Encompix--Thriving on Encompassing Complexity Part Two: Challenges and User Recommendations


Encompix, Inc. (www.encompix.com), a privately-held North American provider of enterprise resource planning (ERP) solutions helps mid-size engineer-to-order (ETO) and project-based manufacturers improve their business is a stellar example of a focused niche vendor. To illustrate, seven US-based ETO companies recently selected the Encompix ERP system within a -days a time frame of thirty days.

While the company's focus allows it to keep pace with trends in technology and customer requirements in its target niche, too narrow a focus comes with its liabilities as well. Namely, in addition to its small size, which may imply a negative viability perception these days when many believe "the bigger is the better," limited financial resources, low visibility and brand recognition, and the product's limited global capabilities are the challenges that the company has yet to overcome. Encompix admits losing some deals because of its inability to support prospects outside North America and in languages other than English (except for a French because of its partner in Quebec, Canada). It remains a good practice for manufacturers that are selecting solutions to factor in costs, the financial viability of the vendor, local support, and many other criteria, which might not go to Encompix' favor.

Also, many ETO prospects still have notable mix-mode manufacturing environments, which handle a significant deal of "widgets" and require certain repetitive manufacturing and inventory management functionalities, where Encompix may not be nearly as competitive as in clear-cut ETO environments. Having to deliver a number of functionalities through third-party solutions, which are natively offered by many larger competitors as a matter of course, may also deter some interface-wary customers. Thus, Encompix should try to provide as many third-party solutions as possible as a standard configuration, which should make customers oblivious to the origin of the module. Encompix also has to beef up and better advertise its product's interconnectivity and e-collaboration and product lifecycle management (PLM) offering. While a comprehensive PLM strategy (see The Many Faces of PLM) might be a tall order for Encompix to deliver on its own, some sporadic projects of integrating Encompix ERP with the project portfolio solution provider Primavera and with the product data management (PDM) provider SmartTeam should be parlayed into more strategic alliances.

The product is also not very focused for the aviation and defense (A&D) and maintenance, repair, and overhaul (MRO) industries, which require strong teardown, remanufacturing, and asset management capabilities. This further narrows down the complex discrete manufacturing opportunity, given that some of its direct and possible competitors like Jobscope, Relevant Business Systems, IFS, Intentia, and Ramco Systems offer these capabilities. For example, airplane service companies and other MRO companies have very stringent requirements they must meet regarding both tracking parts and condition codes.

While the vendor supports Microsoft Windows and UNIX/Linux OS platforms, it is currently limited to the Progress RDBMS (Relational Database Management System). Although it is one of the leading embedded databases for business applications around the world, with its notable scalability and reliability, there is a lost opportunity because some prospects' IT departments have a religious insistence on the Microsoft SQL Server database. Still, given that ETO manufacturers tend to stick to tried-and-true technologies, the dependence on Progress should not be a terrible liability, given Progress' recent bullish posture and notable technological advancements. Encompix seems to be making the right moves, similar to those of other prominent manufacturing ERP vendors that leverage Progress technology, such as Epicor and QAD, which have decided to allow their customers to keep their existing IT investment, while evolving at their pace. Contrary to that, former Frontstep, even before being acquired by MAPICS, had made a tough decision to discontinue support for the Progress database in its future releases of SyteLine, which leaves these customers to sooner or later abruptly migrate to an SQL Server product release, or to something else.

For example, by adding the power of the Progress OpenEdge platform to a native Microsoft .NET user interface (UI), Epicor hopes to offer its small to mid-market manufacturing customers the opportunity to move to the Progress OpenEdge platform supported through a Microsoft .NET UI. The vendor believes customers will be able to leverage the familiarity of the Microsoft UI, while benefiting from the flexibility and power of OpenEdge's operating system's independence, low I (TCO), and support for multiple databases. Epicor believes the combination of OpenEdge and .NET is a win-win for end users, since the platform offers application developers the option of supporting a wide variety of UI techniques and technologies via a single collection of business logic components within the platform.

To that end, Encompix has postponed its .NET rewriting effort in 2002 until Microsoft fully clarifies its Business Framework vision and security issues. At this stage, 2006 seems as a more realistic timeframe for Encompix to adopt .NET technology within its application. In the meantime the vendor is taking interim steps to prepare its application for a Microsoft UI and multi-database support. (i.e., Progress, SQL Server, and Oracle), which apparently means it is trailing current Epicor and QAD's endeavors. Although the vendor already boasts twelve Web-enabled modules, its presentation (UI) remains "boxy" as opposed to a Windows XP metaphor of the solutions that have already embraced a Microsoft .NET UI.

This is Part Two of a two-part note.

Part One summarized recent events and discussed the market impact.

User Recommendations

Potential Encompix customers are primarily North America based companies and their divisions with less than $100 million (USD) in revenues per location and within the following discrete manufacturing industries: machinery, conveyors, tools, dies, molds, automation equipment, oil and gas equipment, custom woodworking, boat builders, satellite communication systems, custom cign-makers, custom greenhouses, etc. These customers should certainly consider the offered product line, bearing in mind what the competitors have to offer. At least, Encompix should be evaluated to raise the bar for other vendors' offerings in the contest in terms of demonstrating how their solutions would manage all aspects of complex projects, deliver on-time and on-budget, generate early warning of project problems (such as, exceeded estimate's time/cost), manage cash flow, provide confidence in estimates, incorporate aspects of e-business, shorten project cycle times, assess which projects are profitable or not, and so on. Prospective customers that typically have materials go straight to the WIP instead of receiving critical materials into inventory that are later issued to the shop floor, may find Encompix as quite accommodating. The same would hold for the customers that prefer not to have to post finished goods to inventory before sending them to the installation site straight from the WIP.

On a more general note, companies who are project manufacturers, ETO, build to order, jobbing shops or contract manufacturers should think carefully when selecting an ERP system. Given the maturity of the ERP market, its ongoing consolidation, and that fact that the competitive advantage is hard enough for manufacturers to find, they should not compromise on their requirements. Small and mid-size enterprises should Especially ask hard questions about the scope of an ERP system, and how it supports project-based idiosyncrasies. After all, a new system should always be about improving the business and not a mere technology initiative.

The vendor that listens to your needs instead of telling you what "cool things" its software can or cannot do, one which speaks your language and uses your terminology and vernacular is a good candidate as a vendor that will understand your business. Still, as a sort of a litmus test, prod each vendor to tell you what percentage of its sales would belong to your industry. Vertical focus indicates that software contains industry-specific features and that ERP vendors have certain industry expertise. Also, in implementing an industry-specific application, it is important to ensure that the application provider's implementation team includes members with in-depth knowledge and experience in that industry. Vendors geared toward certain industries should have solid integration skills or strong relationships with systems integrators that have industry-related expertise. This should significantly streamline implementation time by eliminating a lengthy vendor or integrator learning curve.

Often, buying a completely integrated solution is not an option when companies have either an accounting or project-management system in place, which they will not want to simply rip-and-replace. Thus, prospects should assess the contesting vendors' flexibility to integrate to legacy and other third-party applications, and keep up with new versions or upgrades to both solutions. Built in interfaces to commonly used third-party products like MS Project, MS Office, AutoCAD, Crystal Reports, etc., should be questioned, possibly during software demonstrations.

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