Syspro Hatches 'Encore' IMPACT On SME Manufacturers. Part 2: Market Impact




Syspro Syspro Hatches 'Encore' IMPACT On SME Manufacturers

Part 2: Market Impact
P.J. Jakovljevic - November 8, 2001

Event Summary 

On September 7, the Syspro Group, a privately held Worldwide provider of enterprise software for small to medium enterprises (SMEs), with its US headquarters in Costa Mesa, CA (www.sysprousa.com ), was named a recipient of the START Magazine Vision Technology & Business Award for 2001 in the Manufacturing ($50 million to $200 million) category. In naming Syspro Group as the winner of the START Vision Award, the judges expressed admiration for the company's recent development of the Material Yield System, a software solution that enables manufacturers and distributors to maximize the use of scraps.

This is Part Two of a two-part note on Syspro. Part One detailed recent developments. This part discusses the Market Impact and makes User Recommendations.

Market Impact 

Although it has been present in the market since 1978, Syspro has not been a very vocal vendor, however the latest blitz may prove that the company is changing its marketing approach. Syspro has recorded significant growth in its client base since 1997, which has led to the IMPACT product becoming one of the most widely used ERP solution in the small-to-medium enterprises (SMEs), with over 6,000 customers. That has promoted Syspro into a serious challenger in the SME discrete manufacturing market, since, with estimated revenues in 2000 at about $50 million, Syspro's revenues grew around 10% while many of its peers have seen corresponding decline.

Syspro has worldwide operations, as its products have been installed in 50 countries, and it continues to offer its products and services through the reseller channel/VARs, which has also expanded during the last year. The flagship IMPACT Encore system, has traditionally covered the full spread of modules, including accounting, order processing, inventory management, finite and infinite scheduling, shop floor control and payroll (the alliance with Best Software for ABRA system), with the indication of high levels of customer satisfaction.

IMPACT's functionality is equitably solid in accounting, manufacturing and distribution areas, which is advantageous compared to competitive products that are either mainly strong in accounting (e.g, Microsoft Great Plains and Navision) or in manufacturing/distribution (e.g., Lilly Software and ROI Systems).

Expanded Solutions 

Although Syspro IMPACT Encore is a comprehensive ERP solution for small- to mid-sized enterprises, the company has recently been striving to also be known as a vendor that enables clients to excel through the use of extended-ERP applications. To this end, Syspro has expanded its solutions footprint with applications such as customer relationship management (CRM), warehouse management system (WMS), e-commerce, and advanced planning, scheduling and execution (ASP&E) software (a.k.a. Total Factory Planner). This functionality umbrella should help manufacturers pursue a concept Syspro denotes Strategic (e)Fulfillment, which is envisioned to enable management to make better decisions since it provides visibility and control of all aspects of the supply chain. Moreover, it becomes the means by which these decisions can be executed in the most efficient manner.

Syspro has from its early days had a sole focus on the lower-end of the ERP discrete manufacturing market. The company has long demonstrated a deep understanding of this market dynamics and its pragmatic requirements of inexpensive products, fast and simple implementations, and good service and support. It has also achieved good coverage with its indirect channel, which is an important criterion for long-term success in the SME market segment.

The above native ERP extensions and the product openness promote it as one of the first of the smaller ERP vendors with the ability to embrace customer and supplier activities tied to a core transactional back-office system. Syspro can, therefore, often offer one-stop-shop functionality for many versatile discrete manufacturing environments (from forecasts driven, repetitive make-to-stock (MTS) to custom job shop, including mixed-mode manufacturing) in the low-end of the market. Also positively impacting the sales of its flagship product suite, IMPACT Encore, are its strong multi-site and multi-national product capabilities, which are stronger than those of many more visible competitive products (e.g., Made2Manage, Lilly Software, Fourth Shift, ROI Systems, etc.).

End users of smaller enterprises have also been impressed with its intuitive user interface, which combines on-screen graphics with a functional flow for better visual orientation, and also provides consistently deployed keyboard shortcuts for heavy data entry. It also offers a wealth of administrative features like workflow & event management, querying tools and a built-in report writer.

IMPACT has also been technologically adequate for its target market, as it exhibits n-tier client/server architecture, is fully Windows 2000, Linux and UNIX compatible, and runs under SQL Server 7.0 database, although only starting with the release 5.0. Syspro has long been committed to the Microsoft technology and the product is on par with the latest commercially available technologies, which are well attuned for its target market.

With the support for XML and COM, Syspro offers e-commerce applications tightly integrated to IMPACT back-office, as well as the interconnectivity to third-party products. The above-mentioned e.net solutions architecture should provide a way of directly remotely accessing the functionality within the ERP system, and in such a way that does not compromise its business rules and security. The framework, which delivers the system's functionality as discrete objects of code, supports capabilities such as integrated e-commerce Web storefronts, access to ERP data via wireless devices, and integration with best-of-breed applications.

Syspro's endeavor at some vertical specialization, as seen in its new Material Yield module, is also commendable. The module targets manufacturers that cut sheets, tubes or rods of metal, wood, or plastic, and it takes into account all aspects of the cutting process, including cutting-blade thickness, so that users can better leverage raw materials inventories and maximize yields. Look for Syspro to develop ever-deeper functionality and based on the latest technology such as Microsoft .NET.

Challenges 

Nevertheless, Syspro will have to overcome some significant challenges in order to continue to thrive in a highly competitive environment. Its market awareness is limited, and possibly aggravated by the non-cohesive marketing of its product and company brand names (IMPACT Encore and Syspro). Also, although Syspro has a worldwide presence, it has no local market leadership in any individual country owing to the fierce channel competition from more aggressive, better known and wealthier competitors like Microsoft Great Plains, Sage, Navision, Epicor, and Scala to name some.

Further, IMPACT's functionality 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 except for the above-mentioned specialized module. Some modules that are commonly offered by ERP systems, such as requests for quotation (RFQ), shipping, and engineering change control, are only slated for release later this year. Also, the company has been seemingly inactive in pronouncing its strategy for supporting MS .NET architecture framework, whereas some competitors like Made2Manage, Epicor, Navision and Microsoft Great Plains have been busy delivering the first software components based on that architecture.

Syspro also trails these competitors in its ASP/hosting, private trade exchange (PTX) and/or collaborative portal solutions strategy and delivery.

User Recommendations 

Syspro's target market, general multi-site and multi-national discrete manufacturing companies and their divisions with up to $150 million-a-year revenue range and up to 100 concurrent users per site, should consider the company's value proposition, but avoid selecting it without looking at what the other vendors have to offer.

We generally recommend including Syspro in the long list of vendors considered for an enterprise application selection by the lower-end of mid-market companies. These companies generally are rapidly growing and agile, but have a limited IT budget/staff, a conservative IT strategy, and less complex discrete manufacturing, CRM and B2B e-commerce collaboration requirements.

The industries that would most likely benefit from using its products are those industries that need to maximize yields, minimize waste and, where possible, return remnants to inventory, the Material Yield System module of IMPACT Encore is designed to address the specific needs of manufacturers and distributors that rely on the cutting of shapes and pieces from standard size materials - sheets, tubes, and rods - as part of the manufacturing process. The industries targeted are plastics, steel, rubber, paper, and lumber. Existing users of earlier product releases that run on C-ISAM database may benefit from querying the company's future two-pronged product strategy, product migration path, service & support, and/or scalability strategy.

 
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