Great Plains’ Latest Product Offering — Ready to Stampede the SME Market?

Event Summary

In September, Great Plains unveiled new e-business solutions and services during its 15th annual Stampede to Fargo, a four-day international business conference for Great Plains partners. Value added resellers (VARs), consultants and solution developers who sell, support and develop integrated products for Great Plains e-business solutions, attended the event. Several new solutions were featured, including:

• a new e-commerce offering, eSell;
  
  
• a new application , TimeReporter, for Palm's handheld computing device;
  
  
• new solutions for eSupport;
  
  
• Great Plains' supply chain planning and execution series; and
  
  
• Release 6.0 enhancements to its leading e-business solutions, Dynamics and eEnterprise.

Great Plains unveiled its new, hosted e-commerce solution, eSell. The new solution helps customers bring their businesses to the Internet and enables business-to-business (B2B) and business-to-consumer (B2C) sales over the Web. Great Plains' partnership with Impressa offers an e-commerce solution with functionality for building, administering, and managing a Website, as well as an e-commerce storefront. eSell offers storefront integration to Great Plains Dynamics or eEnterprise through customer, inventory and sales order integration.

During one of Stampede's strategy sessions Great Plains also announced its first application for Palm's handheld computing device. TimeReporter for Project Series is a time-and-expense reporting application for Palm's handheld computer that synchronizes time-and-expense data via the Internet or local area network to Great Plains eEnterprise Project Series. It was developed in collaboration with Iambic Software.

Great Plains unveiled a new version of eSupport, its electronic support system for customers and partners. Available through a dedicated Web site, eSupport provides automated self-support solutions and assisted-support solutions. Improved navigation and convenient 24x7 access to technical solutions help customers increase productivity while decreasing support costs. eSupport is powered by software developed by Motive Communications.

Great Plains reviewed its business-to-business (B2B) collaborative commerce solutions that permit manufacturers, distributors and retailers to more effectively collaborate supply chain planning and execution operations with trading partners via the Internet. The Great Plains Supply Chain Series, powered by Logility, delivers end-to-end e-business by providing planning, forecasting and fulfillment efficiencies across trading communities.

Great Plains announced the addition of Cash Flow Management to Dynamics and eEnterprise through an OEM agreement with Encore Business Solutions, Inc. Great Plains Cash Flow Management allows financial managers to view summaries, at their desktop, of a day's cash inflow and outflow. Forecasting features identify shortfalls or excesses and help management analyze line of credit positions and other investment potentials.

Last but not least, presenters showcased new multinational features found within Release 6.0, the most comprehensive release in the company's history. These new multinational and international enhancements extend euro capabilities and allow customers to enter, view and reconcile transactions for denomination or euro currency checkbooks. Additional multi-currency capabilities enable customers to accept cash receipts in multiple currencies for a single checkbook, reconcile that checkbook and report on that activity. Multinational customers benefit from the new ability to run up to eight multiple languages against a single database.

Market Impact

Great Plains has been following through on its projections from over a year ago when it indicated that front-office applications and e-commerce were two strategic areas of focus for the forthcoming period. It has even gone a mile further by putting together a comprehensive product offering that includes supply chain management and business intelligence. Great Plains has indeed made a great noise and established itself as an undisputed global small-to-medium enterprises (SME) market leader.

It has significantly expanded outside of the US market and has the potential of reaching $300 million in revenues in fiscal 2001. Its extensive and efficient global indirect channel model that consists of over 2,000 partners has been admired industry-wide. Further bolstering its channel architecture is the company's endorsement of the Application Service Provider (ASP) model, which it started more than two years ago (For more information, see Great Plains ASP - Evolution, Revolution, Innovation).

The company has extended its product offering and geographic coverage by striking a fine balance among strategic partnerships, acquisitions, and in-house product development. Great Plains has been impressive in selecting and attracting renowned vendors as its partners and in integrating disparate products. It proudly touts its commitment to Microsoft's technology by being one of very rare vendors that has a number of its R&D team members located on the Microsoft campus and working directly with their Microsoft counterparts.

As another remarkable example, Siebel Systems selected Great Plains as the partner to create a fully integrated back-office and front-office solution for medium-sized companies. Great Plains Siebel Front Office includes functionality for call centers, marketing, and sales, with a number of other CRM modules being slated for the future release (For more information, see "Siebel: Great Plans For Great Plains" ). We also believe that its OEM partnership agreement to sell Logility's Voyager Solutions will follow the similar path and should bode well for both companies. The same should hold for a number of other product alliances mentioned at the beginning of the text.

Impact of Acquisitions

As for its acquisition ventures, the combination of Great Plains and Solomon Software has resulted in a juggernaut within the SME market, with a formidable combination of customers and channel partners. Great Plains offers fully integrated front office/back office business applications for the SME market. Its flagship product, eEnterprise, provides integrated modules for financial, distribution, enterprise reporting, manufacturing, payroll, human resources, service management, electronic commerce, and Internet self-service.

Great Plains' Dynamics product provides similar functionality for the lower-end of the market. Solomon, on the other hand, offers a range of similar applications, also on a Microsoft-based architecture. Solomon IV, its flagship product, contains over 50 modules for financials, project management, bill of materials, systems management, distribution, e-Business, and service management.

Further, its prudent acquisition of FRx Software, a leader in the financial reporting market, and PWA, a UK-based provider of HR software, although less publicized, have both filled gaps in Great Plains' former product offering and have provided additional revenue streams. Nevertheless, we believe that the company will now need to take time to digest all of these acquisitions.

Functionality Developed Internally

One should, however, not overlook the company's effort to develop significant new functionality internally. Enhancements have been made to virtually every major product series (e.g., Project Series, Distribution Series, Manufacturing Series, etc.) within eEnterprise and Dynamics suites. One of the most impressive enhancements is the possibility to foresee any material shortages and conduct a necessary purchase order processing (POP) and inventory control concurrently with a new sales order processing (SOP). This SOP to POP integration capability should help customers manage supply chains much more efficiently and effectively.

Further, an updated user interface and shortcut navigation bar makes navigation easier and more intuitive within Release 6.0. Notable Great Plains' Explorer enhancements include Top 10 lists, queries using multiple filters and several new views. Multinational customers will also benefit from the new ability to run up to eight multiple languages against a single database.

Since its competitors, particularly the larger ones, may with a good reason object that they had delivered similar product features in the past, possibly more impressive is Great Plains' endeavor (and proven success) to deliver bulletproof, bug free new generally available (GA) product releases, based on extensive and stringent product testing. That has not traditionally been the rule for most Tier 1 and Tier 2 applications vendors, whose new releases are often bug ridden.

We favorably regard the company's recent e-business initiatives, which are in tune with the market trends and its customers' requirements. Moreover, while Great Plains has long been cognizant of the Internet revolution and delivered its first Internet-based products in 1996, it has subscribed to a gradual change and extension of its back-office functionality in order not to leave its current customers technologically stranded. As a result, an impressive percentage (over 80%) of its current eEnterprise users have been migrated to the latest release. This approach is captured in the company's slogan "Revolution, through Evolution, with Innovation". We endorse Great Plains' strategy to as uniformly as possible enhance its core ERP products around all the 'hot buttons' of extended complementary functionality (CRM, self-service, SCM, etc.) and continued emphasis on integrating eCommerce components with its back-office systems.

Resulting Challenges

Nevertheless, Great Plains faces a number of notable challenges. Both unavoidable acquisition charges and the exorbitant costs of training its staff in Siebel and other 3rd-party applications, as well as for in-house major product enhancements and cross trainings in acquired products, were major contributors to a significantly lower bottom line in recent times (For more information, see Great Plains - An SME Market Leader, But At What Cost?). It is realistic to expect costs of training to continue to be high for some time to come.

The merger with Solomon has been completed with impressive smoothness (with minimal attrition) and will provide synergistic R&D endeavors in the future. Solomon will leverage Great Plains' experience in developing internally its manufacturing functionality, while Great Plains may benefit from gaining insight into Solomon's experience in developing a fully browser-based portal Solomon Desktop or by 'borrowing' some of its still superior project accounting functionality.

However, the downside of the merger was that it did not expand combined product functionality per se. Great Plains therefore had to internally develop enhancements for its multi-site manufacturing and distribution functionality, field service, and multi-national capabilities (such as support for 8 languages) to name but a few. Not to mention the impending need to broaden Solomon's portfolio beyond its financial accounting sweet spot. Plans to integrate it with Siebel and Logility are well underway. For more information see Winner Takes All - Siebel Ousts SalesLogix From Solomon's Deal).

A major challenge for Great Plains and its affiliate channel remains the management of multiple flagship product lines. It will be difficult to support existing customers and existing products, while juggling competitive product lines. Since the product lines should remain separate for at least two more years, this will add additional development costs, as well as provide a challenge in explaining the position of the different products and produce a sensible and simple pricing mechanism.

The company will have to craft a sales strategy for optimizing the sales of multiple product lines with much overlapping functionality, while avoiding a likely internal competition within the resellers' channel. (One way to resolve this is by slating eEnterprise, Solomon and Dynamics product lines for different market segments, either by company size or vertical industries.) Consequently, Great Plains can expect growing pains in assimilating disparate product lines and training and possibly industry-specializing its large affiliate channel.

While Great Plains' e-commerce solution set, which includes e.Order Internet B2B solution, e.Commerce B2C Solution, and eSell, to name but a few, is impressive, it has yet to provide a crisp e-procurement and vertical digital marketplaces solution. Although all e.Commerce objects are XML-enabled, which is a good premise for building the foundation for integration of technologies such as Microsoft BizTalk as well as integration among and to B2B e-commerce sites and exchanges, the actual execution of these initiatives is a monumental task.

During our attendance at Stampede TEC was made aware that some alliance negotiations were in progress, and the market should expect related press releases in the near future. Any protracted delay in delivering these would aggravate the challenge of protecting Great Plains turf from such Tier 1 and Tier 2 intruders as Oracle, J.D. Edwards and Lawson Software that currently have a more comprehensive offering. The threat will remain even if the Tier 1 vendors' offering is toned down for the smaller market segment. One should also not overlook the fierce competition from direct competitors like Navision, Epicor, and Sage Software. These players can still tout their superior native manufacturing and distribution functionality and vertical focus, which are indisputably ever more important tenets of competitiveness within the SME market.

User Recommendations

Existing Great Plains customers should certainly consider the new offering and carefully determine their needs and/or time framework for a migration/update, bearing in mind problems typical with major product releases. Although all current Dynamics and eEnterprise customers on a maintenance contract will automatically receive Release 6.0 at no additional charge, we recommend identifying your clear e-business strategy and conducting thorough comparison-shopping, at least for the sake of information leverage. Each component should be put through its paces using a well-documented set of requirements, scripted scenario demonstrations and rigorous reference checking.

As for potential users, we generally recommend including Great Plains in a long list of an enterprise application selection to the lower-end of the mid-market companies (with $2M-$500M in revenue), which are staunch users of Microsoft technology and have significant financial accounting, project management, distribution, and service requirements, while currently not needing rather complex manufacturing functionality. Great Plains should be included on any package selection short list within the SME market where electronic business, distribution, services and accounting modules are the main pillars of an enterprise application.

As with all new releases, users should employ a critical approach in their evaluation of eEnterprise, Dynamics and/or Solomon IV, and require all potential vendors to demonstrate specific business processes. Though demonstrations do not guarantee a trouble-free implementation, they can go a long way toward helping users understand how the software might behave in their environments.

As for the newly added CRM functionality resulting from the partnership with Siebel, users are advised to ask for firm assurances on the availability and timeframes for future upgrades, and more detailed scope of combined product functionality. One caveat to be borne in mind is that although this suite was developed from existing Siebel products, it is a first version release. This means there are inevitable bug fixes to be made over the next few months.

Current users of Great Plains eEnterprise with additional warehousing or transportation management requirements may benefit from acquiring the Great Plains-branded supply chain execution products from Logility. Improved technological integration is seldom guaranteed by joint marketing arrangements, and only comes after the arrangement yields considerable implementation experience. Therefore, in the short term, these users should expect some bumpy ground since Great Plains and Logility still need time in which to polish their collaboration on delivering technical support for the products. As Great Plains partners become familiar with Logility's products and the OEM partnership solidifies, these problems are likely to diminish.

Potential clients should conduct preliminary research on the industry expertise and reference accounts of a regional Great Plains affiliate service provider when the Great Plains' product is selected. They should also familiarize themselves with the products' strengths and weaknesses within certain vertical industries. Great Plains distributors generally offer vertical solutions on an opportunity-by-opportunity basis only.

Organizations seeking a Web-based solution and out-of-box functionality with little or no re-engineering effort may benefit from evaluating Great Plains' ASP offering. Support, connectivity, ease of use, security, acceptance, and scalability are only a few considerations. Current users of its traditional client/server product may benefit from informing themselves of the ramifications of switching to the ASP mode.