Navision Enhances Its e-Vision And Looks To Expand Vertically
3: Challenges & User Recommendations
In November 2001, Navision (CSE: NAVI), a Danish provider of enterprise
business solutions for mid-sized companies, extended its business-to-business
(B2B) solution, Commerce Gateway, to the Navision
Axapta product line, giving Navision Axapta customers the opportunity
to save time, lower costs and orchestrate business processes more effectively.
With Commerce Gateway, Navision Axapta customers should supposedly be
able to work more proactively with customers, partners and vendors. They
join the Navision Attain and Navision Financials
customers who were introduced to Commerce Gateway earlier this year.
Navision developments discussed in Part One of this note include:
Axapta Line Extended
Merger Financial Results
Part Three of a three-part note on Navision. Part
One detailed the announcements. Part
Two discussed the Market Impact.
Challenges of Expanding Sales Channels
Moreover, to take advantage of the expanded and enhanced product line,
Navision is focused on adding many more resellers in the North American
market and establishing the Navision brand in the small- to-medium-size
market for ERP solutions. While the company has enjoyed a long and substantial
presence among small-to-medium-size organizations in Europe and Asia-Pacific,
until recently, however, the company operated relatively quietly in North
America. From the mid '90s when the company entered the market, it has
focused on signing up a handful of key resellers and establishing a notable
it will by no means be easy, as the battlefield for vendors providing
enterprise applications to mid-market companies has long been crowded,
and one should expect fierce competition to continue.
the financials and accounting mid-market, Navision has long been competing
with vendors such as Sage, Scala, Agresso, and ACCPAC (a division of Computer
Associates), which all have wide international coverage. In North America,
vendors such as Microsoft Great Plains Software and Epicor Software are
entrenched competitors, which make it relatively difficult for non-US
applications vendors to find suitable distributors in the largest IT market
in the world. The fact that Navision currently has only around 180 resellers
in North America speaks volumes in that regard.
moves are to be expected from a plethora of established manufacturing
mid-market North American vendors, which will vigorously defend against
Navision's intrusion. The Tier 1 applications vendors will be a significant
threat too, as they expand their focus to include mid-market companies,
partly as a response to the great potential in the this market segment,
which has been penetrated far less than the high-end of the market.
will, therefore, have to more effectively leverage its large partner network
of over 2,200 resellers called Navision Solution Centers (NSCs) to further
promote brand awareness in the global market. Despite the complementary
nature and different target markets of the main product lines, the pain
in appropriate positioning of these remains. It is also likely that the
channel partners will face a conflict in terms of market overlaps, as
well as of traditional association with a certain product line regardless
whether it is the best fit for a certain opportunity.
Consequently, Navision has realized that encouraging the NSCs' vertical
specialization is of key importance for global expansion and penetration
of some well-defended markets. The practice of allowing the local representative
(NSC) to develop locally endemic functionality, has been proving to be
one of Navision's tenets of success. This practice proves particularly
useful when product time-to-market is critical. As applications such as
financials, HR and manufacturing must be adapted to meet local needs in
terms of language, legal requirements and business practices, Navision
should combine local autonomy with the need to leverage local best practices
across national boundaries.
NSCs develop new offerings for local vertical markets, there is still
no firmly instituted structure for making such new functionality available
worldwide. Navision should actively promote the best offerings of their
local partners, particularly by certifying the products and providing
a repository with centralized information about product availability.
that end, Navision US operations has recently announced Navision Industry
Solutions (NIS) Program in order to support NSCs that are focusing sharply
on a narrow industry segment and that consequently better leverage their
marketing and R&D expenses, as well as the experience. Further, there
has been some level of rigorousness to the vertical solutions qualification
procedure that Navision has imposed upon its resellers. An NSC is supposed
to provide a sound business plan and marketing strategy, a total industry
solution as opposed to an add-on (a specific functionality that is highly
desired by a specific industry segment rather than from many different
segments), customers willing to be pilot sites, and to have a certified
developer on staff and full access to all development tools.
word "partnership" does not seem to be used loosely in this case - Navision
has been showing a congenial approach and true commitment to the success
of its channel, although it is still figuring out what more incentives
and support it can provide to entice NSCs to make the vertical investment.
On top of typical benefits like global sales opportunity, lead generation,
and access to Navision's training facilities, product news and web-based
seminars (webinars), some NSCs have reportedly been attracted by the exit
strategy prospect - they have a much more valuable asset to sell to Navision
(the developed solution) rather than only their customer base. Further,
the autonomy and freedom to develop a solution independently, as opposed
to be constrained by typical rigid and slow R&D policies of other vendors,
have reportedly made some companies convert to an NSC and defect from
some well-known domestic competitors.
main differentiator though should be the sharpness of vertical focus that
Navision intends to deliver; Granularity of vertical focus will go down
to the level of six figures US-SIC (Statistical Industry Classes) codes.
This level of vertical focus possibly represents a thought leadership
that other vendors may find hard to emulate. As an illustration, the following
are already developed and 'in progress' vertical solutions:
Rental Advantage, Process 800 (Food & Chemical), Apparel Manufacturing,
Jewelry Manufacturing, Wineries, Fund Accounting, Fastener Distribution,
Retail Supplier Link (for distributors and manufacturers that sell
to retail chains), Contractor Distribution (for distributors that
sell to general contractors), and FDA BioPharma Solution.
developed: Municipal Airports, Construction (AIA Billing & Certified
PR), Furniture, and Kanban Solution.
it will take some doing to institute the global availability of these
solutions and to prevent NSCs' duplication of effort and/or product
line/market conflicts, the idea of each NSC in the US having its own
vertical solution might not be that far fetched some time in the future;
therefore, the incumbent vendors should better start thinking about
their appropriate responses to the challenge.
As the current market trend is towards vendors that can provide well-rounded
but vertically focused solutions for medium-sized companies, Navision
seems to have positioned itself well by garnering the above arsenal of
products. The merger outline was sound, the common groundwork has been
identified, and the time for delivery and execution is on.
and existing Navision customers should evaluate the offered product lines,
bearing in mind what the competitors have to offer too. As with all new
releases, users should employ a critical approach in their evaluation
of Navision, and require the local reseller to demonstrate specific technological
and functional capabilities.
a general rule of thumb, consider Navision Attain/ Navision Financials
if you are rapidly changing small or medium enterprise with less than
$100 million in revenues. The product is open-source and customizable;
it features a proprietary integrated development environment, which is
very user-friendly and easy to learn. Navision also has great ODBC connectivity
the other hand, Navision Axapta should be evaluated in less agile and
changing medium and large enterprises (up to $250 million in revenues)
where the traditional product feature-functions and scalability still
play very important part of the selection. Although the MorphX Development
Suite can be used to customize application components, such as tables,
forms, reports, queries and menus, customers should ensure that the system
modifications are preserved during the product upgrade. The product is
best suitable for manufacturing companies with less than 250 concurrent
users within less than 2,500 employees. While the above cited benchmark
figures are impressive, users should inform themselves about the real-life
system performances at equivalent reference sites rather than to rely
on the data produced within laboratory-style experimental conditions.
clients should conduct thorough research on vertical focus, available
resources and reference sites of a regional NSC. Current users contemplating
a sound CRM solution should be pleased with what is becoming available
soon (Siebel Connector) bearing in mind that Navision offers some
native CRM functionality too. Existing customers should review the above-mentioned
B2B enhancements with the local NSC with an eye towards extending the
value of existing applications.
customers with products based on Navision's proprietary technology, 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 Navision should consider the necessary enhancement
modules an essential part of the product and insist on reviewing them
as part of their evaluation.
Navision XAL and Navision C4/C5 customers should be asking
Navision whether and when the above CRM and B2B abilities will be added
to their investment. They should also inquire about any possible impact
(or benefits) of migrating towards more advanced offering.
comprehensive recommendations for both current and potential Navision
users can be found in Navision
Software a/s: Mid-market invasion.