How Has MAPICS Been Extending?

How Has MAPICS Been Extending?
P.J. Jakovljevic - July 19, 2000

Event Summary

MAPICS, one of the leading mid-market ERP vendors, has significantly expanded its product offering during 2000, starting with the acquisition of its rival Pivotpoint at the beginning of year. Following are the excerpts from some recent pertinent company press releases.

On June 15, MAPICS announced the release of XA 6.0, the latest version of its flagship AS/400-based Extended Enterprise Application (EEA). This release offers manufacturers additional Internet functionality to help them collaborate more efficiently with partners in their supply chain, along with tools for streamlining business processes and enhancing decision making. The XA extended enterprise solution is comprised of the MAPICSWeRX family of applications, which includes:

  • FoundationWeRX - solutions that form the business foundation for manufacturers

  • DecisionWeRX - tools that enable streamlined business processes and enhanced decision making

  • ExtensionWeRX - technology for integrating B2B transactions beyond the four-wall enterprise

  • TeamWeRX - solutions for secure supply-chain collaboration via the Internet

  • MarketWeRX - tools that enable organizations to obtain market leadership through participation in Internet marketplaces

XA Release 6.0, which adds significant functionality in the TeamWeRX, DecisionWeRX and FoundationWeRX areas, is generally available in English and other major languages.

XA Release 6.0 includes significant enhancements to the product's 'FoundationWeRX' family of tools such as improved multi-plant and supply chain execution functionality. These enhancements intensify XA's foundation of basic business transactions to be more adaptable to the requirements of manufacturers as they engage in e-business.

Several enhancements were made to XA's 'DecisionWeRX' family of tools as well. These tools extract data from the foundation layer to help users make better business decisions and improve productivity and customer service. DecisionWeRX additions are in the field of Materials Management, Order Based Production Management (OBPM), Accounting Management and Contract Accounting.

"As the manufacturing industry moves to an integrated and collaborative e-business model and as e-business places more pressure on manufacturers to be flexible and responsive to customer's requirements, ERP providers must offer extended enterprise solutions to fulfill their needs," said Steve Haley, COO of MAPICS. "XA Release 6.0 demonstrates MAPICS' continued commitment to our customers, offering solutions to extend out their enterprises and enhancing our core applications to provide a solid foundation."

Three new products announced earlier this year are integrated with XA Release 6.0. The TeamWeRX B2B portal offering allows manufacturers and their supply chains to effectively collaborate over the Internet in order to strengthen key relationships and improve their competitiveness. Product Development Collaboration 'MAGIK!' is a fully integrated 3rd party engineering change control solution that allows all members of the product development process to collaborate remotely on product development via the Web. FRx is an easy-to-use financial analysis and reporting tool, which allows finance, and accounting professionals to streamline processes and generate the financial knowledge necessary to gain competitive advantage.

Earlier, on May 9, MAPICS announced the delivery of its second flagship product, the Point.Man Extended Enterprise Edition, which enables customers, suppliers, distributors and partners to collaborate via the Internet. Specially designed to address the needs of manufacturers, the Extended Enterprise Edition allows companies to provide secure information access and transaction capabilities throughout their entire value chains.

Point.Man's extensive personalization capabilities also allow manufacturers to provide easy-to-use, browser-based access to information views and transactions customized to fit the needs of individual partners, customers or employees. The Point.Man Extended Enterprise Edition goes beyond simple Web-enablement; it addresses the collaboration, transaction, data integrity and real-time information needs of current e-business and e-service models.

"MAPICS' Point.Man product improves on typical EEA models by providing data security down to the field level," said Linda Brooks, MAPICS' vice president of extended enterprise solutions, "In the new e-business market, where data is shared directly with customers and value-chain partners, content-sensitive security is a critical element of the solution."

The company claims that the use of Microsoft DNA Architecture and Xtensible Markup Language (XML) enable the system to retrieve and process XML data sets at high speeds, and the solution is wholly metadata driven, making it easily extensible. This powerful architecture allows customers to collaborate securely with partners via their preferred information appliances-laptops, personal data assistants, etc.

To ensure that it is a well-rounded e-business solution provider, MAPICS has also recently released new wireless software applications. It has partnered with Intermec, a supplier of automated data collection devices, to integrate its Paperless Manufacturing and Communication Software as well as XA software into Intermec hardware. It has also extended the functionalities of COM Net, its Java-based customer self-service application, to the 3Com Palm VII device.

Market Impact

MAPICS is an exemplary case of a vendor reinvigorating itself and significantly extending its products' offering scope by conducting a far-sighted acquisition. With Pivotpoint in its fold, MAPICS is now in a much stronger position to help its customer base of mid-sized manufacturing companies become e-businesses, with its wider portfolio of solutions. We believe this was possibly the best strategic move that MAPICS could have made given its state of affairs during the last few years.

The company has long realized that continuing with a single-platform, mature product would significantly limit its market opportunity. It had initially attempted to build an open systems solution in house but gave it up soon after it realized how tall an order it was. By choosing the acquisition route instead, the company is expected to avoid the product quality issues experienced by other vendors like SSA, JBA and J.D Edwards. With this move MAPICS has resolved the burning issues of the last few years, which were 1) confinement of its maturing XA product to the AS/400 platform, and 2) dismal organic growth.

The combination of MAPICS and Pivotpoint has the potential of becoming a formidable player within the mid-market for business applications, with a notable combination of customers and channel partners. There may be a synergy from a focus on the same market segment (small and mid-sized manufacturing enterprises) but with different products strengths in mainly complementary manufacturing segments. And while MAPICS XA runs only on AS/400, Pivotpoint's Point.Man runs on Unix, NT, and Linux, which rounds up the set of the most commonly used platforms.

In addition, besides obtaining another flagship ERP system, Point.Man, MAPICS has also benefited in adding the Maincor enterprise asset management (EAM) system, the Thru-Put advanced planning system (APS), Minxware and GrowthPower, manufacturing resource planning (MRP II) products, and a slew of e-business modules to its fold, as part of the deal. These products are in tune with the MAPICS focus and can help it mine its existing customer base. This merger has created a company with potential combined revenue of $160M and a product portfolio that can run on all major hardware platforms, thereby leapfrogging most of its competitors in the mid-range ERP market.

We favorably regard the company's recent e-business initiatives, which are in tune with the market trends and its customers' requirements. Moreover, we condone MAPICS downplaying its role as yet another ERP-turned-e-commerce vendor in favor of portraying itself as a vendor that provides a multi-layered solution of ERP transactional systems, extended ERP and e-business applications. Very notable are the product lifecycle management (PLM) collaboration component and user interface personalization, role-based features.

The only e-business components still to be desired are XML interfaces to Internet-based trading exchanges (market places), a fully Web-enabled product configurator, and some more functional B2B e-commerce modules (e.g., reverse auctions), which have been delivered by some of its competitors like QAD and J.D. Edwards. However, these are to be released by the end of the year according to the company.

We also agree with MAPICS' plans of enhancing its core ERP products and continued emphasis on integrating e-commerce components with its back-office systems. Companies are increasingly realizing that the fancy 'click' side of the business is a mere castle in the air without a proper 'brick' business foundation. It still matters very much what and how a company manufactures. Therefore, the company keeps professing to its users that already installed ERP systems and their extended components (e.g., business intelligence) form the necessary foundation layer for the new e-business components. We believe there is a genuine need for recommending these steps beside MAPICS' intentions to generate more revenue from its install base.

Nevertheless, the company faces some notable challenges. Possibly the biggest challenge for MAPICS and its affiliate channel will be the management of dual flagship product lines. It will be difficult to support existing customers and existing products, while juggling competitive product lines. It appears that MAPICS' product strategy is to offer two separate product lines, each providing a best in class solution optimized for the target platform. Since the product lines are likely to remain separate in the long run, it will add additional development costs, as well as provide a challenge in explaining the position of the different products.

The company will have to revise its sales strategy of how to optimize the sales of two product lines with somewhat overlapping functionality and avoid a likely internal competition, not to mention the need to show 'one face' to customers. Segmenting the market into AS/400 and NT territories may not be very practical since deciding which product to present in a new opportunity may happen to be arbitrary.

One solution to this problem would be to reorganize the company into vertical business units. However, what to do in a situation where, e.g., XA would be functionally stronger fit, but the customer is a staunch Microsoft technology follower? Furthermore, MAPICS products can be deployed to a very narrow set of databases. MAPICS XA can only run on IBM DB2 database, whereas Point.Man can only run on Oracle database. Not providing support for Microsoft SQL Server may result in a number of missed opportunities having known the MAPICS' focus on the cost conscious mid-market segment.

Given the fact that the market opportunity for Point.Man is seemingly much larger than for MAPICS XA, the existing AS/400 solution, and due to Point.Man's strong Web-enablement, personalization, flexibility and scalability capabilities, we should imagine Point.Man to tacitly become the main offering for MAPICS in the long run.

That is not going to happen any time soon since XA is still functionally a stronger product than Point.Man across the range. As an example, Point.Man exhibits minimal multi-national capabilities since it currently supports only the English language. Although the support for six languages is slated for September, that will still be very modest compared to XA's support for 21 languages. In addition, the following capabilities are also Point.Man's weaker areas compared to its AS/400 counterpart: shop floor control (tooling requirements, MES, PDM, hazardous material reporting, kitting), sales force automation (SFA), distribution requirements planning (DRP), and project management.

Finally, MAPICS can expect growing pains in merging disparate product lines and training the newly extended large affiliate channel. On the one hand, it will be difficult to support existing customers and existing products, while blending those somewhat competitive product lines. Despite the focus and corporate culture compatibilities, there is much more organizational fine-tuning to be performed.

MAPICS is a stable, old, consistently profitable company, with an immaculate customer service record and almost uniquely developed affiliate channel in over 70 countries. On the other hand, the pre-MAPICS Pivotpoint could not cite any of the abovementioned characteristics. Moreover, the market and investors will keep MAPICS future financial performance under a very close scrutiny. There will be an emphasized (possibly unrealistic) pressure for both growth and profit display. The recent crippling of Great Plains' market valuation to almost its half, despite a respectable (but 'insufficient') growth and profit after the merger with the rival Solomon Software, is a case in point.

User Recommendations

MAPICS should be included on the selection list for mid-market companies (with $50M-$500M in revenue), where discrete, batch manufacturing, engineering and logistics modules are the main pillars of an enterprise application. MAPICS is a renowned mid-market ERP vendor, with a long tradition and a large, loyal and satisfied customer base.

However, since we expect growing pains in merging disparate product lines within the current affiliate channel, potential clients should conduct a preliminary research on industry expertise and reference sites of a regional MAPICS affiliate service provider when the MAPICS/PivotPoint product is selected. They should also familiarize themselves with respective products' strengths/weaknesses within certain vertical industries. Existing users of Minxware and GrowthPower MRP II products may benefit from evaluating other ERP vendors instead of blindly opting for migrating to a MAPICS' product.

Current MAPICS/Pivotpoint users may want to inquire about the company's plans regarding Internet marketplaces in their respective industries. Furthermore, companies outside of above-mentioned industries may benefit from evaluating MAPICS non-core ERP product components on a stand-alone basis for their e-business needs and leverage that information against other vendors in the selection.

As for the new added functionality through partnerships, users are advised to ask for firm assurances on the availability and future upgrades timeframes, and more detailed scope of combined product functionality. In any case, make sure that MAPICS or its affiliate service provider offers a single contract and help desk for all disparate components of its product offerings. This should not be a problem given the company's past customer satisfaction record.

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