That said, there is also a need — with limited delivery — for ‘on-demand’ ERP/CRM services. According to Simon Bragg, European research director at ARC Advisory: ‘There is a noticeable trend towards multi-tenanted, on-demand solutions. Plexus (www.plex.com) has such an ERP solution, while SAP has announced its CRM solution via a partnership with IBM, and there have been announcements from Oracle and web-native hosted salesforce.com.’
The continuing trend in ERP seems to be for the ‘value’ end of the market, unless there is significant financial justification to opt for the traditional ‘high-end’ vendors with the attendant relatively high implementation costs.
Dan Roberts, senior consultant at Cambashi agrees. ‘There is not a lot of excitement in the ERP world these days. In some ways, that in itself is a refreshing change, after the e-commerce hype and Y2K. Then SAP and Oracle decided they would dominate CRM and SCM, which they have. There has also been some movement in the ‘software as a service’ (SaaS) scene, but it’s a slow take-up, rather than a flood. There’s salesforce.com in CRM and a few supply chain players using IBM’s On Demand solution,’ he said.
‘But probably the most interesting development recently was Red Hat’s acquisition of an ERP vendor with a view to releasing an open-source ERP package. However, we’ve had many unfulfilled promises with regard to “open source for enterprise applications” before with Linux, so time will tell.’
Recently CDC Software — whose products include Ross Systems’ ERP and SCM, Pivotal’s CRM and IMI’s warehouse management and order management solutions — acquired all the business assets of JRG Software, a leader in on-demand supply chain planning solutions delivered as SaaS. JRG’s One Plan applications add complementary on-demand factory planning and scheduling to the CDC software enterprise suite of ERP, CRM and SCM applications.
‘The addition of One Plan to our current offering of on-demand applications will enable us to expand quickly into new market segments and geographies,’ said CDC president Rick Marquardt. ‘We are committed to industry leadership in both the hosted model of software services, particularly in hyper-growth developing markets, and enterprise software via traditional licences where it is best suited to a particular customer or industry.’
One Plan combines a highly interactive graphical planning environment with integrated business intelligence to enable the real-time creation, sharing and monitoring of production plans across a manufacturing organisation.
Interestingly, Seibel offers an On Demand-hosted solution, and the rumour is that Microsoft may soon be compelled to soon launch ‘software as a service’-hosted CRM offerings. SaaS can be a compelling way to deliver CRM software to small businesses in a more affordable way. The release of Microsoft Dynamics CRM last December suggests that the company is exploiting integration with Outlook, which some small businesses will take to, but others may be much less enthusiastic.
Microsoft is still more expensive than salesforce.com, which is growing fast because it is built for small businesses. The data-centres are multi-tenanted and provide an underlying IT infrastructure that most small firms can only dream about. The pricing is subscription-based, and there are no server licences.
It is also pay-as-you-go, meaning there is less up-front financial risk. If you employ fewer than 50 people, it’s not likely you’ll be buying Seibel (Oracle), Peoplesoft (Oracle), or SAP — products built for large customers both in price and function. You may not even buy Microsoft, although its CRM Small Business Edition, for companies with 50 employees or less, features click-through installation.
If you have no IT experience, and want to implement a CRM solution — whether on your servers and desktops or as a service — it’s likely you’ll need help. CRM services company NetSuite and salesforce.com have a suite of applications, offering the ability to drive information from the CRM module directly to a general ledger.
For e-commerce the software provides customer self-service and personalised account areas. And, as with any good CRM application, it allows the company to ‘see’ and ‘touch’ the customer at all times — from package tracking through integration with FedEx and UPS, to service enquiries, payment options, ‘business-to-business’ negotiated rates and account histories.
It takes CRM beyond salesforce automation and marketing, and drives information and analysis to and from the back office. For SMEs with large, spread-out markets, it’s helpful to have CRM applications with at least some mobile functionality. NetSuite, for example, will load a calendar and Microsoft Outlook on to a PDA, as well as all key business metrics (bank balance, daily web-hits, monthly forecasts, top order items), with information delivered by e-mail either three times a day or on request.
As mid-range ERP matures, its key functionality aspects are becoming less of a ‘nice to have’ and more of a ‘need to have’. Product configurators, for example, are now becoming an essential, often fundamental, element of any ERP system required to work in a Make To Order (MTO) manufacturing context. So much so, that the quality of the configurator is often the determining factor.
‘The Infor product configurator is head and shoulders above the competition, both in terms of functionality and completeness of its integration with the rest of the solution,’ claims Noel Scott, systems manager at leading forklift manufacturer Combilift.
‘In addition, we needed strong planning and scheduling capabilities — we can’t afford to have an order delayed because one component isn’t in the right place at the right time.’ According to Ray Wang of Forrester Research: ‘A growing SMB market, opportunistic investors, and middle-ware technologies converge to make the SMB market for ERP applications one of the most competitive environments for market growth and product innovation within enterprise applications.
‘Vendors are responding by bulking up and exploiting middle-ware integration, and expanding their partner relationships. Despite the short-term turbulence, customers stand to benefit over the next five years from reduced ownership costs, improved domain expertise, and better support and service delivery through direct interactions, new competitors, and stronger partner networks.’