Plains Software, Inc. is a global provider of enterprise business solutions
for the small-to-medium enterprises (SME) market. Great Plains offers e-business
applications for financials, distribution, enterprise reporting, project accounting,
e-commerce, human resources management, manufacturing, sales and marketing management,
and customer service and support. Founded in 1981, with headquarters in Fargo,
ND, USA, the Company is currently one of the fastest-growing ERP vendors, with
$134.9 million in revenue in fiscal 1999 (57.6% revenue growth compared to 1998).
Great Plains has been a leading provider of business software solutions since
1982 when it began selling its first product, Great Plains Accounting, for DOS-based
and Macintosh computers. For most clients, Great Plains Accounting software
was the first step in the transition from manual to computer-based accounting.
In 1993, the Company released Dynamics, its product suite for small businesses
in the mid-market, which comprises accounting, payroll, and human resources.
In 1994, it released eEnterprise (formerly Dynamics C/S+), which is an e-business
and enterprise-wide business management solution for the upper tier of the mid-market,
and is optimized for Microsoft BackOffice. In 1998, Great Plains formed an alliance
with Create-A-Check to offer software for check printing and bill paying. In
1998, the Company also acquired one of its VARs, ICONtrol. That provided its
eEnterprise manufacturing and human resources functionality, which was previously
developed by ICONtrol using Great Plains' development environment. In 1999,
Great Plains acquired Match Data Systems to further expand its eEnterprise product
with the addition of a project accounting solution developed specifically for
the Great Plains platform.
1999, the Company also announced a partnership with Siebel Systems to offer
Great Plains Siebel Front Office to the mid-market, and a partnership with Systems
Modeling Corporation to incorporate its finite capacity scheduling module within
eEnterprise. Great Plains also provides a product called Enterprise Reporting,
a system for financial consolidation and group reporting, which addresses both
legal and operational reporting. Great Plains' solutions are sold and implemented
exclusively by a worldwide network of independent partner organizations in approximately
95 countries (approximately 16% of its revenue comes from the international
market outside of North America). Great Plains Software, Inc. went public in
1997 and currently trades on NASDAQ.
Plains has established very strong branding and penetration within the Small-to-Medium
Enterprises (SME) segment of the ERP market, with a large and loyal customer
base and a uniquely developed, extensive partner channel within the industry
(over 1,600 knowledgeable and experienced partners).
Company has been recognized within the industry for its high level of customer
and partner service and its commitment to its employees. For the last three
consecutive years, Great Plains has been named to the Fortune list of the
"100 Best Companies to Work For in America". Low staff turnover provides
for a very stable organization, while a long presence on Microsoft's platforms
ensures that R&D money has been spent on enhancing product functionality
in accordance with the voice of customers and/or the market trends.
Great Plains is very competitive in speed of implementation, feasibility
of customization, total cost of ownership (TCO), and price/performance ratio.
Moreover, Dynamics and eEnterprise are a very good functional fit for some
industries (See User Recommendations).
Plains has exhibited very strong long-term and recent track records. The
Company is currently one of the fastest-growing and most profitable ERP
vendors (See Fig. 1 - Great Plains Software, Inc. - Annual Results Chart).
Furthermore, its high market capitalization of approximately $1 billion
(7 times higher than its revenues) makes the Company an unlikely acquisition
Plains currently has very low brand awareness outside of the North American
market. This is mainly attributable to its late-to-market multi-currency
(introduced in 1996), and Euro compliance (in 1998) product functionality.
In addition, the Great Plains products are currently available only in 9
a highly competitive environment, we predict that Great Plains will reach
$400 million in revenues within the next 4 years (60% probability), based
on the attractiveness of its products for Small-to-Medium Enterprises (SME),
particularly for mushrooming '.com' Internet companies that do not require
intricate business processes.
believe that, within the next two years, the Company will have to either
acquire (30% probability) or partner with (40% probability) a vendor whose
products would significantly enhance its manufacturing and/or supply chain
management capabilities. The potential candidates could be American Software,
SSA, or QAD.
expand its global presence, both by opening new offices and developing new
affiliate partnerships. Consider acquiring or partnering with affiliates
of faltering competitors, e.g. SSA, Epicor, Baan, and MAPICS.
further ongoing cost scrutiny and identify opportunities for further cost
reduction. The sales & marketing headcount, measured as a percentage of
the total number of employees, is 26%, and is higher than the industry benchmark
of 23%, while the sales revenue per S&MA employee of $428,000 is one of
the lowest (See Fig. 4). These figures are unexpected for a company that
sells through its strong affiliate channel, and MAPICS would be the perfect
example of a success in this regard.
Remain committed to the introduction of new product features/enhancements
(e.g. multi-site and process manufacturing capabilities, a wider choice
of international languages) and to enhancing Business Intelligence offerings,
possibly through strategic product alliances with competitors.
Great Plains should be included on any package selection short list within
the SME market where electronic business and financial modules are the main
pillars of an enterprise application.
Any organization evaluating Great Plains should consider existing functionality
only, and, in the case of final selection, should negotiate incorporation
of new applications components now at negotiated license fees, in expectation
of Great Plains' increase in new product introductions. Users should also
negotiate possible future server uplift charges, in anticipation of either
the incorporation of new product components or expansion to other sites.