Eight years ago, a whole host of factors came together to drive investment in enterprise applications.
Y2K presented fears and opportunities in hardware and software; the introduction of GST in Australia also drove demand for new financial software, affecting New Zealand because of our inter-linked economies.
Now, in 2008, Sage ANZ managing director Mike Lorge sees similar factors at play as some of these systems are reaching their end-of-life. Disruptive technologies such as Web 2.0 are impacting prompting organisations to expect more from their software investment.
The New Zealand market is maturing, Lorge says. Companies expect tight integration between front office systems and the business back-end and there is a strong trend to integrate CRM with ERP. The possibility of purchasing software as a service as opposed to installing it on-premise is also emerging.
Businesses are seeking wider functionality, too, such as business intelligence, to help them plan their supply chain, all the way down to instant invoicing for the accounts department after the system has checked whether a product is in stock.
Organisations are also looking at their technology to help restructure their businesses, Lorge says. While New Zealand is a small country, our desire for global trade means our systems must be robust enough to cope with foreign currencies, foreign languages, foreign taxes, and any other challenges trade might throw up.
For Sage, all these development have brought about its 2010 strategy for its Accpac, Timberline and other products. The 2010 strategy essentially means customers can access applications anywhere, anytime. This requires integration with other systems, with the products working on-premise, through the web, on PDAs and delivery through hosting.
Salesforce.com offers its CRM solution purely as a SaaS offering. NZ country manager Aden Forrest says this means he can offer highly customised, integrated and on-demand offerings far quicker than on-premise competitors.
For a larger vendor such as Oracle, which has gobbled up other enterprise vendors including JD Edwards and Siebel, recent developments have been focused on its Fusion Middleware and Application visions, to ensure existing users of these products can migrate to future Oracle systems.
Callum Ross, sales director business applications, says firms are looking outside their four walls to help plan their supply chains, promotions, distribution and logistics. He also recommends firms take a modular approach for fast-track implementations.
Fellow tier-one supplier SAP similarly stresses its industry-specific offerings, claiming flexibility of its software, with rapid implementation possible through its “best practice” templates.
“The latest releases of SAP’s solutions are extremely simple to use and they are delivered with advanced analytics so end users can get value from the software easily and quickly,” says Ian Black, managing director of SAP New Zealand.
Black says these releases are based entirely on a Service-Oriented Architecture and follow significant R&D “to support the agility that modern businesses require”. SAP products are used by the largest companies, such as Fonterra, mid-sized enterprises like Gallagher Group and Postie Plus, and on down to SMEs with a turnover of under $1 million.
SAP too can also be installed on-premise or delivered on demand as a service, Black says.
“Through our NetWeaver architecture, SAP’s applications are capable of being integrated with any third party solutions and open source applications. In New Zealand, our customers are linking business processes together in a collaborative way to further improve supply chain processes and customer experience’” he says.
Nowadays, the big boys of enterprise applications include the omni-present Microsoft, whose Dynamics line of integrated financial, supply chain, manufacturing and CRM solutions continues to make inroads into the market. Familiarity through the Office desktop suite is a big selling point.
Systems integrator Gen-i, a Microsoft partner, says two to three years ago, Kiwi SMEs were reluctant to invest in CRM, but after market sector leaders invested in it, the competition followed. Business Intelligence practice manager Stephen Usmar adds CRM is no longer for administration and sales reporting but is now used to analyse real trends and patterns.
The enterprise applications space contains other significant suppliers, including local and trans-Tasman vendors.
Australia’s TechnologyOne, for example, claims major successes within vertical markets such as central and local government. New Zealand country manager Don Glenn says unlike traditional ERP offerings, which were built for the manufacturing sector, TechnologyOne offers best-of-breed modular software aimed at services, which are scalable and provide deep integration with other business systems.
TechnologyOne also claims to be one of just a few vendors to develop, implement and support the solutions it sells.
“This integration of the supply chain means that customers engage with the people who build the software. This avoids the finger pointing which often occurs when things go wrong with resellers acting as intermediaries for large software developers,” Glenn explains.
Furthermore, TechnologyOne’s technology protection programme delivers certainty for customers by offering free licence upgrades to new technologies, planned every six months. TechnologyOne’s latest technology release, Connected Intelligence, promises an intuitive workplace for users which guides them through daily tasks with personal workflow and alerts.
Another Australian company, Pronto Software, also claims a good understanding of the Kiwi market from its close proximity, adding its offerings are agile enough to meet specific local legal requirements.
Managing director David Jackman says enterprises today face a tremendous challenge of managing the ever increasing amounts of data stored on enterprise servers, making analysis and decision making more difficult.
A new solution, Alert Intelligence, offers report-driven operations to identify problems and suggest corrective active.
“Alert Intelligence provides information visibility by monitoring changes within the company’s ERP and delivering alerts to predefined recipients as soon as the event occurs,” he says.
Such action might include sending suppliers an email if a delivery is missed, or advising purchasing managers if a stock item has fallen below a minimum. Jackman says customers seek fully integrated solutions promising immediate improvements in efficiency that are simple and easy to use.
“In terms of trends, IT will move beyond the traditional reactive computing utility to one that drives more value, innovation and competitive differentiation for companies. This is especially crucial in today’s global economy as enterprises need to have better visibility, logistical efficiency and address compliance issues. This is driving companies to re-look their IT strategies,” he says.
SIDEBAR - Kiwi users chart new enterprise application courses
Among the businesses using an all-encompassing ERP suite is plastics and rubber supplies company Skellerup Industries.
Skellerup uses Oracle’s JD Edwards applications, including finance, manufacturing, order management and supply chain modules.
The company previously used a 17-year-old TIMS system which had been heavily modified to match the business. But this also made it cumbersome to extract data, even needing support from the vendor to do so.
Skellerup needed a new system that could support a growing business and provide meaningful analysis of KPIs, sales, and operating tools, as well as better customer service.
IT project manager Jonathan Reuben says the company spent 18 months reviewing various options. Teams were created to map business processes, survey end users, analyse the vendors, including getting a few to provide systems demonstrations and site visits.
JD Edwards was selected because of its ease of use and data extraction capabilities. Scalability was another key factor, along with business continuance support, improved information flow between sites and reduced number of disparate information sources.
The implementation was undertaken in November 2006 and its main issues were process and change management, addressed through extra staff training. Since then, tweaking aside, Reuben says the system has worked well and, looking back, he would have spent less time on vendor selection.
A very strong implementation team with management input helped avoid project creep and untimely or costly delays.
“Change management and business change at the same time of the implementation is another lesson learned. Projects of this nature take a huge commitment in time and resource and locking down other business initiatives would assist in meeting project objectives,” he says.
Hamilton-based Gallagher Group switched to SAP from an old KBM system that had just two other users and provided little support and development. SAP was chosen for its functionality, flexible resourcing, and “future-proof” technology, says group information services manager Julian Philips.
“The company’s growth, support of complex planning issues and process integration were the main business drivers. The reduction of inter-company transactional processing, ability to integrate new acquisitions and the necessity of improving business information reporting were also key factors,” Philips says.
Gallagher Group broke down its key businesses and evaluated applications against each individual function. Vendors also gave presentations on their solutions, with the Project Selection team tasked to estimate possible savings.
Implementation challenges included Gallaghers acquiring a business during the implementation and also installing an Advanced Planning Optimiser (APO) which was too immature at the time, so it was delayed a month to relieve pressure.
Looking back, Philips says, the core platform implementation should have had more focus, with the APO left for another project.
Many IT bosses underestimate the impact of introducing a system such as SAP, particularly on data-take and data integrity. Access to immediate 24-hour support is essential and your IT team will need extra back-end technical skills, he says
“Consider vendor stability, application roadmaps, integration capabilities and lastly but probably more important, support,” he adds.
Construction company Stevensons switched to JD Edwards in 2003, after the previous system’s supplier folded and the product reached its end-of-life. A management team took 18 months assessing the options, finding challenges in managing complex business processes, explains business information manager Mark Klayton.
Klayton says after the system was implemented, the company simplified some of its processes, making some of the functional processes more robust.
“You need to understand your business processes. If you have a complex business, you have a complex solution. The lesson for me is to keep it simple. Work out the impacts of change,” he adds.