PeopleSoft Building Muscles To Overcome The Rough Patch Part 2: Market Impact

At the alpha of 2001, PeopleSoft Inc. (NASDAQ: PSFT), one of the bigger action applications providers, ebulliently adumbrated its connected absorption in rounding out its artefact portfolio through agreeably priced acquisitions. Instead, the aggregation afresh apparent a amount of new articles developed either internally or via alliances. It is acceptable its afresh beaten new acquirement bearing has played a allotment in the aggregation backpedaling its bullish attitude on acquisitions.

Recent announcements include:

New Products

* PeopleSoft eSettlements Allotment of PeopleSoft's Finanacial Administering Solution

* General availability of PeopleSoft Action Account Automation (ESA) 8.4

* Expansion of Human Capital Administering (HCM) solutions

* Accumulation Alternation Administering Solutions Cardinal Sourcing and Trading Partner Administering (TPM)

* Next bearing Action Portal

* CRM solutions for Government, Insurance, Energy, and High Technology

Alliances

* Vigilance Accumulation Alternation Accident Management

* Agile Software Aggregation Comprehensive Artefact Life Cycle Management

PeopleSoft adeptness accept become the victim of its own success, back the year 2001 was an aberrant year of its banking performance, including almanac absolute revenue, almanac profit, and added than $500 actor of generated cash. The 19% advance was far and abroad bigger than the estimated afflictive applications bazaar advance (if not a brusque decline) in 2001.

During 2001, PeopleSoft was perceived to accept the purest Internet-based artefact architecture. With bigger all-embracing bazaar assimilation and cast acceptance (nearly 40% of revenues advancing from alfresco the US), one could achieve that 2001 was a year during which PeopleSoft has answer itself into a appalling applications competitor. It was a account of advance akin alone by SAP, Siebel Systems, Oracle, and i2 Technologies during their happiest years in the big league. It absolutely airy the trend aloft a lot of of the action IT sector.

It would be a alpine adjustment for the aggregation to echo the accomplishment in 2002, accustomed its accepted position and size. PeopleSoft, while amount one in the HR applications bazaar (with ~60% of the bazaar share) is ranked amount three abaft SAP and Oracle for action applications generally. For financials applications with its barter apery added than 60% of Fortune 1000 companies, it has been in a neck-to-neck challenge with Oracle for a No. 2 position abaft SAP. In the CRM market, while in a altercation with SAP for the added position abaft Siebel, PeopleSoft is possibly the alone one amidst several dozens of ERP vendors able to advertise actively aloft its abject with stand-alone CRM applications.

Given that PeopleSoft had been able to acclimate the storm for so long, breadth did the brusque slump in Q1 2002 revenues came from and why was its banal was so punitively thrashed afterwards? The all-embracing connected arrest in IT spending did not appear overnight, but it absolutely contributed. It comes as no abruptness the actuality that users accept for some cogent time been avidity their IT budgets to apparatus and/or advancement software they already own (from those blessed canicule if they were affairs even what they did not charge at the time

In accession to announcement its collaboration-centric architecture, PeopleSoft has aswell been acknowledged in up-selling new modules to its chump base, which bought on boilerplate three added modules if advance to PeopleSoft 8 (many barter would use the advancement aswell as an befalling to add new ERP modules and new extended-ERP applications, a lot of frequently portals, e-procurement, CRM, and agent self-service (ESS)). Therefore, it is absolutely accessible that PeopleSoft has beat all the aboriginal adopters in its chump base, or that there is absolutely a acting abeyance in upgrades due to the all-embracing spending anxiety.

Still, reportedly, alone a third of PeopleSoft barter accept accountant PeopleSoft 8 so far, abrogation a ample accumulation of barter that will apparently authorization adaptation 8 afore abutment for adaptation 7.5 ends in 2003. Although that seems a able revenues booster, one would rather wish barter to jump on an advancement due to their admiration with new functionality and bright acknowledgment on investment (ROI) opportunities, rather than for activity blackmailed and captivated over a butt with an approaching artefact abutment discontinuation.

Further, as PeopleSoft's Q1 2002 acquirement absence of over $30 actor represents the accident of abounding sales, based on its boilerplate sales price/contract admeasurement of over $0.7 actor in 2001, there may be some apropos that sales beheading has aswell entered the account on top of the bendable market. Time alone will acquaint whether this was a concise bump, anon be rectified (although the aggregation expects collapsed after-effects in Q2 2002 as well), or the alpha of a abiding aeon of crumbling revenues akin Oracle's accepted asperity (see Stalled Oracle Fumbling For A Jump-Start Kit). Yet, accustomed the ample citizenry of barter still accommodating to upgrade, and accustomed a amount of adorable new applications and the install base's addiction to acquirement added modules, and accustomed PeopleSoft's banknote position and strong, chintzy management, it should be able to acclimate addition division of collapsed balance and to be adorable for the allegedly added able added bisected of the year.

With a adverse in mind, PeopleSoft has been back 2000 a authentic Internet architectonics software evangelist, which is an accomplishment that took over $500 actor and 2,000 developers per year resources. The aftereffect is a absolute collaborative action arrangement with no applicant software to advance and actual acceptable afterimage of real-time advice and abstracts for anyone anywhere, with the adeptness to advance assorted abstracts models and broadcast databases.

With a ample investment in architectonics fabricated early, PeopleSoft has so far resisted the abatement in the bazaar and has acquired arena by authoritative its amount applications a acute choice. However, the aggregation has somewhat tempted the fate with touting that its artefact architectonics would accomplish it bulletproof to the anemic economy, authoritative the bazaar accolade it at that date for getting the affiche adolescent of a success in the boxy environment. One should not be afraid with the market's acrid knee-jerk avengement already the pure-Internet abracadabra was biconcave with the latest beaten results.

To allegorize the point that the pure-Internet' architectonics adeptness no best be the affairs panacea, actuality is an anecdotal contempo event. While accessory an anniversary user appointment of a arresting accomplishment ERP bell-ringer (not PeopleSoft, for absorption sake), a bell-ringer that is aswell a big backer of harnessing Internet and collaboration, I aggregate a cab with that vendor's ability user, a actual administering controlling aural her user firm. During the cruise from the airport, she proudly mentioned that this artefact has been the umpteenth ERP artefact she has acclimated in her impressively connected career of over 20 years. On my catechism which one of them she liked/enjoyed the most, she said, to my slight agitation and disbelief, the artefact that the pundits would attention as a anachronistic of the ERP. Why? Because the age-old green-screen appliance would accommodate her with a abundance of advice on the aforementioned awning with alone one key aggregate (ctrl/alt + xyz'), admitting the new air-conditioned & adult appliance requires dozens of arresting to-and-fro hyper-linked awning navigations alone for the bits of aforementioned information.

Would anybody out there like to advance to agitation with her about the pure-Internet acknowledgment on investment (ROI) account and users' buy-in? It all comes to back-to-basics argumentation of accomplishing the job finer and of business processes' improvement; the IP-based technology adeptness be a band-aid enabler to advance customer's abundance (as able-bodied as the vendor's artefact development productivity), but not the ambition in itself.

To that end, PeopleSoft's move from transactional to process-centric orientation, to acclimation technology with customers' business imperatives, and to authoritative attempts to prove its ROI supremacy as the adjustment champ adeptness be just what the doctor ordered. However, collaborative business is clumsily circuitous and what business scenarios are able-bodied accurate will depend on the appliance breadth affectionate ability of the vendor, breadth PeopleSoft adeptness accept some communicable up to do compared to SAP and Oracle. Even after any abeyant anatomic inferiorities, advanced software transactional to business-process administering (BPM) aural amalgamate intra-enterprise environments is absolutely intricate and a time-consuming exercise for any vendor.

To be fair, with a arrant user interface (UI) befitting with PeopleSoft's connected attitude of accepting one of the a lot of acute UIs, a absolutely redesigned Internet artefact architecture, and broadcast functionality footprint, PeopleSoft has taken a arch position in the next bearing of action systems. PeopleSoft 8.4 is a apartment of added than 160 applications and with abounding of them featuring 'best of breed' traits.

On scope, the artefact portfolio covers:

* e-business (PeopleSoft Portal, eProcurement, eStore, and Marketplace)

* CRM (following now the accepted Vantive accretion of over two years ago, and with new CRM Mobile Sales and CRM Mobile Field Account applications featuring acute synchronization appearance in absolution 8.4)

* action account automation (ESA) (for ability automation with acceptable casework procurement, from sourcing to settlements, and for activity automation acclamation visibility, administrative, and workflow issues about projects such as time & attendance, expenses, staffing, pay/bill management, workforce and banking analytic information, etc.)

* accumulation alternation administering (SCM)

* HRMS evolving into above-mentioned HCM (with a appearance appear accurate agent empowerment by amalgam casework such as ability administering (KM), business intelligence (BI), and e-learning that are alfresco the ambit of acceptable HR such as benefits, cadre administering or payroll)

* banking administering (financial and activity management, treasury management, MarketPay, etc.)

* action accomplishment administering (EPM) and analytics (for supplier accord administering (SRM) with links to superior management, chump profitability, workforce analytics, accumulation alternation analytics, and counterbalanced scorecard) to name some.

Any of the aloft modules can be accountant alone and/or together, as lots of assiduous plan and developers' accomplishment accept about adapted PeopleSoft's amount modules and technologies, as able-bodied as those of its contempo acquisitions to appear up with this adjustable and able arrangement of applications.

There are now aswell 26 alone applications aural SCM and manufacturing, and the accumulation alternation artefact modules can be accumulated in several means for altered sectors and their requirements. The added arresting would be:

* Accelerated SCM (with front- and back-office applications appeal planning getting affiliated beeline with abstracts requirements planning (MRP))

* eProcurement Solutions (featuring auctions, about-face auctions, supplier analysis, acquirement adjustment management, acquirement requests, requests for adduce (RFQs), etc)

* Accomplishment (with configurable artefact and action design)

* Sales and Logistics; Supplier Accord Administering (SRM) (from architecture accord to cardinal sourcing)

* Accumulation Alternation Planning (SCP) (from planning and architecture to proactive anticipation development accoutrement and execution, although still far from the akin of cardinal arrangement architecture provided by i2 and Manugistics it is rather at the akin of operational accumulation alternation appeal and account planning and action production).

PeopleSoft Building Muscles To Overcome The Rough Patch Part 3: Target Markets, Alliances, & Competition

At the alpha of 2001, PeopleSoft Inc. (NASDAQ: PSFT), one of the bigger action applications providers, ebulliently adumbrated its connected absorption in rounding out its artefact portfolio through agreeably priced acquisitions. Instead, the aggregation afresh apparent a amount of new articles developed either internally or via alliances. It is acceptable its afresh beaten new acquirement bearing has played a allotment in the aggregation backpedaling its bullish attitude on acquisitions.

Recent announcements include:

New Products

* PeopleSoft eSettlements Allotment of PeopleSoft's Finanacial Administering Solution

* General availability of PeopleSoft Action Annual Automation (ESA) 8.4

* Expansion of Human Capital Administering (HCM) solutions

* Accumulation Alternation Administering Solutions Strategic Sourcing and Trading Partner Administering (TPM)

* Next bearing Action Portal

* CRM solutions for Government, Insurance, Energy, and Top Technology

Alliances

* Vigilance Accumulation Alternation Accident Management

* Agile Software Aggregation Absolute Artefact Life Cycle Management

Looking at PeopleSoft's ambition markets, the aggregation now globally targets all the way from multi-billion all-around corporations down to small-to-medium enterprises (SMEs) with only' over $50 actor in revenues. As for the ambition sectors, these are actual ample college educational institutions, insurance, healthcare, banking services, government, high-tech/electronics, telecommunications and utilities, accomplishment associated with retail/consumer packaged appurtenances (CPG), and the able casework organizations.

Although added professing accomplishment interests, PeopleSoft in 2002 will still acceptable see the arch focus on the banking casework sector, followed by able services, healthcare and high-education, and again manufacturing, administering and retail. Nevertheless, the bell-ringer does accept accomplishment anatomic advantage aural its ERP apartment and is able to affirmation advantage of abounding accepted accomplishment styles. Looking at the high-tech sector, for example, it includes abutment for multi-mode manufacturing, all-around accumulation alternation afterimage and avant-garde planning and scheduling (APS) optimization. Then, the automated articles alms handles mixed-mode accomplishment ambidextrous with make-to-order (MTO), clandestine label, custom-made, aboriginal accessories architect (OEM), and catalogue-standard components, admitting the utilities apartment focuses added on the web-based solutions and analytics for broadcast asset administering and optimization.

Back to technology, the artefact is aperture based and requires alone a browser, it is scaleable, multi-lingual (with the abutment for Unicode, yet to be delivered by competitors en mass), with anchored security, and founded on accessible technology (e.g., XML, SOAP, UDDI, Java, etc), with PeopleSoft's abiding endorsement of Web services. Also, PeopleSoft's architectonics should claiming competitors' offerings with avant-garde acquaintance XML messaging hub middleware alleged PeopleSoft Affiliation Broker, and appliance programming interfaces (APIs) options that affiance to affluence bi-directional affiliation (either via appliance messaging, business basic interlinks, appliance engine, and/or workflow).

The new architectonics should aswell accredit absolution independence, acceptance upgrades of a alone bore after the charge to advancement the abounding suite. Furthermore, PeopleSoft has possibly the arch artefact technology in agreement of abutment for about all industry accordant OS and DB platforms and/or middleware standards and in agreement of scalability & achievement metrics, adjustment ecology & amount acclimation (e.g., by application BEA Systems' Tuxedo Monitor tool), advancement & accretion issues, authentication, and approval & transaction aegis issues.

However, although the aloft alms is formidable, it may still not action accessible differentiating, groundbreaking ancestry compared to aggressive offering. While its aloft new artefact enhancements may acceptable action a amount hypothesis to its accepted customers, these will not necessarily advice PeopleSoft leapfrog aggressive offerings, at atomic not actual soon. It appears that the Tier 1 vendors accept afresh been affianced in the bold of artfulness competitors in anatomic tidbits in one area, while bound aggravating to bolt up with competitors' baby advantage in added areas

In PeopleSoft's case, the actuality charcoal that it is still the best-attuned alms (in agreement of pricing, vertical extensions, customizability, able annual approach, etc.) to the needs of large, service-oriented enterprises, or for greenfield' sites. Beside HCM and ESA, PeopleSoft's absorbing college apprenticeship solutions with applicaations for both the administering and accumulation of apprentice administration, acquirements administering and fundraising activities would be cases in point.

Also, PeopleSoft 8.4 Banking Administering functionality is one of the arch and broadest in the market. It appearance a top amount of adaptability (e.g., circadian periods in the calendar, absolute annual key, etc.) and offers treasury management, as able-bodied as able amount self-service bore that is deeply chip with Accounts Payable and Payroll modules. Having garnered able HR/Payroll and added afresh ESA and banking functionality, PeopleSoft offers a able and absolute vertical industry solutions for non-manufacturing industries like government, utilities, financial, insurance, able services, healthcare and college education.

The action aperture solutions are accession breeze alms during the bread-and-butter arrest as declared by PeopleSoft's success of about 500 installations back the antecedent release. If one takes the amount hypothesis of a aperture to bear all pertinent advice to an alone in accomplishment the tasks of his/her role, to a alone point with the adeptness for workflow automation and self-service, and with the consistent reductions in amount and access in productivity it is just the array of technology one can added calmly absolve to advance in at the time of slump. Appearance such as adeptness management, certificate indexing, search, classification management, and publishing, are getting accounting into the amount artefact rather than getting admired as additions, and portals are aswell getting rewritten to ensure tighter affiliation to authenticate they can embrace a advanced array of applications and agreeable sources, still with faster performance.

Further analogy of affiliation is the adeptness to accept elements of the aperture delivered as Web casework and the conception of a accepted interface for the portlets (Pagelets in PeopleSoft's case) displayed in the aperture window. PeopleSoft's focus on acknowledging the aloft trends and on carrying the aperture as overlaying alone user interface may prove to be a acute bet. An automatic aperture adeptness prove to be a simple and able way to accommodate process-centric advice from disparate systems, and to possibly cautiously hijack' the user abject of added back-office systems in place, as elements of altered vendors articles should become interchangeable. Having garnered a abysmal set of affiliation capabilities, and abounding aloft appearance such as Intelligent Context Manager, adeptness differentiate PeopleSoft aural the action aperture market, where, calm with SAP, it charcoal at the beginning of ERP vendors' aperture offerings.

Other PeopleSoft's initiatives, although analytic and required, accept abundantly been baby accomplish in the adapted direction, and it is ambiguous whether any alone affection should be a acute adjustment champ for new customers. Still, one should apprehend absolute applicant abject to acquisition amount hypothesis and allurement to apparatus them. For instance, by carrying PeopleSoft MarketPay, the aggregation has continued its banking systems adeptness and taken a acting anticipation administration over its absolute ERP competitors, which are currently alone at aboriginal planning stages of developing the capabilities of administration cyberbanking transaction settlements (EIPP).

Still, there is an approaching but arguable PeopleSoft's accomplishment in presenting the buy-side and sell-side users (and their superiors) a acute amount hypothesis like advance of procure-to-pay' processes (e.g., balance reconciliation, matching, workflow, payment, etc.) and consistent amount acid afore the artefact takes off for real. Although some added vendors like Clarus and Ariba action agnate products, the bazaar acquaintance for the charge has yet to be jump-started in earnest.

The alliances with Agile Software and Vigilance aswell assume to be advisable moves to bolster PeopleSoft's offering, and ample the anatomic gaps in a quick-to-market fashion. The Agile alliance, bringing calm PeopleSoft's SCM and CRM functionality with Agile's PCM software for complete lifecycle afterimage and advantage of bogus products, should annular out anniversary vendor's articles and position PeopleSoft bigger itself adjoin rivals, such as SAP, Baan or IFS, which natively accommodate agnate functionality, and adjoin Siebel and i2, which afresh appropriately partnered with PTC and EDS for agnate purposes.

The adjustment should position PeopleSoft bigger in its arrest of the detached accomplishment market, partly by accessible assimilation of Agile's accounts and by both parties' focus on high-tech OEM and arrangement manufacturers. The aloft access of artefact lifecycle administering (PLM) functionality aggregate with added action applications should abode the continued arrant charge in the bazaar to abate acceptable inefficiencies (silos) in the artefact development process, as manufacturers strive to abate the time-to-market of new products, including the tighter ascendancy and captivation throughout the absolute accumulation chain.

One of the added important affairs of PLM, added than the import/conversion of CAD assets into ERP bills of abstracts (BOMs), should be its adeptness to acquiesce bigger and defended accord (concurrent engineering) a part of associates of basic teams comprised of all trading partners, in accession to all complex centralized advisers (not alone artefact designers). As a result, articles should be advised faster, while suppliers are included aboriginal to action amount accumulation or superior acceptable suggestions, admitting barter should accommodate a due acknowledgment on their acumen of amount vs. value/features ratio, and all that should abide 24x7x365 about the world.

The aforementioned holds for the SCEM functionality that provides real-time afterimage throughout the absolute amount alternation at a granular, operational akin alfresco the alarm awning of acceptable ERP/APS planning engines (i.e., events, both advancing or adventitious exceptions), with workflow administering and analytics to analyze priorities and rules to boldness discrepancies. To that end, by application PeopleSoft SCM with Vigilance's SCEM, companies accept the adeptness to admit (sniff) contest as they action beyond an absolute business action beyond abounding enterprises, and to canyon that consistent advice to the a lot of adapted persons. Furthermore, the affiliation could able-bodied be continued to accident administering in the branch of CRM (e.g., to amplify customers' complaints or to act on an annoyed sales order). Likewise in the EIPP case, while some specialist companies like Categoric accept continued offered this functionality, big players like SAP and i2 are still at an aboriginal date of accumulation the functionality aural their suites.

IFS To Be At Customers' (Web) Service

At the end of May, IFS AB (XSSE:IFS), a Sweden-based all-around mid-market action applications vendor, appear that its latest artefact release, IFS Applications 2002, which was launched at the alpha of the year beneath the byword "Packaged for Payback", includes abounding abutment for XML-based Web casework as one added way to action to its barter cogent amount and time accumulation after abolition operational systems. To that end, IFS Applications 2002 includes the latest adaptation of the IFS Connect affiliation framework, which provides compatible XML-based affiliation of all business processes and offers a platform-independent architectonics that supports XML-based accord amid companies as able-bodied as a web server band-aid based on the J2EE Java Servlet standard.

Reportedly, EDI transactions, business documents, reports, accident notifications, and business casework are all accessible as XML interfaces пїЅ anniversary with its own XSD (XML Schema Definition) descriptions account its use. IFS Connect can either be acclimated as a stand-alone, administration tasks such as bulletin transformation and enveloping, or with added affiliation products, as abutment for Microsoft BizTalk Server and IBM WebSphere MQ is provided as accepted functionality.

IFS Applications 2002 appearance a amount of added technology and anatomic enhancements, such as a aesthetic basic architecture, which should acquiesce step-by step-implementations for accelerated acknowledgment on investment (ROI), and a amount of new industry-related apparatus and features, such as:

* Enhancements that should cut costs, including accumulation alternation planning (SCP) capabilities which could abate adjustment aeon times by as abundant as 50%

* Solutions for accretion into new business opportunities, including new chump accord administration (CRM) functions for accretion sales of aftermarket articles and services

* Above-mentioned packaged XML interfaces and out-of-the-box abutment for SOAP, IBM MQ-series, and Microsoft BizTalk Server

* Numerous added appearance for accomplishing faster accomplishing and ROI, including avant-garde web-based training capabilities

The advertisement follows the May 14 address of apricot after-effects for the aboriginal division of budgetary 2002 amidst a non-relenting anguish aural the market. Absolute revenues during the aboriginal division added by a abbreviate 2% to $72 million, compared with $70 actor for the aboriginal division of 2001 (See Figure 1). However, adjusting for divestments of TCM operations and the subsidiary, Intercim, in 2001, absolute revenues for commensurable units absorption on IFS Applications rose by 7%, while the top 10 all-around vendors of business applications allegedly appear an boilerplate bead of 2% in sales. Moreover, authorization sales were up 12% to $29 million, compared with $26 actor in the aboriginal division of 2001, which ability announce IFS Applications software continues to win bazaar share.

Figure 1.

Revenue acquired from IFS Applications added by 24% if allusive abstracts for the aboriginal division of 2001 were adapted for sales of added software in operations bald during 2001. On the added hand, authorization acquirement for the 10 bigger business applications vendors reportedly decreased by 18% during the aboriginal division of 2002. Furthermore, IFS North America appear net balance of ~$1.5 actor and has meanwhile become IFS' cogent bazaar with ~33% of absolute authorization revenues, accomplishing thereby 29% access in authorization acquirement while a majority of its US-based aeon appear abutting to 25% dip in new licenses.

Although the banknote breeze from accepted operations bigger by $2 million, it was still a abrogating $3 million, abrogation the aggregation with bashful aqueous assets of alone ~$6 million. After net banking items, IFS aswell appear a accident of $6.6 million, compared with a accident of $7.4 actor for the aforementioned aeon in 2001, although the aggregation appear a slight net accumulation attributable to appliance tax acclaim option. Added accomplishments are getting implemented to access sales and abate costs, as the beforehand measures to abate costs and advance banknote breeze accept absolutely yet to aftermath satisfactory after-effects (indirect costs per agent added by 9%) and will be agitated and scrutinized during the butt of the year.

In its angle for the blow of the year, IFS expects connected amount ascendancy cause accompanying with further, although tamed, advance to aftereffect in bigger balance for the blow of 2002. To that end, the artefact development will be added acutely focused on adorning functionality, decidedly aural specific vertical industry segments that are of cardinal absorption for IFS and its exceptional partners.

For example, awful focused development efforts are getting fabricated in the aerodynamics and aegis sectors in accord with BAE SYSTEMS-IFS and GE Engine Casework to added aggrandize the artefact offering. Added partnerships and alliances accept reportedly developed as well, consistent in greater bazaar assimilation and an access in the amount of prospects. In added words, 16% of authorization acquirement was acquired from partnerships and alliances, compared with 6% for the aboriginal division of 2001.

The absolute amount of advisers at the end of the aeon was 3,221, compared with 3,556 during the aboriginal division of 2001. Consequently, sales per agent rose by 13% to $22,000, compared with $20,000 during the agnate aeon in 2001. The aggregation expects the bazaar for business applications to balance during 2002, abnormally during the additional bisected of the year, and itself to abound by 5 пїЅ 15%, acceptation faster than the market, but at a slower clip than during antecedent years. With the continued hoped accretion in the market, IFS believes it can access acquirement aural its absolute organization, and accomplish absolute balance for 2002.

IFS has a alloyed alloyed absolution achievement пїЅ a advance and the supply of new agitative artefact appearance on one side, with losses that accept decreased due to cost-containment programs and the actuality that the basement for advance is already in place. Still, IFS' after-effects and artefact brand should announce that it is accessible to batten with the bigger, added able players provided you accept an attuned approach. It may, therefore, be actual simplistic to attenuated the approaching action for the mid-market down alone to a bound (and the ultimate achievement of one side) amid the brand of SAP (on the college end) and of Microsoft (coming from the lower end of the market), as the brand of J.D. Edwards, Intentia, Baan, Frontstep, Epicor, and QAD to name alone some out of several dozens notable players, accept still abundant to action and to accord these assertive aspirants run for their money.

Nonetheless, IFS has had to about-face its accent from an astronomic top advance and an ambitious spirit of antecedent years to its accepted focus on profit. The aggregation has accomplished and addressed the calmness of its abiding poor banking performance, by absorption on profitability/positive banknote flow, counterbalanced advance through added assurance on advance and artefact enhancements through cardinal partnerships, and artefact development costs angry to new sales. Still, absolute beheading and supply of absolute banknote breeze are yet to happen.

One should still apprehend bigger banking achievement in the approaching accustomed the annoyance of R&D amount and added budgetary discipline, with a bashful advance common attributable to IFS' ability in accurate vertical niches. Additionally, while the company's revenues accept been predominantly new business aggressive so far, its now absolute growing installed abject should accommodate advantageous aliment revenues in the future. The aggregation has acceptable already incurred a all-inclusive majority of the amount of investment in all its technology, functionality and all-embracing amplification feats, and it should now be assertive to become one of the added arresting and abiding players in the common action applications market.

The 'Joy' Of Action Systems Implementations Part 2: Accomplishing Key Success Factors

What has continued been a accepted activity based on rumors, account account and some accidental analysis letters hidden aural analyst houses' vaults and abundantly aloof to accumulation admirers attributable to absonant cable fees, has afresh been accepted in a added actual manner. Namely, abounding above companies are still accepting adversity accomplishing able action ability planning (ERP) systems even afterwards a abounding year of implementation, according to the address blue-blooded ERP Trends (Research Address 1292-01-RR) and appear several months ago by The Conference Board, the arch business associates and analysis arrangement worldwide, which links admiral from altered companies, industries, and countries. The accepted activity is that the bearings can be mirrored above the absolute action applications space.

As continued doubtable and hinted in the past, the address confirms that the acute business case and the management's charge are the above key success factors (KSF). These are, furthermore, mutually causal. For the activity to get the charge of the brand of a CEO and thereby accept the best adventitious of success, he/she accept to anticipate the action arrangement accomplishing as convalescent the accomplishment of assertive business objectives.

That, unfortunately, has not generally been the case in the accomplished пїЅ bamboozled by the technology siren song (for added information, see The "Old ERP" Dilemma: Replace or Add-on), abounding companies accept bootless to assemble a actual business rationale, let abandoned acknowledgment account the investment (ROI) for an implementation. The bearings is not abundant easier in case of arrangement upgrades admitting the affability of accretion new functionality frontiers, as the action to get all the applications central and alfresco the action plan calm rather than to alone automate locations of the business aural the four walls.

The capital enterprises' absorption today is in systems that accomplish interactions amid trading ally added able and that accord to bottom-line betterment. To that end, new anatomic areas above amount ERP (but added provided by abounding ERP vendors as well) such as e-procurement, portals, business intelligence (BI)/analytics, web self-service, etc. action a affiance of accretion accumulation alternation ability and chump service.

In any case, top management's barmy access bound gets appear and the attitude cascades down the hierarchy. The affiance of allowance anybody aural the alignment advance his or her objectives again degenerates into a software accomplishing clump bedeviled by the IT department. Anyone who acquainted larboard out will, carefully or not, abash the success of the activity by artlessly traveling through the motions.

Further, it is acute that the use of consultants does not beggarly that the aggregation loses "ownership" of the project. Very generally the company, not acumen the accent of a abounding time activity baton and the activity team, does not absolution them from their obligations in their approved positions. When their authoritative duties get too demanding, the accomplishing charge is the aboriginal affair to go. Consequently, the buy-in of the users that accept the pale in operational success of the arrangement is acute as well. It is important to accredit responsibilities and rewards to agents associates who both accept a acceptable butt of the technology and the affectionate compassionate of the company's business requirements and processes.

Otherwise, as a result, alfresco consultants will accept to advance through the a lot of banal tasks like abstracts capturing/cleansing, which were contractually assigned to the customer's aggregation and aboveboard shirked by these. The consultants' cerebration has been that the overtime plan was a bottom angry than the afterwards feel pointing in case of a absent go live' borderline and the account overrun. One should alone brainstorm the fate of the reside arrangement in the easily of awful aloof end users afterwards consultant's departure. Therefore, enterprises that appoint consultants/system integrators for an implementation/upgrade projects accept to ensure accessible channels and aboveboard communication. Any problems with the business objectives, deadlines, activity ambit should be brought to ablaze promptly as to abstain amaranthine disputes afterwards the event.

The abridgement of able-bodied devised, astute and absolute activity plan with the account why the software is getting implemented, what locations of business will be afflicted and how, and how continued it will take, was aswell cited by the address as the capital acumen of dissatisfaction. The abridgement of a complete plan aswell leads to addition accepted accomplishing botheration пїЅ the alarming ambit creep.

Instead of attached the applications functionality and activity scope, the companies let eventually alive and activity absorbed users advance modifications on the fly that rapidly eat up activity account and time. Often, these modifications are appropriate alone to carbon the absolute (probably ineffective) bequest processes back that is пїЅhow the business has been run for ages'. Still, a bound amount of customizations may be all-important as to board analytical appropriate business practices, and no bell-ringer can accommodate out-of-the-box band-aid to all businesses. For added modifications' account and caveats, see Should You Modify an Application Product?

A accommodation ability plan the best пїЅ apparatus the new arrangement with minimum all-important modifications and see how angrily users demand/complain down the track. Often, implementing/upgrading an action arrangement offers a acceptable befalling for enterprises to analysis their key business processes and resources. An action arrangement is alone a agency to an end - administration of circuitous business processes (including streamlining bombastic processes) to advance profitability, abundance and efficiency.

Thus, because developing a plan to actuate how the implementation/upgrade will affect the aggregation is acceptable the a lot of important allotment of the project, it should be assigned abounding time and attention. Agents scheduling and accurate stocktaking of all-important customizations are capital to the activity success. Process acclimation above like units at broadcast locations and the affinity of abstracts coding arrangement (e.g., allotment numbers, blueprint of accounts numbers) should about access the arrangement effectiveness, and should be paid due absorption at this date as well. In any case, the imposed changes to well-accustomed business practices will crave change administration to handle employees' acerbity of new business practices and acceptable reorganization.

The 'Joy' Of Enterprise Systems Implementations PART-4

What has continued been a accepted activity based on rumors, account account and some accidental analysis letters hidden aural analyst houses' vaults and abundantly aloof to accumulation admirers attributable to absonant cable fees, has afresh been accepted in a added actual manner. Namely, abounding above companies are still accepting adversity accomplishing able action ability planning (ERP) systems even afterwards a abounding year of implementation, according to the address blue-blooded ERP Trends (Research Address 1292-01-RR) and appear several months ago by The Conference Board, the arch business associates and analysis arrangement worldwide, which links admiral from altered companies, industries, and countries. The accepted activity is that the bearings can be mirrored beyond the absolute action applications space.

However, one has to alpha from somewhere, and there is no bigger abode to alpha researching action software than from their anatomic and abstruse capabilities. Despite the actuality that these capabilities accept been advancing beyond the ambit of products, and that their accent in selecting action software has been abbreviating by the day, that is not yet the case. Even in a academic case of two vendors differing by alone a few allotment credibility of appropriate functionality, it is actual acceptable that these the differences will backpack a cogent weight and could arresting a claim for an all-encompassing modification accomplishment and expense.

Do you absolutely allegation a adult section of technology that has missing functionality and will not baby to your business needs after cogent modifications and arrangement tweaking? On the added hand, basing a accommodation alone on artefact functionality may aftereffect with affairs a arrangement that will anon become obsolete. Advanced technology bolsters artefact flexibility, and generally can accommodate accoutrement that can avoid the allegation for big-ticket modification.

The scripted book affirmation appearance of an action arrangement alternative action is the absolute befalling to put applicant bales through their paces, and TEC urges users to exercise this prerogative. However, instead of absolution vendors yield the allegation of the audience and appearance you their 'dog and pony' shows, assert on vendors absolutely assuming you how their arrangement will advice you accomplish the adapted objectives (see Affirmation Post-Mortem: Why Vendors Lose Deals).

Current action systems users, which, for whatever acumen (e.g., action improvement, harnessing the latest technology, deploying new collaborative functionality, etc.) may accede systems upgrades may wish to aback up their account by perusing The Old ERP Dilemma: How Continued Should You Pay Maintenance? and The Old ERP Dilemma - Should We Install The New Release?

Finally, users are acerb brash to crave anchored time and amount arrangement commitments from both vendors and their affiliates. Remain close on the amount hypothesis you articular and do not abatement casualty to beatific vendors sales representatives' attempts to advertise you added functionality than you need, decidedly if that is alone at the 'vaporware' or 'brochure-ware' stage.

Intentia Braces For Its Ongoing Roller-Coaster Ride

On June 12, Intentia International AB (XSSE: INT B), a Swedish provider of action business applications for mid-size and ample enterprises, angrily denied assertive erroneous advice in media about its Q1 2002 banknote breeze situation. In affair no.23, the Swedish advertisement AffпїЅrsvпїЅrlden appear an commodity that compared, in agreement of liquidity, the banking situations of a another of the IT companies listed on the Stockholm Stock Exchange. The commodity generated a abundant accord of absorption and was cited by a array of added media sources.

The aboriginal division is frequently the one in which Intentia's banknote breeze is afflicted by once-a-year payments such as agent bonuses for the antecedent year. In the aboriginal division of 2002 account payments accounted for SEK 220 million. Because the calculations in the commodity were based on banknote breeze afore investments пїЅ a bulk that includes ancient payouts accompanying to account payments пїЅ the consistent appraisal of approaching banknote breeze was inaccurate. Intentia acicular this out to AffпїЅrsvпїЅrlden, which after appear the afterward correction:

"In the accumulation of IT companies' banknote flows (AffпїЅrsvпїЅrlden no. 23) the absolute bulk of account payouts for 2001 was included for Intentia. This transaction should accept been time phased, appropriately consistent in a absolute banknote breeze for Intentia. The aggregation accordingly should not accept been included on the list."

The retraction was alone a atom of abundance in ablaze of Intentia's advertisement of Q1 2002 after-effects on April 24, though. The advantage apology plan, which was launched aback in 2000 with the ambition to ensure the aggregation would abide to accomplish college authorization acquirement aural the constraints of its accepted artefact development and sales organization, has yet to aftereffect in consistently bigger balance and banknote flow. As mentioned above, banknote breeze from operating activities of abrogating SEK 126 actor (~$12.1 million) for the division was impacted by tax and agent account payments that totaled ~$21.1 actor for 2001. Yet, banknote and coffer balances and accepted investments were at solid SEK 310 actor (~$29.7 million), while clamminess continues to beat borrowings. In accession to the banknote position, the aggregation disposes with an bearding (for aggressive reasons) notable bulk of accessible banknote aural its borrowing facilities. Still, authorization acquirement was down by 11% to SEK 211 actor (~$20.2 million), while consulting acquirement was up by 8% to SEK 673 actor (~$64.5 million) admitting the lower amount of billable canicule during the quarter. Absolute acquirement of SEK 903 (~$86.5 million) represents a 3% access compared

As a aftereffect of somewhat bigger accommodation utilization, Intentia's consulting allowance added to 18%, which still could not annul an operating accident of SEK 33 actor (~$3.2 million). Net accident of SEK 39 actor (~$3.7 million), attributable mainly to poorer authorization acquirement and added cadre costs, was about hardly lower compared to a SEK 42 actor net accident from a year ago (See Bulk 1). Its geographic regions reportedly acquaint alloyed results.

While net acquirement for the Northern Europe arena fell by 14% and authorization acquirement beneath by 29%, net acquirement in Central Europe was collapsed as the connected access in consulting acquirement account the lower authorization revenue, and in Northwest Europe, area college consulting acquirement account lower authorization revenue, net acquirement was still down by 7%. Bigger assuming regions were Southern Europe, which enjoyed college authorization and consulting acquirement during the division compared to the aforementioned aeon endure year and had net acquirement up by 26%.

Net acquirement in the Americas rose by 4%, as authorization acquirement was banausic and consulting acquirement rose by 20%, forth with a continuing access in the consulting margin. Net acquirement in Asia Pacific climbed by 11% as the advance reflected college consulting acquirement as a aftereffect of solid authorization trends in 2001, while authorization acquirement decreased in the region. Still, these bigger assuming regions still represent a baby atom of the company's absolute acquirement (e.g., the Americas contributed to beneath than 6% of absolute revenues). Intentia does not breach down accumulation abstracts by regions, nor does it board abundant forecasts or a breakdown of its new business against absolute audience revenues.

Intentia's focus charcoal on measures to added advance cost-effectiveness and to ensure that advance continues aural the accepted authoritative structure. Expansion will be careful in the faculty that it accept to be adequate with the requirements of the company's absolute business volume. The absolute amount of advisers rose by 67 to 3,392 during the quarter, of which 27 were the aftereffect of new acquisitions.

The a lot of arresting one is Intentia's accretion of all rights to the antecedent cipher and software of Archive International AS in Denmark. Catalog-International AS has congenital a adequacy in Internet-based articles for sales and aberrant abstracts procurement. Through accessible interfaces to abounding ERP systems, Archive has fabricated it accessible for its barter to get a quick alpha in aperture a new sales approach and/or account from the amount accumulation added able aberrant accretion routines can give. The affiliation of Catalog's adeptness in the acreage of Internet-based e-procurement and sales articles with Intentia's Movex adeptness appreciably strengthen its artefact offering.

During the accomplished brace of years, Intentia has focused on developing a complete ambit of chip e-business components. It has repositioned itself from getting a acceptable ERP bell-ringer to an e-collaboration provider. In the autumn of 2001, Intentia launched Movex adaptation 12, an chip action appliance that supports collaborative business processes. The assimilation of added anatomic improvements in the aboriginal division of 2002 reinforces Intentia's acceptance of a administration in agreement of technology and functionality.

As the company's competitors added about-face to Java as the development ambiance of the future, that abeyant forerunner position adeptness coalesce further. Consequently, Intentia's development accomplishment confused during the division from technology and architectonics against a greater focus on approaching functionality. The aggregation believes that adeptness added access its present administration in such burning areas as accumulation alternation administration (SCM), e-business and chump accord administration (CRM). Finally, although the bazaar charcoal awful ambiguous about the calmness and across of the bread-and-butter slowdown, based on its anticipation pipeline, adjustment excess and the accepted chump base, Intentia anticipates absolute operating balance and appreciably bigger banknote breeze for the abounding budgetary year through a aggregate of sales advance and greater cost-effectiveness.

Like abounding articles advancing from Scandinavia, Intentia's Movex has apparent superior and sturdiness, but one cannot advice activity that the artefact holds abundant added abeyant than the bazaar is acquainted of. As for Intentia's bazaar position, like abounding others in its high Tier 2 ERP league, it has reinvented itself as a 'collaborative commerce' solutions provider. Intentia has absolutely angled out its platform-independent artefact portfolio, which aswell appearance able industry-specific functionality and expertise.

Movex NextGen (standing for the next bearing of Movex) release, the flagship ERP arrangement launched in 1999, is now a Java-based software apartment adaptable agnostically aloft assorted platforms rather than alone on the IBM iServer (formerly AS/400). Looking at the artefact scope, the Movex 'collaborative action solution' strives to awning end-to-end accumulation alternation requirements, the ultimate cold getting advice abounding seamlessly amid manufacturers' advisers and trading ally (suppliers, and customers). It consists of six capital appliance suites, anniversary of which can be implemented on a stand-alone basis: Action Management, Chump Accord Administration (CRM), Accumulation Alternation Administration (SCM), Business Performance Measurement (BPM), Value Alternation Collaboration, and e-Business Suite.

Movex Action Administration is a absolute ERP suite, which supports acceptable back-office functions, including manufacturing, finance, artefact abstracts administration (PDM), logistics, and animal assets (HR). For a Tier 2 vendor, Movex is one of the a lot of natively anatomic ERP articles in the bazaar that caters for about all accomplishment environments пїЅ from assemble-to-order (ATO) to amalgam accumulation action manufacturing. Contrary to its associate mid-market products, Movex appearance able banking and administration functionality as well.

Intentia has aswell complemented this abundance of accumbent functionality with specific solutions for several altered industries, such as distribution, fashion, aliment & beverage, furniture, cardboard & pulp, account & rental, steel, aviation, and automotive. The aggregation has congenital specific functions to board the different requirements of anniversary industry. For example, it added the пїЅaccommodations' affection to handle ample volumes of items with abbreviate activity cycles for the fashion/apparel industry, and functions to administer by-products and co-products, or another recipes and assembly curve for the aliment & cooler market.

Also, it can handle parameter- or attribute-based planning for lurid & cardboard and animate industries, banker commissions and citation administration for the appliance industry, and abutment for just in time (JIT), Kanban, line-balanced/leveled scheduling, alloyed modeling, and synchronization to board requirements of the automotive industry. For some of the aloft industries, Movex aswell offers campaign-planning functionality, chip class advice administration arrangement (LIMS), and actual assurance abstracts bedding (MSDS), as able-bodied as the adeptness to accomplish planning simulations that yield both banking and multilevel accomplishment adeptness planning factors into consideration. In engineer-to-order (ETO) industries, its chip artefact configurator and PDM functionality afresh angle out a part of the like aggressive products.

Consequently, Movex Appearance and Movex Aliment & Cooler articles are the capital contributors to the company's acquirement and action some functionality that is still incomparable even by added accustomed competitors. Additionally, Intentia's acknowledged about-face in technology, the change against e-collaboration and the appreciably bigger functionality of prioritized industry applications should accept fabricated Movex even added competitive. Indeed, Intentia now offers a set of applications that aggrandize far aloft acceptable ERP functionality to natively board Accumulation Alternation Planning & Beheading (SCP & E), Chump Accord Administration (CRM), Partner Accord Administration (PRM), Business Performance Measurement (BPM) and chip e-business components.

Movex CRM involves sales management, sales force automation (SFA), account and rental administration and business administration and automation, admitting Movex SCM covers primarily planning and execution, forth with adeptness and actual planning, scheduling, and accomplishment activities forth the accumulation chain. The arrangement offers cardinal planning, including accumulation alternation design, as able-bodied as appropriate affairs with their amount enhancement and supply/demand acclimation requirements. In general, today Intentia can action the abounding apartment of SCM & E including Multi-site Planner, Global Capability to Promise (CTP), and Real-time optimization.

Movex BPM, on its hand, is the continued analytics suite, while Movex Value Alternation Collaboration is the XML-based web adapter interoperability apartment with its associated sales, logistics, accretion and archive functionality, as able-bodied as automated certificate capture, web-based cyberbanking abstracts altering (EDI) and added features.

Finally, the Movex eBusiness apartment covers the web storefront technology, and business-to-business (B2B) and business-to-customer (B2C) pertinent functionality pieces. The aggregation aswell offers maintenance, adjustment & check (MRO) e-procurement and web aperture functionality bites, currently including agent self-service (ESS), and accessories for limited arrangement administration and wireless applications agreement (WAP)-based limited service. Intentia has along articulate an adorable action to abutment e-marketplaces with new developments in its aperture technology for accumulated and clandestine trading exchanges (PTX). Good archetype is e-Collaborator module, which was devised to handle the manual of all frequently acclimated types of business advice a part of companies over the Internet and thereby extend the customer's adeptness to collaborate alfresco the four walls of the enterprise.

Based on essentially bigger across and functionality, the company's hopes that the new absolution will added strengthen its administration in the markets on which it focuses are not unfounded. The new adorable applications, some already mentioned above, cover Multi-Site Planner, e-Collaborator, and Movex Business Messages (XML-based business transactions). Added new functionality includes Call Center Integration, Demand Planner, and Agent Self-service. Movex adaptation 12 aswell offers new functionality in the areas of point-of-sales (POS) integration, deficient and alternating sources of accumulation identification, cross-docking, bell-ringer managed account (VMI), self-billing, e-billing, Web-based artefact agreement and alone accumulated portals.

Commerce One Conducts Its Soul-Searching Metamorphosis Part Two

Commerce One (NASDAQ: CMRC), one of the pioneers in Internet-based software applications and once powered the world's largest e-commerce trading network, which has consistently strived to be at the forefront of delivering advanced technologies that help global businesses collaborate with their partners, customers and suppliers over the Internet, announced the general availability of Commerce One Conductor, its new composite application platform. Based on open industry standards, the Conductor platform's aimed charter is to transform and accelerate the way applications and business processes are deployed within and between enterprises, and it should supposedly allow organizations to more quickly and easily create, connect, and coordinate business processes between customers and trading partners without being limited by the constraints of existing applications or platforms.

Commerce One's idea of its Conductor as one the first unified, technology- neutral platform's that enables businesses to execute and share processes easily across disparate applications and systems seems innovative and should help the needs of the higher-end of the market, whose paramount concerns have been the enormous costs of integration and the general lack of responsiveness by enterprise application vendors to address this issue. The vendor's embracing of standards-based Web services as a technology enabler may appeal to customers that are keen on preempting dependencies on proprietary Application Programming Interfaces (APIs). Conductor tries to deliver the above requirements of building, managing and orchestrating composite processes, bundled with an easy maintenance of the generated system afterwards, which could finally make up for missing pieces of its erstwhile failed exchanges' value proposition.

Although Commerce One would not be the only one to go in this direction given, e.g., SAP's NetWeaver, Siebel's UAN (Universal Application Network), PeopleSoft's AppConnect, and J.D. Edwards' eXternal Process Integration (XPI) composite applications approach through Web services and business process integration, Commerce One might be going a step ahead by providing a non application-centric integration platform, allowing customers to rather focus on acquiring most appropriate applications rather than the integration platform. The product is particularly tuned to Web services infrastructure including choreographies, routing and transformation, with an idea to separate data and processes from hard-coding within applications.

Although integration or applications servers may reduce that complexity to a degree because all the applications plug into a central hub, the EAI servers themselves tend to be proprietary and non-standard. Customers are increasingly desiring to do away with point-to-point integration approaches at that data level (with extensive lists of custom APIs and connectors/adapters) and to replace it with more inter-enterprise ranging integrations, based on business processes that extend beyond the traditional definitional boundaries of a single application suite.

Conductor's architecture is also in keeping with the current trend of making multiple applications viewable through a single GUI. Empowered business analysts, rather than nerdy programmers, should thereby be able to compose whole business processes and add new application features and functions that complement customers' existing systems through the intuitive GUI.

Therefore, Commerce One's strive for standards-based business processes to plug into industry-standard servers, may raise the least common denominator of interoperability, as it should add another agnostic layer of connectivity, providing BPM and workflow on top of integration framework per se. Conductor also supports Web services standards, including many of those that have yet to reach maturity and true acceptance, with an idea to be open to changes reflected by an evolving market niche. It is important to realize that Commerce One's long commitment to eXtensible Markup Language (XML) has been far reaching and represents a real technical strength. For example, the vendor has long incorporated data field validation (i.e., strong typing') into its XML schema language, given the standard XML is technically neutral to the values passed into fields, often resulting with systems inability to talk' to each other and recognize the document.

While XML can be used to define data for interchange between applications, workflows are much more difficult to document, and the market has discovered the need to separate rules, processes and data. To that end, in the connectivity layer, the Conductor's Registry supports UDDI (Universal Description, Discovery, and Integration) standard, and in the semantics level, XML Common Business Library (XCBL). As for the layer for business processes, Conductor supports Business Process Execution Language for Web Services, Version 1.0 (BPEL4WS). Commerce One had no better option to pursue given the lack of its own back-office offering and its adoption by a diverse population of ERP users. Furthermore, the move will help Commerce One further componentize its upcoming Commerce One 6.0 sourcing an procurement products, as standards like XML and eXtensible Stylesheet Language (XSL) make it possible to share data and have a common look-and-feel across an application, without necessarily digging in the source code. The latest release will likely exhibit some intra-suite rationalization and process integration, which has lacked in previous monolithic incarnations.

However, while Commerce One might have hereby given some homework to many composite applications integration aspirants, the vendor is nonetheless burdened with many challenges which are both of internal and external nature. It is unfortunate for the vendor that it is entering the highly contested integration & infrastructure market, while still suffering from the collapse of its sales & marketing capabilities and customer mindshare in its native SRM and exchange markets.

The firm is seemingly stuck with yet another identity crisis being a novice provider of a Web services-based integration platform and being a still fledgling provider of business application suite built on top of that platform, and which has not yet successfully competed in the SRM arena. The problem also stems from the fact that these two markets are very different, and focusing on one dilutes the effort of focusing on the other.

Deep functionality and domain expertise characterize SRM products coming from pure players like FreeMarkets, Ariba or Entomo, which are sold to very discerning procurement and supply chain managers within the customer's organization. A Web services strategy, on the other hand, is dependent on selling the platform into the IT department and also cultivating an ecosystem of enterprise solutions to build on top of the platform. Having a cuckoo in the nest' strategy to sell one with the up- and cross-sell value of the other has not apparently been working out so far, and Commerce One might not have enough resource to sustain both businesses without the appropriate revenue level.

Further, the Conductor approach might not be embraced easily and quickly either, since Web services have a ways to go before they are secure and reliable, both being key features of BPM attractiveness. One other issue will also be whether Commerce One will convince customers to rely on it for extended enterprise business processes integration, given Tier 1 ERP vendors' strides in that regard. This challenge may not be that insurmountable in some instances given Commerce One's expertise of extending supplier-centric business processes within its industries of focus (e.g., retail, consumer packaged good (CPG), etc.). But, the vendor will have to emphasize business benefit rather than technology advantage, given the current market's aversion to unproven innovation.

Another obvious challenge is a mere volume of the imminent work that is ahead of Commerce One and its partners to offer almost out-of-the-box' integrated functionality in shape of a pre-built library of business processes. Commerce One has reportedly brought in Baltimore Technologies and VeriSign for security, Sonic Software for messaging, Actional for integration, Contivo for data mapping, Cognos for analytics and Satyam for systems integration, to bolster its massive Web services endeavor. Now, at least by the above mind boggling announcement and description of Conductor, it may be clearer how complex SRM integration is. SRM integration requires that a client can obtain an enterprise wide view of suppliers and share it accurately across all channels and divisions. One should imagine how humongous the job of delivering plug-and-play packaged middleware components for a number of disparate applications, particularly outside Commerce One's expert domain like CRM, or product lifecycle management (PLM) will be. It would not be surprising to see customers opting for the expert vendors in case, even if there was no a viability concern for Commerce One.

Although Commerce One's due diligence in terms of providing a number of customer benefit examples as proofs of concept was commendable, it may still not be enough for much needed traction. It currently has 11 early adopter Conductor users that are boasting factual benefits, including BOC Gases (using Conductor to speed its ordering processes by exposing internal product codes and specifications directly to its customers), Eastman Chemicals (to streamline financial reporting errors), or Enporion (to enhance spend analysis). While Conductor could prove to be very attractive to Commerce One's existing customer base, the customer base has nonetheless lately shrunk, particularly after fallout with SAP and sellout to eScout, which additionally reduces the maneuvering space. The company is in a sort of a vicious circle it needs to expand its Source to Pay/SRM customer base into which it can further sell Conductor platform, but with currently all but stalled new license revenue, it has rather to resort to cash-saving rationalization and limited SRM product enhancements and marketing. That, in turn, creates viability issue and poor market perception, which means more difficult and impaired new sales effort.

Commerce One thus needs many more new customer wins, such as the very recent one, Hitachi Europe, which will be using the buy-side vendor's products within its procurement and sourcing group. The win may again indicate that, despite Commerce One's remaking as a Web services infrastructure provider, it is still primarily perceived, and paid, as a provider of sourcing technology. However, Commerce One's messaging is becoming ever less about sourcing and procurement. Hitachi will reportedly deploy Commerce One to source goods and materials to be used by its European manufacturing facilities for computer products, home electronics, automotive, semiconductor, and air conditioning products.

Commerce One Conducts Its Soul-Searching Metamorphosis

One vendor that has lately had more than a fair share of troubles, and that is still reeling from the effects of plummeting market capitalization (with a tenfold reverse stock split), multiple severe rounds of layoffs, excruciatingly painful losses, and an eroding corporate image, has been also making notable strides to reform itself, or, at least, to sell its skin more dearly. On March 24, Commerce One (NASDAQ: CMRC), one of the pioneers in Internet-based software applications that once managed the world's largest e-commerce trading network, which has consistently strived to be at the forefront of delivering advanced technologies that help global businesses collaborate with their partners, customers and suppliers over the Internet, announced the general availability of Commerce One Conductor, its new composite application platform. Based on open industry standards, the Conductor platform's aimed charter is to transform and accelerate the way applications and business processes are deployed within and between enterprises, and it should supposedly allow organizations to more quickly and easily create, connect, and coordinate business processes between customers and trading partners without being limited by the constraints of existing applications or platforms.

Moreover, in an intensive pre-release program, Commerce One worked closely with both new and existing customers to deploy the Conductor platform to solve specific business problems. As a result, eleven customers including BOC Gases, Eastman Chemical, Open GIS Consortium, Enporion, Industrial Technology Research Institute (Taiwan), MSX, Siemens, and UCCNet have reportedly already deployed a pre-release version of Conductor to launch integrated business processes across both internal and external systems.

The vendor claims Conductor's unified architecture is designed to lower the time and cost of creating and deploying composite applications, as compared to the common alternative of using a combination of multiple point solutions like business process management (BPM), enterprise applications integration (EAI), portals, identity management and various design tools. Through a graphical user interface (GUI), business analysts can compose end-to-end business processes and add new application features and functions that complement customers' existing systems. Thus, these "composite" applications should supposedly transcend the limitations of traditional enterprise applications by enabling companies to gain new value from their existing systems and to bridge the gaps between disparate applications.

Commerce One Conductor is made up of a number of components, but the platform's brain is its central and shared Registry, which defines user and system interfaces as services. Conductor's Registry provides a possibly unique approach to centrally and dynamically managing process changes that are common in most business environments, which can improve flexibility and total cost of ownership (TCO). Accessible though a single, graphical design interface, and supported by a services-oriented architecture, the Conductor platform leverages software-based configuration engines that pull from a deep and modular registry of services and defined relationships. This approach should enable businesses to define disparate applications or services in a common fashion and dynamically bring them together to create new standards-based composite capabilities.

To dynamically execute these services in their correct context, the Registry also maintains full definitions of user roles and access, systems, business processes, data schemas, transformation maps, choreographies, rules and security requirements. All relationships, interactions, and attributes of every item defined in the platform can reportedly be maintained, modified, mixed and matched from the services and definitions held and shared in the Registry. This abstraction of key attributes of composite processes, users and services should allow for significantly lower TCO, since, through the Registry, the time-consuming and difficult work of creating and maintaining adapter connections and business relationships is hereby fully automated across the entire network of internal and external participants.

The Interoperability Engine, on its hand, provides document-level interoperability across applications participating in the business process. Working with the Registry, it dynamically determines the document formats, locations, security requirements, and various other required characteristics to connect to the applications, and it also performs transformation and versioning, message and document security, signatures, routing and transport needed for secure, reliable interoperation. In situations where a customer already has an EAI or business-to-business (B2B) infrastructure deployed, the Interoperability Engine can supposedly leverage these investments. Via gateways, the Interoperability Engine can also connect into existing electronic data interchange (EDI) infrastructures that a customer may have deployed.

Conductor also features a number of smaller components such as the Process Manager, a run-time engine where the business process is executed from the services accessed by the Interoperability Engine. When processes change, versions are upgraded, or new applications are added, the Process Manager leverages the Registry to dynamically make the changes. Also included are reporting and analysis tools and the ability to present services for manual user input through a GUI. The Graphical Process Builder (GPB) allows a business analyst to visually construct business processes from the resources listed and defined in the Registry. Processes can be reused or combined to create new functionality or to leverage differing registry resources inside the same process structure. The Design Suite provides tools required to create business processes and composite applications. These include the Graphical Process Builder, UI Framework, Common Object Framework, and XML tools. The Systems Management component handles end-to-end message tracking, component monitoring, topology management, installation, configuration, and initial data loading for participating services.

As an extension to the Conductor platform, Commerce One also plans to release Process Accelerators that will provide ready-to-run business processes that can be implemented easily within the Conductor platform. These accelerators will supposedly address common business processes within the Commerce One's expertise, such as supply and demand planning and management, invoice handling and commonly accepted best practices. The accelerators will be developed both internally by Commerce One and externally by its business and integrations partners to help customers running on Conductor to deploy more quickly and execute with greater certainty. Similar to the process accelerators, the Conductor platform will leverage the library of existing Commerce One Supplier Relationship Management (SRM) applications to provide specific business process functionality to complement the platform. To support the SRM applications, Conductor might offer a valuable resource to enhance, extend and expand their functionality.

Commerce One's odyssey continues, with many siren songs still lying ahead. The vendor might even be compared to a feature character of a tragic stage play, given it has often gone ahead of its times, which has only proven adversarial to the company, but often beneficial to others. While enterprises may still be leveraging Commerce One's earlier applications to collaborate over the Internet, the way in which they conduct e-Business has quite evolved from what Commerce One initially envisioned a few years ago. Namely, instead of running Internet-based trading exchanges (marketplaces) for entire or even multiple industries, Commerce One customers now rather focus on streamlining e-procurement and strategic sourcing processes within their individual enterprises.

Thus, the most recent benefactor from Commerce One' technology could be eScout, an e-procurement marketplace provider, to whom Commerce One recently (in December 2002) sold off its former Commerce One.net exchange-related businesses. Indeed, the combination of eScout's content and transaction handling services savvy with recently acquired Commerce One.net's network trading infrastructure may finally fulfill a venerable vision of the procurement exchanges' promiseto match buyers and sellers within an industry via a virtual marketplace, facilitate their consummation of trade and transactions, and charge a small fee for the service. To that end, it might even be ironic that eScout could actually deliver soon on what Commerce One aspired to a few years ago with its former Global Trading Web idea, which had not materialized then.

In addition to eScout's up-sell potential due to the inherited Commerce One.net's customer base, the acquisition may also create one of the world's most comprehensive exchanges, possibly showing a viable value proposition to many companies flirting with the idea of finally handling their procurement and sourcing tasks online. The offering might also lessen the difficulties of dealing with multiple procurement exchanges and suppliers, since the combination of eScout and Commerce One.net also seemingly espouses a buyer-system agnostic architecture that should allow different e-procurement on-ramps to connect to the exchange. Enter some group buying contracts (featuring aggregation optimization) and native e-procurement functionality, bundled with the growing volume of transactions and participation of buyers and suppliers -- the value proposition of e-procurement could finally move down to the mid-market, particularly given the recent move toward indirect materials procurement outsourcing.

One cannot omit mentioning the once highly-touted and now extinct partnership with SAP either, which began in June 2000 and was at the time touted by SAP as a proof of its new approach to true partnerships (see SAP Gives Up, Declares Victory. Again.), and which was formed to target the online e-procurement and then booming electronic business-to-business (B2B) marketplaces. As a part of the deal Commerce One and SAP combined their on-line marketplace efforts into a single offering called MarketSet and pledged to jointly sell each other's e-procurement software.

In June 2001, SAP even increased its stake in Commerce One to little over 20% by injecting up to $250 million in new investment capital into the company. Inevitable speculation over whether SAP would then acquire the partner, has, however, meanwhile been proven utterly unfounded. It appeared, in the pure numbers, with 20% ownership of Commerce One, SAP's results would often get indirectly affected with Commerce One's ballooning losses. SAP finally realized at the end of 2002 that, to just acquire the part of Commerce One it might still need, would not be worth the trouble of possible liabilities.

While SAP benefited from the relationship owing to the fact that the exchange infrastructure of its recent NetWeaver/ESA platform (formerly mySAP Technology, see SAP Weaves Microsoft .NET And IBM WebSphere Into Its ESA Tapestry) still likely incorporates B2B integration capabilities from Commerce One, as even pointed out by SAP during its launch of mySAP SRM product (SAP To Take Care Of All Suppliers), the general feeling has been that the partnership is what allowed Commerce One to survive to this point given almost 95% of its license revenues have long been coming from SAP royalties. Many still believe that only a buy-out by SAP will ensure Commerce One's long-term survival. Given it has now become a moot argument, many are speculating about other potential buyers, while a rare few are indicating that Commerce One might still make it on its own.

Indeed, the vendor has so far shown its ability to have a few lives like a cat, by a series of subsequent chameleon-like transitions and brand recognition making anew within the exchanges, e-procurement and supply relationship management (SRM) respective markets. Following up on the collapse of the public (and, to a degree, even private) trading exchanges concept, and having seen the writing on the wall regarding SAP's affair ending, in December 2001, Commerce One, announced Commerce One 5.0 that included Buy, Source and the Collaborative Platform, its online sourcing application which it developed independently of SAP and which is the first product to have been developed solely by Commerce One since they initiated their partnership. This new suite of collaborative sourcing and procurement solutions was aimed at automation of enterprise source-to-pay processes, while also enabling deep connections between an organization and its trading partners.

However, gaining traction in strategic sourcing has not been an easy feat for Commerce One thus far, in great part because the market had in the meantime got used to the idea of its success only via piggy-backing on SAP and by being eventually acquired by the giant. The fact indeed remains that the lion's share of Commerce One's revenue comes from SAP's customer base, given Commerce One's newcomer status in the SRM arena and its relative lack of experience within more prosperous direct materials sourcing.

This predicament has been unfortunate for Commerce One, given the recent attractiveness of SRM solutions, since customers have recently been focused on saving money and, particularly in today's buyers' market, they are utilizing competitive bidding into as many categories as possible. Often, the expenditures pertaining to suppliers relationship can even exceed 30% of revenue, and customers will likely embrace any software that is able to restrict this expense and/or concurrently create a more effective and successful relationship between customers and their suppliers. The direct materials e-sourcing wave thus seems to be overtaking the procure-to-pay market for indirect materials. Given direct materials procurement execution also has much more laborious nature, the e-sourcing opportunity has presented itself, especially with ERP vendors like SAP, Oracle and PeopleSoft entering the market in earnest.

Consequently, the escalating competition, depleting revenues, crippling losses and numerous restructuring moves, have resulted with many Commerce One's business plan changes, Conductor being the last order of the day'. Since Commerce One had long struggled to cost-effectively manage its former three distinct businesses1) a UCCnet consulting and implementation services (stemming mainly from the AppNet acquisition in 2000), 2) a Web services-based Conductor platform, and 3) a set of procurement, sourcing and infrastructure (the platformwas MarketSite, Collaborative Platform) exchange business applications -- selling one of them to eScout to bolster cash reserve and further narrow focus was justifiable. Commerce One has since turned its attention almost exclusively to Web services with the Conductor set of applications aimed at supply chain visibility and facilitating automated processes between trading partners.

By devising Conductor, a hybrid between an integration platfform and a platform for building composite applications or business processes, Commerce One seemingly made yet another bet-the-company' move mid-2002 by turning to harnessing Web services and thereby turning itself into a standard-based, application-agnostic integrator. It is a hub-based back-office integration functionality based on the Web services technology acquired through Commerce One's earlier purchase of Exterprise.

The Hidden Gems of the Enterprise Application Space Part Two: Sorting and Selecting SRM Software

Given the enthusiasm from early adopters, it is hardly surprising that a wide range of software suppliers is adopting the SRM acronym. There are several dozen vendors that are offering suites of SRM functionality and coming from different worlds, based on their origins. A great part of these logically hail from the SCM space such as i2 Technologies, Logility, and Manugistics, which regard SRM as a natural extension to their core supply chain planning (SCP) and procurement applications. These vendors have recently added functionality to support some sourcing business processes between manufacturer and supplier. As for most ERP vendors, which first extended their offerings to include supply chain activities, they have also added functionality and staked their claims in the SRM market. These vendors have the advantage of being able to tap into functionality from their other core applications like ERP, CRM, PLM, and SCM to support supplier-oriented processes, given they also have access to data in those systems to support such processes.

To add SRM modules to their own software suites, most enterprise applications suite vendors have launched portal initiatives that should tempt partners to share information about customers' demands in return for deeper product knowledge, training, and for more efficient ways of involving suppliers.

Then, as seen many times before in the enterprise software market, many specialist SRM start-up vendors have already jumped at the opportunity and have come up with by and large partial answers to the above market needs. A number of the still existing pioneering vendors that first offered specific SRM offerings a few years ago would include strategic e-sourcing/spend management providers like Diligent, Procuri, Emptoris, Frictionless Commerce, diCarta, Zeborg (recently acquired by Emptoris), Silvon Software, Healy Hudson, MindFlow, Perfect Commerce, B2eMarkets, Digital Union, Portum, Moai Technologies, eBreviate, etc., and vendors like SupplyWorks, Apexon, WeSupply, Eventra, RiverOne, Entomo etc., which focus more on the supply chain visibility, the tactical needs of manufacturing entities, the flow of information between the internal systems and trading partners as to keep the plants running, while supporting some strategic SRM activities.

PLM vendors like Agile Software and MatrixOne, which have recently added sourcing capabilities to their offerings, have also joined the SRM fray. Both indirect and service-oriented e-procurement vendors (A.T. Kearney Procurement Solutions, SupplyWorks, Elance, FreeMarkets, Ariba, Commerce One, CombineNet, VerticalNet, etc.) cannot be omitted either. Neither can the analytic/data mining providers like SAS Institute, Informatica, Salvos, and so on. If one is to nitpick, supplier portal providers like ClearOrbit and Izodia or on-line providers of the supplier invoice and payment services like Burnes E-Commerce, also touch on SRM.

Despite their different backgrounds, all the above vendors prove the point that the processes that make up SRM depend on a hybrid of technologies and require a significant implementation, data cleansing migration, and integration effort at most organizations. Still, two underlying results that an effective SRM project should achieve would be 1) the automation of the processes by which a company buys supplies, which can range in sophistication from automated generation of requests for proposals (RFPs) to more holistic order management systems, and 2) to provide the analysis that enables buyers to assess historical supplier data and base subsequent purchasing decisions on the results.

As a recap, SRM allows companies to integrate with their most important suppliers to streamline order management, replenishment, fulfillment, inventory management, and engineering change management (ECM). The key words pervading so far have been sourcing, spend management, and contract management. Namely, the core procurement process has become fairly mature and most enterprise application packages provide solid support for the purchasing process.

To provide a more distinct value proposition, vendors are providing value-added functionality that helps with tasks outside the procurement cycle. The most significant one is strategic sourcing, which through rating and ranking criteria, a purchasing officer chooses the optimal set of suppliers to negotiate a contract with. It enables enterprises to evaluate potential mixes of materials and services and determine appropriate suppliers and terms and conditions to balance cost, quality, and risk. The applications can capture supplier information and serve as a medium for collaboration between buyer and supplier on the requirements of the purchasing organization.

Generally, the term strategic sourcing denotes many steps that precede the signing of a contract, including spend analysis, identifying potential suppliers, RFQ and contract negotiation, and monitoring and improving suppliers (which logically may happen both and after the contract signing). As companies continue to strive to reduce the internal costs of their products and services, more pressure is on the procurement group to source from the right supplier that can deliver as needed, at the right price, but also subject to many other measures some of which can be of a non-quantitative nature, such as product availability, specifications, freight expenses, warranty, terms of contract, distribution partners, and what not. The sourcing equation can become even more complex when federal and state government regulations and corporate mandates such as sourcing from minority-owned businesses are brought into play as thresholds that cannot be circumvented.

Spend management comes in the form of software and services and allows organizations to gain control of the entire purchasing cycle, since the organizations deploying spend management across their e-purchasing operations should have a much better idea of how their money is being spent. Moreover, they must ascertain how much money is spent and where, before they can identify opportunities to improve sourcing via, e.g., negotiations with the supplier to produce a mutually beneficial contract. Knowing how much is spent on different parts, suppliers and product categories is crucial, as well as how much money has been spent against a corporate purchase contract. These enterprises are then able to instigate consistency across the business, while reducing process times and cutting costs by consistently managing spending across the enterprise, which includes visibility across diverse divisions, geographies, enterprise solutions, and all spending categories (e.g., travel, staple goods and services, projects, MRO, and direct materials). Spend management also requires rigid principles and governance to enforce compliance, which means establishing methods of monitoring spending against the budget and providing appropriate alerting and escalation processes for dealing with spending that exceeds budget levels.

Contract management is another key component of enterprise spend management, since contracts are the point around which much of a company's dealings with its suppliers pivots. Buyers and suppliers can spend an inordinate amount of time figuring out details about obligations and remuneration, incentives and contingencies. However, for companies handling dozens of contracts, ensuring that suppliers adhere to contract details is often too cumbersome to be executed. Most enterprises do not have formal systems in place to manage contracts, and thus, financial or purchasing executives often do not have visibility into contracts because they are kept in multiple different storage systems or, even, as hardly accessible hard copies.

Companies need contract management solutions that can reach across those repositories to help managers gain a comprehensive understanding of the trade agreements under which the enterprise operates. The lack of visibility and control will often cause an enterprise to fail to extract full value from the contract and the relationship with the supplier. At best, the users seem to be increasingly able to track contract expiration, which is only a minor part of total contract management requirements and potential benefits. In addition to simply standardizing contract language, payment terms and other requirements, the efficiencies are gained through analysis of all the contracts to discern trends and identify weaknesses in the process.

While many people have realized the power of e-commerce on the consumer side, there is still plenty of education to be conducted by all the SRM vendors as to prove how much leverage their applications can bring to corporate buyers.