SalesLogix and ACT! Officially Branded As Best Software Part 2: Challenges and User Recommendations

SalesLogix and ACT! Officially Branded As Best Software

Part 2: Challenges and User Recommendations

P.J. Jakovljevic - July 30, 2002

Event Summary

At the beginning of July, Best Software, one of the leading business management products and services providers for small and mid-size organizations, announced that Interact Commerce Corporation's popular ACT! contact management and SalesLogix customer relationship management (CRM) solutions will join Best Software thereby creating its CRM Division. The company believes the move should further strengthen its position as a leading provider of front-office/back-office business management solutions for small and mid-size businesses (SMBs). Interact Commerce Corporation and Best Software were operating as sister organizations in the US under their the UK-based parent company, The Sage Group plc (LSE: SGE.L), one of the leading worldwide suppliers of business management solutions and services for small and mid-sized enterprises (SMEs). The new division joins Best's four existing Mid-Market, Small Business, Specialty Products and Nonprofit/Government Divisions.

This is Part Two of a two-part analysis of Best Software. Part One discussed the Market Impact of recent announcements.

Positioning

Looking at positioning, about less than one fifth of the entire Sage client base is in the manufacturing industry, while the rest of its business and products are aimed very successfully at the customers with prevailing needs for accounting, HR/payroll and financials. Still, Sage does have a notable SME manufacturing customer base, particularly at the lower end of the spectrum. Rounding out Best Software's offerings should allow the vendor to solidify its position in its target market. Whereas other vendors such as Epicor Software and Microsoft have been trying to move up-market, Best will likely maintain its focus on the lower-end of the mid-market.

Additionally, the company sells almost entirely through value added resellers (VARs) as per Great Plains' and Navision's business model. The company has particularly found certified public accountants (CPAs) to be very effective in marketing its bottom-of-the-range of accounting products. At the enterprise level, niche markets and vertical applications are developed by more than a hundred of MAS 90/200 licensed Master Developers. Best's VARs have a reputation for relatively low-cost implementations often with equal service and software license costs (due to the implementation methodology and business templates) and with a go-live within 60 days period, although in part this reflects the smaller scope of implementations too. One has also to remember Sage's widespread global coverage as to discern the company's true position within the global SME market.

Sage's former acquisition of Interact will have given pause to Microsoft Great Plains/Navision, Epicor, as well as to Siebel Systems, Oracle, SAP, Baan, J.D. Edwards and PeopleSoft that have overtly been targeting the SME for some time. Sage had long needed CRM functional capabilities, and it might have hit the bull's eye with Interact Commerce. The two vendors have indeed marshaled a powerful back-office and front-office systems' combination to the market for SMEs.

Challenges

The downside, as a rule, is the painstaking integration effort yet to be devised for a number of remaining products in the Sage/Best family and to be subsequently exerted. The mitigating factor for already integrated products was the fact that erstwhile Sage and then SalesLogix had long formed the product alliance, so the integration task had not started from scratch. However, this might not be the case for the rest of the product portfolio, and as integration is never a simple feat anyway despite SalesLogix' proverbial Open CRM' initiative and a number of mid-market ERP product alliances and subsequent product integration experiences (deals with Exact Macola, Intuitive Manufacturing Systems, and Expandable Software being some, as a matter of interest). A quite similar situation exists with the Abra HR/Payroll product that, likewise SalesLogix in the CRM market, has a prominence in the SME HR market, and has been used via many OEM or any other arrangements by a slew of vendors.

Best Software will still have to address other challenges in order to continue to thrive in this ruthless competitive environment. The competition is flying from many directions since the company competes in many diverse markets. To that end, in the traditional back-office market, the threat comes from the likes of Intuit and AccountMate in the small business accounting market, via its peers (e.g., Microsoft Great Plains, Navision, ACCPAC, Exact Software, Epicor, SunSystems and Scala to name only some), to the Tier 1 vendors storming down the market. In the pure HR/Payroll mid-market, its archrivals have long been ADP, Employease, Ultimate Software, Agresso, and Lawson, while in the pure-CRM mid-market, that would be the likes of Onyx, Pivotal, Kana, Salesforce.com and FrontRange. Not to mention that SAP, Oracle, PeopleSoft and J.D. Edwards will likely be faced in all the above markets as well.

Additionally, the wealth of corporate names and a likely unwieldy slew of products within each of Sage's divisions and groups, presents sales and marketing confusion for the company, both internally and externally across the globe. For instance, while the Best brand will be applicable for the North American market, Sage offers for the other international markets a line of products for small business comparable to the above-mentioned Best's line (e.g., Instant Accounting for a single user, Line 50 (for up to 5 users), Line 200 (5-25 users) and Line 500 (up to 1,000 users, f.k.a. Sage Enterprise).

Therefore, Sage has a myriad of products in its portfolio that could benefit from integration with ACT! and/or SalesLogix, and the company must clearly articulate its plans and the timeline for integration for each of its products. Otherwise or it may face confusion and/or anxiety amongst both its current and potential customers as well as within its VARs. That would be the music to its direct competitors' ears, some of which have already (or all but) rounded up their CRM offering after daunting integration experiences (see Mid-Market ERP Vendors Doing CRM & SCM In A DIY Fashion and Epicor Claims The Forefront Of CRM.NET-ification).

Room for functional enhancements remains too, despite some of the products' leading positions. To that end, Abra Suite v 7.0 will ship in October with a number of enhancements, including modules for open enrollment and timesheet entry, both of which supplement its existing web-enabled employee self-service and alerts modules. Also, Best will have to build or acquire additional CRM functional enhancements (e.g., database-based marketing management, data mining/analytics, and support for field service) to round out a complete CRM suite. Not to mention the need to bolster external/field service and multilingual capabilities, well beyond English and Spanish.

The vendor has also been working on extending its coverage of factory processes, especially in terms of job- costing and project-based manufacturing and of more advanced planning capabilities areas that Best Enterprise Suite already addresses well. It also intends to build on its web integration side as to bolster its private trade exchange (PTX) and/or collaborative role-based portal solutions strategy and delivery. The company only recently extended its reach in the professional service automation (PSA) area, with additional enhancements to Best Enterprise Suite that should make it competitive with the above-mentioned peers.

User Recommendations

Best's target market, single- and multi-site and multi-national light manufacturing companies and their satellite subsidiaries with up to $250 million-a-year revenue range, should consider the company's value proposition, but avoid selecting it without looking at what the other vendors have to offer. These companies generally are rapidly growing and agile but have a limited IT budget/staff, a conformist IT strategy (a staunch Microsoft shop), and solid to order' manufacturing, distribution, CRM and B2B e-commerce collaboration requirements. Certainly, for SMEs that have long been using one of Sage's/Best's products for financials or HR/Payroll, Best Enterprise should continue to be seen as a logical, but not necessarily the only solution.

Looking at industry sectors, the company covers financial, distribution, manufacturing and service sectors. Preferred manufacturing styles are make-to-order (MTO), make-to-stock (MTS), and configured products/assemble to order (ATO) in discrete and semi-batch manufacturing processes. Where it does target vertical sectors they would include textiles, furniture, automotive, pharmaceuticals, electronics, food and steel stock holdings via third-party add-ons and resellers' functional additions. Small and mid-size batch process manufacturers should look at Best Mid-Market Division's BatchMasterPFW, a recently acquired comprehensive process manufacturing package.

While we believe that the above intra-company merger should be synergistic in the long run, some outstanding integration issues, and discontinuation of redundant products are always to be expected. Consequently, until the internal restructuring is consummated, users evaluating the above individual products should exercise moderate caution, keep themselves informed, and consider generally available (GA) functionality only.

Potential clients should conduct preliminary research on the industry expertise and reference accounts of regional offices or affiliate service providers of merged companies in case. Existing non-Sage/Best users of SalesLogix and/or ACT! should clarify their support status and the long-term product development and migration strategy with CRM Division management. Customers adopting the first integrated product lines should anticipate significant changes in later versions of the products.

Existing users of earlier product releases that run on UNIX and Oracle database may benefit from querying the company's future product technology strategy, product migration path, service & support, and/or scalability strategy, given the company's continued Microsoft-centric strategy.