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Resurrection, Vitality And Perseverance Of Former ERP 'Goners' Part Five: User Recommendations

Written By: Predrag Jakovljevic
Published On: March 26 2003

Event Summary

Although encouraging, it might also be quite ironic that, during these days of general lethargy of the market, the rare good pieces of news, in addition to some usual suspect' software giant's upbeat financial reports due to their certain large oligopolies' heritage, have been coming from these reformed traditional ERP vendors, which, not long ago provided ammunition to some pundits to announce the obsolescence of ERP. This note examines four vendors once considered to exemplify failed business models.

Those vendors are:

  • Ross Systems

  • SSA Global Technologies

  • Geac

  • Baan

While a strong demand for services and incremental purchases of new extended-ERP functionality from existing client base, with a modest ooze of new accounts may not put the revitalized former ERP losers back on the top of the enterprise applications charts, they will likely remain safely in business and impede the mid-market forays of both Tier 1 brethren and the likes of Microsoft. Going forward in the near to mid term, enterprises will focus most of their budgets on improving and better leveraging already installed applications. All the vendors in case seem positioned well to respond to these requirements, given their value propositions that appeal to their respective markets but they will have to further reinvent themselves to take on more service-oriented architectures.

This is Part Five of a five-part note covering these four ERP vendors once considers "Goners."

Parts One and Two detailed specific vendors.

Part Three discussed the Market Impact.

Part Four covered the Challenges.

User Recommendations

The analyzed vendors' viability should no longer be an issue, at least it should not be used as an excuse for not putting these vendors on evaluation lists despite their focus within the sector. Their rejuvenated management teams have done a praiseworthy job of bringing the companies back to health while concurrently unveiling new product releases that can compete with the other products in the market. Deep vertical functionality, process integration, and the sharing of detailed product strategy blueprint with the market, should help users manage TCO during this era of conservative IT budgets.

While respective vendors' balance sheets were largely boosted by recent events, a more positive sign is their intent to become true software-developing vendors, not simply software collectors and dealers. The "catch 22" for current and potential users is to discern their respective vendor's corporate strategy viability within the product line/industry in question. Users will benefit from approaching their vendor and informing themselves about what the company plans for future service & support (or divestiture and/or product stabilization?) of its individual products are and what would the ramifications of migrating (or not) to its new product offering be. Users should vigorously question their provider on its future options and investigate alternative solutions now to fully understand their situation and options. As for the newly added and/or anticipated functional footprint, users are advised to ask for firm assurances on the availability and future upgrades timeframes, and more detailed scope of enhanced product functionality.

Existing customers, particularly those that have been yearning to rejuvenate their almost outdated technologies in place should welcome the above vendors' plans and check whether any new product in the family might be a fresh replacement, although product switching is typically a bumpy road for users of legacy applications. Less technologically aggressive global companies and/or their divisions that have been happy with their aged product instance's performance may be better off by staying with older instances for the time being.

Nevertheless, at the end of the day, users will have to undergo thorough what if' scenarios' assessment such as, e.g., porting onto another platform, keeping the status quo, migrating to another product from the same vendor, going for another ERP provider, etc. Identifying and approaching your local sales representative and vigorously negotiating assurances and firm commitment to future product roadmap, and service and support would be the best course of action at this stage. For more rationale on what to do about your legacy application in place, see The "Old ERP" Dilemma: Replace or Add-on , The Old ERP Dilemma: How Long Should You Pay Maintenance? , and The Old ERP Dilemma - Should We Install The New Release?.

Become involved in special interest groups, since by voicing your concerns/requirements that might have otherwise been overlooked by the vendor you will be increasing the likelihood of your system's future enhancements, and you might continue to push the vendor into even greater functionality for the industry. Be aware that no core development enhancements will likely be provided for very old products, but the benefit of OEM partner products might likely be extended to these as well. Also, XML interfaces might not be retrofitted over a few generations' old products, and thus some products will likely not receive major functional enhancements owing to aging technology.

Until the new product components, particularly through the OEM partnerships, have been officially delivered and put through their paces by reference customers, we advise potential and current users to evaluate the product with due diligence even within the vendor's industrial sweet spots. Although some vendors' partnership strategy is justifiable given the company's current state of affairs and as it results in offerings that it may have otherwise never happened, it places a burden on the company of having to rely on its partners' update schedules, is problematic in terms of integration issues and potential support difficulties

By having seemingly the least baggage, Ross Systems is poised to take advantage of the market that still has a need for payback-justifiable enterprise business applications, but with a dearth of true process manufacturing oriented software providers. Enterprises in the food & beverage, chemicals, life sciences, metals and natural products industries worldwide should look closely at Ross Systems. We believe that not many other enterprise software vendors offer the same commitment and focus on the Process industries and/or offer the same depth and breadth of targeted functionality Still, it is suggested that evaluations of Ross and all other vendors be conducted at a detail level, looking at not only what a vendor does, but also how it does it

Only by looking closely at "the how" aspects during the process of scripted software demonstrations can a company understand which vendors can meet their specific demands. Since requirements differ significantly among different types of process and discrete manufacturing companies, users should focus on those functions that make their kind of industry unique. From any vendor in the selection contest, do obtain in-depth demonstrations of those functional areas. Each e-business component should be put through its paces using a well-documented set of requirements, scripted scenario demonstrations that mimic the real-life business processes, and rigorous reference checking. Thus, insist on "scripted business scenarios demonstrations" or "conference room pilots," or even ask for the opportunity to conduct extensive system tests within your environment. We also suggest that companies insist on talking to customers that are an identical match, or at least very close. Many of the less focused vendors can force-fit their applications to address the basic need of a manufacturer in a certain industry, but at what cost and how complete is the solution remains dubious. Since many of these implementations cost many times more than the software itself, do inquire whether these vendors have, e.g., documented implementations with zero customizations due to their products' fit with the industry requirements that can be handled with basic configuration settings only.

On a more general note, existing customers of troubled vendors should address their concerns directly to the management and put contingency plans in place for ongoing support. Potential customers should proceed cautiously, buying components in a tactical manner and with a tangible, quick ROI. Stick to a series of smaller projects targeted at streamlining a specific business process. Keep it simple and smart, and be aggressive while negotiating risk allocations, price parity and general terms and conditions. Fixed project prices (as opposed to time and material pricing), milestone payment schedules linked to deliverables, and a penalty clause for late deliveries (as well as a profit sharing incentive for early completions) should be a matter of course. It also might not hurt to consider reviewing your current processes and systems to find any still undetected malfunctioning practice in accounting and/or financial reporting.

More on a general note, leading applications vendors are reaching parity in many areas. New users should base their software purchase decisions on many other criteria such as impending integration costs, product usability, product architecture, and TCO. Given the vendors' zeal for new license revenue, take advantage of any assistance offered by vendors identifying ROI, both in application customization for vertical industries, and in integration to your legacy applications.

Very detailed information about Ross Systems' iRenaissance ERP, Baan iBaan Enterprise, SSA GT BPCS, Infinium, and PRMS is contained in the ERP Evaluation Center at http://www.erpevaluation.com/

 
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