How Great Is Great Plains' Manufacturing Offering (Did Somebody Say Microsoft)?




Event Summary 

Great Plains is a leading small-to-mid-market provider of back-office and e-business solutions. In March 2001, the company (still an independent entity at the time) held Convergence, a four-day annual user conference and international business event for its customers.

Although not given much attention at Convergence, Great Plains' foray into the discrete manufacturing market caught TEC's attention. While the company is admittedly aware of its limited success and brand recognition in this market segment, partly the result of arriving late in the game (eEnterprise Manufacturing Series was released only at the end of 1998; the product was previously developed within Great Plains' development environment by Great Plains' former VAR ICONtrol, which the company acquired in April 1998), it is poised to significantly improve its posture and product offering. See Market Impact for our view of Great Plains' odds of success with this endeavor.

Convergence Summary 

This was the fifth Convergence for Great Plains Dynamics and eEnterprise customers, and the first for Great Plains Solomon customers. In September 2000, Great Plains unveiled new e-business solutions and services during its 15th annual Stampede, a four-day international business conference for Great Plains value added resellers (VARs), consultants and solution developers. These constituents sell, support and develop integrated products for Great Plains e-business solutions, (for more information, see Great Plains' Latest Product Offering - Ready to Stampede the SME Market?).

During Convergence users had their turn to preview such new applications as release 6.0 of eEnterprise, although most applications has already been showcased at Stampede. Release 6.0 of eEnterprise is the most comprehensive release in the company's history, with significant new multinational and international enhancements. Still, Convergence featured such recent events as the availability of a time-tracking solution for hand held computing devices.

Other recent announcements included Great Plains' strategic alliance with Concur Technologies Inc. (NASDAQ: CNQR), a provider of Corporate Expense Management solutions, to resell the Application Service Provider (ASP) model for Concur Expense. Concur Expense is a Web-based travel and entertainment (T&E) expense management solution that will be resold by Great Plains' 2,000 Value Added Resellers (VARs) to middle market companies and existing Great Plains Dynamics, eEnterprise, Solomon IV and Classic customers.

Also noted was Great Plains' announcement of plans to add a web-based budgeting solution to meet the budgeting, planning and collaboration needs of mid-market organizations. FRx Software, a wholly owned subsidiary of Great Plains, will acquire the new budgeting solution, ebudgets, and will re-brand it as FRx Forecaster. The integration of FRx Forecaster with FRx's financial reporting application will automate operational expense, personnel, capital and revenue planning and allows multiple users and locations to participate directly in the budgeting process via the Internet, a corporate intranet or a LAN-based network. FRx Forecaster Professional will be available to Great Plains eEnterprise and Solomon IV Premier customers in the second calendar quarter of 2001.

Despite the organizers' attempt to focus on 'business as usual', it was inevitable that the audience's interest was in the status of Great Plains assimilation by Microsoft (see Microsoft And Great Plains - A Friendship That Turned Into A Marriage). The acquisition was formally completed with Microsoft's April 5, 2001. announcement.

Market Impact 

"Contentment without complacency" was TEC's impression that Great Plains exuded during the conference with regard to becoming a part of Microsoft. While relying on Microsoft's immense R&D resources (five times bigger than the value of Great Plains' acquisition) is certainly pleasing, it would not suffice in the long run without Great Plains' tenets of success in the past, e.g., focus, product quality, channel, etc. Cannibalizing the business of Great Plains' direct competitors that are still Microsoft's partners is not an option - Microsoft has to be wary of being anti-competitive, given the DOJ's constant attention to its moves. Therefore, Great Plains continuation of business as usual is quite plausible.

Selecting and attracting renowned vendors as its partners and integrating disparate products have marked Great Plains' strategy in the past. Great Plains has impressively delivered on its projection from almost two years ago when it indicated that front-office applications (through the alliance with Siebel Systems) and e-commerce were two strategic areas of focus for the future. The company has even gone a mile further by putting together a comprehensive product offering that includes supply chain management (through the alliance with Logility). Consequently, Great Plains has indeed made great noise and established itself as a global small-to-medium enterprises (SME) market leader. This is not the case in the manufacturing part of the segment, but the company is determined to change its posture in that regard.

The first and foremost reason for maintaining a higher profile is finally having a real product with tried-and-true functionality. The eEnterprise Manufacturing Series provides a broad suite of applications designed for discrete manufacturing businesses with Make To Stock (MTS), Make To Order (MTO), Assemble to Order (ATO) and Hybrid manufacturing environments. It features the following traditional ERP Modules:

Manufacturing Orders Quoting/Estimating
Capacity Requirements Planning (CRP) Work Center Definition
Sales Forecasting, Inventory Management Routings
Quality Assurance Material Requirements Planning (MRP)
Master Production Scheduling (MPS) Engineering Change Management (ECM)
Bill of Materials Work in Process (with Lot/Serial Control and Data Collection)
Job Costing Sales Configuration

The Manufacturing Series integrates with other typical ERP functional series available from Great Plains such as the Distribution Series, the Financial Series and eEnterprise Payroll. The tight integration with HR, FRx enterprise reporting, e-commerce and Siebel CRM modules, and with Logility Supply Chain Planning modules (still in the future) will render the product even more attractive to the target market segment.

Competitive Position 

The customer base is also getting to a critical mass, although it still has to grow. The company cites approximately 160 manufacturing installations, almost exclusively in the discrete manufacturing spot, with a small number of batch process manufacturers. Although the company cites targeting the companies with up to $250million in revenues, the real sweet spot is the manufacturing companies with $10million - $75million preferably with a single location. The customers are currently only North America-based owing to Great Plains' endeavor to get all its ducks in a row before releasing products for wide spread availability. The global availability is expected within a year.

Since its competitors, particularly the larger ones, may with good reason object that they had delivered the above product features a way back, the differentiator for this Great Plains' endeavor (and proven success) is to deliver bulletproof, bug free new generally available (GA) product releases, based on stringent product functionality and performance testing. That has not traditionally been the rule for most bigger applications vendors, whose new releases are often bug ridden. The market where Great Plains is competing is quite unforgiving to these kinds of flaws, possibly more so than with the vendor candidly admitting the missing functionality.

What should also bode well for the campaign is Great Plains' possibly unrivaled global indirect channel model that consists of over 2,200 partners; it has been admired industry-wide as the most appropriate delivery business model in the target market segment. Further bolstering its channel is the company's endorsement of the Application Service Provider (ASP) model, which it started more than two years ago (For more information, see Great Plains ASP - Evolution, Revolution, Innovation). Moreover, the speed and low price, as well as the low hardware requirements may cause the prospect to overlook the bells and whistles of other competitors.

Implications For The Future 

Nevertheless, Great Plains will have its work cut out for it. The product still lacks in some functionality that TEC noticed as increasingly required during recent software selections engagements such as lean/flow manufacturing, intuitive visual (graphical) finite scheduling/plant level execution, plant maintenance, document management/PDM, etc. The product also lacks strong distribution requirements planning (DRP) functionality, which still renders the product not particularly suitable for multi-site implementations. There is also lack of vertical focus and industry templates - the fact that the majority of customers are electronic manufacturers/OEMs is more the result of serendipity than the company's orchestrated effort in the industry.

To that end, during our attendance at Convergence, TEC was made aware that some alliance negotiations were in progress, and the market should expect related press releases in the near future. While belonging to the Microsoft family has advantages, the downside is that Great Plains' intended initiatives would likely be hampered and tied to the strategy of the bigger brother. The request for expanding the functionality of Microsoft bCentral small business service may push aside some other initiatives that Great Plains had earlier deemed necessary. Before integrating with Microsoft bCentral can happen, in turn, Great Plains' stable of products has to be re-architected/re-written for .NET as opposed to any proprietary development tools (e.g., Dexterity). And only then, when all the products are interchangeable, eEnterprise will be able to benefit from using the Solomon IV superior distribution or project management functionality and vice versa. This is not going to happen any time soon.

Any protracted delay in articulating and delivering these initiatives would aggravate the challenge of protecting Great Plains turf from such Tier 1 and Tier 2 intruders as SAP, Oracle, J.D. Edwards and PeopleSoft that indisputably have a more comprehensive and deep offering. The threat will remain even if the Tier 1 vendors' offering is toned down for the smaller market segment (see SAP Claims Big Gains In The Low-End Battleground and PeopleSoft Joins The Hunt For SMEs). One should also not overlook the fierce competition from direct competitors like NavisionDamgaard, Epicor, PRONTO, and Lilly Software to name but a few. These players can still tout their superior native manufacturing and distribution functionality and vertical focus, which are indisputably ever more important tenets of competitiveness within the SME market.

As a summary, Great Plains has most of what it takes to be a strong competitor - product, channel, implementation methodology, market focus and corporate viability. There is still much room for improvement in expanding the functionality and the market awareness; with Microsoft's wind in its sails, one should look for more effervescent activities in these matters.

User Recommendations 

As for potential Great Plains discrete manufacturing users our advice would be:

  • Evaluate eEnterprise if you are a small to medium, North American single-site discrete manufacturing company or division, with a limited IT budget and a timid IT strategy.

  • Bear in mind that if the non-manufacturing modules (e.g., HR/payroll, CRM, e-commerce, etc.) are also critical to you, then Great Plains brings added value to the table, although the integration should be validated during the technical review sessions as a part of a thorough selection process.

  • Companies that require complex engineer to order (ETO) functionality, multi-site and/or more intricate multi-national capability may benefit from evaluating other offerings.

  • During the selection process, question the company's executives about the positioning of its manufacturing offering within the total business strategy of Great Plains/Microsoft.

  • Talk to or visit existing users with a profile similar to yours to assess their past experiences and confidence in the future of Great Plains' manufacturing product and its track record relative to meeting the industry needs.

More comprehensive recommendations for both current and potential Great Plains users can be found in Great Plains' Latest Product Offering - Ready to Stampede the SME Market?

 
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