Space: The Final Frontier How Retailers Make Shelf Space Allocation Decisions

In both retail and consumer product goods sectors, the gap between winners and losers widens every day. What is it about the winners that make them more and more successful, extending their lead every quarter? What are the dynamics driving this "battlefront" between retailers and their suppliers in the struggle for projects, profits, customers, and market share? What can suppliers do to win more exposure and space? To answer these questions, ChainLink Research surveyed more than 130 leading retailers and manufacturers.

The research found that the processes, policies, performance, and enablers widen the gap between winners and losers. Top-performing suppliers with high volumes and strong brands are rewarded with more shelf space and increased visibility, which further strengthens their brand and volumes. Marginal performers are "starved" out of the system. This study confirms one of ChainLink Research's key tenets: Winners and losers are determined by how well each player manages the links with trading partners (see figure 1). Disconnects in processes, perceptions, and dialogues between trading partners are a major cause of problems and competitive disadvantages.


Figure 1

The survey showed that suppliers often underestimate the importance of yield to retailers, while overestimating their own performance. Suppliers that understand and support retailers' goals and differentiation have a much higher likelihood of success.

Shelf-space and Category Management

Shelf-space Allocation

Four of the five top criteria used by retailers' sales volume, individual product's profit, individual product's revenue per square foot, and brand/category leadership, are directly related to the strength of the supplier's product performance, value contribution, and ultimately customer preference. Top performers get more real estate, while the losers are squeezed out.


Figure 2

Suppliers overestimate the importance of their overall profit contribution. Category managers want to allocate shelf space based on each individual product's role and contribution in driving profit or driving traffic. This goal is complicated when suppliers price their line as a portfolio. The retailer may want decoupled pricing to give them the flexibility to select an optimum mix.

Suppliers also underestimate the importance of seasonality in shelf-space decisions compared with retailers that ranked it as the third most important factor. This is surprising, given that suppliers must understand as well as anyone the impact of seasonality on the demand for their products. They may view it as just a given—products are either in the assortment or out in a given season.

Interestingly, slotting fees, which have been the subject of much heated debate, were rated as the least important factor in shelf-space decisions, by a large margin.

Category Management

The research also asked how far the industry has gone in the trend toward suppliers having more responsibility for restocking and replenishment decisions for the shelf space. (Note: chart for this question is not included.) Retailers said they are still responsible for about 85 percent of replenishment decisions and suppliers are responsible for only about 5 percent of those decisions, although suppliers estimated slightly higher numbers for their share of the task. Retailers said 6 percent of replenishment decisions were made collaboratively and 4 percent by third parties. The survey also asked the same question about responsibility for category management (see figure 3).


Figure 3

The responses reinforced how infrequently suppliers are selected to manage categories. It also uncovers a large difference in perception. Suppliers claim to make about 17 percent of category management decisions, whereas retailers say the figure is about 3 percent. This may be due to a difference of interpretation of what is meant by "managing" the category. Retailers, even if they rely heavily on manufacturers for insight and analytics, will still claim they make the final decision.

The responses in figure 3 mask the degree to which retailers rely on suppliers' knowledge and input in making category decisions. As shown in figure 4, supplier knowledge is almost as important as POS information in managing categories and shelf space. Retailers frequently are not willing to hand over the final category management decisions to the supplier, but they do leverage the information and experience of the supplier.


Figure 4

Many suppliers would like to manage categories. A case can be made for it based on the supplier's depth of knowledge, expertise, and brand strength in its category. Figure 5 below illustrates that the no. 1 criterion used by retailers to select a supplier to be category manager is trust. Retailers need to have confidence that the supplier will maximize overall category performance for the retailer and not misuse the position of trust. This trust is gained through a solid trading-partner relationship when the supplier combines

* Consistent execution excellence (always coming through, keeping promises, rock-solid reliability)
* Integrity (always doing what is in the best interest of the customer)


Figure 5

The second most important factor according to retailers is the strength of the supplier's brand and its category leadership. Retailers want a category manager who can think about both brand and category to maximize profits. There is a major difference between category management and brand management in most product segments. Store-within-a-store (SWAS) practice is an example where the retailer is "renting" real estate to a manufacturer whose brand is the category. Retailers will look for a supplier that gives the supplier's own brands the appropriate role in a category. The best manufacturers have mastered merchandising principles to create the highest level of turns and profits.

Conclusion

There will always be a tug-of-war between retailers and suppliers in their power struggle for margins, the customer's loyalty, and market share. To stay on the winning side of the winner-loser divide, companies must take charge of their own destiny by building the strength of their brand and constantly improving their processes, policies, and performance. Suppliers need to understand end-consumer identity, behavior, and requirements. Understanding the end customer over a lifetime will give suppliers knowledge and power to decisively design, develop, and deliver the right products and services into real, rewarding markets. At the end of the day, suppliers and retailers gain and maintain their power position in the chain by deeply understanding, focusing on, and connecting with the ultimate end customer.

SOURCE:
http://www.technologyevaluation.com/research/articles/space-the-final-frontier-how-retailers-make-shelf-space-allocation-decisions-17847/

Peregrine Exits Quiet Period Making Noise

Peregrine Systems made some key moves to consolidate its strengths in asset management. First, it entered into a partnership with Motive Communications. Motive specializes in augmenting and bypassing help desk personnel by providing tools that allow individuals with IT problems to diagnose and repair their own desktop machines.

Peregrine will license a version of MotiveNet Server. This product allows users to automatically diagnose problems and initiate self-repair operations. Should these be insufficient users will make contact over the Internet with support staff using a combination of Motive's technology and Peregrine's Get.Help! self-service application. Motive and Peregrine have promised to develop tight integration between the two companies' product suites.

Peregrine also announced two partnerships with service provider companies. The company signed with KPMG Consulting, LLC to jointly develop infrastructure management solutions for the transportation industry. The solutions will cover IT, real estate and facility assets. KPMG will contribute its industry expertise and will have its consultants trained in Peregrine's solutions. Peregrine will contribute its entire suite of applications, including ServiceCenter, AssetCenter, FacilityCenter, FleetAnywhere, InfraTools, Knowlix and its new line of employee self service "Weblications" known as Get.It!

Peregrine also entered into a global partnership agreement with the British consultancy CI, a specialist in corporate asset management and desktop security. Under the agreement CI will deploy Peregrine's AssetCenter and InfraTools Desktop Discovery products to customers of both companies. Desktop Discovery can take inventory of desktops systems and their current configuration from a single point. AssetCenter manages all assets that are critical to the business mission.

Market Impact

This is a strong trio of moves for Peregrine. In substance they strengthen both its asset management product line and its overall ability to deliver solutions to customers. In combination with the Harbinger merger they indicate that Peregrine is capable of expanding and acting on many fronts simultaneously, reinforcing its image as a strong competitor that is likely to be with us for a long time.

Given estimates suggesting that a company can save between $1,500 and $2,500 on the annual cost of a single PC using judicious asset management, and given the difficulties of recruiting, training and keeping help desk personnel, Peregrine will be an increasingly attractive asset management solution to large companies, where the potential savings can be in the millions of dollars. This positions them to introduce their self-service Get.It! applications into the largest enterprises, putting them into head-to-head competition with a number of vendors in that space, including Ariba and Commerce One, neither of which has shown the same energy in attacking the asset management problem.


SOURCE:
http://www.technologyevaluation.com/research/articles/peregrine-exits-quiet-period-making-noise-15898/

Ten Key Legal Concerns in E-Commerce Ventures and Contracts

The rapid pace of e-commerce development has generally left the legal system struggling to keep up and gasping for breath. In much the same way as companies doing e-commerce must invent new business procedures and rules, the legal system is trying to adapt existing laws to fit new settings where it is simply unclear how these laws will apply.

The e-commerce legal tool of choice is the contract. If parties can agree how matters will be handled and capture that agreement in a written contract, they can, in a meaningful way, establish the rules that will govern their arrangements. In other words, these contracts can provide some degree of certainty even in the rapidly changing arena of e-commerce law. We can also expect that as legislatures and judges try to catch the law up to developments in e-commerce, they will look at successful methods and practices as models.

Today, there is a premium placed on negotiating contracts that adequately cover the likely scenarios that will arise out of an e-commerce relationship, to the extent that those scenarios can even be predicted. For example, "application service providers," were largely unknown even a year ago and novel e-commerce arrangements and relationships are announced on a regular basis.

Think of a "co-branding" venture where one party handles backend supply and fulfillment, the other party operates the front-end web site, and both parties outsource hosting and other services to third parties. Spice up that arrangement with corporate structures that include separate e-commerce entities, subsidiaries or joint venture relationships, and the notion of a "short," "simple," or even "standard" contract really does not make much sense. In fact, unlike traditional legal documents such as residential real estate contracts, it is difficult to point to a "standard" contract for e-commerce arrangements. You might even have several different types of contracts with different parties in any given e-commerce venture.

Given the importance of contracts in the e-commerce arena, you will want to know what to look for and what to think about when launching your e-commerce venture. While this article obviously will not discuss every issue, I have highlighted ten key legal concerns that you should consider in your e-commerce ventures and contracts.

Nail Down Your Domain Name

Do you have a "dot-com" name upon which you can build a brand presence? In e-commerce, brand often means everything. The domain name system was not designed to handle either today's volume of name requests or the issues raised by domain name selection. In simplest terms, domain names are registered on a first-come, first-serve basis. Problems are largely resolved through a dispute resolution system that lacks history and, at times, consistency.

You might find that your company's name, or something confusingly similar, has been registered by someone who now wants to sell the name back to you at a high price. This practice is now known as cybersquatting. There are now laws against this practice and actions that can be taken to get "your" domain name in that scenario. In another example, the domain name you want for your e-commerce business may be taken, leaving you with the choice of either changing the name you will use or purchasing the domain name you want from its owner at whatever price the market will bear.

There is a substantial interplay between trademark law and the use of domain names. You will want to obtain the domain names that you want and secure them through a combination of practical and legal methods, including the use of trademarks. Some of those methods of protection should be addressed by contractual provisions that govern the use of the name and any related trademarks. Something to watch out for: If your web host or developer registers your domain name for you, make sure that you, rather than the host or developer, is listed as the owner on the registration. Also, clarify who will have responsibility for renewing domain name registrations so you do not lose a domain name.

Demand Definitive Developer Contracts

Not even lawyers like long contracts, but, given the complexity of issues that can be raised in a web development arrangement, you will want to think carefully when balancing the desire for brevity with the need for adequate protection. Most companies seem to be having third party developers, rather than employees, develop e-commerce sites. There are many benefits of this approach, including reducing the time-to-market of your e-commerce site. The downside is you are transferring a lot of responsibility for your e-commerce strategy to an outside party.

You want your development contract to cover comprehensively the issues that matter to you. You will want to establish hard deadlines for a "go live" date, meaningful hold backs in payments, penalties for delays, and adequate test procedures for your e-commerce project. Ideally, you will want to condition your acceptance of the site on the completion of these testing procedures and have the right to cancel a contract for a full refund if the site does not meet your specifications. Not every developer, however, will agree to acceptance testing or refunds. In that case, you will want to obtain warranties that the site will perform in accordance with the specifications. The more detailed you can be in the written specifications of the site that are incorporated into the contract, the better off you will be.

A good contract will cover many of the other issues mentioned in this article but also should include warranties that your use of the site will not infringe on anyone else's intellectual property, and be fair and even handed about liability limitations and other issues. Because a developer of an e-commerce site will have access to vital information about your business, well-drafted confidentiality provisions are essential in any development contract. A key point to remember: the more of your core business processes that you put on your e-commerce site, the more complicated your development contract is likely to become as you think through and address the business aspects of the arrangement.

Know Who Owns the Intellectual Property

You own your site, right? The intellectual property ownership provisions in many e-commerce development contracts may surprise you. You may also find that your contracts, or lack thereof, with employees and independent contractors have not given you clear ownership of key components of the patents, copyrights and other intellectual property you thought you owned. The process of negotiating an e-commerce contract can be an eye-opener in this regard.

The issues of ownership will be different whether you have employees developing your site, independent contractors, a third party e-commerce developer, or if you outsource the entire e-commerce operation. Careful attention must be paid to employment contracts, contractor agreements, assignments of rights, and other documentation so that you can establish clearly the ownership of intellectual property rights. This process can be cumbersome, but it is necessary.

In certain circumstances, you may not be able to obtain ownership of, for example, certain components of a site that are produced by a third party developer because the developer will insist on retaining the ownership of those rights. In that case, you want to be sure that your contract specifies that you have a license to use these components in your e-commerce site and in other ways that you think will be necessary in the future. Making sure that ownership is clarified and that all necessary rights, licenses and permissions are granted is a major part of negotiating an e-commerce contract.

SOURCE:
http://www.technologyevaluation.com/research/articles/ten-key-legal-concerns-in-e-commerce-ventures-and-contracts-16262/

Geac Hopes To See System21 Shine Again Like 'Aurora' Part 3

Lately, Geac Computer Corporation Limited (TSX: GAC), a large and until recently struggling Canadian supplier of enterprise management software, has indicated it might have finally gotten its ducks in the row not only has it posted a few stable and profitable quarters, but the company has also shown the intent to move away from its all but failed business model of selling maintenance and services for outdated applications. As a result, it has a number of recent new contract wins.

This note covers the following recent Geac announcements:

* The Extensity and EBC Informatique acquisitions

* A contract with ZPC Mieszko

* A contract with Ghim Li Holdings Co Pte Ltd

* Delivery of three new System21 products for automotive manufacturers

* Further details on Project Aurora

* Industry response to AnswerLink

* Financial Results for fiscal year 2002

This is Part Three of a three-part note on recent announcements by Geac. Part One detailed the announcements. Part Two covered the Market Impact.

Challenges

However, beyond this, although it is functionally strong, System21 has, until recently, lacked some of the technology and buzzword must haves' that have been natively provided by many of its rivals such as SAP, Intentia, IFS and J.D. Edwards. Contrarily, Geac has so far mostly talked to the outside modern collaborative world through a plethora of open APIs (application programming interfaces) and remained content (or forced) to talk in terms of best-of-breed' connectivity. Additional function suites, like CRM, advanced web-based product configuration management, business intelligence and e-commerce are largely provided through partner alliances such as with Cognos for business intelligence (BI), Applix for its iCRM solution and with Frontstep for its SyteLine APS and SyteCenter solutions.

By intending to further expand the range of partnerships, Geac might partially allay some customers' fears that System 21 functionality will increasingly lag that of its major competitors. To that end, however, Geac also will have to create a rock solid strategy for integrating its product suite with multiple partners. The company may benefit from picking J.D. Edwards' and Siebel's brains, and closely partner with a major enterprise applications integration (EAI) vendor in order to ease integration with its partners (see J.D. Edwards Chooses Freedom to Choose EAI and Siebel Rallies Its Integration Alliance Troops). To that end, the vendor has strong technology partnerships with IBM and Jacada (for hardware and middleware).

The partnerships are also intended to enhance Geac's StreamLine Windows NT/2000-based ERP solution for 5 to 150 users, starting at around the $100,000 price tag. Geac's customers will benefit from being able to use Eden Origin, a tool that enables product configuration/product search engine via a Web-enabled interface. Through Geac's partnership with Preactor International, small to medium (SME) manufacturers might benefit from advanced planning and scheduling (APS) and finite capacity scheduling. However, given that the above functionalities have become all but commodities nowadays, Geac will have to work much harder on StreamLine's enhancements if it is to match the functionality from many competitors, as most of the e-business and CRM components are still lacking. The product's scope still remains within managing the flow of production through the supply chain, from purchasing of raw materials to sales and distribution of finished goods.

The proverbial problem for Geac has been its preference for acquiring new products rather than pursuing in-house product development and/or true strategic alliances. While the strategy might have worked in a number of esoteric industries with a low penetration of competitors like hotels & restaurants, real estate and construction, it is indisputably, a completely different ball game in the global enterprise applications market in the mainstream industries.

Modern enterprise applications must be able to support dynamic business requirements, and every vendor is compelled to add much more value to its products and services portfolio to attract and retain customers, rather than mainly investing in the existing bundle of disparate core products and hoping for endless support revenues. Geac's fierce competitors mentioned earlier have long grasped the reality and acted accordingly. Realizing the crying need to change its faltering business model, Geac seems to be finally addressing its strategic options, with the above product strategy announcements showing it is serious about appeasing and shoring up its large customer base. One is only to hope that the Geac's renewed interest in alliances and acquisition will be to the point of effectively enhancing prosperous product lines as required by its large installed base.

The Extensity and EBC Informatique purchases should seemingly provide Geac with enhancements to its multiple core ERP systems for a modest price tag. The companies have technological compatibility (a J2EE-based product architectures of Geac and Extensity, and IBM iSeries support for Geac and EBC), which should bode well for the applications integration. While it is still unclear how the acquisition will affect current Extensity users and/or its competitors, it should certainly provide important employee-facing financial tools to Geac such as a portfolio of travel and expense management, time and attendance, and basic procurement applications.

In times when everybody is keeping a close eye on all IT investments, financial management products that help companies achieve better control of spending should prove strong value propositions and quick Return on Investment (ROI). Even Geac's industries of interest such as construction, apparel, automotive suppliers, financial institutions, and government agencies have the need to streamline processes involving the procurement and reimbursement of employee expenses and time. In addition to cross-selling more products to its existing customers, the acquisition holds the potential of generating new customers. Given the "once bitten, twice shy" one should believe Geac will have carefully thought out the rationale for the above two acquisitions. Although there is still a sizable work ahead of winnowing out the remaining under performing units/product lines, there is an opportunity too provided Geac can regenerate new growth strategy.

SOURCE:
http://www.technologyevaluation.com/research/articles/geac-hopes-to-see-system21-shine-again-like-aurora-part-3-challenges-and-user-recommendations-16755/

Challenging the Competition: Mega-mergers and Supply Chain Technology

In the face of the mega-retail stores, like Wal-Mart and Target, some of America's oldest retailers have joined forces to remain competitive. Late 2004, Kmart Holding Corporation (NASDAQ:KMRT) and Sears, Roebuck and Co. (NASDAQ:S) signed a definitive agreement to merge. Following suit, Federated Department Stores, Inc. (NYSE:FD) and The May Department Stores Company (NYSE:MAY) announced February that they also entered into a merger agreement.

Part Two of the Retailers Join Forces for a "Make or Break" Attempt Their Competitive Landscape series.

On paper and in terms of numbers, these acquisitions look like idyllic marriages of convenience—they will, theoretically, create more powerful revenues players in the retail industry with their respective $55 and $30 billion (USD). Points of distribution and renowned proprietary home and apparel brands will be expanded and significant opportunities for improved scale and operating efficiencies will surely emerge. In the short term, by combining supply chains and aggregating their purchasing powers by, for example, consolidating shipments or leveraging volume deals with carriers, Sears and Kmart, estimates at least $300 million (USD) in savings. In theory, the merger could produce a new layer of competitive challenge to two undisputed mega-retailers, Wal-Mart and Target, by giving Sears Holdings a combined total of nearly 3,500 stores and by creating a service organization capable of a major expansion to serve the needs of existing Kmart and Sears customers.

The merger should generally enable the combined businesses of Sears and Kmart and of Federated and May, respectively, to produce higher profits or profit margins than any of these companies could achieve on their own. This may particularly be true for Kmart, for whom this merger is a virtue made out of necessity and likely the only way it could continue its long-term existence. While Kmart has improved its financial performance and operations since coming out of bankruptcy in 2003 to the point where it even become a buyer, it has not been able to distinguish itself from Wal-Mart and Target, not to mention an army of boutique specialty stores, catalog retailers, and Internet-based sellers. Without this merger, its stand-alone, long-term survival is difficult, at best.

The Kmart's conundrum has long been its inability to position itself clearly within the retail market. It was caught in a twilight zone between an extremely efficient low-cost retailer, Wal-Mart, and a fashion-oriented brand-name discounter, Target. At the same time, the company appeared to be oblivious to customers' voices of dissatisfaction as seen in its poor customer service, run-down stores, and indolent merchandising and outdated product lines.

Thus, Sears might provide a better corporate foundation, brand tradition, and more demand-driven growth strategy that can better leverage Kmart's extensive real estate assets more effectively in the highly competitive retail marketplace. Namely, the amalgamation might make the Sears and Kmart franchises stronger by accelerating Sears' much needed off-mall growth strategy by using existing, convenient Kmart locations.

As a proof of concept for the off-mall model, Sears is experiencing early positive results with three "grand" store formats. Instead of taking the time-consuming approach to assess a new site location and to build a store, Kmart's current store assets, distribution, and logistics infrastructure allows for a relatively immediate set of options that can be re-brand into Sears Grand and be broadened into new geographies. In fact, the idea for the merger was born during the recent sales transaction of several dozens stores between Sears and Kmart when they were independent.

Ultimately, the savings from the merger should certainly bolster Sears and Kmart's competitive strength, since their combined purchasing clout and streamlined supply chain capabilities is projected to result in $300 million (USD) of financial improvements. This may be cost equivalent to Target and somewhat improve costing against Wal-Mart. The volume of this combined portfolio can increased the opportunities for new private-label product development. According to some calculations, if improved process flows like stock availability, promotion planning, and price management are combined with (though not yet fully fleshed out) supply chain improvements, the combined entity could produce nearly $1 billion (USD) in cost and operational efficiencies. Still, these advantages, coupled with potential savings from workforce wages spiraling down across several industries, may reflect an emulation of Wal-Mart's practices rather than any sort of differentiation.

In the case of Federated and May, the cost efficiencies from their merger may not necessarily reverse the protracted decline in their department store sales, given its scale is much smaller than the behemoths like Wal-Mart and Home Depot. In fact, the merger might even increase the risk of brand equity erosion, given that in the future, their presence will no longer be as geographically dispersed, and that there will be a subsequent, reduced distinction between the stores' brand recognition.

This is Part Two of a three-part note.

Part One detailed the event summary.

Part Three will cover technology and make user recommendations.

Demographic Challenges

The Sears-Kmart merger should "beef up" their brand portfolios, since each will benefit from the other's distinctive merchandise assortment. On one hand, as Sears continues to fine-tune its merchandise strategy, successful product lines like the Kmart's Martha Stewart Everyday or Jaclyn Smith should become viable options to include in the Sears mix. Conversely, Kmart's remaining branded locations could see the introduction of longstanding Sears product lines, including Craftsman, Kenmore, or even the new Lands' End apparel products. Merchandising is to retailers what rosters of pitchers and hitters are to baseball sport clubs: the broader assortment of options should, in principle, allow each retailer to fine-tune products to the appropriate target customer demographics for each of the remaining product lines.

However, one should note that though Kmart and Sears are large retailers, they do sell to different groups of consumers— Sears sells mainly to married men in their late thirties and early forties who are looking for Craftsmen tools. Kmart targets largely senior citizens with lower incomes. This might impair future cross-selling. Moreover, Sears has not proven its proficiency with apparel. Its 2002 acquisition of Land's End, which pioneered the virtual fitting room back in 1999, has been poorly exploited.

The Land's End customer profile seemed to be a good fit with the demographics of buyers of Sears appliances and tools, and Sears attempted to use the preppy brand to lure well-off shoppers to its combined apparel and home appliances department stores. However, with apparel being a stocking nightmare with nearly a gazillion styles, sizes, and colors that completely change every three months or so (see Intentia: Stepping Out With Fashion and Style; Part One: Characteristics and Trends of the Fashion Industry), Sears often had meager selections at each locations, discouraging its middle-class clientele. Thus, the merger with Kmart provides both an opportunity and challenge of how Sears should handle the popular Land's End brand. However, one should note, that Sears may have already decided as there are early indications that it is seeking a buyer for the Land's End division .

In general, Sears Holding will have to force customers through a new learning curve with significant advertising campaigns to increase market share and customer loyalty to certain product brands. Customers will have to change their perception from discount mass merchandise stores to more upscale stores. However, Sears Holding will have to make sure that customers are not pressured by too aggressive sales associates trying to push the new retail image, because customers need to feel they are making informed decisions about their purchases. If not, customer loyalty may be compromised.

Developing a Competitive Strategy

Moreover, these potential benefits come with a number of significant "ifs and buts." The main question is whether Sears Holding can develop a successful, competitive strategy. At this stage, most consumers have different perceptions of merging parties. Kmart is still associated with low prices, boring store layouts, and mediocre services, while Sears, despite losing market share to equivalent general stores like Target, Lowe's or Kohl's, is synonymous with higher-quality merchandize and above-average customer service.

If Kmart is going to remain a mass discounter, how will it succeed in the long term if its prices remain even 15 percent higher than those of Wal-Mart? On the other hand, how will Sears, with its aura of a genuine North American retailer, differentiate from its competitors in terms of its product categories and the way its stores will be arranged, located, and stocked? In other words, the combined parties will have to figure out, first of all, what (or, if still diversified, in which ratio) they want to be. Do they want to be a mid-size retailer in the malls or a mega-store operator in the suburbs or rural areas? Once decided, they need to devise the merchandizing, pricing, payment, and other processes to back up their strategy.

The decisions the future Sears Holdings makes in the area of a coherent merchandizing strategy will not only have an impact on its future brand recognition, revenues, and margin, but also on the performance of its supply chain and downstream business processes. It must first figure out and then bring into line the capabilities and goals of merchandising, supply chain management (SCM), and its accompanying IT assets. It is expected that Sears Holdings will build its SCM capabilities around efficiency like Wal-Mart, but, for the sake of some differentiation, these competencies should also envelop speed and flexibility to compete with more versatile competitors.

Even if the two retailers merge their different corporate cultures, store formats, working procedures, and target demographics, perhaps the biggest challenge will be instilling a pervasive culture that embraces IT as an enabler.


SOURCE:
http://www.technologyevaluation.com/research/articles/challenging-the-competition-mega-mergers-and-supply-chain-technology-17901/

Software Evaluation, Selection, and Procurement Part Two

Software evaluation and selection is a learning process. The selection team will learn a great deal about itself, the company requirements, external software vendors, application software tools, and outside consultants. During this "journey of discovery" it is often helpful to take a guide someone who has been there before and can lead you through the process.

When looking for a consultant to guide you through the process, look for a firm that is unbiased and has no hidden agenda. Many consulting firms resell software or have close financial alliances with software vendors. While these consultants may be very useful during the implementation phase, their judgment may be impaired during the selection phase. Also closely examine the specific individuals who will work on the project.These are the people you will work closely with on a daily basis, so choose them wisely. Evaluate their skills, past experience, market knowledge, industry expertise, honesty, integrity and references. Be wary of any consulting firm that will not clearly identify the resources for your project.

Don't rush the process!

This seems like heresy in today's corporate climate where everything must be done yesterday. The key here is to maintain the paradigm of software as a capital investment. Look at similar corporate decisions regarding machinery, real estate, facilities, etc. and use that as a guideline for your decision-making timeline.

Obviously there is a balance between "analysis paralysis" and constructive action toward a known objective. Effective management is crucial at this early stage to ensure the team continues to make progress and does not bog down in over analyzing the selection.

Build a strong business case

Probably the most important deliverable in the entire evaluation and selection process is the business case, which serves as the "guidebook" for the remainder of the project. A strong business case establishes the project expectations and guidelines including:

* Project scope

* Expected costs

* Expected benefits

* Project performance metrics

* Risks

* Overall implementation approach and timeline

* High level project workplan

* Resource requirements

* Assumptions

But it is not enough to simply produce these documents and call the business case complete. Sufficient analysis must be performed such that the project expectations are realistic and supported by factual evidence. For example, saying that a project will result in $1M in cost savings due to "more efficient supply chain processes" is not sufficient analysis. One must identify the specific performance metric that will improve due to the new system, discuss how the software will actually improve that metric, assign an "owner" responsible for delivering that benefit, and then calculate the expected financial results.

For example, if your project is expected to reduce raw material inventory, a thorough business case will record this as follows:

Expected Benefit #1 - Reduce raw material inventory in category A by 25%

* Justification:
o Software and business process enhancements will reduce the purchasing cycle from 4 weeks to 3 weeks. This 25% reduction will allow a corresponding reduction in raw material inventory on hand. This benefit assumes that the three week purchasing cycle will not result in additional transportation costs due to increased shipment frequency or less than truckload shipments (this assumption is supported by the evidence presented on page XXX of the business case).

* Owner:
o Bob Jones, Director of Purchasing

* Savings Summary:
o Expected annual savings = $125,000

o Expected one-time reduction in working capital investments = $1,250,000

* Savings Detail:
o Current average raw material inventory value in category A = $5,000,000

o Expected inventory reduction = 25%

o Expected annual return on invested capital = 10%

o Annualized Dollar Savings = $5,000,000 x 25% x 10% = $125,000

o Reduction in working capital = $1,250,000

As you can see, a more detailed set of benefits will remove ambiguity, assign ownership and give the project team a clear set of goals and metrics to target. Developing a business case at this level of detail is a key component in gathering executive support for the project.

In addition, a strong business case serves as the project reference manual. As the implementation begins questions will arise surrounding scope, objectives, budget, resources, deadlines, milestones, etc. The business case must be used to guide the decision making of the project management team. Without an effective business case, and managers who use it properly, an implementation can quickly lose focus and wander off course.

This is Part two of a two-part article.

Part One discussed some of the reasons software implementations so often fail.

Involve all affected departments on the selection team

What seems to be a simple concept is often bypassed for political, personal, and resource/schedule constraints. But there should be no compromise here. A software evaluation and selection team that does not include affected parties will invariably face high-levels of resistance and increased risk of failure. When implementation troubles set in or questions arise over the software capabilities, organizational buy-in and support will help you manage through these issues. Without it, the project can and will lose momentum.

Be thorough in your requirements definition

Again this is a simple concept, but one that is often bypassed due to expediency or difficulty. A comprehensive set of business functional and technical requirements serves multiple purposes:

* Acts as a basis for software evaluation

* Acts as a basis for defining software gaps

* Acts as a basis for final software testing (system, performance, user acceptance, etc.)

* Acts as a basis for training

* Establishes project scope


SOURCE:
http://www.technologyevaluation.com/research/articles/software-evaluation-selection-and-procurement-part-two-recommendations-for-improvement-16878/

SQL Release 6.0 Simplifies Purchasing And HR Services For Midsize Companies

Geac SmartEnterprise Solutions released an updated version of its human resources and accounting applications for midsize companies at the beginning of January. SQL Financials and HR Release 6.0 are available immediately, as are a set of employee self-service applications that integrate with the suite. Geac SmartEnterprise, a division of Geac Computer Corp., acquired the SQL suite last year from Clarus Corp. The company says a key benefit of HR Release 6.0 is tight integration with the Clarus eProcurement suite, an application available separately through Clarus that simplifies and controls the purchase of office supplies and services by individual employees. Used with Geac's SQL financial suite, eProcurement enables a seamless purchasing process that links requisition activity directly to accounting systems, such as budgeting and accounts payable.

In addition, the rollout of a new component of the SQL HR suite called HRPoint gives users access to HR, benefits, and payroll information through a Web browser. Geac says HRPoint can reduce administrative costs and improve HR service to employees by eliminating paperwork and phone calls. Beth Price, Geac's human resources management systems product manager, says the SQL product line is aimed at companies with less than $1 billion in annual revenues, which typically require less complex tools than the high-end packages offered by Oracle, PeopleSoft, and SAP. SQL Release 6.0 and HRPoint are compatible with the latest versions of Microsoft SQL Server and Oracle database platforms. Financial and HR packages start at $40,000 per module, while HRPoint starts at $70,000. Pricing varies according to the number of licensed users.

Market Impact

Geac has proven itself an adroit and disciplined acquirer of application software businesses. The latest announcement of its expedient incorporation of Clarus' former product line is the most recent example. Furthermore, the mission-critical nature of its solutions makes the company a "first call provider" in some esoteric markets whose customers turn to it first for further system enhancements (See user recommendation). Geac intends to mine its existing large client base. While we believe that Geac's product strategy against the largest ERP vendors is shrewd, one should not discount fierce competition coming from its nimble mid-market competitors, like Lawson Software and Great Plains. These vendors have been offering self-service applications via the Web for over a year. Geac also trails these vendors with its CRM capabilities, which may prove detrimental to its new license revenue growth.




SOURCE:
http://www.technologyevaluation.com/research/articles/geac-upgrades-accounting-and-human-resources-apps----sql-release-6.0-simplifies-purchasing-and-hr-services-for-midsize-companies-15514/

The Convergence of ERP and Field Services—One Vendor’s Leadership

There is continued evidence that people-centric services organizations in both the public and private sectors are under increasing pressure to streamline their operations and gain cost efficiencies. For some industries, such as utilities, energy, and real estate management, the divergent needs of managing large physical assets and recurring smaller service needs is a challenge. For more information, please see part one of this series, An ERP for Services Vendor Poised to Overtake the Market

Until recently, these organizations have had few choices of systems that integrate field services and asset maintenance. But Agresso’s Field Force solution offers these organizations a combination of features that address the following realities of services industry businesses:

* Large projects and small field services orders often must coexist within the same business model or operation.

* Financial controls and visibility must drive from both a bottom-up (individual project) and top-down (multiple reporting) perspective. Further, they must intersect appropriately for both performance management and for problem resolution.

* Complex pricing models carry inherent profitability, invoicing, and financial reporting challenges.

* Service contracts must be carefully managed, monitored, and enforced to balance the tightrope between customer satisfaction and business profitability, ensuring that the best and most financially rewarding customers remain long-term revenue generators.

Following are the capabilities delivered through Agresso Field Force:

1. Integrated business processes.

By tightly integrating customer, business, and operational data, and then providing role-based visibility to both operational executives and mobile workers, Agresso Field Force optimizes field services and asset maintenance decision making and controls at every level. The solution’s capabilities span projects, procurement, financials, and human resources (HR), as well as workflow, reporting, and analytics.

Typically, customers will select Agresso Field Force as a complement to Agresso Procurement and Agresso Projects. By sharing a common data repository, customers can create their own inquiries and reports, manage changing business requirements on the fly, and intelligently analyze, predict, and plan around asset maintenance requirements. Agresso Field Force can also manage workforce evaluation and scheduling, project assignments, project tracking and completion, parts inventory or equipment management, and individualized reporting and billing.

2. High-volume field services management.

There is an inherent cost relationship between administrative tasks when they are tied to thousands of daily orders. Additionally, delayed, forgotten, or lost orders extract an equally painful price on an organization’s bottom line—in terms of both immediate receivables and the potential for end customer dissatisfaction or loss. Thus, Agresso Field Force was designed with the capacity to handle up to 2,000 orders per day.

Agresso’s “Service Order Central” design provides a comprehensive capability for managing all aspects of work orders in a high-volume environment:

* Users can register and maintain order data, which results in an auditable, consistent, flexible, and legally defensible historical record for organizations challenged with hundreds or thousands of recurring orders.

* The screen setup is user-friendly and intuitive, allowing employees both in house and in the mobile workforce to access key data, input orders, prepare invoices, and record activities.

* Status workflows are customizable and event driven, assuring that “next-step” actions are designated, tracked, and recorded to ensure they occur (or defended as to why they have not occurred).

* A special reporting tool stacks all order elements, providing the time, financial, and inventory management requirements needed by services organizations.

* The system can be accessed in several ways: in the office, via the Internet, or by using mobile devices. This ensures that mobile workforces are never out of touch.

* Role-based views provide security and data tailored to each mobile worker; job-specific information is conveyed simply and quickly.

* Both regularly scheduled and unpredicted, emergency repairs are easily managed. Mobile field communications can redirect work crews, juggle scheduling, and change the pricing attached to scheduled and unscheduled work.

3. Unlimited pricing and service model variations.

Agresso Field Force contains modeling capabilities to help organizations analyze, determine, and establish service agreements. With the ability to manage the parameters of time, maintenance schedules, workforce pay rates, parts and products needs, and customer demands or special needs, organizations are able to create and select from various complex pricing and service models that are in the best interest of the service provider, the inventory partners, and customers.

Additionally, Agresso Field Force is able to adjust to customer data changes, pricing increases, volume discounts, or workforce parameters, on the fly and without external IT intervention. Management has clear visibility to model known and unknown what-if situations that might have major bottom-line impact.

By being able to set, manage, bill, and adjust pricing and service levels for high-volume individual contracts, Agresso Field Force provides a best-of-breed solution set with virtually no limit to the complexity—or creativity—service organizations wish to build into their pricing and service contracts. The solution can manage these multiple disparate contracts from both a workforce deployment and a financial-reporting perspective.

4. Embedded analytics and reporting functionality.

Agresso Field Force’s embedded analytics and reporting capabilities flow throughout each of its field services and asset maintenance business processes. Organizations can build reporting structures and hierarchies that reflect the management and deployment of their field workforces. The Agresso enterprise resource planning (ERP) reporting umbrella provides full drill-down, drill-around, and analytic capabilities, from high-level information, down to transactional data, as well as relevant documents (purchase orders, invoices, contracts, etc.).

Service or customer inquiries and individualized or aggregated reports can be published to web sites, portals, and intranets for easy access by both traveling management and mobile workers. Ad hoc inquiries are made through an intuitive, graphical user interface (GUI), which provides sophisticated analytics capabilities that can leverage opportunities or quickly change courses that cause financial or operational stress to the organization.

5. Agile mobile workforce support.

Field services organizations need the most agile field services technologies available to facilitate communications and reporting and to build cost efficiencies into the wide range of business processes performed off site. Just a few years ago, field operations revolved around limited thin client web capabilities that delivered rudimentary self-service business processes. Today, powerful mobile laptops, multifunction smart phones, and personal digital assistants (PDAs), as well as full-spectrum broadband communication infrastructures, all keep mobile workforces connected. The result is access to and exchange of reliable, up-to-date information, which speeds up the completion of jobs and accurate invoicing.

With Agresso’s Field Force, such mobile devices are tightly integrated to role-based enterprise information in order to
o reduce or eliminate costly and time-consuming trips back to the office

o reduce or eliminate paperwork or reporting redundancies

o access invoices, contracts, or service procedures to streamline service calls and visits

o fill out and complete asset maintenance schedules for legal and preventative maintenance purposes

o order parts and supplies quickly and cost-effectively to close out jobs faster and improve customer satisfaction

o enter billable time against specific contracts to expedite accounts receivable activities

6. Asset management and maintenance.

In asset-intensive industries, the reliability and cost of maintaining infrastructure are critical components to an organization’s success—top line, bottom line, and long-term business viability. Business processes for reviewing and improving upon asset and infrastructure maintenance schedules have become titles in the business book aisle, and speech fodder for technology analysts.

Poor asset maintenance made global headlines with the near environmental disaster wrought by shoddy maintenance of oil pipelines in Alaska. What’s more, the incidence of plant sewage overflows following rainstorms continues to embarrass water treatment facilities.

Field services operations are often tightly tied to the maintenance and management of critical organizational assets. These fall into three categories:
1. preventive maintenance, which is based on proven, routine schedules and guidelines tied to infrastructure;

2. predictive (pre-scheduled) maintenance, which is based on the timely analytics of recent field services emergencies, in cases where similar assets and structures exist elsewhere;

3. and unpredicted or emergency maintenance, which is tied to urgent essential infrastructures that fail and that must be serviced immediately.

Predictive maintenance has been positively impacted by the newest compare-and-contrast analytics, where “sensing” technologies have been added to the mix. The more sophisticated, reliability-centered maintenance guidelines infuse a deep understanding of equipment specifications, needs, and priorities (overlaid by financial and personnel resources) to plan maintenance activities.

Unpredicted, emergency service of assets can have a huge negative margin impact. An organization’s ability to use a combination of Agresso Field Force’s analytics, workforce, and communications capabilities can minimize the impact by redirecting scheduled work, workforce crews, and scheduled commitments to meet financial and customer needs.

One of Agresso’s differentiators from other enterprise solutions providers is its ability to tailor its solution to the unique requirements of each customer—both in the pre- and post-implementation phase. Regardless of the type of asset maintenance schedule desired—whether accommodated for outsourced service teams or internal service teams—Agresso can create a complete framework for scheduling, cost, time and billing, best practices, analytics, and reporting.

Both Market Segments Growing Rapidly

In April 2007, IDC Research published a report titled Worldwide Enterprise Asset Management 2007–2011 Forecast: No Longer a Sluggish Backwater (IDC, April 2007, Volume 1, Product, Project and Portfolio Management Solutions: Market Analysis), claiming that the world of asset management growth is no longer the “sluggish backwater” (having backward or slow-technology solutions) it once was. IDC reported the worldwide enterprise asset management (EAM) market in 2006 to have reached over $1.3 billion (USD), with $1.1 billion between the Americas and Europe, the Middle East, and Africa (EMEA). It projects year over year revenue growth to exceed 7 percent per year, to grow to an incredible $1.9 billion (USD) by 2011.

As proposed in this paper’s preamble, the definition for both field services and for asset management has grown deep and multifaceted tentacles. Here is IDC’s definition of the latter:

Enterprise asset management application software automates the many aspects of asset management and maintenance, repair, and overhaul (MRO) operations (e.g. machinery and equipment, buildings, or grounds). The software generally includes functionality for planning, organizing, and implementing maintenance activities, whether they are performed by employees of the enterprise or by the contractor. Typical features include equipment-history record management, descriptions of items maintained, scheduling, preventative and predictive maintenance on the assets, work order management, labor tracking (if integrated within the maintenance management applications), spare parts management, and maintenance reporting.

The report continues,

... service providers are increasingly under pressure to maintain their assets and facilities, as well as those of their clients, in optimal working order to satisfy their end customers. Integration with PLM (product lifecycle management), ERP, and CRM [customer relationship management] solutions will provide service organizations with access to product information, including engineering data, materials and services purchasing, manufacturing planning and service scheduling ... and services contract and warranty management.

In a separate interview, Gisela Wilson, director of IDC’s study Product Life-Cycle Management Solutions and the author of the IDC report, says, “There aren’t a lot of companies that have attempted to do both EAM and high-volume, low-ticket field services—yet the demand is there. The big ERP players have attempted acquisitions to knit both pieces together, but the benefits are lagging due to poor integration and change capabilities. Buyers haven’t been able to get their ideal mix of change-resistant integration, plus deep rich functionality in both pieces. Something always comes up short.”

Mary Wardley, IDC’s field services guru and vice president of CRM applications software, also advises that the field services and asset maintenance hybrid has either been a disconnected free-for-all, or a no-man’s land, depending upon your point of view.

“To date, the traditional vendors on each side have made some wrong assumptions about what the buyer wants,” Wardley says. “The emerging new field services/asset maintenance model is somewhere between ERP and front office. It’s easy to see why initial efforts to join the two pieces have failed: field services vendors are traditionally a downstream piece of CRM, so they are struggling to understand the nuances of back office, asset management operations—like inventory management, logistics, product information management, parts management, etc.”

Conversely, the asset maintenance vendors are not nearly as comfortable with the analytics and mobility necessities required of the field operations piece. “These are people who have serviced assets—like cell towers, utilities, shopping malls,” Wardley said. “They were on nice, comfortable maintenance schedules that were regular, predictable, with more stabilized time/billing/parts. This is a very different world from rapid-response, ‘I’ve broken it’ service needs. The two solution sets have been speaking different languages for years ... and it will take time for many of these vendors to understand each other and mesh well.”

Wardley also concurs that Agresso’s Field Force provides a compelling solution in blending the two applications. “Agresso has done a comprehensive job in delivering the analytics, financial controls, mobility, scheduling, inventory, contracts, pricing, and billing capabilities tightly into one solution,” she said.

People-centric Business Expertise

Agresso has been a global leader of fully integrated ERP solutions for companies in the professional services and public sector for more than 20 years. With 2,700 customers and over 10,000 deployments operating in 100 countries, more than one million users use Agresso’s solutions to run their businesses. The company markets its solutions under the Agresso Business World brand.

Agresso’s deep understanding of people-centric organizations has led the company to achieve a number one market leadership position in the public sector of several European countries. Its customer base is almost evenly split between the public and private sectors.

Agresso’s VITA Architecture: Addressing “Businesses Living IN Change”

Agresso management understands that in a head-to-head competition with the giant global ERP providers, it is at a size disadvantage. Given that standard ERP applications (such as financials, HR, etc.) have relatively small nuances from one vendor to another, Agresso’s sales, marketing, and support organization (largely direct) cannot seriously take market share from the well-entrenched leaders. Even with solutions like Field Force, where the product may prove to be superior over time, Agresso is anywhere from one-third to one-twentieth the size of its core competitors.

Since the company is consistently winning multimillion-dollar deals in direct competition against SAP, Oracle, and Microsoft, how then is Agresso doing it, and how can the company prevail?

The answer is one word: architecture. Or, more specifically, the capabilities of its architecture.

Agresso has focused its sales and marketing efforts on a narrow market niche that it calls Businesses Living IN Change (BLINC). Agresso solutions reside on an architecture it calls VITA, which has supported numerous generations of technologies, including Web services and service-oriented architecture (SOA) capabilities.

The VITA architecture combines its data model, process model, and delivery (analytics and reporting) methodology into a cohesive unit. A change made in any one of these areas automatically and intelligently flows and makes associated changes and adjustments throughout the system. This combination favorably impacts the bottom lines of its customers as well as the corporate strategies selected by management.

The inherent weaving of these three components to make business changes in lockstep is a defining characteristic of the Agresso architecture. The Agresso technology platform uses open standards and allows chief information officers (CIOs) to leverage their preferred choice of popular and readily available industry components. This liberates organizations from being locked into technology solutions that are fashionable one day and out of favor the next. For more information, see Enterprise Systems and Post-implementation Agility—No Longer an Oxymoron?

If required, in a heterogeneous environment, Agresso also offers an SOA capability that supports Oracle, Microsoft SQL, and MySQL databases. Additionally, Agresso’s solution is based on an N-tier, web-based, scalable platform and a .NET framework. It also supports XML-based data-sharing, and provides unified, secure access to information via Web services.




SOURCE:
http://www.technologyevaluation.com/research/articles/the-convergence-of-erp-and-field-services-one-vendor-s-leadership-19254/

Infrastructure Management Wunderkind Divides And Integrates

Peregrine Systems (NASDAQ: PRGN) has reorganized itself into two business groups. The new Infrastructure Management Group (IMG) will handle Peregrine's core business, infrastructure resource management. This group will sell and support all solutions relating to asset management, which for Peregrine encompasses the full lifecycle of all complex indirect goods purchased or leased by the corporation. The newer businesses that stem from Peregrine forays into e-business and its acquisition of Harbinger (see Big Bird Dines Again) are collected into the E-Markets Group (EMG), which specializes in e-commerce connectivity, data transformation, catalog creation and management, and portal creation and management. EMG will target itself to four market verticals: automotive, energy, industrial components, and retail and distribution.

Peregrine also announced that it has completed integration of its e-procurement and infrastructure applications. By integrating Get.Resources (see First Look: Peregrine Offers Cradle to Grave Procurement) with the e-commerce enabling engine Get2Connect.net Peregrine promises to deliver a unified stream of data about the full lifecycle of assets.

Meanwhile the company has been uplifted by good financial news. Revenues were up in the first quarter, which ended June 30. Total revenues were $94.3 million compared with $51.6 million in the first quarter of fiscal 2000, representing a period-to-period increase of 83%. Expenses were roughly flat (except for the $113 million cost of acquiring Harbinger). Peregrine has also announced that since June 30 it has added eleven customers to its ASP service. The company's strategy calls for expanding its management products, including the entire Get.It! suite of Employee Self Service applications, ServiceCenter FacilityCenter and Real Estate Portfolio Manager.

Market Impact

Peregrine continues to fly high. It has been looking financially stronger for each of the past five quarters and is making well-focused product moves. It has an excellent story to tell about asset management, and integrating its asset management and procurement applications should let it approach or even achieve dominance in its sector.

The E-Markets Group has a steeper road to climb. Regardless of how good their product is the market is quite fragmented. Everyone wants to build a marketplace to tie in their suppliers and buyers, but everyone is also a supplier and buyer to a number of different companies. So everyone is asking "What are my requirements, what are my partners' requirements, what other marketplaces will we individually have to participate in, and how does it all tie together?"

To really win in the long-term Peregrine needs both market share and mind share, so that the eventual consolidation will leave them on solid ground. They don't have that yet - only Ariba and Commerce One (now working with SAP; see SAP Gives Up, Declares Victory. Again.) really have such leadership positions. Barring a significant step forward in standardization of interconnection technology, we don't see room for more than a small handful of additional leaders, even when considering the small and medium business space. Peregrine could be one of them, but it's got some work cut out for itself.



SOURCE:
http://www.technologyevaluation.com/research/articles/infrastructure-management-wunderkind-divides-and-integrates-16226/

Peregrine Offers Cradle to Grave Procurement

Peregrine Systems Inc. (NASDAQ: PRGN) has been known for applications that automate the management of complex, enterprise-wide information and infrastructure assets. While staying in that general territory, it is building a new field with its "Get.It" application suite. The first team member is Get.Resources, an E-procurement application that is being pitched at companies that acquire capital assets. The company's existing products in this area, Asset Center and Service Center, are designed for professionals within the company.

Get.Resources is a self-service application that distributes capabilities and responsibilities to individual desktops. Functionally it rides on top of Asset Center and may optionally use capabilities of Service Center.

Capital assets, ranging from real estate to desktop computers, differ from such consumables in that their acquisition cost is typically only one-quarter to one-third of the total lifecycle cost. Additional expenses accrue from such lifecycle activities as configuration, installation, maintenance, monitoring, help desk support, redeployment and retirement. Peregrine's Get.Resources works with the company's existing Asset Center and Service Center products to manage assets through their entire lifecycle. It can also be used to purchase consumables.

Asset Center contains modules that, in totality, track the initial and ongoing costs, location, and status of assets ranging from industrial machinery to software licenses. Both purchased and leased assets can be accommodated, and cost tracking can include acquisition, repair, operations, related consumables, and disposal. Purchasers of Get.Resources need the core engine from Asset Center but do not need to purchase every one of the modules.

Service Center can add such capabilities as the automatic generation of work orders, tracking service levels provided by third-party service providers, and consolidated service desk management including trouble ticket and work order tracking.

Product availability was announced December 8, 1999. The product is currently in beta with two customers, although 1-3 more beta customers are expected. The formal launch of the beta program is planned for February 2000.

Besides the actual Get.Resources product, the initial launch is very likely an incremental step toward a new architecture. While the company is making no formal announcement of any architectural changes at this time, it is clear that its stated goal of providing an integrated suite of employee self-service applications requires such a move within the next year, because its current applications run on individual databases and servers. A truly integrated suite would have a single database for all products. This is clearly not a serious issue as far as Get.Resources alone is concerned .


SOURCE:
http://www.technologyevaluation.com/research/articles/first-look-peregrine-offers-cradle-to-grave-procurement-15206/

PowerCerv Finally Overpowered By The '02 Hurricane Season

What has long loomed as inevitable fate has finally happened at the beginning of October, when PowerCerv Corporation (OTCBB: PCRV, www.powercerv.com), a Tampa, FL-based provider of enterprise software solutions for small-to-medium sized discrete manufacturers and distributors, announced that it has signed a definitive agreement to sell substantially all of its assets to ASA International Ltd. (NASDAQ:ASAA, www.asaint.com), a holding company of vertical enterprise software business-to-business (B2B) software solutions and value-added services, based in Framingham, MA. Under terms of the agreement, in addition to ASA assuming certain PowerCerv liabilities, upon closing ASA will pay PowerCerv $500,000 cash and issue a $90,000 note due in six months, although the purchase price may be subject to certain post-closing adjustments. Following the closing, PowerCerv will reportedly use its best efforts to settle its remaining liabilities and possibly buy another operating business. Closing of the transaction is subject to the satisfaction of various conditions, including the approval of PowerCerv shareholders.

By becoming an ASA company, PowerCerv hopes to continue to focus on its core competencies and vertical segments knowing it has a stable parent behind. Marc Fratello, CEO and a co-founder of PowerCerv claimed its 24 employees will keep their jobs and he will remain chief executive of what will become an ASA subsidiary.

Market Impact

This would be yet another harsh object lesson of how a solid product and an intriguing value proposition can be hampered with a poor market perception due to the company's plunging viability. PowerCerv has indeed had an interesting rise-and-fall 10-years ride, since its founding in 1992. The company grew from less than $1 million in revenue to ~$38 million in 1996. PowerCerv, which started first as a reseller of PowerBuilder tools, then evolved into one of former Powersoft's (now part of Sybase) first VARs, reselling the development tools and providing complementary services, spent its first several years crafting its business applications product and expanding its sales & marketing organization to support application sales. Over that time PowerCerv developed a suite of products aimed at abounding PowerBuilder developers including an object class library, workflow and asynchronous processing tools and a security system.

Owing to the extraordinary growth of PowerBuilder adoption during the mid 1990s, a market consequently emerged for PowerBuilder-based applications, and, in response, PowerCerv had logically begun to develop and garner a set of modern enterprise applications, called initially the EnPower Series. However, the rampant transition from a software tool reseller to an enterprise software developer took its toll in 1997, and PowerCerv has since been going through numerous major attempts to revitalize itself. The first one had happened throughout 1996/97 when the company did away with the unfocused strategy of serving many markets to focus on the discrete manufacturing mid-market with a single product suite named ERP Plus. As a result, PowerCerv then divested several businesses that were not in tune with the new strategy including a general consulting business, an application development tools business, and reselling database software.

Its dismal price tag nowadays that equals a value of a decent piece of real estate in any larger US city's middle of the range suburbs should be a sign of the dj vu' downfall of an ERP software maker once viewed as one of its region's more ambitious technology companies. The company has been shrinking since 1977 -- it had ~$6 million in total revenues in 2001, more than six times down from a peak in 1996, with almost no new license revenue in 2002.

The company went public in 1996 for $14 a share, equivalent to $126 a share adjusted for last year's 1-for-9 reverse stock split, with its shares lately being traded for about a penny (reminding us all of our own personal investments and/or 401k funds dwindling across the board). PowerCerv's bad luck includes a protracted shareholder lawsuit from 1997 (which was eventually settled last year) that prevented an earlier sale of the company when the price could have been reasonably higher.

The nature of PowerCerv's more recent difficulties has indisputably been different than in 1997, as it is particular to a slew of Tier 2 and Tier 3 vendors that have been feeling the Y2K-caused pinch that morphed afterwards into seemingly never-ending economic slump. Lately, the company simply could not compete with many larger vendors considered as more viable in a tough environment for all technology companies, with customers becoming ever more vendor viability cautious and eager investors vanishing.

Its situation has been additionally exacerbated by its late market entry, resulting with low presence (around 200 customers) in an already cramped marketplace and already marked territories, an undeveloped international distribution channel, high staff turnover, the lack of indirect channel to supplement its direct sales force, inferior service & support due to growing pains in the past, and a rapidly eroding financial situation. The reliance on PowerBuilder development tool, despite some of its advantages over Microsoft Visual Basic for Applications (VBA) (e.g., true object orientation, platform independence, scalability, release migration, etc.), has not helped either, given Microsoft .NET's and/or Java camp J2EE's recent capture of both market and mind share, and consequently becoming perceived as de facto enterprise applications development standards, rendering all other development environments almost archaic. Fronstep's recent abandonment of its initial Progress development tool and database speaks volumes in that regard



SOURCE:
http://www.technologyevaluation.com/research/articles/powercerv-finally-overpowered-by-the-02-hurricane-season-16785/