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Made2Manage Affirms Its Technological Astuteness

Written By: Predrag Jakovljevic
Published On: January 20 2003

Event Summary

Recently, Made2Manage Systems Inc. (NASDAQ: MTMS), a provider of broad enterprise business systems for small and mid-market manufacturers, announced at the APICS International Conference & Expo in Nashville, TN, the introduction of its new wireless offering, M2M Mobile Manager, showing further proof of the company's drive to assist small and mid-market manufacturers. Based on IEEE 802.11b standards, Mobile Manager should provide mid-market manufacturers with "always on" mobile access to the Made2Manage Enterprise Business System product suite.

The newest Microsoft .NET-based offering that is also browser-based and hardware independent, Mobile Manager should allow mid-market manufacturers to access critical back-office data in real time from anywhere in a warehouse facility using a pocket PC, tablet PC or vehicle-mounted device. To access warehouse management data previously, workers typically had to run paper-based reports at the start of each day, which soon became outdated, or continually log in and out of a stationed warehouse management system (WMS). By moving the office desktop onto the shop floor, manufacturers should now retrieve and enter mission-critical information like shop floor schedules, inventory levels, customer information, and job and quote orders from anywhere in the facility at anytime.

Mobile Manager requires the use of any portable data assistant (PDA) that is equipped with a Compact Flash Type II slot to accept the Wireless Fidelity (Wi-Fi) 802.11b network card such as Microsoft's Pocket PC. For the worker who requires a device that is built to withstand rugged factory environments, many industrial handheld units are available from companies such as Intermec, Symbol, and Percon. Because the application is browser-based and built entirely on the Microsoft .NET platform, Mobile Manager is supposedly able to support and develop device-independent capabilities to extend the functionality of the product even further.

Also recently, Made2Manage announced the launch of its corporate Web sites on the Microsoft .NET technology platform, the latest news in a series of announcements that support the company's ongoing uncompromising .NET-based product strategy. To that end, the company's corporate site, www.made2manage.com, customer support and service site, M2M Expert (www.m2mexpert.com), and company intranet site, M2M Inside, each showcase improvements including a new "look and feel", enhanced features and greater functionality. Utilizing the .NET platform should also result in improved integration between the corporate Web sites and the Made2Manage Enterprise Business System product suite.

This is Part One of a three-part note.

Part Two will discuss the company Strategy.

Part Three will cover Challenges and make User Recommendations.

Utilizing .NET Technology

Made2Manage is one of few early adopters in bringing .NET technology to the mid-market. To that end, since June 2001 the company has announced the roll-out of several key applications housed within the Made2Manage Enterprise Business System, including the enterprise portal solution, M2M VIP, business intelligence product suite, M2M BI, and its integrated customer relationship management suite, M2M CRM (see Made2Manage Offers New Functionality And A VIP Treatment).

In addition to its new .NET product architecture, Made2Manage's corporate Web site has undergone a complete makeover of design, content, features and functionality. The new features and functionality are expected to play a significant role in helping Made2Manage shorten its sales cycle and better service its growing customer base. For example, the .NET platform should improve the interface between the company's corporate Web site and its M2M CRM solution, allowing the site to better capture and import leads, and thereby provide the eating its own dog food' proof of concept example. In addition, .NET technology should allow the Made2Manage marketing team to easily update content without having to manipulate code or rely on the development team.

The launch of M2M Expert on the .NET platform should enable the company to closely integrate M2M Expert services with the Made2Manage Enterprise Business System, allowing the seamless integration of various site features into a single, powerful tool for customers. The launch also accompanies improvements to the Web site, including an upgrade of the Ask Expert Knowledgebase, which is used by both customers and Made2Manage support analysts, and changes to the site's content and design. Microsoft .NET technology should enable Made2Manage Systems to provide better customer service and support by allowing those involved in a company's implementation of the Made2Manage Enterprise Business System to effectively collaborate online using the site's Consulting Sitebook. The new architecture should improve Private Virtual Education, which enables customers with a M2M University contract to receive personalized, one-on-one education from a Made2Manage product expert.

The Made2Manage corporate intranet site, M2M Inside, was the company's first Web site to launch under the Microsoft .NET platform in April 2002. Since that time, Made2Manage has reportedly seen significant advantages to its development environment. Because the Microsoft .NET platform utilizes a modular architecture, the Made2Manage development team is provided with the tools and solutions needed to add almost any type of functionality or feature to the corporate intranet at a greatly reduced timescale. Launching the corporate intranet site under the Microsoft .NET platform has helped reportedly reinforce the goals and original intent of the Web site: information sharing, teamwork and company growth. M2M Inside now serves as a complete collaboration center and information repository for all Made2Manage employees and business partners.

Expanding Product Functionality

Having not forgotten the product functionality side either, on January 14, Made2Manage and Infoscan Software Systems, a provider of warehouse management and data collection software for warehouse and distribution-based organizations, announced a partnership that will unite the Infoscan Warehouse Management System with the Made2Manage Enterprise Business System. The partnership should provide the small and midsize manufacturing market with a fully integrated and comprehensive supply chain management (SCM) solution enhanced by Infoscan's warehouse management solution (WMS), possibly at a fraction of the cost typically offered by larger technology vendors. By partnering with Infoscan, the Made2Manage Enterprise Business System and its supply chain management product suite, M2M SCM, should now offer a truly comprehensive solution that satisfies customers with both manufacturing and distribution requirements, particularly in industries such as sporting goods, consumer items, store fixtures, industrial hardware and printing/publishing materials. To that end, the combined solution should fully support warehouse planning, layout, tracking, replenishment, transaction support and logistics. Under the terms of the agreement, Infoscan's wireless warehouse management solution will also be marketed to Made2Manage Systems' customer base of more than 1,600 small and midsize manufacturing operations throughout North America.

Further, in September, during the IMTS Manufacturing Conference in Chicago, IL, Made2Manage announced the availability of FRx Forecaster to its customers via a partnership with FRx Software Corporation, a provider of advanced financial reporting, budgeting and planning, and financial analytics applications, and a division of Microsoft Business Solutions. With the integration of FRx Software, the Made2Manage Enterprise Business System should provide expanded financial consolidation and reporting capabilities. By integrating FRx Software's Analytic Suite with existing Made2Manage financial applications, users should be able to enhance Made2Manage's high-level accounting functionality, and at the same time integrate spreadsheet and other non-general ledger data sources to create comprehensive financial reports that support business managers in making mission-critical decisions. Also, the Version 6.5 of FRx Financial Reporter and FRx Forecaster reportedly offer additional features to increase the two products' usability and compatibility with one another and with supporting general ledgers.

During the same event, the company announced significant enhancements to its supply chain management (SCM) solution, M2M SCM, which is a suite of intertwined SCM tools that include demand forecasting, planning and scheduling applications. In an effort to help manufacturers optimize supply chain performance and better communicate both internally and externally with customers and suppliers, Made2Manage has enriched its M2M SCM application with developments in many levels of the Made2Manage Enterprise Business System product suite. The company has added several new functions to its enterprise portal, M2M VIP, and enhanced its Electronic Data Interchange (EDI) capabilities with XML technology in its enterprise integration tool, M2M Link. Both applications are reportedly fully integrated with the M2M SCM solution and the Made2Manage Enterprise Business System. In addition, Capable to Promise (CTP) functionality has been imbedded within M2M ERP product to work in tandem with M2M Synchronizer, an application server that enables the M2M SCM planning and scheduling functionalities. Previously only available through M2M SCM, CTP is now accessible from the M2M ERP system. Thus, without having to look in a separate planning or scheduling system, users should now be able to determine CTP dates directly from the sales order screen.

In addition to M2M VIP's core features, which include real-time account and order tracking, shipment tracking, inventory availability, product quotes, reporting capabilities and a marketplace for the exchange of goods and services, the following key features and functionalities have been added:

  • Expanded search capabilities enabling vendors to search and view purchase orders based on a variety of search criteria.

  • Automatic scheduling of catalog updates and the ability to export updates into an Excel spreadsheet for easy modification.

  • Advanced reporting capabilities using a "My Profile" feature or other desired classifications.

Since EDI one of the most common forms of automated electronic communication used by businesses today and is often a requirement for manufacturers working with large customer organizations, Made2Manage has gone a step further with its existing EDI solution, which enables system-to-system communication to improve data accuracy and create a faster, more responsive supply chain. Via EDI/XML technology, key information such as customer orders can flow into a customer's back office and be accessed through a shared database with M2M SCM, enabling more effective forecasting, planning and scheduling. The new M2M Link EDI-XML solution should allow users to exchange documents of any format (e.g., EDI, XML, flat file) with trading partners without the hassles of having to deal directly with a Value-Added Network (VAN), as the vendor now provides the VAN services usually associated with a third party. By using Microsoft's BizTalk Server instead of third-party translation software, both XML files and EDI documents can be exchanged seamlessly.

Made2Manage Financials

Still, a fly in the ointment would be the recent announcement of financial results for the third quarter ended September 30, 2002. While earnings declined to a net loss of $727,000, compared to net income of $25,000 in the third quarter of the prior year, the company generated $287,000 of positive cash flow for the quarter. Revenues for Q3 2002 were $6.7 million, which is a 19% drop compared to $8.3 million in Q3 2001 due to $1.8 million lower software license revenue compared to 2001. Software license revenue was $1.4 million in third quarter 2002, a whopping 56% decline compared to $3.2 million in 2001 (see Figure 1). The increase in service revenue was consequently not sufficient to offset the reduction in software license revenue in order to continue the company's recent trend of five consecutive quarters of improved pretax results over the same quarter prior year.

Figure 1.

Market Impact Having long had a size' disadvantage (with ~$34 million in 2001 revenues and currently with ~230 employees), Made2Manage has been compensating by providing a suite of applications with an inherent ease of use and low total cost of ownership (TCO) that small enterprises in its target market desire. The vendor has also not had to hold out on the functionality aspect either. Although any vendor of its stature cannot completely be out of the woods, as also seen in its recent quite subdued revenues, owing to its astute management of costs amid reduced revenues and yet significant concurrent R&D investment (15% of revenues), which have jointly resulted with a comfortable cash position of over $16 million, Made2Manage' future seems to be much more certain than most of its peer vendors that have either been heavily bruised or eliminated during the recent rampant insolvencies, mergers & acquisitions (only for those that are lucky) crunch period.

Offering low-cost products with cutting-edge technology to a narrowly defined market segment has allowed Made2Manage to weather the still ongoing and brutal business climate. The vendor has been attempting to show customers a clear and compelling advantage, both in the form of cost savings, and in capabilities that previously had not been available. Should it continue to execute, Made2Manage should have a good opportunity within its target market, which is still without a dominant vendor. Although the larger, Tier 1 vendors have long been moving down-market, Made2Manage's target segment is still largely below their radar screen.

This concludes Part One of a three-part note.

Part Two will discuss company Strategy.

Part Three will cover Challenges and make User Recommendations.

 
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