Shows Far More Than A Bit Of A Backbone
- August 8, 2002
Part 3: Challenges and User Recommendations
the beginning of July, Scala Business Solutions (ASE: SCALA; www.scala.net),
an Amsterdam, the Netherlands-based provider of collaborative ERP software
for mid-size enterprises and subsidiaries of global corporations, launched
a number of initiatives to defend its turf by providing a counter value
proposition to users of its larger competitors, especially SAP.
the value proposition covered in Part One and Two should bode well to
creating increased demand and acceptance of the Scala offering in the
global SME market, nevertheless, there will be many challenges to overcome
in order to continue to thrive in this ferocious competitive environment.
fierce competition comes both from the multiplicity of its peers and the
Tier 1 vendors storming down the market. Likely the biggest challenge,
however, lies in the concurrency of iScala with SAP's Business One
offering for SMEs, the result of SAP's move earlier this year when it
acquired TopManage (see SAP
Tries Another, Bifurcated Tack At A Small Guy). SAP Business One is
targeted at companies with less than 250 employees, and includes financials,
sales, procurement, banking, inventory management, costing, multi-national,
and some basic CRM functionality. It also includes the impressive "drag
and relate" functionality available in SAP Enterprise Portal aimed
at alleviating the proverbial SAP R/3's complexity and functionality that
has become a liability rather than an advantage in targeting (and appalling
as well) SME's in the past. Given declining revenues, SAP is likely to
be hostile rather than agreeable to Scala's symbiotic' (likewise the
Plover Bird cleaning crocodile's teeth) relationship in penetrating and
servicing SAP's global customers' remote divisions.
for functional enhancements and product delivery work-in-progress remains
too. To that end, iScala Developer has been slated for the near future
enhancements including the Web deployment Server and Portal
Deployment Server, while iScala still has to match Scala ERP's language
capabilities (24 vs. 30). Also, Scala will have to build or acquire CRM
(currently limited to Service Management and Customer Information Management,
without any Sales Force Automation capability), supply chain planning
& execution (SCP&E) and product lifecycle management (PLM) functional
enhancements to round out a complete collaborative extended-ERP suite,
readily available by many of its peers (see Mid-Market
ERP Vendors Doing CRM & SCM In A DIY Fashion and Epicor
Claims The Forefront Of CRM.NET-ification and SalesLogix
and ACT! Officially Branded As Best Software) let alone the likes
of SAP, Baan, Oracle, Intentia and IFS.
Not to mention the need to bolster strategic supply chain planning, manufacturing
operational capabilities and shop-floor execution, well beyond a mere
Scala's market awareness might possibly be aggravated by somewhat non-cohesive
marketing of its product brand names (iScala 2.1 and Scala 5.1). Despite
thought out transition between the products (the upgrade path from Scala
5.1 to iScala 2.1 is reportedly no more complex that that between service
releases of Scala 5.1), Scala does not intend to immediately withdraw
Scala 5.1, as there are still existing customers who are in the middle
of a roll out of the product and as not all languages have been implemented
in this initial release of iScala 2.1. Further, the company has to build
the Hospitality and Pharmaceutical functionality into a forthcoming new
release of iScala 2.x. Some of the confusion that may exist over whether
the company has two product lines may have arisen because it did release
some of the collaborative functionality as "add on" capability to Scala
5.1 and at that time (in 1999) it named these add-on modules "iScala"
products. The functionality in these products has either been replaced
or will shortly be replaced by the fully integrated iScala 2.1.
of its product's globalization advantage (which is not a small thing though),
its genuine collaboration' message lacks much of differentiation traits
given that many other Microsoft-centric vendors like Ramco Systems,
Syspro, and Made2Manage to name but a few, offer like value
proposition of collaboration and visibility across the entire supply chain.
Ironically, the relationship between iScala and Scala ERP resemble the
one of mySAP.com collaborative platform and SAP R/3 ERP
systems, and Scala will have to be careful not to fall in SAP's former
trap of confusing the market with the product's genealogy, future migration
path, licensing, service & support discontinuation, etc. Scala should
thus try to more clearly articulate the message that true collaboration
can only be achieved if the core product is an ERP system which by its
very nature enables intrinsic collaboration (such as iScala), rather than
a product which has to have modules added on to achieve the collaboration
is Part Three of a three-part note covering recent initiatives by Scala.
One covered the initiatives. Part
Two discussed the Market Impact.
target market, general multi-site and multi-national enterprises with
up to $1 billion in revenues and their divisions with up to 200 concurrent
users per site, should consider the company's value proposition, and we
generally recommend including Scala in the long list of vendors considered
for an enterprise application selection by the upper-end of mid-market
companies that are a mixture of regional business, divisions and semi-autonomous
operations, each with its own autonomous requirements and business processes.
These companies generally are rapidly growing and agile, but have a limited
regional IT budget/staff, and less intricate discrete or batch process
manufacturing, CRM and B2B e-commerce collaboration requirements.
the product may be the most suitable as a solution for global mid-size
enterprises, worldwide dispersed, with strong requirements on distributed
infrastructure, security and with private trade exchange (PTX) and/or
collaborative role-based portal solutions strategy and delivery. The industries
that would most likely benefit from using its products are those from
Scala's proven core target sectors—including telecommunications, hospitality,
pharmaceutical, and food & beverage.
5.1 users should position iScala 2.1 central to their collaborative B2B
and B2C e-Business strategies although being informed about competitive
products cannot hurt. They should also question the company's future two-pronged
product strategy, the timeline for the products' language and other capabilities
convergence, product migration path (upgrade licensing arrangements and
ongoing service & support, and/or ramifications for not opting for iScala).
Non-Scala users may as well benefit from evaluating iScala product for
their collaborative needs.
global corporations with a centralized management philosophy looking for
strong global corporate financial and HR modules, for a highly scalable
cross-platforms solution, and for much broader functionality beyond traditional
ERP boundaries (e.g., more intricate CRM, PLM, or complex project /engineer-to-order
(ETO) functionality) from a single vendor may benefit from evaluating
other products at this stage. For more on the pro et contra of unified
corporate-wide enterprise solution deployment, see Standardizing
on One ERP System in a Multi-division Enterprise.