MAPICS Moving On Pragmatically Part 4: Competition and User Recommendations


For the last several months, MAPICS, Inc. (NASDAQ: MAPX), a global provider of extended ERP applications for world-class mid-sized manufacturers, has embarked on a painstaking process of producing a strategy going forward that would pragmatically blend the company's traditional values and success factors with new approaches to stay in tune with market trends.

If Microsoft Business Solutions (MBS), with its huge resources and a single .NET and SQL Server platform foundation delivered in-house does not foresee delivering a unified ERP foundation for at least next three years (see Microsoft Lays Enforced-Concrete Foundation For Its Business Solutions Part 3: Challenges), one can only assume that it would take MAPICS significantly longer, given its much more modest resources and a task of deploying onto multiple platforms. The technological foundation disparity of the products will likely take its toll by multiplying the development expenses and in delivering products integration. This also complicates the tracking of third-party partnerships to compensate the products' different weak areas.

The positive news is that using the applications such as portals, PLM, or EAM (and supplier relationship management (SRM) in the future) as coarse grained Web Services (e.g., the pricing, inventory, supplier performance, order management, and catalog components within SRM) on top of both .NET- and J2EE-based ERP products' foundations via a Web Services interface layer should result in synergies, despite the downside that it cannot be done within the core ERP products owing to a huge gap between the products' technologies and functional capabilities. Another cloud on MAPICS' competitive horizon is the entry of Microsoft, through its recent Great Plains and Navision acquisitions, into MAPICS traditional SME market (see Microsoft Lays Enforced-Concrete Foundation For Its Business Solutions). The traditional MAPICS affiliate channel, which is still concentrating on the iSeries product, will have to wrestle with new, aggressive, technology savvy competitors from the Microsoft .NET world. The fact that the existing affiliate channel has not aggressively been selling the more open and technologically more advanced ERP for Extended Systems begs the question when the channel's mindset will change to start thinking in terms of customers needs rather than in terms of products allegiances.

MAPICS' challenge in its new technology foray will also be to effectively move its partners with it, as they will also need to invest in new skills. While they do, service may drop below MAPICS' stringent standards because the company might find its own resources spread thin to fill in the service gaps created by inexperienced VARs. Another risk is that as the likes of SAP, PeopleSoft and Oracle move down market and MBS comes up market and invade, MAPICS' market space they might actively lure its qualified VARs for sales and service, potentially restricting MAPICS' ability to expand its market presence, and leaving its customers at risk of losing local support.

There is also a conundrum, for penetrating the higher-end of the market since MAPICS is not at the forefront of natively provided multi-national financials/consolidation, budgeting, project accounting/management, and human resources (HR) functionality. Without these in hand, it is a tall order for any vendor to penetrate the corporate management level competing against likes of Oracle, SAP and PeopleSoft. Production management remains MAPICS' strongest spot, and, therefore, it has often been implemented only in manufacturing divisions of large global organizations that use a Tier 1 ERP product for corporate financials and/or HR applications.

The competition will, of course, not end with these vendors. Taking the iSeries software first, main competitors include Intentia, SSA GT, Baan, Geac and J.D. Edwards. As for the NT/Unix-based Extended Systems product, the peers list seems almost never-ending, with QAD, IFS, Syspro and Frontstep leading the way. Therefore, executing the above-announced ambitious initiatives with its modest albeit solid resources compared to the above competitors will be a notable challenge. Any hiccups and delays in its product development execution, possibly bundled with continued limited sales execution (that relies largely on the support & maintenance revenue stream rather than on new licenses), may put further significant strain on the company's performance and keep it in the difficult position of having to maintain tight cost controls, while executing a visionary strategy. MAPICS will either have to produce significantly higher revenues or it will have to protract its products delivery deadlines, given its dedication on preserving profitable bottom line at the same time.

This is Part Four of a four-part article on MAPICS.

Part One detailed recent announcements.

Part Two discussed the Market Impact.

Part Three covered the Challenges.

User Recommendations

MAPICS remains a stable company, with a strong financial position, a depth of manufacturing knowledge, a strong customer service record and a developed affiliate channel, which has also broadened its product offering. However, how well will it maintain strength within its affiliate channel, how well will it target the right business issues for the discrete manufacturers, and, subsequently, how will it spark the growth of new licenses, remain to be seen. Still, prospective customers in the above-cited industries of focus should consider evaluating MAPICS, given its understanding of manufacturer's business problems, its excellent track record of customer service and its set of solutions for discrete manufacturing companies with revenues in the range $20 to over $1 billion.

The MAPICS ERP for iSeries product focuses on complex discrete, MTO and ETO and project-based manufacturing involving deep bills of materials (BOMs), targeting particularly automotive parts suppliers, electronic and electrical suppliers, industrial equipment, fabricated metals, heavy duty transport suppliers and measurement and control device manufacturers. MAPICS ERP for Extended Systems, on its hand, has recently moved beyond its semiconductor industry roots to include the high-tech and discrete manufacturing and the medical instrumentation markets.

Existing MAPICS ERP customers should review the above-mentioned enhancements (both developed by MAPICS and through alliances) with their local affiliate with an eye towards extending the value of existing applications. MAPICS customers with custom systems or products from other vendors should review the affiliate's development capabilities in order to gain data integration between their various systems. New customers evaluating MAPICS should consider the necessary enhancement modules as an essential part of MAPICS product and insist on reviewing them as part of their evaluation. MAPICS, for its part, should educate its existing user base in the value of PLM, EAM, CRM and BI and push to make the entire offering available as quickly as possible.

Existing MAPICS XA customers should be asking MAPICS management whether all the above-mentioned strategic extensions will also be added to the ERP for iSeries product line and when. They should also inquire about any possible impact (or benefits) that MAPICS' ambitious product strategy and brand unification might have on their current MAPICS XA investments. Mid-market manufacturers in high-technology industries considering ERP for Extended Systems should first seek reference sites and determine the experience level and dedication to the product of the local MAPICS' affiliate. Although MAPICS might be successful in up-selling newly introduced add-on functionality to the iSeries base and is determined in expanding its platform support via J2EE- and WebSphere-based enhancements, still, for the time being, only those complex discrete manufacturers viewing iSeries as a strategic platform may benefit from considering the ERP for iSeries solution, given likely product immaturity on new platforms.

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