costs for SAP and database administration.
NetSuite certainly offers a very complete SaaS ERP package, as do other companies, but the SaaS deployment’s biggest coup so far is its cost, which explains why on-premise ERP is not extinct, and will probably take longer than expected to die out. When SaaS ERP packages are more extensive, then we’ll really begin to see some change.
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