A review of new software products that can make a big difference to your business

Enterprise software survey 2007

By Michael Burns

Our annual CAmagazine software survey is back and this year it’s bigger than ever. We combined all our surveys — accounting/ERP, customer relationship management, business intelligence/corporate performance management and professional services automation — into this issue.

Accounting/ERP systems automate what is called the back office, including financials, manufacturing and human resources. CRM automates the front office: contact management, sales force automation, etc. ERP and CRM systems both generate lots of data and that is where BI comes in. It turns the data into information useful for making decisions. CPM includes BI along with other tools found lacking in most ERP systems, such as consolidation, budgeting and forecasting, strategic planning and scorecarding. PSA is the same as ERP but was designed specifically for professional service organizations that manage projects and track their time.

The big trend today is to merge ERP and CRM with BI/CPM. In March 2007, Oracle purchased Hyperion. In May, SAP followed suit with the acquisition of Outlooksoft. Many wonder whether Cognos (another leading BI/CPM vendor) will be purchased — and if so, when. By the time this article is published the answer may be clear. PSA is also being swallowed up by ERP, as vendors extend their footprint to professional service organizations.

Tiers
As always, we segregated the ERP products into tiers based on customer revenue and employees and product cost. This is a convenient, albeit not perfect, means of differentiation. For example, an organization with low revenue may have complex business processes that place it in a higher tier.

On the accompanying ERP chart, we slotted all the products into what we believe are the appropriate tiers based on cost and target market. Be cautious if you’re trying to calculate the costs for a system, since these numbers are just averages. For example, the licence fees for a Tier 3 product should range from $50,000 to as much as $150,000. Assuming the licence fees are $100,000, the implementation fees could be anywhere from $125,000 to $150,000, depending on the complexity of the implementation. SAP and Oracle are Tier 1 vendors that initially targeted the Fortune 1,000. Those implementations would cost millions for the larger customers. SAP and Oracle are now targeting smaller companies. We have not broken down the other products into tiers because they can generally be implemented by a wide range of both small and large companies.

Every year, we also add more information to the surveys. This year, our changes to the ERP survey include a lot of construction-specific questions. We also added budgeting and forecasting to the CPM survey, and made a number of smaller additions to both the CRM and PSA surveys.

The charts include both large, well-known vendors and small vendors that are most likely unfamiliar to you. Don’t rule out small vendors that can potentially respond more quickly to your needs and focus on just your industry. A small vendor does not have the same overhead as the major players and can succeed with only a few new clients a year. However, one of the big advantages for industry-specific vendors may be short-lived, since some of the larger vendors are also focusing on specific industries. For example, Microsoft has recruited business partners to extend the Microsoft Dynamics platform into specific industries.

We spoke to several vendors to get a sense of what is happening from their perspective. Exact Software has recognized the importance of integrated CRM and business intelligence. Its ERP systems share the same database as its CRM system and some business intelligence/online analytical processing has been built into the base system. OLAP is a great tool for analysing information across multiple dimensions. Rather than generate 150 reports, OLAP gives you an online cube to get it all with a few drags and clicks.

Another vendor that has embedded BI in its product is Multiview, which we wrote about a couple of years ago (see “Multiview’s well-kept secret,” www.camagazine.com/multiview). The company’s BI tool includes OLAP, financial reporting and generic report writing, which for some vendors are three different products.

We also spoke to Deltek, one of the leading PSA vendors, which has recently opened a Canadian office. A few years ago, it released Vision, which it now calls its flagship product. Vision is one of the few PSA solutions that includes all the operational functionality required by professional service organizations (project management, time and expense management, etc.), as well as financials.

OpenAir is another PSA product, but it deploys the system as software as a service. SaaS, which is also called ASP (application service provider), allows you to rent rather than buy the software. You use the infrastructure and resources of the ASP to maintain the database. SaaS/ASP has now become mainstream with vendors such as salesforce.com for CRM and NetSuite for ERP.

For the past few years we have included a link to our customer survey of ERP systems. We did not do it this year, because last year’s results were insufficient statistically to draw any conclusions. We know some of the vendors that did manage to get their customers to respond were disappointed — in particular, SYSPRO, which scored well a couple of years ago. Perhaps some of the other vendors breathed a sigh of relief.

It’s impossible to include commentary on every product and we apologize if you feel your product of choice did not get sufficient coverage. We did try to include all the leading vendors in our survey, but some, such as Oracle, declined to respond.

The analysis in the accompanying charts is based on the vendors’ responses. Although we tried to correct any obvious errors, we cannot validate every line item. We do believe, though, that the vendors are inclined to be honest, especially if the questions are very specific. They do this partly because they realize trust is the most important factor in the selection of a new system. Vendors typically need to jump through hoops to win your trust during the selection process. Trust is hard to win but easily lost.

Michael Burns, MBA, CA, is president of 180 Systems ( www.180systems.com/), which provides independent consulting services, including business process review, system selection and IT audit. Contact: 416-485-2200 or mburns@180systems.com.