ERP developers head for a new market

Although the term enterprise resource planning, or ERP for short, has not changed during the last few years, the concept has seen some remodelling.

Not only have ERP implementations been declared cumbersome and time-consuming, but they were also very costly. Developers such as SAP, Baan and Oracle are now trying to change this by introducing modules or components into their solutions. This, they say, ensures faster and cost-effective implementations.

It will also enable these developers to enter a previously no-go zone - the mid-market. Although this sector does not have the money or skills to implement the large solutions, the introduction of components is making it a more viable option.

What else can we expect from these companies this year? ITWeb investigates.

German ERP developer, SAP AG, has set its sights on the mid-market, according to a statement made by the company's VP for mid-market solutions, Allen Brault.

He adds that there will be as many as eight more vertical applications on tap for users. This will expand SAP's Accelerated Solutions offerings beyond the financials, human resources, automotive, manufacturing and consumer packaged goods offerings that are currently available.

California-based Oracle announced last month that it has launched FastForward RPM for Manufacturing High Tech. This product is aimed at mid-market manufacturers of high-tech equipment and is the latest in Oracle's FastForward programme. Other suites for financials, public sector and manufacturing are already available.

The company also announced last month that it would ship two analytical applications for value-based management and strategy planning early next year.

These applications, along with two other components, will make up Oracle's Strategic Enterprise Management Suite. The other two components in the suite - Activia, for activity-based management, and Oracle Balanced Scorecard, which is based on the popular business benchmarking system - have been shipping since Oracle acquired them last year. Activia was bought from PriceWaterhouseCoopers LLP and the Oracle Balanced Scorecard technology came on board when the company acquired Graphical Information.

California-based PeopleSoft also launched the first components of its Enterprise Performance Management suite last month. This consists of Enterprise Warehouse, a platform for storing and analysing data, analytical applications for activity-based management, funds-transfer pricing and weighted capital.

PeopleSoft plans to deliver a balanced scorecard, applications for employee compensation and asset liability management, as well as a user interface to Enterprise Warehouse.

The company says it is moving away from what it sees as a rigid ERP model toward Internet-based applications that focus on the electronic-business model. "The term 'ERP' will be replaced over time," says Aneel Bhusri, senior VP of product marketing strategy for PeopleSoft.

He adds that the company is very positive about the Web-based delivery of analytical applications and that all the company's business applications are taking on a strong Internet flavour.

Lawson, which opened a local division in partnership with Dimension Data (DD) in SA this month, has been acknowledged as one of the top five ERP developers in the US.

Lawson Insight is already in use locally and a R6 million contract was recently signed with DD to implement an ERP suite.

With major ERP developers already settling into the local market, Lawson faces strong opposition, but it believes its small stature can be turned into an advantage. Lawson has 2 600 clients worldwide and has carved itself a $150 million niche market in the financial, HR and procurement sectors, focusing on mid-market companies.

During November last year, Baan officially launched the BaanSeries product family in SA, which features open, best of breed components for extended enterprise applications. It aims to deliver speed and flexibility to meet business requirements, a dynamic and stable framework for integrating legacy and new business applications, and an accelerated path to measurable return on investment.

Gary Lawrence, MD of Baan SA, says that with the BaanSeries, customers can select and implement different components from various vendors to meet business requirements and needs throughout an organisation's value chain.

Last month, Denver-based JD Edwards announced the availability of the latest version of OneWorld, the company's multi-platform, enterprise software suite. The new version includes additional front office and financial functionality for sales configuration, customer service management and activity-based management as well as Java and HTML deployment options giving businesses the direct power to extend enterprise applications via the Internet and corporate intranets.

JD Edwards president and CEO Doug Massingill says: "Customers are demanding a more adaptable and easier to use solution that allows change at the speed of ideas."

Boston-based AMR Research predicts that the ERP software market will grow at a rate of 37% over the next five years. The firm's "ERP Software Report, 1997 to 2002" concludes that total company revenue will top $52 billion by 2002.

This means new markets for these developers, such as the Internet and mid-market. AMR also found that large ERP developers are looking to strike a balance between functionality and the limited resources of mid-market firms, whose needs are far different from larger companies, especially through peddling packages pre-configured and tailored for this market.