Getting a More Exact Picture of, well, Exact Software Americas - Part 2

Part 1 of this series talked about my long-standing coverage of Exact Holding, and in particular about my recent update briefing with the Exact Americas division. My post concluded with the vendor’s intent to go back to its local roots and push its well respected North American manufacturing and distribution enterprise resource planning (ERP) products, especially Exact Macola ERP.

Macola Redux

Thus, this past fall saw Exact America’s more aggressive renewed push of Exact Macola ERP, via the launch of the Exact Macola Manufacturing Pro and Exact Macola Distribution Pro product flavors in September 2011. The new Exact Macola Manufacturing Pro solution is designed to meet the needs of manufacturers in many segments such as the machinery, aerospace, automotive, electronics, and general discrete manufacturing segments. The solution comes complete with nearly 20 modules for manufacturing experts who need integrated shop floor control, manufacturing cost accounting, inventory, and project management.

For its part, the Exact Macola Distribution Pro ERP solution was designed for business services companies in the logistics, supply chain, original equipment manufacturer (OEM) assembly, component supply, and technology industries that need easy-to-use manufacturing, inventory, and distribution capabilities integrated with business management and finance software. With 15 individual modules, users should benefit from integrated distribution, manufacturing, inventory and project management as well as services such as Health Check and Business Process Assessments.

Then, in November 2011, Exact delivered Macola On Demand, a hosted subscription-based offering. To be accurate, Macola is not on the latest Microsoft .NET Framework-based technology, although this is not an issue for its target market that values a tight functional fit, proper price, and the ease of use. For more information, see the blog post by my colleague Gabriel Gheorghiu.

In addition, Macola, and its ERP brethren at Exact for that matter, have long gone beyond the traditional ERP scope by allowing their users to define business rules, workflow, and exception alerts and events. Previously, the alerts and events capability came from a third-party event management product, which is still supported at existing customers. In the meantime, Exact has delivered its own Exact Event Manager product.

This way, Exact users are able to define a process that allows, for example, a sales order to travel from credit approval through fulfillment without using a single piece of paper; to automatically generate a customer notification for an overdue invoice; or to generate an email alert to a sales representative if a regular customer broke their pattern and did not place a purchase order on a given date. Needless to say, Exact ERP users can optionally benefit from the Exact Business Analytics (EBA) capabilities as well (mentioned in Part 1).

But Wait, Who Is the ERP Boss Here?

Surprisingly or not, the local product that has been doing very well of late is Exact JobBOSS, a reasonably priced and uncomplicated but functional ERP product aimed at the specific needs of small job shop environments, such as machine shops, mold makers, and sheet metal processors. It has been in the market for over two decades and is installed in thousands of active sites, which are machine shops (job shops) and make-to-order (MTO) manufacturers typically with up to 50 employees, with about US$10 million in revenues, and with up to 10 users. These low volume and high mix manufacturing environments place a high priority on the ability to track their actual cost and labor.

There seems to be a renaissance of sorts of small manufacturers in the US. These highly skilled job shops are resistant to outsourcing and offshoring (in fact, there has been a reported shortage of skilled machining artisans, such as CNC machine operators, milling machinists, and lathe operators). In addition, these companies are often family ran businesses that can recoil (and do something else) in quieter times and regenerate when required.

Recently, these shops have increasingly been required to even carry some inventory and have repetitive manufacturing capabilities. I have recently heard similar market sentiments from ProfitKey, a direct competitor of JobBOSS. If necessary, JobBOSS can integrate to Intuit QuickBooks, and enjoys the status of "Gold Partner" with Intuit.

Similar to ProfitKey, which is developed on Unify’s Gupta platform, and with similar technical capabilities and issues, the underlying technology platform is not a major issue for smaller manufacturers that insist on exact functionality and non-taxing implementations. Embarcadero’s Delphi platform that Exat JobBOSS uses has even released many updates over the last four years including the following: a .NET compiler, support for Microsoft Windows 7, cloud apps on Windows Azure and Amazon EC2, touch screens, etc. So it already offers many advanced contemporary capabilities.

In fact, Exact claims an internal metric of a greater than two thirds win ratio in 2011 against Epicor Express, Global Shop, ShopTech E2, etc. The high JobBOSS win rate is reportedly a result of market segmentation and development of the following three packages for each needs-based segment in the job shop market:

  1. Starter – with the focus on job costing and proposals

  2. Professional -for those shops needing more manufacturing functionality

  3. Enterprise - for those shops needing more customer relationship management (CRM) and advanced quality functionality

Price, packaging, and positioning allows Exact to win within various segments of the job shop market, based on the realization that the job shop market is not a homogeneous industry, but rather comprised of various sub-segments with different needs. On the other hand, ProfitKey has told me about winning over JobBOSS at somewhat larger customers that also require mixed-mode manufacturing capabilities beyond mere jobbing. JobBOSS mostly has MTO and some MTS capability for those needing to stock production, but not true repetitive manufacturing “bells and whistles” typical in a MTS environment.

Is Exact MAX Maxing Out?

For its part, Exact MAX is a client/server-based production planning package designed for lower-end of the discrete repetitive manufacturers market such as machinery, testing equipment, electrical equipment and components, and medical equipment manufacturers. It has found an appeal for hundreds of mixed-mode manufacturing (MTO, MTS, and some process manufacturing) enterprises with less than US$50 million in revenues and less than 20 users (50 to 250 employees), by offering integrated applications that include material requirements planning (MRP), advanced planning & scheduling (APS), product configuration, CRM, and integration to Microsoft Dynamics GP accounting (formerly Microsoft Great Plains).

The product also comes integrated with Quickbooks for lack of its own accounting capabilities. Its demand has been steady, but the hurdles in the future will be the Dynamics GP’s own MRP capabilities and its lesser interest in promoting a third-party add-on solution.

What About Exact Synergy?

The final product to discuss in this post is the Exact Synergy global collaborative platform. I have always admired the product but have also felt that it was unfortunately a bit ahead of its time (see Part 1). Indeed, Exact has long struggled with how to position it, given that the product has had basic CRM, human resources (HR), enterprise portal, and project management capabilities, but it was not strong enough for best-of-breed comparisons. Exact Synergy has been integrated to Exact Macola and Exact Globe (in a two database setup in both cases), but its collaborative capabilities have had only a limited appeal to conservative smaller manufacturers and distributors.

But nowadays is the age of the social enterprise, and Synergy might finally find its vindication by its Salesforce Chatter, Microsoft SharePoint, Jive Software, and other social platform brethren. Formerly written in classic Microsoft Active Server Pages (ASP), the product has recently been rewritten in .NET and it looks as slick as ever. The product has a notable install base of over 10,000 companies worldwide, and time will only tell whether and how Exact Holding will position it now in the age of social media and users’ awareness and acceptance of such tools. To make it more appealing and a focused offering, Exact has lately released CRM and Quality templates for Synergy, and many more are to come.

In Conclusion

Exact Software Americas struck me with its candidness and no-nonsense stance. The company acknowledges the ongoing tough competitive environment, both due to the sluggish economy and much richer competitors’ ability to wage price wars of sorts (via aggressive discounting). In spite of some perhaps self-inflicting moves a few years back, Exact still can claim low customer attrition and high-touch relationships with its 12 customer advocates (dedicated employees). The vendor strongly believes to know its place in the small to medium enterprise (SME) world, especially in the “smaller” end of the market, where it has established itself as a trusted advisor.

Dear readers, what are your views, comments, opinions, etc. about Exact Software’s “new old” strategy, its recent moves, and your experiences with the vendor and its products? Do you think the refocused and regrouped company stands a good chance in this cutthroat competitive environment?
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