Epicor Claims The Forefront Of CRM.NET-ification. Part 2: Market Impact and User Recommendations

Part 2: Market Impact and User Recommendations
P.J. Jakovljevic & L. Talarico - June 12, 2002

Event Summary

On May 21, Epicor Software Corporation (NASDAQ: EPIC), one of leading providers of integrated enterprise and e-Business and collaborative commerce software solutions solely for the mid-market, announced Clientele Customer Support 8.0, the first application of the Clientele CRM.NET Suite that is completely built on the architecture of the Microsoft .NET Platform. Clientele Customer Support 8.0 is envisioned to provide a "hands/administrator free" deployment model allowing the application to be distributed from a single Web site.

By harnessing .NET possibly more zealously than its creator Microsoft's Great Plains and Navision enterprise counterparts amid still difficult market situation, Epicor might be showing us that 'a brave heart and wise mind' might keep it in the mid-market leadership race amongst a slew of formidable opponents.

The company has recently also made attempts to logically group and brand an unwieldy number of its products. In manufacturing, which would be approximately half of its customer base, Epicor has Vantage and Avante as its major ERP products while the 'e by Epicor' is an umbrella brand name for a number of products (as eIntelligence, eFrontOffice, eCommerce, eBackOffice, eProject, ePortal, eCentre, etc) that cater to both non-manufacturing industries and the manufacturing ERP offerings. The iSolutions group, which includes the Avante, DataFlo, ManFact and InfoFlo products and the eManufacturing group, which includes the Vantage and Vista ERP products remain strategic to Epicor and will continually be enhanced both with core ERP functionality and with extended-ERP components such as enterprise portals and Web storefronts. The release of the Web-enabled eFrontOffice product and its integration to back office solutions including eBackOffice, eManufacturing (Vantage) and iSolutions (Avante) products, speak in that regard. As for specialization, Vantage remains the preferred system for make-to-order (MTO), job shop enterprises, while Avante leans towards complex manufacturing and project work environments; Vista, on its hand, is the low-end product for much smaller discrete manufacturing enterprises.

This is Part Two of a two-part analysis of recent announcements from Epicor. Part One detailed the recent announcements.

Appealing to SMEs

Coming back to the announcement of Clientele, Epicor seems to have positioned itself well for the impending gold rush into the SME CRM market segment, which has been largely underserved so far. The needs of SMEs like having solutions that are scalable and reliable but cost-effective, functional but easy to deploy and customize, and open but have a relatively low barrier to entry (TCO), have yet to be met completely. The likes of Siebel Systems and big ERP CRM wannabe's are overkill and cost/time prohibitive. On the other hand, recently announced Microsoft CRM might likely not have all the needed functionality. Given the high prevalence of Microsoft technology in the SME market, Clientele's early .NET embracement should be attractive to Microsoft-inclined customers evaluating CRM options. Web services' have potential to offer interoperability at an acceptable cost, while satisfying companies' need to use existing technology and skills.

The move should further bolster legitimacy of the .NET platform and the concept of Web services, which many still consider to be hype and a strategy in flux. Since Web services will likely become an enterprise applications integration (EAI) integration facilitation tool, .NET-based applications, like Clientele offer a prospect to meld more easily with third-party and legacy applications.

Epicor's CRM (Clientele, a.k.a. Epicor eFrontoffice) solution enables SMEs to manage their entire customer lifecycle by enabling businesses to gather, organize, track, and share prospect, customer, competitor, and product information into a single database capable of dispensing critical data throughout entire organization. The product might appeal to companies that need more advanced CRM capabilities or must manage customer relationships through diverse lines of business (LOBs). These customers would most likely require extensive customization, for example building workflow-managed processes to align sales teams by territory, product line or campaign.

Clientele also offers a multitude of out-of-the box sales process reports such as Open Calls by Hour, Marketing Activity Analysis, Return Material Authorization (RMA) Detail, Account Manager Opportunity, Continent Pipeline by Product, Follow-ups by User/Due Date, etc. Although the product could long have been implemented incrementally in a component-fashion or all at once, its flexibility and enhancements extensibility (even by third parties) should be significantly bolstered by its new .NET architecture platform. Also, having long been in the market, the product is not a me-too CRM newcomer product, but rather a product that capitalizes on the melded experiences of its CRM and ERP focused erstwhile parent companies.

Epicor thereby remains a prominent mid-market leader, with ~180 million in revenues, 950 employees and 15,000 customers worldwide (with over 3,000 CRM customers). In addition to its focus and understanding of the mid-market, the company has established a solid global infrastructure and localized product capabilities, as well as a vertical focus for some industries. Still, while the long awaited porting of Epicor's products onto Microsoft SQL Server as well as continued focus on .NET framework should significantly relieve the company's R&D burden and improve its general competitiveness, the remaining work of making all the above product portfolio .NET compliant remains colossal.

Existing 3,000 Clientele customers, will sooner or later have to migrate from the current non-.NET application, although Epicor is committed to supporting these customers indefinitely, which will draw on its duplicated R&D and support resources. One should imagine the magnitude of the effort when the plethora of its above-mentioned products, some with extensive customer bases on non-Microsoft technologies, should follow the Clientele's path. Executing these initiatives without significantly increasing its top line will be a notable challenge. Although its fierce competitors, Microsoft Great Plains/Navision, Onyx, Pivotal, Interact Commerce/Best Software, and FrontRange, to name some in the CRM space (without mentioning a slew of ERP competitors) are not in any better conundrum regarding existing customer base migration, Epicor's stronger financial situation and/or brand recognition might make prospects more amenable to believe that their success is more plausible.

User Recommendations

Epicor's ability to enhance its products and its determination on executing product and technology strategies deserves commendation. Current users are advised to follow Epicor's new product introductions and keep an eye on its future product strategy. The positive sign is the company's more manageable and narrower focus, as demonstrated by its most recent results.

Small and medium size businesses with less than $50 million annual revenues using either Epicor back office applications or other Microsoft-centric enterprise applications, and that have solid CRM product needs (sales & marketing automation, and customer service activities) should react positively to this news. They should evaluate the above CRM functional enhancements as a way to add value to their existing applications although bearing in mind that other vendors currently offer mature and strong products as well. These companies should consider adding the announced functionality to their requirements list, as to secure value in terms of both cost savings and increased efficiency.

However, enterprises that have integration needs outside of the Microsoft environment, with multiple-platform and strong scalability requirements, or need complex CRM functions such as product configuration, content management, personalization and relationship optimization, might want to look at more sophisticated offerings.

Mid-market companies with up to $500 million in revenues that are within Epicor's industries of focus (e.g., Internet startups, hospitality & food service, financial services, software & computer services, metal fabrication, capital equipment manufacturing, and electronics) and companies with a need for a single-source functionality beyond core ERP scope, should benefit from including Epicor in the short list of potential candidates for the enterprise applications selection. As for manufacturing segment, Epicor targets mid-market manufacturers across the board, covering discrete mixed-mode, make to order (MTO), make to stock (MTS), configure to order (CTO), engineer to order (ETO) and project manufacturing. Key vertical industries are aerospace, automotive, furniture/windows/doors, capital equipment, job shops and metal fabrication. Users from industries not mentioned above may benefit from evaluating some stand-alone Epicor product components (e.g., CRM, APS, e-commerce, and business intelligence application suite) on an opportunity-by-opportunity basis. This as well as obtaining Epicor's implementation guarantee could be leveraged against other vendors in a selection.

Existing users of Epicor products that face stabilization and/or discontinuation may benefit from querying the company's future product migration path, service & support, and/or scalability strategy. As for the newly added and/or anticipated functionality, users are advised to ask for firm assurances on the availability and future upgrades timeframes, and more detailed scope of enhanced product functionality. Any organization evaluating Epicor should consider existing functionality only, and, in the case of final selection, should inquire and negotiate incorporation of new applications components now at negotiated license fees, given its recent and forthcoming new product introductions. They should also inquire about any possible impact (or benefits) of migrating towards more advanced offering. Taking stock of current resources VB and C++ skill sets and assessing the effort to train these into VB.NET and C# is highly recommendable at this stage.

More comprehensive recommendations for both current and potential Epicor users can be found in Epicor Software Corp.: Completing Painstaking "e"Volution. Also, very detailed information about flagship Vantage and e by Epicor products is contained in the ERP Evaluation Center.