Is MAPICS Getting the Magic of PLM? Part Two: Strategy

Strategy

For over two years, MAPICS, Inc. (NASDAQ: MAPX), possibly the largest global provider of extended enterprise applications for solving the challenges of discrete manufacturers following the acquisition of its former competitor Frontstep (see MAPICS To Leap Forward In A Frontstep Way), has shown signs of significant change and a persistent number of its historically recognizable and invariant tenets of operation. During the same time, the vendor has continued with the painstaking process of producing and executing a strategy going forward that would pragmatically blend the company's traditional values and success factors with new approaches to stay in tune with market trends.

To that end, on May 5, MAPICS announced it recently acquired the MAGIK! Product Lifecycle Management (PLM) solution, from its longtime partner—Ceimis Enterprises of Laguna Hills, California (US). This former strategic extension solution has purportedly been well received by a number of MAPICS customers and is already integrated with the MAPICS ERP for iSeries product.

Although MAPICS remains in an acquisition mode owing to a somewhat bitter pill of assimilating the MAPICS ERP for Extended Systems product (derived from the acquired former Pivotpoint's Point.Man product), it is not likely that MAPICS will opt for another direct enterprise resource planning (ERP) competitor's acquisition. MAPICS had to make a crucial decision to do provide a smooth migration path and conversion tools to MAPICS SyteLine ERP release 7, rather than embark on redevelopment of the product per se (although the suite will nevertheless continue to be supported for users that choose to stay on it).

This is Part Two of a three-part note.

Part One described recent events and began a discussion of the market impact.

Part Three will discuss challenges and make user recommendations.

Strategic Extensions

Another headline is that MAPICS has been trying to leverage the best from each platform's camp to create advanced extended-ERP applications that would readily connect to various enterprise system packages. These strategic extensions, such as CRM, Web portals, and e-business applications will ideally be shared by both ERP foundations. Namely, in addition to its ERP products, pre-Frontstep MAPICS had also offered extensions that would be made available to both the iSeries and Extended Systems ERP products, such as MAPICS SCM (from former Thru-Put), and an enterprise asset management (EAM) product called MAPICS Maintenance & Calibration (former Maincor EAM) products.

Other like solutions worth mentioning include a business intelligence (BI) product MAPICS Analytics, and MAPICS Portal. Although some of these come from strategic alliances (such as, the Access Commerce's Cameleon Product Configurator, the FRx financial reporting product, Vanguard Solutions Group for BI add-on modules and Magik! PLM, MAPICS emphasizes that all of these are under original equipment manufacturer (OEM) agreements, with MAPICS owning product upgrades and support so that the origin is effectively transparent. One recent change though is that the relationship with Vanguard has stepped back from a true OEM relationship. Moving forward, MAPICS has recently expanded its partnership with Cognos introducing MAPICS Enterprise Business Intelligence for iSeries through an OEM relationship.

On the other hand, the following extended-ERP offering from MAPICS SyteLine ERP, which is mostly provided natively, or also in a tight OEM fashion from long-term partnerships, was comparable to the MAPICS above set: SyteLine APS, SyteLine CRM, SyteLine Business Intelligence (a partnership with Cognos), SyteLine Business Process Management (a partnership with Cobre), SyteLine Workflow Automation (a partnership with former Keyfile, then known as Lexign and now eiStream), SyteLine Configuration, SyteLine Data Collection, and SyteLine EDI (often using Sterling Commerce translator or information broker, but with the options to other EDI providers as well). Except for FRx, Cognos, and Sterling Commerce, which are beyond MAPICS' means and desires, look for more acquisition in the future that would resemble the MAGIK! PLM one. All the above components incorporate Web services technology to simplify integration and information exchanges with other systems. Thus, the idea is to extend these to both iSeries and SyteLine users through a "develop once, deploy twice" strategy.

During our recent briefing, MAPICS' executives acknowledged that almost all enterprise software companies are either "hunting" or being "hunted". While the likelihood of MAPICS being acquired is not very slim, the least MAPICS can do about it is to continue its proven strategy and good financial performance, which in turn results with a solid market capitalization (that is a multiple of its annual revenue) as a deterrent to bargain hunting (i.e., the smallest possible price for a largest possible market share increase) predators like SSA Global.

On the contrary, that could not be said for Ceimis, whose financial performance we do not know for sure due to its privately-held nature, but the company has nonetheless had quite a subdued posture of late. If one is to judge that at least by the (not so) recent press releases, they date back a few years ago, such as the partnership with Microsoft Great Plains, which has likely not been much active given the very recent alliance announcement between Microsoft Business Solutions and Autodesk (see Autodesk to Bring Microsoft Business Solutions Closer to PLM). On the other hand, MAPICS will have had quite a stake with MAGIK! being widely adopted within its install base to let the product languish further or even worse, get discontinued.

What Is Driving The Market?

The need for shorter product life cycles is being driven by competitive pressures, customer demand, and the need to cut operating expense, and, in that regard, product lifecycle management (PLM) products should give manufacturers the tools to collaborate with trading partners for faster time-to-market, reduced manufacturing costs, higher quality products and improved customer satisfaction, as some potential benefits. But, given the relative immaturity of the PLM movement, PLM often means different things to different people.

For a detailed discussion of PLM see PLM Coming Of Age: ERP Vendors Take Notice.

Namely, due to its deep engineering roots from the 1980s, it still often gets confused with computer-aided design (CAD) or product data management (PDM) systems. While CAD involves the use of high-resolution graphics in product design activities, allowing quick evaluation and modification of the designer's intent, PDM systems were originally developed as merely vaults for storing and updating data, which replace paper-based processes and information storage with a single, centralized data repository that enables authorized users throughout a company to access and update current product information, while ensuring they follow specific procedures.

On the other hand, PLM, which is an overarching strategy (concept) of guiding the product throughout its entire life cycle, entails much more than just PDM. It allows collaboration amongst many constituents and successful planning and execution of new product development and introduction (NPDI) programs. Namely, a much broader mission of PLM would be to provide a panoramic "one version of the truth" in terms of data and business processes associated with the product from start to finish (i.e., from cradle-to-grave) to any involved party, such as design engineers, manufacturing engineers, production planners, purchasing, marketing, c-level executives, suppliers, and other trading partners.

This still evolving category of software should help any manufacturing company deliver a product and continually enhance it by helping it manage and automate materials sourcing, design and visualization, engineering change orders (ECO), and product documentation, such as test results, product packaging, and post-sales data. The product development life cycle—conceptualize, plan, design, procure, produce, deliver, service, and retire—naturally includes multiple people, operating in multiple departments, and typically from multiple companies, each with locations in multiple countries around the world. It should also help companies manage through a mushrooming number of local, state, federal, and international regulations.

In other words, at the core of any serious PLM initiative is typically a database or data warehouse that handles and stores every important piece of information that goes into making a particular product, such as formula and bills of material (BOM) cards, packaging information, shipping specifications, regulatory data, patent data, and so on. The emphasis is not only on how to design products, but also how to manage the accompanying information. From there, all the constituencies should be able to slice and dice data and create workflows to deliver specific information to specific functions.

This concludes Part Two of a three-part note.

Part One described recent events and began a discussion of the Market Impact.

Part Three will discuss Challenges and make User Recommendations. Link to Part One

About the Authors

Predrag Jakovljevic is a research director with TechnologyEvaluation.com (TEC), with a focus on the enterprise applications market. He has over fifteen years of manufacturing industry experience, including several years as a power user of IT/ERP, as well as being a consultant/implementer and market analyst. He holds a bachelor's degree in mechanical engineering from the University of Belgrade, Yugoslavia, and he has also been certified in production and inventory management (CPIM) and in integrated resources management (CIRM) by APICS.

Jim Brown has over fifteen years of experience in management consulting and application software focused on the manufacturing industries. He is a recognized expert in software solutions for manufacturers and has broad experience in applying enterprise applications such as product lifecycle management, supply chain management, ERP, and customer relationship management to improve business performance. Brown began his professional experience at General Electric before joining Andersen Consulting (Accenture), and subsequently served as an executive for software companies specializing in PLM and process manufacturing solutions. He is a frequent author and speaker on applying software technology to achieve tangible business benefits. Brown can be reached at jim.brown@tech-clarity.com.