ORLANDO — Canadian customers gathered at Microsoft‘s (NASDAQ: MSFT) Dynamics-based Convergence conference in Orlando Tuesday to discuss their recent implementations of Dynamics NAV-based products, which executives said highlighted the popularity of vertical-specific ERP and updating old technology.
Kristin MacMillan, director of operations with the Vancouver-based name badge company Imprint Plus, said that the company has many large clients and, during its growth, has been focusing on customer care and customization, which includes crafting a software solution that allows customers to craft their own ready-made badges. The company turned to Vancouver-based consulting company Habanero Consulting Group, said client experience manager Tracey Santos, which recommended the Dynamics NAV solution.
“They were looking for something flexible and scaleable that would offer a holistic solution,” she said. “They needed e-commerce, business intelligence, collaboration, CRM and ERP, so they needed a product that would touch on a lot of different domains, and scaleability was especially important as they have had a lot of growth.”
Users aren’t just looking for the basics anymore, according to Marc Di Giorgio of consulting company and Microsoft partner Industry Built. “Most buyers of ERP are getting smarter. It used to be about pure functionality when they weren’t as schooled in ERP. Now they’re concerned with risk, and user adoption,” he said.
Industry Built is a vertically-focused business, which includes its JustFood products geared toward the food industry. One customer is the Toronto-based CanGro, a fresh-pack food processor. The company was divested from Kraft where, according to IT manager Kirk Southcott, “there was some semblance of an ERP system.” The complex, cumbersome system had a lot of interfaces between them, said Southcott, and required a $5-million to run per year. Once Kraft started divestment, CanGro was given the choice to clone the current operations or start from scratch.
Getting vertical business’ management to spring for a new ERP system can be a hard sell, said Di Giorgio. “People don’t want to get ERP. If they’re going to invest in something, they want increased capacity. They usually need a trigger event for a reason to invest,” he said.
But, after looking at SAP (NYSE: SAP), the company went with the JustFood platform, performing a $2-million, six-month implementation for 160 users in July 2007. The last seven months have seen drastic improvements, said Southcott. “There’s been much more transparency in the system and for looking at the data. Our reporting speed is better, and our GL updates have gone from eight days to three. Our IT budget has been reduced by 50 per cent, and we’ve simplified our business processes,” he said.
Such vertical-specific applications are becoming more and more popular, according to Tim Hickernell, an associate senior analyst with London, Ont.-based Info-Tech Research Group. User adoption at Imprint Plus was helped along by the familiar look-and-feel of the Microsoft product, said MacMillan.
And the food-market-specific aspects of JustFood, while helpful, didn’t drastically speed up the learning period, according to Southcott. He said, “There were definitely problems with people adapting to it. They were used to a green screen and entering the same numbers. Being able to access the item card from four different places was a little daunting for them, but the adoption has been very good in the end, especially with periodic refresher training.”
With the exception of small businesses, however, most businesses are seeking out ERP applications super-tailored to their needs, which is paying off for partners. “The overarching theme is ‘make it work for my business,’ more often than not,” said IDC Canada software research analyst Kevin Restivo.
CanGro is just one of the many businesses on the ERP bandwagon, said Hickernell. According to a study of over 1,000 small and mid-market enterprises last winter, 20 per cent of respondents were planning an ERP implementation for 2008.
Canadian results in the survey differed from the general and American trends, he said. For instance, the No. 1 reason overall was an update on outdated equipment, with a reduction in complexity coming in second. Canadians, however, cited a reduction in complexity as the No. 1 reason.
The third reason, however, was an extension of the life of current systems, which, said Hickernell, continues the dependence on third-party partners to offer support after the vendor withdraws it.
The respondents overall were after the financial, procurement, order management, and analytics and reporting improvements. Canadians, on the other hand, cited manufacturing, quality management, asset management, and CRM as their top picks for an ERP implementation.
Canadians also generally plan to spend more on implementations and are more concerned about the impact on business processes. Also important is the necessity of getting one’s data and business processes in order before attempting an ERP implementation, according to Di Giorgio.
“People come to us thinking that ERP will fix everything in their business, but it actually will make you more accountable for the information and will uncover weakness. But we’re also seeing more customers looking for ERP come to us with a better understanding of their content needs,” he said.
Said Restivo: “You need to refine your business processes. If you’re looking for a quick fix, then there’s a higher probability for failure. You also need executive buy-in-not only on the C-level, but with people involved in the project and the users.”