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SYSPRO - Awaiting Positive IMPACT From Its Brand Unification Part Three: Challenges and User Recommendations

Written By: Predrag Jakovljevic
Published On: March 15 2003

Challenges

Last fall, SYSPRO, a privately held global provider of enterprise software for small to medium enterprises (SMEs), with its US headquarters in Costa Mesa, CA (www.syspro.com), announced a new global brand, representing the culmination of more than 18 months of extensive internal market research and preparation. To optimize brand awareness and increase market penetration, the company, SYSPRO and its product, IMPACT Encore, will be branded under the unified SYSPRO name.

Nevertheless, in addition to some caveats mentioned earlier, SYSPRO will have to overcome other significant challenges in order to continue to thrive in a highly competitive environment. Its market awareness remains limited, despite recent departure from the non-cohesive marketing of its product and company brand names (IMPACT Encore and SYSPRO). On the other hand, the increased awareness will also instigate mushrooming competition that will now inevitably be appearing from many directions since the company competes in a variety of vertical niche areas.

To that end, in the traditional discrete manufacturing ERP market, the threat comes from its peers like Epicor, J.D.Edwards, ROI Systems, MAPICS and SoftBrands, to name but a few, to the Tier 1 vendors storming down the market. In the pure WMS mid-market, there is an army of recently bullish players like RedPrairie, Manhattan Associates, HighJump, and Provia, with superior WMS/TMS functionality such as multi-modal transportation, labor management or supply chain event management (SCEM). Further, the Tier 2 ERP vendors like Adonix, SSA GT, Lilly Software, ACCPAC, MBS Axapta and MBS Navision, which have also espoused a strong WMS product in addition to their traditional back-office product, could prevent it from further penetrating the ERP manufacturing and distribution mid-market, and not necessarily only with a WMS solution.

Also, although the company has a notable worldwide presence, it has no local total market leadership in any individual country owing to the fierce channel competition from more aggressive, better known and wealthier horizontal market competitors like MBS, Sage, Epicor, and Scala to name some. SYSPRO's VAR channel therefore still needs both number bolstering and morale boost, given some regional Microsoft Business Solutions' (e.g. Great Plains, Navision, or Solomon) and or Best Software's (e.g., MAS 90 or SalesLogix) resellers often generate more than $10 million in annual revenues. However, SYSPRO's VAR channel is extremely focused on manufacturing and distribution, which provides a very strong capability in its field.

In addition to noting how painstaking a process it has been to build the strong channel (i.e., almost two decades for Sage's 19,000 or MBS' 4,500 resellers), one is to see how the likes of SYSPRO will play against these cash laden vendors' recent enticing financing arrangements for their VARs and customers, particularly during these days of cash scarcity. Maybe, to that end, SYSPRO should try to interest its resellers in industry niche specialization and provision of vertical extensions (which these would own' and thereby be entitled to additional revenue), and/or should internally vertically incline its product offering and develop industry templates, wizards and implementation methodologies to further decrease the time and expense of implementation projects. While developing vertical solutions in-house has its advantages in terms of controlling the releases and policing' the code development (i.e., avoiding the Independent Software Vendor (ISV) partner's and/or the reseller's delay in catching up with the master vendor's integrated software package release because of heavy modifications), its downside is in slower time-to-market, and in helping VARs get up to speed on the new offerings, teaching them how to sell, market and implement them rather than to have them put their money where their mouth is.

Incidentally, SYSPRO functionality scope across the board, although broad and well balanced, has not been recognized as a differentiator in the market as the company does not exhibit much of a vertical focus in its marketing. SYSPRO has developed lateral functionality, often exceeding industry niche packages without this being commonly known. The competition is not negligible even in the plastics industry owing to the likes of IQMS' and DTR Software's well-attuned offering. Again SYSPRO functionality against these competitors is often deeper and more extensive. However, even with this, SYSPRO is likely to meet fierce competition from industry specific packages, despite the fact that they may not be as well-rounded in accounting, manufacturing or technology.

Some modules that are increasingly offered by many ERP systems, such as product lifecycle management (PLM), hazardous materials reporting, enterprise asset management (EAM) and plant maintenance, are only possibly slated for future releases. Without the above, SYSPRO's strategy for supporting the .NET architecture framework and the consequent accessibility of its functionality may not be that groundbreaking, given some of its peers have been far ahead in porting parts (or even the entirety) of their applications onto .NET, in delivering flashy portal applications, and in their forays to deploy wireless devices (see Frontstep Ups The .NET Ante, Epicor Claims The Forefront Of CRM.NET-ification and Made2Manage Affirms Its Technological Astuteness). SYSPRO also trails these competitors in its ASP/hosting and/or private trade exchange (PTX).

However, the SYSPRO Document Flow Manager (DFM), an XML-based collaborative commerce engine, is poised to make forays into the collaborative solutions arena. The DFM creates opportunities and simplifies interoperability and integration into disparate systems. Further, SYSPRO has been proactive in delivering a comprehensive .net based development environment to further extend functionality. The concept of developing custom solutions without undermining the integrity of the SYSPRO business logic or data, is novel as a result of the tools and the holistic attitude that SYSPRO has taken in this regard

Also, while the product's applicability to diverse discrete manufacturing environments has resulted with many opportunities within diversified companies, it sometimes can be a curse as in case of a customer requiring a sharp industry-endemic functionality. For instance, when the importance is on the automotive industry or lean manufacturing idiosyncrasies, SYSPRO will likely show poorer than QAD, BRAIN, SoftBrands or SSA GT, while IFS, Intentia, Baan, may fare better within complex manufacturing/big capital project management. The analogy could go on for many other industries.

This is Part Three of a three-part note.

Part One detailed recent SYSPRO announcements.

Part Two discussed the Market Impact.

User Recommendations

SYSPRO remains a stalwart vendor within the mid-market accounting, manufacturing, and distribution software markets. The current market trend is towards vendors that can provide comprehensive solutions for small and medium-sized companies with a justifiable return on investment (ROI), and SYSPRO seems to have a fair shot. Moreover, with its global coverage, multi-national product capabilities, suitability to diverse manufacturing environments, as well as with its cross-platform support and excellent service & support track, the vendor seems poised to give run for the money to almost any contender.

SYSPRO's target market is single and multi-site, discrete manufacturing and distribution companies (and their divisions) with up to $500 million-a-year revenue range and up to 250 concurrent users per site should consider the company's value proposition. These companies generally are rapidly growing and agile, but have a limited IT budget/staff, a conservative tried-and-true IT strategy, and solid accounting, discrete manufacturing, distribution, CRM and B2B e-commerce collaboration requirements. SYSPRO has a broad range of high-profile customers with its largest customers having over 1000 users.

Looking at industry sectors, the company covers distribution and manufacturing, with a broad range of industries it could fit industrial & commercial machinery and equipment, plastics injection mold & extrusion, plastics & metal cut-shape suppliers, primary/fabricated metals, automotive & auto parts, high-technology, electronics, furniture, consumer packaged goods (CPG), food & beverage, wood products & paper, medical instrumentation, aerospace products, etc.

The industries that would particularly benefit from using its products are those industries that need single and multi-site distribution and/or discrete manufacturing capabilities with strong accounting functionality. SYSPRO is particularly efficient in multiple manufacturing modes including make-to-stock (MTS), make-to-order (MTO), engineer-to-order (ETO), configure-to-order (CTO), batch process, assembly and job shops, providing added leverage to companies doing mixed-mode manufacturing. SYSPRO is also very attractive to companies that have a need for an extended enterprise solution requiring ERP, CRM, APS, WMS and e-commerce solutions. Enterprises looking for a much broader functionality beyond traditional ERP boundaries (e.g., more intricate CRM and collaborative functions such as content management, portals/exchanges, then product lifecycle management (PLM), e- procurement, plant maintenance, and/or deeper process manufacturing functionality) from a single vendor may benefit from evaluating other products at this stage. However, SYSPRO remains a solid fit for a mid-market distributor or manufacturer looking for a nearly end-to-end supply chain solution.

Existing SYSPRO customers should review the above-mentioned enhancements with their local affiliate with an eye towards extending the value of existing applications. Existing users of earlier product releases that run on ageing proprietary C-ISAM database may also benefit from querying the company's current offering, future product blueprint, product migration path, service & support, and/or scalability strategy.

Very detailed information about SYSPRO 6.0 is contained in the ERP Evaluation Center at http://www.erpevaluation.com.

 
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