Is Fourth Shift Succeeding in Providing 'Complete Customer Care'?
Written By: Predrag Jakovljevic
Published On: August 14 2000
Is Fourth Shift Succeeding in Providing 'Complete Customer Care'?
According to a press release from July 25, Fourth Shift Corporation, a
Minneapolis-based global application software vendor for small-to-medium
enterprises (SME) and SupplierMarket.com, an Internet marketplace that
provides mutual benefits to buyers and suppliers of manufactured direct
materials, have partnered to bring together enhanced e-commerce functionality
for Fourth Shift users. Fourth Shift will utilize the SupplierMarket.com
XML Integration Toolkit to seamlessly link Request-for-Quotation (RFQ)
data and Quotation data with the SupplierMarket.com online strategic sourcing
platform for manufactured direct, indirect, and specification-based raw
Shift users who are involved in discrete manufacturing will be able to
source built-to-order components and other specification-based materials
involved in the manufacture of their end products directly from their
desktop computers. Additionally, they will be able to search for open
RFQs in their areas of expertise and nominate their company to bid on
the contract. With the added benefits of SupplierMarket.com, purchasing
professionals will be able to locate ideal trading partners, submit RFQs
for new contracts, and receive the results of reverse auctions, all from
their familiar Fourth Shift vendor operations, manufacturing planning
and scheduling, and product definition screens.
a company incorporating the Internet into our core business strategies,
Fourth Shift's progress is evident," stated Keith Vincent, Fourth Shift's
VP of 'e'. "It's staggering to imagine the tremendous time and cost savings
that this e-procurement option will bring to our customers. We're very
excited about our partnership with SupplierMarket.com."
are thrilled to bring our e-procurement functionality directly to Fourth
Shift users, " stated Bill Sheehan, vice president of business development
at SupplierMarket.com. "Our partnership will put viable e-commerce tools
on the desktops of thousands of manufacturers. The transparent functionality
is elegant, and the economic results will be powerful."
on July 18, Fourth Shift Corporation reported a loss of $.37 per share
for the second quarter ended June 30, 2000. This loss includes a one-time
charge of $.08 associated with an expense reduction plan implemented on
June 30, 2000. Total revenue for the quarter was $15.1 million (See Figure
second quarter results are disappointing," said M. M. Stuckey, Chairman
and CEO. "The market's in a pause, we have tightened our belts accordingly,
our cash position is adequate and our strategy is right for what our market
needs. Businesses are asking for advice on Internet strategy and looking
over their shoulders for what their peers are planning, so they are holding
off buying decisions. This decision dam will break and the race will be
on to get operational, but when is still uncertain. Fourth Shift is positioned
to grow rapidly when buying decisions resume".
The time has come for Tier 2 and Tier 3 vendors to feel the Y2K-caused
pinch, while their bigger brethren seem to have gotten over that malaise.
This was not unexpected, as Tier 1 ERP vendors were hit first, primarily
due to much longer implementation times required for larger implementations
and customers had to put their plans on hold much sooner. We believe that
the smaller vendors are now in for a rough time as they continue to expand
their products, refine their marketing message and defend their turf from
each other and from ever more intruding bigger vendors, while coping with
much scarcer resources. Fourth Shift CEO's somber message speaks in that
Fourth Shift Corp. seems to understand the requirements of its target
market (SMEs) that wish to acquire most of their business applications
from a single source. To that end, the company launched in February 2000
a program to promote itself as a sole solutions provider. The program
is called Complete Care and is possibly the most comprehensive approach
for small and midsize manufacturers to obtain needed business enterprise
applications, backed by professional services and a long-term commitment
to the customer's success. The Complete Care program begins even before
a customer commits to any purchase as a Fourth Shift project manager is
assigned to participate in meetings with potential customers. However,
Fourth Shift has yet to demonstrate substantial progress in developing
an indirect channel to supplement its strong direct sales force.
Shift introduced Complete Care concurrently with enhancing its core ERP
product. The new functionality includes a set of what Fourth Shift refers
to as business relationship management (BRM) applications, providing functionality
for such things as automating sales forces and facilitating relationships
with customers and suppliers. That was provided through an OEM relationship
with Pivotal's BRM product, which has been tightly integrated with the
Fourth Shift 7 e-ERP system.
Shift also offers a robust and fully integrated APS engine as part of
its product suite through an OEM relationship with Systems Modeling Corp.
Further in 1999, Fourth Shift began developing a set of applications that
will enable its customers to conduct business-to-business (B2B) e-commerce.
Fourth Shift acquired underlying technology for these applications, which
it calls e-Business Centers, through the purchase of Computer-Aided Business
Systems (CABS), which specialized in developing workflow-based e-business
solutions. This acquisition has also somewhat mitigated the company's
multi-site product functionality, which was mediocre in the past.
Shift offers products and services for e-commerce, 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. Fourth Shift 7 provides connectivity to other applications
and follows the Microsoft standards regarding BizTalk and XML.
differentiating Fourth Shift from its main competitors is the company's
ability to measure, at a strategic level, the cost, benefits, and business
justification of the new technology. Fourth Shift's new website BenchmarkReport.com
is a portal where manufacturing companies can benchmark themselves against
comparable companies contained in an online database of more than 150,000
firms. This site is co-sponsored by Grant Thornton a leading accounting
and management consulting firm providing a broad range of professional
services to growing entrepreneurial organizations.
for the latest partnership announcement in case, we foresee a benefit
for both parties. Fourth Shift and its customers' potential benefits are
obvious, whereas SupplierMarket.com should embrace the addition of 3,700
Fourth Shift customers who will utilize the functionality and collaborative
sourcing technologies that allow buyers and suppliers to locate new trading
partners, negotiate purchases, and collaborate on the Internet.
Fourth Shift's target market, manufacturing and distribution companies
in the $10 - $150 million-a-year revenue range, should certainly consider
the company's latest value proposition, but avoid selecting it without
looking at what the other vendors have to offer. We generally recommend
including Fourth Shift in a long list of an enterprise application selection
to lower-end of the mid-market companies, which have limited IT budget
and conservative IT strategy, and have significant discrete job shop manufacturing,
CRM, supply chain and B2B e-commerce requirements. The industries that
would most likely benefit from using Fourth Shift 7 are electronics, computers,
machinery, fabricated products, and medical devices.
should insist on a contractual timeframe for delivery of a solution, and
seek reference sites (preferably in their vertical market space), which
have been successful with the product suite. Each e-business component
should be put through its paces using a well-documented set of requirements,
scripted scenario demonstrations, and rigorous reference checking. 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.
interested in Fourth Shift's assistance in connecting them to digital
market places may want to ask the following questions: What methodology
does (or will) the company prescribe? Will Fourth Shift map customers'
schemas to those of the marketplace? With suppliers talking to manufacturers,
customers and sales people interacting via the network and a back end
solution "keeping up" with all of it, what "lowest common denominator"
network configuration is recommended by the company?