in 2001 Fourth Shift Corporation, a former prominent mid-market ERP provider
for manufacturers, became part of then AremisSoft, another diversified but somewhat
obscure ERP provider (see The
Mid-Market Is Consolidating, Lo And Behold), and has unfortunately all but
fallen into oblivion due to the alleged criminal activities of its new parent
company towards the end of 2001. Namely, AremisSoft, with the accusations of
reporting fictitious revenues, the ensuing Security & Exchange Commission (SEC)
investigation, a shareholders' lawsuit, and the company's consequent bankruptcy
filling, became a harbinger of an Enron-like trend.
the turmoil, a part of AremisSoft spun off from the old corporation with its
clean books, and renamed itself into SoftBrands Inc. group (www.softbrands.com),
which has been operating as a privately held holding company and has since taken
over the responsibility of its products and customer base, hoping to shed its
tainted past, to return to its enterprise software roots, and leverage its large
installed base of more than 5,000 users in 60 countries. The company as a whole
also now has over 700 employees and is projecting revenue for 2002 of ~$80 million,
falling significantly down from $175 million of 2000's combined revenues for
what was then AremisSoft and Fourth Shift, though (the magnitude
of revenue shrinkage might not be that severe given AremisSoft's 2000 reported
revenues are quite questionable from the hindsight). Softbrands' revenue comes
mostly from its SoftBrands Manufacturing division (www.softbrands.com/mfg),
but it also receives about 30% from sales and support of a mid-market hotel,
property and leisure management systems (i.e., PORTfolio, IGS HOTEL,
Medallion, RIO Grand and other respective products) within the
SoftBrands Hospitality division (www.hospitality.softbrands.com).
The manufacturing group of SoftBrands, on its hand, has three complementary
product sets tailored for mid-sized manufacturers: Fourth Shift, evolution
SoftBrands emphasizes the spin-off action has distanced it from AremisSoft's Chapter 11 filing (as of August 2, there is no any relationship between SoftBrands and AremisSoft, other than that SoftBrands is entitled, per the final agreement, to 10% of any proceeds from the ongoing actions against AremisSoft and its former executives), and has allowed it to move on unfettered by past difficulties, as it has spent the past year also sensibly re-aligning itself with significant changes in the overall IT market, such as the demands on enterprise applications providers to deliver better return on investment (ROI), their increasing need to balance skill shortages and the escalating costs of new product development between certain regions. The new organization seemingly has a strong vision, confidence and great enthusiasm, as it is seeking to advance its two flagship enterprise resource planning (ERP) products — Fourth Shift and evolution — as well as its new supply chain execution (SCE) DemandStream solution, which addresses lean manufacturing and execution .
that end, as to send more positive vibes to the market, the company recently
made its first major announcement since being acquired with the release of Fourth
Shift 7.20, believed to be an important milestone in the advancement of
its ERP scope, as it introduced several new features designed to benefit both
the user and system administrator. Although it included over 40 functional enhancements
most frequently requested by its current customers, it was largely a technology
release rendering the product fully Web-enabled, browser-based with a configurable
role-based portal front end. Thus, the 7.20 release offers the following enhancements:
- My Fourth
Shift Workplace, a browser based User Interface (UI) for use locally on
a local area network (LAN) or remotely over the Internet, has been enhanced
as users can now access through it the entire suite of Fourth Shift's extended
ERP modules, as well as virtually any Windows-based application. Role-based
portals can be created for common positions or tasks, such as purchasing,
shipping, production planning and accounts payable.
- The Connectivity
Toolkit provides a doorway into a new realm of customization by featuring
a library of customization tasks varied from simple to advanced, to make modifying
VBScript, and Active Server Pages (ASP) and Web-oriented customization tools
for My Fourth Shift Workplace' should allow users to integrate fields from
other web sites and other data sources directly into the Fourth Shift task-based
screens, including customized lookups, cross-references, and data collection.
- The Electronic
Data Interchange (EDI) module has been completely re-written to
provide much faster performance. Speedy Advanced Shipping Notice (ASN) data
entry with new screen customization should allow users to change labels or
hide unused fields within screens.
- Fourth Shift
7.20 runs on a Microsoft Windows platform and features support
for SQL Server 2000. Enhancements in this release for SQL Server include
powerful information search features as well as automated full or incremental
backup and restore capabilities.
company also plans to harness Microsoft .NET technology within the release
7.30, slated for the first half of 2003, as well as another large group of user-requested
is Part One of a two-part analysis of recent announcements. Part Two will discuss
Challenges and make User Recommendations.
"Down, but (certainly) not out" should describe the current SoftBrands' state of affairs. These have by no means been easy last several years for smaller applications vendors, but SoftBrands' predicament has been additionally magnified by the well-publicized extraneous trouble on top of the proverbial conundrum of how to expand the products offerings, deliver a modern, Web-based product architecture, and defend the turf from flagrantly intruding and succeeding bigger brethren and peers, while coping with thinning resources. If one could extricate at least one benefit gained from former AremisSoft, it could be its early astute moves in terms of rejuvenating acquired software largely by shifting its development offshore to India (and then to China owing to Fourth Shift's strong presence in the market), resulting in AremisSoft's alleged solid growth while erstwhile Fourth Shift company had been a sluggish at the same time.
The offshore development remains a significant part of the new company's strategy, since product development for evolution is done in India, and for Fourth Shift in China. SoftBrands is indeed one of a few rare vendors that fully incorporate offshore development into its R&D strategy in a more than a casual manner, the trend that has recently been taking hold market-wide. Even more, skilled programming resources in India and China, complementing their more expensive counterparts in the US and Europe, have recently been bolstered to ensure that constituent divisions will have all necessary wherewithal to develop new products and enhancements at a less cost for markets around the world.
combination of similar offshore R&D philosophies could become even more of a
driving force, given enough product development in the pipeline and on the company's
platter in order to match the competitive offerings. Having long acquired a
reputation for quick and inexpensive implementation and excellent service &
support, and in an effort to expand up-market from its traditional small, single-site
enterprise stronghold, erstwhile Fourth Shift embarked on harnessing advanced
technology (i.e., object-oriented, Windows NT/SQL Server-based, and featuring
productivity enhancing graphical user interface (GUI)) by introducing in 1997
OBJECTS Enterprise Software. This was its intended upgrade of its former
outdated MSS product (which was written in 3GL C code, and featured a
batch process architecture and non-relational proprietary database) that was
supposed to enable users to link to multiple sites using the Internet or wireless
technology. Disappointing sales sent the company back to the drawing board,
where it combined OBJECTS with MSS, releasing MSS for OBJECTS in 1998,
soon after to be renamed in Fourth Shift Software System.
1999, Fourth Shift began developing a further set of applications to enable
its customers to conduct business-to-business (B2B) and business-to-customer
(B2C) e-commerce. To that end, it acquired underlying technology for these applications
through the purchase of Computer-Aided Business Systems (CABS),
a Colorado-based developer of workflow-based e-Business solutions. The CABS'
acquisition has much improved the company's plant execution and multi-site product
functionality, which had been mediocre or non-existent before, by providing
VisiBar and VisiWatch applications.
VisiBar is a data collection and workflow application that accepts input from multiple sources (e.g. bar code scanners, sensors, digital scales, relays, and other software applications) and allows users to create scripts to transfer, manipulate, analyze and act on the collected data, enabling thereby the organization to e.g., automate plant floor, materials transfer and warehouse operations.
VisiWatch is a transaction monitoring application that can be set up to "watch" for specified events and then take a predetermined action, such as sending an automated e-mail message, generating a report, making a change in another database, or synchronizing the info with another enterprise system. VisiWatch is a Visual Basic for Applications (VBA)-programmable software application, a sort of a "silent assistant" designed to monitor and react to any of the following seven kinds of events: Transaction Event, Time-based Event, Startup Event, File Event, E-mail Event, Transmission Control Protocol (TCP) Event, and Object Linking and Embedding (OLE) Events.
Response to Market Requirements
Fourth Shift had long grasped its target market's requirements of competitively
priced functionally adequate products, ease of use and modification, short implementations,
and strong service and support, during the late 1990s, however, it, somewhat
painfully like many of its peers, realized that its target market needed more
than an inexpensive and easy-to-use back office system. To that end, the company
has gradually introduced or incorporated, in an "embedded approach" OEM fashion,
a line of integrated e-business, customer relationship management (CRM), and
advanced planning and scheduling (APS) components within its core ERP solutions.
It has been known for adroit blending of third-party products with its own and
delivering the combination as a tightly integrated unit, transparent to the
user. By embracing concepts of component (modular) technology in designing its
product, the company has been providing a great number of middleware application
programming interfaces (APIs) for interconnectivity among its own and third-party
components, also providing for flexibility and incremental deployment. Fourth
Shift 7 provides connectivity to other applications based on the Microsoft standards
like BizTalk and eXtensible Markup Language (XML), which is considered
quite appropriate for its target niche.
had promoted it as one of the first smaller ERP vendors with ability to embrace
customer and supplier activities tied to core transactional back-office system.
To that end, Fourth Shift offers very competitive e-commerce ability within
its market niche, including but not limited to online catalogs, Internet storefronts,
online credit checking, credit card validation, rules-based parametric product
configurator, online procurement, and order fulfillment. All the major constituencies
have been provided with e-Business applications while the above-mentioned
My Fourth Shift Workplace takes care of employees, Fourth Shift's Customer
Center application enables customers or channel partners to browse the user-enterprise's
online catalog, configure products, place orders, view their own specific pricing,
check product availability, and access the status of their order(s) by tracking
shipping and viewing their account and payment information. Former Fourth Shift's
Supplier Center application, which was originally designed to streamline
purchasing and give suppliers visibility into the user-enterprise's production
demands, has been discontinued and all of its functionality has been rolled
into DemandStream. As mentioned earlier, the recent release of the Fourth Shift
suite offers integration to DemandStream, and complete Web-browser enablement.
Fourth Shift product remains a major breadwinner for the SoftBrands Manufacturing
division (~65% of its revenue), being a web-enabled product for different manufacturing
mid-markets (available in 17 languages) spanning across 60 countries with more
than 4,000 customers (although only a half of them are actively paying for maintenance),
some of which are the fastest growing manufacturers and global enterprises from
the Global 2500 including Eastman Kodak, Unilever, Bosch,
Gillette and Electrolux.
Shift product covers many bases with nearly 50 integrated application modules
handling order entry, accounting/finance, inventory control, manufacturing,
executive decision support/business intelligence (BI), engineering (in alliance
with Agile Anywhere for collaborative product design), purchasing
and shipping, along with the above-mentioned adaptable web-based supply chain
visibility modules that communicate through portal technology. The product has
traditionally been very strong in terms of transaction entry and reporting and
tactical level production status visibility, lot traceability, cost control
and work in progress (WIP) management, rendering it well suited for order-ship-bill
operations within make-to-stock (MTS) and configure-to-order (CRM) manufacturing
environments. CRM and HR are also integrated and through DemandStream integration
there is support for lean manufacturing, while APS comes through alliance with
Preactor, web-based product configuration through Eden Origin
partnership, financials can be enhanced with Ledgersoft, and e-procurement
comes from Biomni alliance.
The evolution Product
extended-ERP product named evolution (formerly Aremis Enterprise) is
a highly configurable ERP and B2B solution, built on Windows NT and Unix server
and Oracle, Informix and Microsoft SQL database platforms (i.e., Oracle
and Informix on the Unix server platforms, Oracle and Informix on the
Windows NT platform, and Oracle and SQL Server on the Windows 2000 platform),
and therefore should be more amenable to larger mid-size manufacturers. Its
deep functionality embraces applications for the Internet, information publishing,
connectivity and multi-site operations, with core applications being production,
planning, sales, inventory, purchasing and financials as approximately 6,000
loosely coupled, configurable components. The product is especially strong in
dimensional and converter manufacturing environments such as textiles, apparel,
food and metals, by featuring functionality for dimensional slitting, cutting
and rolling, lot tracking, product configuration, plant maintenance, engineering
change control (ECC), quality management, distribution and multi-plant planning
and project control.
Fourth Shift, there are also integrated CRM and HR applications, and EDI support,
and shop-floor data collection. A recently announced release tagged 10i
allows a complete browser-based deployment of all applications and system administration
tools, with a universal look-and-feel browser-based interface. As for implementation
there is so called ensure' business process toolkit with a 1,000 strong
library of default business processes and HTML-based drag and drop modification
on its hand, is a supply chain execution (SCE) solution whose purpose is to
increase the velocity and decrease the cost of a manufacturer's supply chain.
It achieves this by enabling a blend of lean methodologies and eliminating wasteful
steps and processes. In doing so it allows companies with uneven demand patterns
or high product mix environments to take advantage of "Lean" principles like
Demand Pull scheduling. Available off the shelf, DemandStream is able to interact
with most ERP systems including Fourth Shift and evolution and thereby bridge
the chasm between companies that are heavy planners, and those that must respond
to constantly changing demand on the fly. To that end, the Data Integration
module is responsible for importing data using Import Wizards into the
Shop Floor Module from a back-office system, and for inputting data using
XML messages generated by the Shop Floor Module back into a business system.
Applets are included that generate manufacturing orders and purchase orders,
item changes, bill of material (BOM) changes, and non-replenishable Kanban.
The product delivers the following four important capabilities to manufacturers:
- Dynamic Electronic
Kanban or replenishment signals -The Material Replenishment Module
uses multiple inputs, including demand patterns to determine the optimal Kanban
quantity, which dynamically moves with the business' demand to ensure an efficient
inventory level. Shop Floor Operations is an interactive application
that uses the Web-based graphical Kanban Board to create and manage
the work cell schedule. The individual work cells can make any necessary adjustments
and then execute the schedule automatically. Purchase Orders are also automatically
based on the Dynamic Kanban signal.
- Demand Responsive
Operations through Supply Chain Event Messaging
- Supply Chain
Planning & Scheduling - Supply Chain Execution is also an interactive
Web-based application that enables the shop floor to interact with suppliers
through the Supplier Kanban Board. Features include interactive shipping
and an enhanced XML messaging system, while reports include material shortage
reports and daily workload usage reports.
- ERP System
data translation and integration.
Consequently, the product should allow manufacturers to leverage their investment in ERP systems and at the same time embrace lean manufacturing methods, and thereby improve productivity, competitiveness and profitability, all being a must in current difficult economic times.
Therefore, the above broad product set, bundled with a reputation for quick and easy implementation, low start up and running costs, one of the speediest problem resolution in the industry and one of the highest ranking for the management of upgrades and excellent customer service should create at least cross-selling opportunity for SoftBrands to shore up its large customer base.
concludes Part One of a two-part note on Fourth Shift Corporation. Part Two
will discuss the Challenges the company faces and make User Recommendations.