the beginning of October, during the annual conference of the American
Production and Inventory Control Society, APICS 2003,
in addition to Microsoft Corporation's (NASDAQ: MSFT) initiative
to avail a majority of its Microsoft Business Solutions (MBS)
division's enterprise resource planning (ERP) offerings with long needed pieces
of product lifecycle management (PLM) functionality through an extension of
the existing relationship with Autodesk, Inc. (see Autodesk
To Bring Microsoft Business Solutions Closer To PLM), Microsoft also made
other announcements pertinent to enhancing and supporting its current line of
ERP business solutions and service offerings. Namely, to help its small, mid-market
segment and even certain large corporate customers improve the effectiveness
of current ERP solutions, Microsoft Business Solutions announced the general
availability of Microsoft Business Network, and the upcoming
delivery of two demand planning modules.
Business Network (MBN) is a combination of on-premise software integrated with
Microsoft Office, Microsoft Business Solutions applications
(albeit currently only with MBS Great Plains) or Microsoft
BizTalk Server, and hosted Web services. MBN was designed to help businesses
more easily and effectively work with their trading partners (suppliers and
customers) through a fully automated Microsoft .NET-connected
solution, thereby increasing efficiency with a deep degree of integration throughout
their business and desktop applications and lowering the total cost of business-to-business
(B2B) collaboration. In other words, MBN uses the messaging and collaboration
facilities of Microsoft Outlook and the integration facilities
of BizTalk Server, to solve the supply chain connectivity part of the overall
supply chain management (SCM) puzzle.
for the underlying pieces of the vast SCM functionality, to help businesses
improve customer satisfaction, maintain optimal levels of inventory and reduce
operating costs, Microsoft Business Solutions announced that it will deliver
demand planning modules that enhance its Axapta, Great Plains,
and Navision products, and that should help existing and prospective
customers strategically plan for future demands and adjust their daily operations
accordingly. The feat will come from a non-exclusive worldwide distribution
agreement that has been signed between MBS and TXT e-solutions
(www.txt.it ), an Italian provider
of content management, supply chain and customer management software, relating
to TXT's Demand Planning solution, which consists of two modules:
DP Power User and DP Collaborative. Contrary
to the above-mentioned Autodesk alliance, MBS and TXT seem to be much clearer
with regard to the delivery roadmap. General availability of MBS Demand
Planner for the Axapta and Navision solutions is expected in November
2003, while MBS plans to announce general availability of the Great Plains module
in early 2004. The integrated software will be distributed by MBS internationally
through its network of more than 6,000 partners and resellers. On the other
hand, TXT, which specializes in SCM largely for the consumer goods and fashion
industries, will receive license royalties for each sale, and will provide paid
services to MBS' partners and resellers.
above moves come on the heels of the August 18 announcement of the availability
of an enhanced release of the Microsoft Business Solutions Business
Portal (Microsoft Business Portal), its Web- and roles-based portal
application for two of its ERP solutions, MBS Great Plains and MBS Solomon,
which should in the long run become the primary user interface (UI) for all
MBS' enterprise applications. The idea behind Microsoft Business Portal is to
extend an organization's ERP solution to provide business intelligence (BI)
and processes to all employees, helping companies reduce information support
costs, providing greater access to information, and enabling users to complete
common tasks more easily.
that end, the new HRM Self Service Suite for Microsoft
Business Portal 1.2 is designed to help employees review their HR and
payroll information and complete common tasks, such as filling out and approving
timecards, submitting requests for time off, reviewing paycheck and benefit
information, and more easily changing their employee profile information. The
HRM (Human Resource Management) Self Service Suite consists of five modules:
Employee Profile, Employee Pay, Time
and Attendance, Recruitment, and Skills
and Training, and it works with MBS Great Plains US payroll
and human resource applications.
new KPI module offers executives and other decision-makers
at-a-glance access to the key business metrics they need to help them quickly
assess the health of an organization and take action when conditions change.
Key performance indicators (KPIs) can be expressed in graph or chart form and
can include green, yellow and red alert conditions to identify critical areas
of concern. The module enables executives to drill down into the underlying
data for further analysis, and is available for both MBS Great Plains and Solomon.
Microsoft Business Portal 1.2 also includes the ability to deliver reports created
with MBS Analytics—FRx through the portal, so users can easily access the financial
and business reports they need to accurately gauge financial conditions and
make better-informed decisions.
is Part One of a two-part note.
Two will discuss challenges and make user recommendations.
the immense development undertaking, which began at MBS even before its strategy
was espoused in 2002 (see Microsoft
Lays Enforced-Concrete Foundation For Its Business Solutions), the incremental
approach towards building a more complete SCM product portfolio seems logical,
if not the only possible option. The embedment of a simplified version of TXT's
Demand Planning as an integrated module in MBS's ERP solutions is the last of
MBS's recent and somewhat tepid incursions into the SCM market.
partnership should mutually fill functional voids within the two parties' current
product offerings and should enlarge both vendors' opportunities. The products'
technologies are quite compatible so integrating the products will not be terribly
complex, as indicated by the speed of the expected integrated solutions delivery.
MBS's aspirations to capture the manufacturing and supply chain/distribution
mid-market have been known for some time (see Microsoft
'The Great' Poised To Conquer Mid-Market, Once and Again), with much noise
and visibility coming from MBS's Manufacturing Division of
late, particularly through its strategy of targeting individual divisions of
large corporations and presenting its case for lower total cost of ownership
(TCO) compared to a standardized corporate-wide implementation of a tier one
product. In a somewhat simplified manner, the division has been positioning
Axapta for engineer-to-order (ETO) environments, Solomon for project-based and
service-oriented businesses, with very basic manufacturing and distribution
functionality, Navision for a variety of mixed-mode discrete and batch process
manufacturing environments, and Great Plains as a tightly packaged "out-of-the-box"
solution for mainstream discrete manufacturing environments.
However, the feat has not been exactly a pushover, for various reasons. One would be the fact that the MBS ERP product lines, with a possible exception of Navision and Axapta, have not been the landmark SCM/distribution-oriented products, at least not within markets that need more than basic demand planning and forecasting requirements. Indeed, to date Navision has only had production forecasting as a built-in module, while Axapta might have had deeper forecasting software, but not sophisticated enough to support collaborative inter-departmental processes. While forecasting might have had a poor reputation in manufacturing, recently there has been an increased awareness that with good collaborative planning and forecasting software, which would support collaborative sales and operations planning (SOP) processes, many manufacturers could improve their business performance. Like with the production planning, manufacturers need to remain on top of forecasting by leveraging much shorter review intervals than traditional quarterly updates. By taking forecasting more seriously and supporting it with smart, interactive tools, all the parties within the manufacturing businesses should be on the same page at the end of the day, which should result with agility.
the other hand, enriching MBS applications by acquiring a pure-play SCM vendor
with a full-fledged broad SCM functional footprint would only burden the MBS
product development staff that is already up to their gills working frantically
towards Project Green, which will supposedly feature all MBS
products on a single, global code foundation built on the Microsoft
Business Framework and .NET Framework, some time in
2006, when Microsoft is also aiming at coordinating the delivery of its next-generation
Longhorn platform too. For the reasons above, and given the
time-to-market urgency, the alliance with TXT seems a logical move. TXT's demand
planning and forecasting technology has been well-known in Europe, and existing
and prospective MBS' ERP system users should benefit from new capabilities in
the near future. Operationally, the software will import data out of MBS ERP
systems, run its modeling algorithms to generate the forecast, and update the
respective master production schedules (MPS) within these systems.
distribution agreement with MBS will potentially increase TXT's visibility beyond
local European markets (MBS has over 250,000 customers in over 130 countries
worldwide), and will provide it with a possible formidable indirect sales channel.
The deal might also give TXT additional opportunities to sell not only demand-planning
software but also other modules in TXT's Supply Chain & Customer Management
(SC&CM) suite down the track. Similar to the Microsoft CRM
product (see Microsoft
Paints CRM Landscape On Lately A 'Still Nature' Business Applications Scenery),
the appeal of which has largely been within its Outlook-like interface, MBS's
customers should benefit from the familiar Excel-like interface of the TXT demand-planning
solution and at a reasonably low price.
Not coincidentally, the MBS product too will facilitate system-to-system communications via XML, traditional value-added network (VAN)-based electronic data interchange (EDI), or Internet-based EDI (on the AS2 standard), whereby using secure extensions to Outlook or Excel, small and midsize companies linked to MBN will be able to exchange purchase orders, acknowledgements, advanced shipment notices (ASNs), and other business documents germane to SCM transactions, all with minimized (if not completely eliminated) manual data entry and paper-based processes.
Mid-market manufacturers, which have been overwhelmed by the huge scope and complexity of ever-expanding SCM processes, might want to start initially from enabling the convergence of marketing and manufacturing/distribution by balancing consumer demand against shelf life, appropriately planning production resources/constraints initiated by trade promotions, and determining the demand quantities for new product introductions. In the consumer products goods (CPG) sector, which happens to be one of TXT's sweet spots, this is of key importance, since marketing drives demand through the use of promotional activities advertising, deals, point of sale promotions, etc. The supply chain must stay in sync with marketing and marketing must stay in sync with the supply chain for the generated demand to be fulfilled. The demand driven supply chain requires a single, consistent, demand-based plan that optimizes marketing, inventory and replenishment decisions.
The messages of enabling customer satisfaction and retention, freeing-up working capital by reducing inventories, increasing returns on trade promotions, bringing new products to the market faster than competitors, and achieving top-line growth by reducing stock-out situations, as the first manageable SCM initiatives, should strike a chord with the risk-averse target. The objectives of end-to-end supply chain visibility are better plans, better service, increased inventory turns, and higher profit margins, where MBS Demand Planner might answer most of their requirements.
concludes Part One of a two-part note.
Two will discuss challenges and make user recommendations.