PowerCerv Facing Another Stormy Season
Written By: Predrag Jakovljevic
Published On: September 12 2000
PowerCerv Facing Another Stormy Season
According to its press release from August 17, PowerCerv Corporation,
a Tampa, FL based mid-market enterprise applications vendor, announced
the general availability of PowerCerv Vision, a process-mapping solution
that creates a vast business knowledge repository and supports the PowerCerv
Integrated Enterprise Response application suite by providing seamless
graphical representation of processes between e-business, Customer Relationship
Management (CRM), Enterprise Resource Planning (ERP) and Advanced Planning
and Scheduling applications.
of four distinct components - Business Processes, Implementation Methodology,
Total Enterprise Training and Data Migration - PowerCerv Vision helps
companies document their internal processes, facilitates faster system
installations and teaches users how to maximize the potential of their
PowerCerv enterprise application solutions.
Vision is a tremendous tool for our customers. It's an immense repository
of practical business information that helps users learn proper operating
procedures and teaches them how to maximize the capabilities of their
PowerCerv enterprise solutions," said Roger Ciarleglio, PowerCerv's senior
vice president of sales and marketing. "The software can literally walk
someone through how to write a purchase order or how to set up and document
a business process based on tried and true best practices."
August 8, PowerCerv Corporation announced the general availability of
three new e-business components of the PowerCerv eSeries - eCRM, eOrder
and eDashboard. Each component Web-enables its respective core enterprise
operations such as Customer Relationship Management (CRM), order management
and business intelligence. eCRM, eOrder and eDashboard address key business
operations for companies engaging in e-commerce. Accessible via the Web
and any common browser, each component is integrated with the ERP Plus
software suite to provide Web access to critical enterprise information,
which supports PowerCerv Integrated Enterprise Response. Integrated Enterprise
Response enables companies to extend their enterprise operations across
the virtual supply chain and to successfully respond to customers, suppliers,
partners and employees around the world 24 hours a day, seven days a week.
successful e-business requires collaboration. To compete and win on the
Web, companies must open their enterprises and share information with
their customers, suppliers and partners around the world," said Marc Fratello,
PowerCerv's CEO. "eCRM, eOrder and eDashboard are self-service applications
that help companies touch their virtual supply chains in a variety of
methods. These new applications deliver benefits to online customers by
increasing the number of touch-points and adding value via the Web. Also,
our customers achieve the unique benefit of e-business solutions that
are developed to integrate seamlessly into existing PowerCerv applications.
The result, one tightly integrated system from one vendor that links critical
front-office and back-office information to the world via the Web - while
providing an easier implementation and lower cost of ownership. Today,
supply chain-managed inventory, not just vendor-managed inventory, is
imperative - it's the key to real e-business success. eSeries enables
true e-commerce by delivering information and enabling collaboration across
the virtual supply chain - eliminating boundaries of time and distance."
on July 28, PowerCerv announced its financial results for the second quarter
ended June 30, 2000. From continuing operations for the quarter ended
June 30, 2000, the company reported revenue of $3.3 million and a net
loss of $3.1 million, or ($0.23) per share, in comparison to revenue of
$4.5 million and net income of $624 thousand for the second quarter in
1999 (See Figure 1).
license revenue grew significantly over our first quarter and is heading
in the right direction, we know, however, that we still have a lot of
hard work to do. We have taken a tough look at our company and made the
changes that we believe we needed to make," said Marc Fratello, PowerCerv
founder and CEO. "We have restructured our organization to take better
advantage of our people and resources. In addition we have reduced our
operating expenses and consolidated some of our operations to sharpen
our focus. We have reduced our breakeven point significantly in an effort
to be able to return the company to profitability. I feel that we are
now appropriately sized to take advantage of opportunities in the marketplace
and improve our execution. We are moving forward in extending additional
B2B e-commerce capabilities into our enterprise solutions. These e-business
initiatives will further enhance our Integrated Enterprise Response, which
allows companies to respond to their customers, partners, suppliers and
employees around the world."
on July 7, the company announced the resignation of Mike Simmons, president
and CEO, effective immediately. Marc Fratello, PowerCerv founder and chairman
of the board, became president and CEO. In addition, PowerCerv announced
that it has reduced its work force by approximately 37 people as part
of a company wide cost- cutting program.
PowerCerv has been going through its second major attempt to revitalize
itself. The first one had happened throughout 1996/97 (See Figure 2) when
the company did away with the unfocused strategy of serving many markets
to focus on the discrete manufacturing mid-market with a single product
suite - ERP Plus. As a result, PowerCerv divested several businesses that
were not in tune with the new strategy including a general consulting
business, an application development tools business, and reselling database
nature of its current difficulties is indisputably different. PowerCerv
ranks among a slew of Tier 2 and Tier 3 vendors that have been feeling
the Y2K-caused pinch. Like its brethren, the company is now in for a stormy
season as it continues to deliver new products and defend its turf from
ever more intruding bigger vendors, while coping with depleting resources.
PowerCerv CEO's openly grave message speaks in that regard. Its situation
has been additionally exacerbated by its low presence in an already crowded
marketplace, an undeveloped international distribution channel, high staff
turnover, the lack of indirect channel to supplement its strong direct
sales force, inferior service & support in the past, and an eroding financial
PowerCerv Corporation seems to have grasped the requirements of its target
market (SMEs) that wish to acquire most of their business applications
from a single source. To that end, it has continuously attempted to differentiate
itself from its peers by providing combined ERP, CRM, APS, and business
intelligence functionality, and technology that facilitates flexibility
and supports distributed, remote applications deployment. Its product
has long exhibited a componentized architecture, which is crucial for
deployment of e-business products.
witnessed in the latest announcements, PowerCerv continues to enhance
its eSeries suite of e-Business solutions with the latest attractive components
like eOrder, eCRM and eDashboard. eOrder provides the ability to do either
business-to-business (B2B) or business-to-consumer (B2C) transactions
over the Web. eCRM is the Web enablement of CRM functions. eDashboard
is a customizable Web-based screen that tracks key business drivers important
to executive officers such as CEOs and CFOs. Integrated Enterprise Response
is the company's term for the focus that its enterprise application software
brings to customers' minds.
immediate future will show whether PowerCerv is facing a devastating hurricane
or only a light tropical storm.
PowerCerv's target market, primarily North American manufacturing and
distribution companies with less than $250 million-a-year revenues, with
light manufacturing requirements and that require integrated ERP and front-office
functions, should certainly consider the company's latest value proposition,
but avoid selecting it without looking at what the other vendors have
to offer. Organizations with significant engineer-to-order and process
manufacturing requirements may benefit from evaluating other products.
The industries that would most likely benefit from using ERP Plus are
electronics, consumer goods, machinery, and fabricated products.
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.
companies outside of above-mentioned industries may benefit from evaluating
PowerCerv products on a stand-alone basis for their e-business needs and
leverage that information against other vendors in the selection. Current
users may want to inquire about the company's plans regarding Internet
marketplaces in their respective industries. However, any organization
evaluating PowerCerv products should still exercise moderate caution and
consider existing functionality only, until the company regains a consistently
profitable financial performance.