Traktion, a newly-formed enterprise-wide information management company falling under the JSE-listed MB Technologies group`s software and services arm, MB Worksoft, is aiming to capture 15-20% of the midrange enterprise resource planning (ERP) market within the next two years.
The company is planning to officially launch its flagship ERP solution, also called Traktion, at the business-to-business exhibition, Comdex, to be held at the Gallagher Estate from 3 - 6 October. MB Worksoft, together with all 10 member companies, will be one of the biggest exhibitors at Comdex.
According to Andre de Meyer, business manager at Traktion, the company`s new product offering is a "new-breed ERP solution".
He said the midrange ERP market is worth a "conservative" R180m per year.
Commenting further on the launch of Traktion, De Meyer said Traktion is not a traditional ERP software solution. "It is more of a proactive data warehouse, or rather a software solution that allows the proactive selection of information for intelligent data warehousing."
De Meyer said traditional ERP systems "have not covered themselves in glory", with more than 70% of ERP installations failing to meet their business objectives, or coming in well over budget. They are now perceived as unable to fulfil the required management information requirements in most business scenarios. Indeed, most companies making use of so-called
ERP systems make use of lots of supporting systems to re-process or re-arrange the data. "The old breed - or the dying breed - of ERP systems are fundamentally financially oriented and, in the midrange market space, in particular, these solutions do not provide the vital, manageable information that is required for management to make informed business decisions."
De Meyer said medium-sized companies frequently have large chasms between the lower level workers and top management. "The middle management layer in medium-sized companies is often on the thin side. And it is this middle management personnel that are tasked to provide top management with information that they can use. Often, due to the inflexibility of enterprise systems - in particular ERP systems - this is impossible.
"One must remember," said De Meyer, "that a lot of the data required to manage bushiness is non-financial in nature - or certain tasks have to be formed before the financial data is processed. This is often impossible with most ERP systems, which is a major shortcoming."
The premise here is that management cannot process financial information and then interpret the data. The process needs to be proactive. Moreover, the software is structured from a software process point of view and not from a business process perspective.
"It is this rigid approach - and the rigid design of systems - that have given ERP solutions a bad reputation in the market." And deservedly so, reckons De Meyer.
He said it is all very well knowing which parts need to be ordered, or how many of a certain part, or component, are in stock. But in order to "improve business efficiencies" companies need to gain an intelligent view of data in order to turn it into useable management information. "It is great knowing what your turnover is, what the turnover per department is, or per stock item - even per salesman. The trick", said De Meyer, "is to know why - and to be able to present workable business plans as a result of knowing why."
A good ERP or enterprise-wide solution should be able to tell the user, for instance, how many pick notes are outstanding in the warehouse. It should be able to tell you how many late deliveries there are, how many unfulfilled orders there are, what value of lost sales are due to insufficient stock holdings. Only with this type of information can informed business decisions be made. Otherwise, all you are doing is transaction processing.
"If you are in an industry where on-time deliveries are of cardinal importance, and 70% of your company`s deliveries are late, you are facing a huge problem - one that needs to be resolved urgently. The financial data might, at the same time, be showing an increase in turnover and profitability - but this information could be distorted, leading to complacency or the adoption of incorrect business strategies. The company might be showing an increase in trading because it recently landed a huge client. But if deliveries continue to be delayed in an industry that requires prompt delivery, the company`s prospects of holding onto its clientele, including its newly-acquired client, will become increasingly slim."
Traktion is well-suited to a number of vertical markets, including the clothing and footwear industries, as well as motor spares, distribution of white goods and hardware.
Highly flexible and scalable, Traktion can be harnesses for sites with as few as 10 users to as many as 500 - and beyond.
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