Bridging the Reality Gap Between Planning and Execution Part Two: The Manufacturers' Perspective

Despite the fact that many manufacturers have invested in enterprise resource planning (ERP) systems and supply chain management (SCM) systems, most continue to use inopportune batch reports and pesky spreadsheets to manage their operation's performance. These have proven to be inefficient and error-prone methods of supporting decision-making, resulting in a reliance on "educated guesswork" rather than on accurate dynamic analysis to align decisions with strategic objectives. For that reason, some innovative enterprise software vendors intend to do the same for manufacturing and operational decision-making as has already been done to financial decision-making by some business intelligence (BI) applications. (See Financial Reporting, Planning, and Budgeting as Necessary Pieces of EPM).

Manufacturers today need to react quickly in order to remain efficient and competitive, given that the biggest problem they face is that change is the only constant in manufacturing. For those who are lucky, only minor changes will happen between the "as planned" and "as executed" worlds. These changes are the usual minor but endless variances that exist between planning and forecasting in the "ideal world" and manufacturing in the "real world." For all the investments spent on sophisticated supply chain planning (SCP) and manufacturing-planning tools, almost proverbially, the only sure thing about a forecast is that it will be wrong, by and large. Years ago, in business, many minor variations could be ignored as margins were sufficient to accommodate many suboptimal decisions or manufacturing processes, such as keeping increased safety stocks or frequently expediting. But in today's world of often razor thin margins, the variances between plans, real customer demand, and forecasts must all be spotted, and manufacturing success can be determined by the speed and effectiveness of the response to even minor changes.

Sometimes, however, the more serious changes, which disrupt routine tasks of planning and forecasting, manufacturing, delivering, and invoicing standard orders, result from significant unplanned events that occur either within the company or elsewhere throughout the extended supply chain (e.g., a supplier is late, supplies are wrong or of unacceptable quality, a manufacturing line is still unexpectedly busy or is down, there is a last-minute order change, etc.). The risks can be high, ranging from lost margins to loss of customers or erosion of competitive market positioning. Speed and effectiveness in response to these changes can determine the difference between profit and loss in manufacturing an order, or they can determine margin size in a manufacturing cycle or run.

In addition to the above minor and major changes, manufacturers face a third and typically more powerful change to the business itself. Namely, to remain viable and prosper in today's ruthlessly competitive global markets, manufacturers must continually reinvigorate themselves and even occasionally reinvent themselves. Fundamental business changes range from new product introductions and promotions to new corporate goals and objectives; to new target customers, continually changing customer demands and new supply chain partners; and even through to merger and acquisition (M&A) activities and structural changes to the business itself.

Some manufacturers try to cope with possibly the most difficult yet pervasive of all forces in business—never ending change—by trying to leverage the strategic information systems they have been using to control, manage, and optimize the "as executed" state of their business, such as ERP systems, or SCE systems available respectively from their ERP vendors and a broad array of pure play SCE players. However, it has been extremely difficult for them to deal with day-to-day events in real-time with a transaction-based ERP system that relies on batch processes to extract the data they need. It can be daunting for a manufacturer to get real-time notification of a supply chain event, understand its impact, and take the appropriate action given traditional ERP and or execution applications do not really provide this capability. Almost every enterprise has huge volumes of information flowing through their enterprise systems, but only few possess the tools to quickly exploit their wealth of data and thereby optimize their operational and corporate performance.
Most manufacturers will have gone a step further in addressing this problem by deploying some level of strategic planning or forecasting systems to help them forecast and model the "as planned" state, in solutions ranging from a variety of business intelligence tools, such as Cognos, Hyperion, SAS, or Business Objects, all the way through comprehensive SCM solutions, such as those from Manugistics or i2 Technologies, or again from their ERP providers. If one considers traditional business intelligence tools, they merely do a prodding analysis of historical data after the fact, but one cannot count on the future to look like the past, which has been the shortcoming of some forecasting methods as well. Therefore, more up-to-date information is a requirement.

On the other hand, best-of-breed SCP solutions may not be the answer, as they require a significant investment in both software and integration. Sometimes the solutions to improve manufacturing effectiveness are so complex and costly that they overwhelm any benefits that they might provide, such as when engaging consultants to, for example, scrutinize modeling revenue, cost, and supply chain capabilities, with breaking products into families and analyzing the channels they are sold through and the geographies they cover. Frequently, the exorbitantly high cost and complexity keeps companies from realizing the potential benefits that these systems promise.

Additionally, there are still significant barriers to an easy deployment of SCP systems, as they are based on cumbersome proprietary algorithms and heuristics that take a long time to master and harness to work, forcing companies to have full-time rocket-science' expert consultants on the premises to interpret the results and to keep the application in tune with the business processes it supports. Therefore, the use of a traditional APS method that is non memory-resident and latent in itself, as a basis for all decision-making, is becoming increasingly unsound. Due to the growing visibility of supply chain information, the necessity of SCM has also progressively become more the provision of real-time information. Still, early supply chain event management (SCEM) systems, while crucial to increase visibility and raise flags, have lacked the ability to figure out resolution processes in the applications and their subsequent impact on operations.

It’s About Process (or Ability to be Responsive) – Part I

After several years (if not decades, even) of painstakingly corralling and setting up all their custom data, objects, tables and whatnot, and making sure that these static and/or dynamic transactional data are secure, many enterprise applications users have realized that the time is long overdue for them to start looking at ways to make their applications more process-savvy.

Companies are increasingly trying to adopt and implement standardized (and yet flexible and easily modifiable) business processes to help their operations run more consistently and smoothly. For example, the chief executive officer (CEO) might decide that as of, say, next month “All customer service cases must be resolved within 24 to 48 hours,” or, “We are going to institute a new sales process for all deals worth over US$100,000.”

However, these business processes often get communicated to employees in an ad hoc and unregulated manner. A process document with instructions may exist on a network file share, but people have not the foggiest idea that it’s there. And some employees might rely on word-of-mouth information from co-workers (so called “tribal knowledge”) to learn the processes for their jobs.

Consequently, standardizing and instituting new business processes can prove challenging for most companies, particularly larger organizations.

Indeed, until recently most enterprise applications have hardly been anything more than glorified databases — they could hold all of the information users may need and allow users to search for records based on various criteria, but they could not really help users to perform the functions of their daily jobs more effectively.

There’s still often no native automation and agility within the system that lets, e.g., a recruiter instantly know when the status of a candidate has changed or when a new position requisition has been entered into the system.

Indeed, when any changes are made somewhere in the organization, users have to remember to notify one another of the change or else rely on others finding the updates on their own. Neither solution is practical in the long term and invites the possibility that the software solution or best practice will not be adopted consistently by all employees at the company.

How can one then build processes into enterprise applications so that users won’t need to, time and again, rely on manual (pedestrian) methods of communication to inform others of changes, increasing the risk that many issues will fall through the cracks?

Introducing Workflow Automation

To that end, a built-in or an external standalone add-on tool (or capability) that can be used to solve the process automation problem is called workflow automation (or workflow management). Some will refer to it as business process management (BPM), and we will shortly try to point out the differences between the two – i.e., workflow and BPM.

Traditional enterprise applications typically feature some built-in functionality, such as a human resource management system (HRMS) or a procurement application, with some capability to tailor the base functionality through parametric configuration options (e.g., via “order types” that entail different mandatory and optional “order steps”) that users have to learn by heart.

To be fair, some enterprise applications have introduced workflow capability into their products to give users some ability to control the process behavior of documents such as an invoice or an engineering specification. But in most enterprise applications workflow is implemented through hard-coding, which means that programmers must develop and maintain the code.

In addition, workflow automation of the typical enterprise application is generally limited to a single document or task routing. This usually means that companies implementing an enterprise application must choose between accepting the vendor’s pre-built business process behavior or paying the vendor dearly to make expensive modifications to accommodate more complex processes, which will then make upgrades either costly or impossible.

In contrast, a specialized workflow tool enhances a single task and/or document routing by providing an integrated capability to include rich user interfaces (UIs), system integration, rule processing and event handling.

Rules are necessary to determine which path users should take next in a process that has multiple possible paths, e.g., an order worth less than US$1,000 does not need manager approval, but over that amount it does. On its part, an example of event handling would be a necessary step after a product recall: a “pull from shelves” notification must be sent throughout the distribution channels.

These capabilities can be pretty powerful, since in general, if users can come up with a standard rule that specifies when a particular event should happen, they can make it happen automatically with workflow. In other words, workflow becomes the magic ingredient that transforms many traditional transactions-capturing applications from a glorified database into fully functional tools that basically everyone in the company should find useful.

Workflow Components

The individual components that make up workflow are rules and associated actions — tasks, field updates, and alerts.

In general, a workflow rule is the main container for a set of workflow instructions. It includes the criteria for when the workflow should be activated, as well as the particular actions that should take place when the criteria for that rule are met. Every workflow rule must be based on a single object that users will choose when they define the rule, as this object then influences the fields that are available for setting workflow activation criteria.

For example, if a user defines a workflow rule for the “Job Application” object in an HR application, he/she will be able to set workflow activation criteria based on the values of fields like “Job Application Number” and “Status”. Users can also set workflow activation criteria based on standard fields, like “Record Owner” or “Created Date”, as well as fields based on the currently active user when a rule is evaluated, such as their “Role” or “Time Zone”.

When a workflow rule is triggered, there are many types of actions that can occur, starting with a workflow task (or step), which assigns a task to a user according to a particular template. Just as in Microsoft Outlook, tasks include information about something that needs to be done by a certain time, such as making a telephone call, creating an order, shipping goods, or paying an invoice. Typically, assigned tasks appear in a user’s “My Tasks” related list on their home tab (or page) and generate reminder messages that pop up when a user logs in.

When an administrator defines a workflow task, he/she provides default values for data fields like “Assignee”, “Subject”, “Status”, “Priority”, and “Due Date” for tasks that are generated by its associated workflow rule. Administrators can also make sure that a notification email is sent to the assignee when a task is automatically generated.

In additon, a workflow field update changes the value of a particular field on the record that initially triggered the workflow rule, while a workflow alert sends an email according to a specified email template. Unlike workflow tasks, which can only be assigned to users of the application, workflow alerts can be sent to any user or contact, as long as they have a valid email address.

A workflow rule can include any combination of these actions when the rule is triggered. For example, one rule might send out an alert and update two fields on a particular record. The action that one workflow rule takes can also trigger the execution of another workflow rule.

Workflow-enabled Applications

Many enterprise applications today come with built-in workflow management capabilities, such as the Salesforce.com Enterprise Edition on-demand customer relationship management (CRM) suite and its on-demand Force.com (formerly Apex) platform, Agresso Business World (ABW) or Exact E-Synergy, to name only some.

Microsoft Dynamics CRM too includes a workflow module that users can use to automate their business processes based on the rules, logic, and actions that they design. Microsoft has revamped the workflow functionality in Microsoft Dynamics CRM 4.0 so that it now uses the Microsoft Windows Workflow Foundation (WF), whereas previous versions of Microsoft Dynamics CRM used their own proprietary workflow engine.

The result of the revised workflow functionality is that users, administrators, and developers can design and create business processes using the workflow tools with new features and a new UI for creating and monitoring the workflow processes.

Windows WF provides a comprehensive programming model, run-time engine, and tools to manage workflow logic and applications. The Microsoft Dynamics CRM workflow UI relieves users and administrators from the need to interact with WF directly. Therefore, users do not necessarily have to understand the underlying workflow technology to create workflow logic in Microsoft Dynamics CRM.

As a recap, a built-in workflow provides a tool to help companies set up and define business process activities (including the proper sequencing) that involved employees can use when working with the enterprise system’s data. Conceptually, one should think of a workflow as an application or service that runs in the background, 24 hours a day, 7 days a week, constantly evaluating the data and the multiple workflow rules in the company’s deployment.

When the workflow service encounters a trigger event, it activates the appropriate workflow rules to run the workflow actions. Typical workflow actions include sending an e-mail message, creating a task, and updating a data field on a record.

By implementing workflow processes in the enterprise resource planning (ERP), supply chain management (SCM) or CRM systems deployments, users can enjoy many benefits, such as:

1. Ensuring that users track and manage their customer data and processes in a consistent fashion — instead of relying on users to remember the appropriate steps for processing data, managers or administrators can create workflow rules that will automatically determine the next required steps and assign activities as necessary;
2. Processing the customer data more quickly so that, for example, new sales leads or customer service requests are assigned and routed immediately upon record creation; and
3. Allowing users to focus on more value adding activities — instead of having to perform a large number of manual repetitive steps.

It’s About Process (or Ability to be Responsive) — Part II

BPM Suite Components

Full-fledged BPM system components thus include visual process modeling: a graphical depiction of a process that becomes a part of the application and governs how the business process performs when companies run the application.

They also feature Web and systems integration (SI) technologies, which include displaying and retrieving data via a Web browser and which enable companies to orchestrate the necessary people and legacy applications into their processes.

Another important BPM component is what’s been termed business activity monitoring (BAM), which gives reports on exactly how (and how well) the business processes and flows are working (for more information, see TEC’s article entitled “Business Activity Monitoring - Watching The Store For You”).

Optimizing processes that involve people and dynamic change has been traditionally difficult, and one barrier to optimization has been the lack of visibility and ownership for processes that span functional departments or business units, let alone different enterprises. In addition, the industry often changes faster than information technology (IT) departments can update the applications set that the business relies on to do its work, thus stifling innovation, growth, performance and so on.

But today, the pervasiveness of Web browsers and the emergence of simpler application integration technologies such as Web sevices, simple object access protocol (SOAP), extensible markup language (XML), business process execution language (BPEL), etc. have enabled IT staff to deploy technology that supports the business process across functional, technical and organizational silos.

In the broadest sense, BPM components address the issues of the following: process modeling, documentation, certification, collaboration, compliance, optimization, and automation (i.e., via a workflow engine that is rule-based).

Again, highly functional, top-of-the-range BPM suites use graphical (visual) process modeling tools that enable business users and business analysts (i.e., those people that are most familiar with the process) to implement and manage the process definition. To complete any transaction, the BPM suite must also call on various siloed legacy applications that hold necessary information, for example, customer, inventory or logistics data.

But to the ordinary user the complex process that runs over many enterprises and various systems should appear seamless. End-users should be spared the effort of hunting down the scattered information themselves, since the underlying BPM platform provides tools for:

* Business analysts to model (and change) the business processes and define the business rules that control how those processes behave;
* IT departments to integrate the necessary legacy systems;
* Joint teams to build applications for the end user that enforce the processes and rules; and
* Management to review process performance (e.g., the required time to resolve client return exceptions) and even adjust process parameters in real-time (e.g., increasing the dollar value threshold during peak periods to trigger management review and approvals of client returns).

Therefore, the most vital BPM attributes would be the following: being event-driven, orchestrated, intended for both internal and external processes/customers, and leveraging human-centric workflow and business analytics.

With the leading BPM platforms/suites, everyone in the company will be working on the same shared data and process model, so changes to the process can be put into action very quickly. This is because these sophisticated platforms provide integrated process modeling, real-time process monitoring, and Web-based management reporting — all working in unison to support rapid process innovation.

BPM — Much More than Integration

BPM is often used to integrate multiple enterprise applications and various internal and external users into a new process, but it goes way beyond mere integration. Whereas traditional enterprise application integration (EAI) products help companies to move data between applications, BPM adds interaction with people and the ability to support processes, which then become as manageable as data.

BPM integrates existing applications, Web services and people in order for companies to quickly change, destruct or construct processes as required. Again, BPM enables a company to more cost-effectively and quickly model and change its business processes to meet the specific requirements of a particular business. Via BPM, people can be involved in two ways:

1. From a rank-and-file employee point of view — BPM represents units of work from the business process as tasks, whereby each task contains work instructions, status, priority, due date and other attributes. Workers use BPM to monitor and execute the tasks that are assigned to them or to the workgroup to which they belong; and
2. From a manager or executive point of view — Managers and executives use BPM to monitor process performance by viewing graphical reports that summarize task status and alert them to process bottlenecks. They also frequently get involved with tasks by participating in approval or escalation process steps.

Thus, many BPM products provide real-time monitoring and insight into the process operation. The process flow model of BPM allows management the ability to not only easily identify bottlenecks and inefficiencies in the process, but also to more easily modify the process to improve productivity.

For instance, with industrial (plant-level) BPM deployments, companies can digitize their work processes and close the loop on performance with actual execution data. By applying BPM in manufacturing plants, companies can manage and audit their production more effectively and consistently thus improving their conformance, compliance, throughput, and ability to deliver. They can also empower their workforce by integrating people and their roles and by customizing individuals’ work styles and decision-making processes.

Astute BPM suites that focus on manufacturing can enable companies to close the loop on production process improvement, digitize good manufacturing practice (GMP) tasks, standard operating procedures (SOPs) and work instructions. They can also enable corrective action/exception management, Hazard Analysis and Critical Control Point (HACCP) monitoring procedures, and also orchestrate high-level processes and manage data between various disparate systems and empower domain experts to solve production problems immediately on the shop floor.

For more information on BPM, see TEC’s earlier articles entitled “Business Process Management: How to Orchestrate Your Business” , “Giving a Business Process Management Edge to Enterprise Resource Planning” and “Business Process Analysis versus Business Process Management.”

Special credit also goes to CIO Magazine’s articles entitled “ABC: An Introduction to Business Process Management (BPM)” and “Making Workflow Work and Flow for You.” All of the above articles were quite leveraged for this blog series thus far.

What’s the User’s Choice Then?

As said in Part I, the BPM market remains quite stratified, whereby there seems to be a number of powerful and full fledged BPM software packages (e.g., from IDS Scheer, Appian, Tibco, Lombardi, Ultimus, Fujitsu, Oracle-BEA Systems, Metastorm, etc.), many of which can be found in TEC’s BPM Evaluation Center.

BPM is considered one of the most overlooked trends in enterprise applications today. In fact, it is increasingly becoming a native part of the IBM WebSphere (best shown by the recent acquisition of ILOG), SAP NetWeaver and Oracle Fusion Middleware platforms and applications, which could be a glimpse into the future of modeling, workflow, re-engineering, and continuous change, all around ERP.

For a typical implementation that leverages a comprehensive on-premise (which is still a dominant deployment model) BPM suite, companies should count on forking out up to US$500,000 to address a few meaningful processes in their organization. Moreover, potential hidden costs include (all on top of already hefty investments in existing enterprise applications):

* Having to license and deploy multiple development, test and/or production environments to support multiple BPM initiatives;
* Additional application and database server licenses;
* Additional staff to provide the care and feeding of these servers; and
* Internal cost of direct involvement from business users to participate in process modeling, business rule definition, user interface (UI) design, testing and rollout activities.

At the lower end of the market there are a slew of workflow-based software packages addressing specific processes, such as bug or issue tracking systems. While upper-range BPM packages address complex business processes and issue tracking systems typically deal with one simple workflow, a number of workflow (possibly BPM wannabe) vendors like FloWare, Skelta, Red Maple, Web and Flo, Quask, XALT Technologies, ZyLAB Technologies, etc. are addressing a space in between.

How About Workflow (and Eventually BPM) On-demand?

But again, not many of these solutions are delivered in true no-frills software as a service (SaaS) fashion, as they still require significant hardware, software and professional service resources to be deployed on the customer’s site. Also, some business processes, although mission-critical for the company, are not transactional in nature and do not necessarily need to be part of the back-office database.

In fact, trying to capture every step and status of every little case (e.g., a customer’s product complaint or improvement suggestion that needs to be investigated by several employees) would only unnecessarily encumber the ERP or customer relationship management (CRM) database.

Maybe mapping only some critical data between the case management process and ERP database (e.g., for inventory or invoice adjusting purposes), and doing application programming interface (API) exchanges only periodically in a batch fashion might make more sense there.

It’s About Process (or the Ability to be Responsive) — Part III

The Ability to Respond, On-demand

In May 2008, Webcom announced the availability of ResponsAbility, its newest offering addressing the case management and workflow processing areas. ResponsAbility is designed to speed the “time-to-resolution” process, eliminate unnecessary time delays and improve overall value chain communications and productivity through improved transparency and collaboration.

The idea behind this case management and workflow solution was to help organizations keep their projects on track and their employees on the same page, thereby making the lives of internal and external team members much less complicated (and more productive and enjoyable).

This straightforward application provides a central location (repository) for managing the key aspects of many types of cases, including product and service defects, customer and supplier complaints, non-conformance issues, health and safety incidents, and RMAs. Separate tabs keep key information within easy reach, whereby team members can log issues as they arise, prioritize them, and update their status as appropriate.

Built-in reports let users see open issues by project, projects by stage, and many other categories. On a proactive side, the tool can be leveraged by companies to create and implement corrective and preventive actions (CAPA) and to support a plethora of regulatory and compliance requirements. All in all, users that have always had the responsibility now have the “ability to respond”, as required.

This case management software may not currently have all the bells-and-whistles associated with full-fledged BPM packages, such as programmatically driving a workflow engine, visual process modeling, process monitoring and optimization, or automatic task allocation based on workload. Still, it seems well suited for small and medium size companies, who can leverage such a software tool with an intuitive user interface (UI), for handling many, if not all of their processes, in an incremental manner.

The design and enforcement of processes is enabled because both administrators and end-users are able to design workflows, notifications, and data collection forms, as well as setting up permissions accordingly. The system manages cases by ushering each case through the resolution process, and by tracking the progress of each case throughout the entire process.

The multi-tenant software as a service (SaaS) delivery model ensures that a customer can be up and running quickly with all of the selected critical processes being modeled and functional. No onsite deployment is necessary and the software only requires a Web browser and some modest to minimal data and process setup to be up and running.

Brethren Software Vendors as Likely ResponsAbility Users?

For example, a software development company can deploy this tool within a day or two and allow its customers to report bugs. This information can then be internally routed according to a customized workflow to the support department, then to the engineering and testing staff, and then back to the customer for approval and case closure.

To elaborate, the Software Bug workflow logically starts with the customer reporting a software bug. Then a default assignee at the software vendor reviews it, and then either resolves it on the spot (hopefully) or assigns it to the software engineering staff by providing a test case. Then the software engineering team determines a cause for the bug and either provides a workaround, fully fixes the bug, or determines that the software behaves as designed after all.

At the same time, ResponsAbility can be used to allow customers to create new feature requests, which are then routed via a different customized workflow starting from project management, via development, release scheduling, back to development, quality assurance (QA), documentation (technical writers), product management, and finally to marketing teams.

Again, if the bug can be fixed, the case is assigned to the testing staff, back to the support team, and finally back to the customer for approval and case closure. But, if the issue turns out not to be the bug after all, the case is then converted to a new feature request and follows an entirely different workflow.

To that end, the New Product Feature Request process starts with customers, sales & service people, channels and/or product managers requesting a new feature. Often, the existing users (install base special interest groups [SIGs]) are allowed to vote on it, and based on the number of votes and other factors, some new features are assigned to the engineering department to estimate the effort entailed to implement the requested feature.

Based on the estimate and other criteria, some new features are then assigned to the engineering or research and development (R&D) departments for implementation. Upon implementation, the new feature is assigned to the QA department for testing and approvals. Finally, based on the QA results, a new feature is returned back to engineering for a rework or is scheduled for production (or general availability).

Apparently, various instances of a process (called cases) can be changed midstream. For example, something that was initially entered as a bug upon investigation may be classified as an expected behavior. The customer who did not expect such behavior from the software can then change a case type of this instance from a bug to a new feature request, without having to re-enter any information and this case will then follow the prescribed new feature workflow process.

Also, a built-in notification and permissions engine ensures that all communication and collaboration happens within ResponsAbility, so everybody is aware of anything that anybody ever stated about the case via comments, file attachments, etc.

Unlike some of the simple issue tracking software packages mentioned in Part II, ResponsAbility can be used not only for tracking things, but also for enforcing a process in order to ensure that things get done correctly. For example, a workflow engine can be set up to make sure that a process status cannot be changed from “bug fixed” to “in testing” until a concrete test case scenario is provided by a user via customizable online forms.

Webcom — “Eating Own Dog Food”

It might be interesting to note that Webcom, as a software developer itself, has since late 2006 been using ResponsAbility internally for its older sibling WebSource CPQ product’s bug tracking and new product features introduction.

The traditional model, whereby the dedicated product/project manager and support staff were the only bidirectional conduit between the client’s team (i.e., WebSource CPQ users and administrators, local project manager, application owners, stakeholders, etc.) and Webcom’s team (i.e., developers, modelers, QA, consultants, product managers, etc.), has over time been shown to have many disadvantages.

Namely, despite the dedicated project manager’s intimate knowledge of the individual client’s installation and the established relationship and hand-holding comfort level, the challenges have repeatedly been the bottleneck nature of the dedicated project management and support team, with no significant value being added by this additional layer of communication.

Other disadvantages would be the all too often “black hole” syndrome due to the lack of a single project/client/tasks/issues depository. Therefore, priorities are often managed on an inefficient (and often redundant or conflicting) one-to-one basis.

The advantages of the new support model, with ResponsAbility providing a single repository of all cases (in a hub-and-spoke manner), start with collaboration and the ability for all parties to both instantly contribute to the case/task/issue and have instant visibility into the case status. Also, new resources that include clients, Webcom employees and third-parties (partners) can all immediately participate and be notified, while the enabler for everyone is also an advanced searching capability within the system.

The Webcom Q2O clients’ adoption was initially somewhat tepid due to the ingrained human habit of emailing or calling directly the preferred contact or due to the clients having their own issue tracking systems. Of course, there is always the need for a human touch and chatting (as a “bonus”) with Webcom associates about the “critical” issues like a “lovely” winter weather in Wisconsin or about the Green Bay Packers’ revival.

Nonetheless, joking apart, from the end of 2007 ResponsAbility has been the sole vehicle for communication, tracking and managing tasks and cases at Webcom. Prior to that, Webcom had used the JIRA issue tracking system, which at the time allowed users to create a workflow based on a set of offered statuses.

However, at the time (the things might have meanwhile changed though) there was not the user’s ability to create statuses and workflows at will. For instance, the offered statuses were “open,” “in progress,” “closed,” etc., but the user could not create a custom status like “material returned”, “in engineering”, “being analyzed” or so.

Further, users could add custom fields, but they could not design forms in a drag-and-drop fashion. There was no way to specify forms and fields for each action (task) either, so that, e.g., when the process passes from the “bug fixed” into the “in testing” phase, the user could not create a mandatory field named “test case.” While administrators had ample controls, the end users had very little control over what fields they could see on the screen, and so on.

Key ResponsAbility Design Tenets

In contrast, ResponsAbility was built with several design concepts in mind, starting with scalability in terms of users’ ability to create an unlimited number of cases, processes, statuses, status transitions, custom fields, users, user types, departments, etc.

There is also flexibility in terms of creating permissions (e.g., by project, by process, by custom fields, etc.) and the assigning of rules and permissions is visible system-wide. As for data flexibility, there are custom fields and forms and process-related fields and forms, while at each process point (step) fields can be assigned as read-only (viewable), editable, and/or required (mandatory). There is also a flexible definition of assignments, notifications, and recipients, whereby conditional actions drive implicit and explicit notifications.

Furthermore, the ease-of-use concept translates into hardly any training required, whereby the idea for the tool is to be perceived by users as their enabler for getting things done instead of an enforced mandatory tracking tool by the “ivory tower.” Some examples of the ease-of-use features are:

* An intuitive drag-and-drop interface for administrators to design and preview online forms;
* An instant system feedback regarding the field size, informing users how many characters they still have left or by how many characters they have exceeded the maximum field size, and all of this happens dynamically while they are still typing;
* When looking at the list of cases, dragging a mouse over a case will bring additional fields in a hover (a so called “mouseover”), so that a user can find out more about each case while browsing a list, without having to open each case (thereby saving valuable time); and
* Each list of cases can be customized (personalized) by users in order to show fields as columns based on what that user is interested in or what a user considers to be important. If, e.g., a case type has 100 fields, it is impractical to put them all as columns in a list of cases on the screen. It is also impossible to select 10 most important fields universally because their importance depends on individual user needs. Therefore, each user can determine (select), in a drag-and-drop manner, which fields are truly important for them.

Last but not least, the ease-of-setup tenet starts with a pre-built library of processes, but companies can certainly create their own processes with an intuitive and flexible setup of forms, workflows, notifications and permissions. In addition to the abovementioned advanced search capability, users have a facility of unlimited comments and uploading of attachments.

Pronto Xi—The ERP from “Down Under” Becomes TEC Certified

Introduction to Pronto Software
I’m pleased to say that the certification for the PRONTO-Xi enterprise resource planning (ERP) system has been completed by TEC’s analyst team. Here I’d like to share my impression and some conclusions regarding this system with you.

This past week we had the pleasure of receiving Pronto as guests at TEC’s offices. Both Terry Leister, VP North America, and Jayd Blunden, Senior Business Consultant at Pronto Software were here for the certification meeting. I really appreciate the fact that they made the long trip from Australia to Canada to meet the analysts and show us their impressive system.

Pronto Software is an integrated solution provider, known mostly in Australia (where they are based), as well as in the South Asia region. They are currently putting a lot of effort into becoming more recognized and successful in the North American market. The company has catered to the midsized ERP market for over 30 years and undoubtedly has a deep and clear understanding of their over 1,500 customers’ business needs and challenges. Pronto Software defines its major clients as manufacturing, importer distributors, integrated retailers, facilities and service companies, mining, and mining supply companies.

Product Strengths and Challenges
In order to define the solution’s features—in other words, its strong aspects as well as its weaker points—I used the information that I obtained during the demo meeting as well as the data from the request for information (RFI) that was completed by Pronto. I also used TEC’s eBestMatch™ decision support system (DSS), which can be used by anyone looking to do a similar exercise for any enterprise software selection project.

Among the functionality of the Pronto Xi ERP system, I would like to highlight the following:

* I personally liked the user interface logic that the system is based on, where the user has a variety of information readily available on the screen—in real time. In combination with online queries, screens, reports, and drill-down and screen customization capabilities, it gives users the ability to adjust and shape work spaces, concentrate on business tasks, and reduce the number of input errors. The screen customization allows you to change, modify, add, or hide screen prompts, fields, grids and buttons, and even create user-defined buttons.

* Pronto Software is a single-source supplier. This means that they provide a single code application, and no integration is required for the most typical business processes: the customer does not need to purchase and install additional third-party programs. The company offers additional partner applications—mostly for business intelligence (BI) using Panorama—and interfacing with other systems. All other modules are an inherent part of the system and can be easily turned on and off as needed.

* Another interesting aspect of Pronto’s Xi product is its scalability. The system can be successfully used by small businesses with very few workstations, as well as by relatively large corporations with thousands of users and an extended number of business processes and procedures. The system is scalable and stable enough to serve organizations with more than 2,000 users.

* Pronto Xi software can be delivered to the customer through traditional installation or through the software-as-a-service (SaaS) model. The vendor offers Pronto Hosted Services that provide multi-site hosting and management facility with data mirroring and replications.

* Pronto Xi ERP also contains a robust and powerful point-of-sale (POS) module for retailers and distributors. The rating scores for the functionalities of this module in our eBestMatch system were high; which most definitely shows that Pronto Xi has the ability to compete with the best POS systems on the market.

* Alert intelligence and task intelligence features are also provided with this system. These are tools that can be used for interactive communication with your ERP system. The system is smart enough to generate short message service (SMS) and pop-up messages, send a fax or e-mail, run a process, and launch an application based on particular events or important task milestones. It’s totally up to the user to define them. It can be used—for instance—to e-mail your customer when the order is ready to be shipped, or it can SMS the inventory manager to alert him/her that a particular item is out of stock and needs to be reordered.

* With standard auditing capability, the system allows users to track changes that have been made to any field or piece of information within the entire system. The “what,” “when,” “where,” and “by whom” types of questions can be easily answered.

That’s No Ordinary RFI—Why BPM and the TEC RFI Are So Important to Your Software Selection Project

To start your software selection project off on the right foot, you must first define all of your current business processes—and then document them. This task alone can take months. However, with the right methodology and tools, the time spent doing this can be cut down significantly. If you are using your own methods for gathering requirements, your list of business processes must be structured in such a way that allows vendors to easily apply them to their products and determine whether they can support certain functionalities.

Again, no easy feat!

Many organizations often start a software selection by first choosing a vendor and then working in tandem with the vendor throughout the process of identifying and modeling their business processes on software capabilities. This is all fine and dandy—but who knows your business better than the people who perform these processes day in and day out? You, your department managers, and IT staff. Why put the onus on the vendor to perform this task and then risk not being certain that everything your new system may need has been identified? Not to mention the cost this type of vendor service could carry!

So what’s a software selection project manager to do?

Let’s take a look at how you can build a comprehensive request for information (RFI) by first reviewing the basics principles of business process modeling (BPM) and how it correlates to the RFI.

BPM Made Simple

Review Your Existing Systems and Business Processes

This process starts by documenting your business process workflows across all departments and functional areas. Knowing the capabilities of your current software is important in understanding where you need to add and improve functionality. It’s also important for you to review systems currently in place in order to gauge whether it’s worth upgrading your current software, as opposed to acquiring a new system. At the same time, reviewing your business processes can help you pinpoint areas where you can replace inefficient practices with best practices that will be supported by your new software.

List and Prioritize Your Functional and Technical Requirements1

Functional requirements are capabilities that you need the software to have. BPM ensures that all functional requirements are included in your RFI and eventual request for proposal (RFP). It helps you identify your customization requirements early on and make them part of your decision. It allows you to map your business processes to features and functions so that vendors can understand and accurately respond to them.

Technical requirements are things that the new software needs to support in order to integrate smoothly into your existing IT infrastructure. Assigning initial priorities to the functional and technical requirements will help you sort out what is important—and what is not.

Creating Your RFI

Now it’s time to map your processes onto a software feature-and-function model that will allow you to clearly communicate your needs to software vendors. Great! But how do you explain those processes to the software vendor in a language they can understand?

RFI, Anyone?

The process of building an RFI can be painstaking for an organization. A traditional RFI is primarily used to gather information to help make a decision on what steps to take next in your software selection project. In addition to gathering basic information, an RFI is often used as a solicitation sent to a broad base of potential vendors for the purpose of gathering information, developing a strategy, building a database, and preparing for a RFP or request for quotation (RFQ).

Why TEC’s RFIs Can Help You

TEC’s RFI and RFP templates do a lot of the tedious work for you. They are created in a manner that allows an organization to easily define which features and functions it would like from the software and how important each of those features and functions are to the business.

These industry-standard RFI and RFP templates also help ensure accurate responses from vendors. The RFI templates contain thousands of functional and technical criteria that have been vetted by TEC’s analysts. TEC’s RFIs on average cover about 75 to 80 percent of a business’s functional requirements. These RFI documents can also be customized to meet your company’s own unique requirements.

The RFI and RFP templates help you obtain accurate information from vendors that can then be compared with your business requirements.

Making Your Software Evaluation Easier

Once your RFI is complete (having added your custom functionality and prioritizing what features and functions are important to your business), it’s time to go after some vendors to see what they have to offer and how well they can support your business processes.

Sending your prioritized RFI to a long list of vendors and gathering their responses could take several months. Do you have that kind of time? Probably not.

TEC has developed a structured methodology that, within a complex selection project, narrows down the list of potential vendors to only those that match your business model, priorities, and special requirements. How? With TEC’s online decision support system (DSS), ebestmatch™. By taking advantage of our knowledge bases (KBs) to compare the vendors on your long list, you can quickly—and easily—see how well each vendor addresses your specific requirements. You can also use ebestmatch to create “what-if” scenarios that show you how well each vendor’s solution will scale as your business evolves.3

The Choice Is Yours

Time is of the essence when it comes to selecting software. The process can be long and drawn out, so why not arm yourself with some methods—and tools—that will help move it along more smoothly and quickly? The choice is yours. Good luck!

NOTE: The above information in no way is intended to cover an entire selection process (as you are aware, there is much more to it than just that). This blog is merely a glimpse at some of the important and crucial first steps of gathering or defining, prioritizing, and documenting your business processes and turning them into a feature-and-function set of capabilities that software vendors can understand.

Pronto Xi—The ERP from “Down Under” Becomes TEC Certified

This past week we had the pleasure of receiving Pronto as guests at TEC’s offices. Both Terry Leister, VP North America, and Jayd Blunden, Senior Business Consultant at Pronto Software were here for the certification meeting. I really appreciate the fact that they made the long trip from Australia to Canada to meet the analysts and show us their impressive system.

Pronto Software is an integrated solution provider, known mostly in Australia (where they are based), as well as in the South Asia region. They are currently putting a lot of effort into becoming more recognized and successful in the North American market. The company has catered to the midsized ERP market for over 30 years and undoubtedly has a deep and clear understanding of their over 1,500 customers’ business needs and challenges. Pronto Software defines its major clients as manufacturing, importer distributors, integrated retailers, facilities and service companies, mining, and mining supply companies.

Product Strengths and Challenges
In order to define the solution’s features—in other words, its strong aspects as well as its weaker points—I used the information that I obtained during the demo meeting as well as the data from the request for information (RFI) that was completed by Pronto. I also used TEC’s eBestMatch™ decision support system (DSS), which can be used by anyone looking to do a similar exercise for any enterprise software selection project.

Among the functionality of the Pronto Xi ERP system, I would like to highlight the following:

* I personally liked the user interface logic that the system is based on, where the user has a variety of information readily available on the screen—in real time. In combination with online queries, screens, reports, and drill-down and screen customization capabilities, it gives users the ability to adjust and shape work spaces, concentrate on business tasks, and reduce the number of input errors. The screen customization allows you to change, modify, add, or hide screen prompts, fields, grids and buttons, and even create user-defined buttons.

* Pronto Software is a single-source supplier. This means that they provide a single code application, and no integration is required for the most typical business processes: the customer does not need to purchase and install additional third-party programs. The company offers additional partner applications—mostly for business intelligence (BI) using Panorama—and interfacing with other systems. All other modules are an inherent part of the system and can be easily turned on and off as needed.

* Another interesting aspect of Pronto’s Xi product is its scalability. The system can be successfully used by small businesses with very few workstations, as well as by relatively large corporations with thousands of users and an extended number of business processes and procedures. The system is scalable and stable enough to serve organizations with more than 2,000 users.

* Pronto Xi software can be delivered to the customer through traditional installation or through the software-as-a-service (SaaS) model. The vendor offers Pronto Hosted Services that provide multi-site hosting and management facility with data mirroring and replications.

* Pronto Xi ERP also contains a robust and powerful point-of-sale (POS) module for retailers and distributors. The rating scores for the functionalities of this module in our eBestMatch system were high; which most definitely shows that Pronto Xi has the ability to compete with the best POS systems on the market.

* Alert intelligence and task intelligence features are also provided with this system. These are tools that can be used for interactive communication with your ERP system. The system is smart enough to generate short message service (SMS) and pop-up messages, send a fax or e-mail, run a process, and launch an application based on particular events or important task milestones. It’s totally up to the user to define them. It can be used—for instance—to e-mail your customer when the order is ready to be shipped, or it can SMS the inventory manager to alert him/her that a particular item is out of stock and needs to be reordered.

* With standard auditing capability, the system allows users to track changes that have been made to any field or piece of information within the entire system. The “what,” “when,” “where,” and “by whom” types of questions can be easily answered.

In spite of all the software’s features and advantages, I found a few areas where Pronto Xi’s capabilities were not as robust as its competitors in this space.

* There are some weaknesses in the process manufacturing management module. It’s obvious that this ERP application has grown from discrete manufacturing (where I feel it is undoubtedly strong in functionality) and based on Pronto’s response to our RFI, some specific business processes particular to continuous type of process manufacturing are not supported by default, and might require customization, modification, or—in the case of by-products or co-products tracking for defined tasks—“workarounds.” In other words, the application can support these business processes, but it does not do so “natively,” i.e., some user manipulations within other sets of functionality may be required. A similar approach may be required for dynamic recipe adjustment based on the actual characteristics of ingredients, yield calculation, multiple process models for the same item, circular bill of materials (BOM). The good news for potential customers considering Pronto Xi ERP is that this hasn’t stopped other process manufacturers from using the product, and Pronto has experienced many successful system implementation examples in the pharmaceutical and chemical verticals, food processing, and other mixed-mode or process industries.

* The overall rating for the human resource (HR) module was lower due to a relatively weaker employee self-service functionality. This functionality ideally allows employees to view pay stubs and review and maintain own personal information, such as name, address, benefits related to a life event, tax filing status, number of exemptions, dependents and beneficiaries, etc. This is supposed to be offered in future releases but for now it may not be the best choice if self-service functionality is a critical priority for your company. Other than the self-service area of HR, Pronto demonstrated HR ratings that left the mixed-mode ERP average far behind.

* The company focuses mainly on the Australian, New Zealand, South-East Asia, and North American markets. As such, the system is translated into French and Spanish languages only. This might be an issue if you are planning to use your ERP system in countries where users speak other languages.

The contribution analysis graph below shows that in most business areas, Pronto’s Xi system rates higher than average by the industry benchmark. The only exceptions—as I mentioned earlier—are human resources and process manufacturing management areas—where the ratings are slightly lower than the industry benchmark.

Manufacturing Systems with an IQ: Beating the Odds, Mightily – Part 1

Some time in mid-2005 TEC published a six part article on IQMS, a relatively small and obscure enterprise resource planning (ERP) vendor based in Paso Robles, California (US), with offices across North America (i.e., in Chicago, Canada, and Mexico), Europe (i.e., Sweden and with recently announced indirect presence in the UK) and Asia (i.e., China and Taiwan). Some readers were likely wondering why I “made so much mileage” out of a seemingly unimportant vendor of fewer than 70 employees and with only a few hundred customers at the time.

Well, I might have been somewhat vindicated in early 2009, when IQMS announced that it closed 2008 with double-digit profitability and a 10 percent increase in new customer accounts. Even as manufacturing markets have tightened and doom-and-gloom sentiments have pervaded the globe, IQMS has accumulated revenue gains for several years. Namely, in 2005 and 2006, the company grew by about 25 percent each year (which was a multiple of the industry’s average growth), demonstrating its value proposition to selected manufacturing industries worldwide, including medical devices, automotive, aerospace, plastics, and consumer packaged goods (e.g., appliances, electronics, computers/business machines).

IQMS (whose name alludes to “manufacturing systems with an intelligence quotient [IQ]”) was incorporated in 1989 and has been privately held ever since without any venture capital (VC) money involved. Having been based in California and founded (and still majority-owned) by a married couple, IQMS somewhat resembles its bigger fellow ERP peer, QAD. But the differences between the two vendors are also apparent starting with QAD being publicly held for over a decade. QAD is also a much larger vendor, with typically larger customers (although overlapping and possibly competing with IQMS in many similar industries and regions), and has an incomparably better global presence.

For its part, IQMS boasts a 98 percent customer retention rate and continuous profitability and growth, which traits have not always characterized QAD. Currently, IQMS has a total of over 500 corporate customers at over 1,000 locations in 4 continents and 11 countries. These user companies range from a single site with only 5 users to companies with 10 sites and an unlimited number of users.

IQMS focuses on small-to-medium enterprises (SMEs) in make-to-order (MTO) and make-to-stock (MTS) operations in the discrete manufacturing, repetitive manufacturing, and process manufacturing environments. These companies tend to embrace lean manufacturing (and overall “lean business”) principles and thus require low-maintenance and cost-effective (but fully functional) ERP systems. To that end, perpetual licensing provides the rights to all future upgrades and includes database licensing too.

Master of Its Own Destiny (and Its Own Domain)

Being privately held and not burdened with the stifling demands of private equity firms, venture funds, or public shareholders has proven to be a blessing for IQMS. Namely, not only has IQMS stayed away from the disturbance of the ongoing vendor consolidation bonanza, but it has also been able to control its own destiny and make independent decisions about product development. IQMS customers are also intimately involved in product development via annual user meetings, an online user group, and participation in focused development teams.

In keeping with growth and its commitment to delivering leading-edge solutions, IQMS added employees to every department in 2008 (with a total head count now well over 100), and created new work units including the Automation and Oracle Data Services groups. These groups are focused exclusively on system advancements, customer satisfaction, and bridging shop floor equipment directly into functional ERP applications.

For instance, IQMS’ Automation Group’s charter is to expand the interface capabilities of IQMS’ flagship EnterpriseIQ ERP [evaluate this product] system with manufacturing equipment on the shop floor. The newly formed group, comprised of engineers and programmers, has as its goal working with existing IQMS customers to create greater efficiency and automation between shop floor hardware and ERP software. This integration is expected to result in leaner manufacturing operations.

The IQMS Automation Group was launched with several custom programmable logic controller (PLC) interfacing projects developed with customers’ input at a number of customer beta sites. Implementations included capabilities such as:

* two-way communication with PLCs to control and initiate conveyor systems, vertical lifts, scanners, palletizers, photo-eye sensors, and other pieces of equipment;
* two-way communication with stretch wrap machines via relay/digital input boards to automate final packaging of customer product;
* automated first-in-first-out (FIFO) pick/store warehouse applications for forklifts; and
* directly interfacing with work centers to automatically report scrap and production.

“Not Invented Here” Attitude

One of the key tenets of IQMS’ success has been a laser-sharp vertical industry focus, of which I have always been a big proponent, in general. Namely, when the company started in 1989, it initially catered solely to injection molding manufacturers. This focus has allowed IQMS developers to focus deeply on the requirements of this esoteric market segment and really gain subject-matter expertise on the idiosyncratic problems and issues of those customers.

Namely, if a system doesn’t understand and support tricky requirements such as family molds or multiple cavitations running at the same time, it will cost the customer dearly in terms of system customizations, lowered efficiency, and heavy-lifting maintenance. Since 1989, IQMS has judiciously expanded its focus to SME companies in related industries such as automotive suppliers, packaging manufacturers, and medical device makers.

But other tenets of IQMS’ success have seemingly been at odds with conventional wisdom and the practices of vendors of IQMS’ size and means. Namely, IQMS’ niche focus has driven the company to try to address as many of the needs of its target customers as possible. As a result, the EnterpriseIQ suite has (surprisingly to a first-time observer) a pretty wide footprint of functionality (coming from such a small vendor with limited means).

To be concrete, the suite natively provides extended-ERP applications such as enterprise asset management (EAM), customer relationship management (CRM), electronic data interchange (EDI), and warehouse management system (WMS). As if these capabilities were not impressive enough, then how about adding the abovementioned intrinsic shop-floor equipment automation and monitoring, time-clock, and quality management system (QMS) functionalities?

These features mean that all these modules run on a single database and feature out-of-the-box integration with a consistent user interface (UI) or look-and-feel. Furthermore, we are talking about real-time transactions here, rather than delayed (and thus after the fact) batch processing (e.g. data transfers) and necessary interfaces when “alien” third-party applications are involved.

Many IQMS customers have indeed benefited from an EnterpriseIQ production management application called RealTime Machine Monitoring. This application connects each work center to the EnterpriseIQ database, allowing users to follow jobs as they move through production. Because production data feeds directly into the ERP database, job status is automatically updated down to the minute. The system also supports graphical scheduling screens and reports that can be used by stationary and remote users to assess job status, track downtime, and view quality data. Pager and public announcement (PA) system alerts are also available for the plant.

Single-source Strategy

Now, there is certainly nothing wrong with the “single source,” “one-stop-shop,” and “a single-throat-to-choke” strategy. Smaller manufacturing companies especially appreciate a strategic business application that integrates financial management, human resources management system (HRMS), manufacturing systems, and other corporate software functions into a single system.

However, such homogeneous offerings are yet to be offered even by vendors that are incomparably larger. Even the market leader SAP has recently given up on its traditional “not invented here” attitude (think of the Business Objects or Visiprise acquisitions), but not tiny IQMS.

In fact, IQMS’ management strongly believes that the company has not only survived but also thrived by serving a few targeted industries with a full-function system. The system has been developed organically (in-house and with no acquisitions) to fulfill most (if not even all) of customers’ needs, while also providing a hands-off system (in terms of minimal ongoing maintenance) but with a decent technical performance.

Believe it or not, IQMS professes a strategy of being the single source for virtually everything a customer might need beyond software development and programming. Namely, “single source” also refers to sales and implementation services, training, and customer service and technical support. With some minor exceptions in optional fringe functionality (i.e., embedded Crystal Reports, Global Software for financial reporting and spreadsheet automation, Actify CAD Viewer, or CLEO for EDI communications), IQMS touts no need for using third-party applications for core-competency modules, and no third-party implementation providers.

For example, in the automotive industry, EDI is a major component in a supplier’s ability to deliver exactly what customers want. To that end, the IQMS EDI Translator module is embedded within the EnterpriseIQ system, which operates entirely within a single database, so that customers have no need for pesky third-party hardware interfaces. Incoming EDI files are automatically translated into the ERP system, thus instantly updating all of the pertinent records, while outgoing files are automatically transferred back to customers and suppliers. Since there is no need for manual data entry, suppliers (IQMS customers) can be confident that they are disseminating accurate, timely information across their supply chains.

With third-party EDI systems, which transfer EDI data via dedicated modems, automotive suppliers not only face hefty costs, but also often have trouble finding and correcting any problems associated with orders. Some IQMS customers talk about their inability (even over 80 percent of the time) to respond fast enough to EDI errors because the data transfer was slow. This problem would ironically be magnified with some accounts that are geographically close to the plant. Namely, if the customer’s plant is only 40 minutes away or so, shipping errors will be arriving at the customer’s plant before the shipping department could catch them.

This native EDI module allows a much greater degree of integration for processes such as outsourcing (subcontractor) management, where products may move through multiple nodes in the supply chain. IQMS provides visibility to this material moving within the supply chain, relying on advanced shipment notices (ASN) in its EDI capabilities to track the movement.

I Mean, Single-source in Every Aspect

When it comes to sales and implementation services, IQMS Sales and Professional Services provides complete project management and implementation services in North America (and through resellers/partners in Europe and the Far East). The involved IQMS employees are APICS-certified, which helps to deliver a typical implementation in three to six months time. IQMS claims that 95 percent of its customers meet their target “go live” date, with implementations taking on average less than 40 percent of software spending.

Intelligent Manufacturing Systems: Beating the Odds, Mightily – Part 2

EnterpriseIQ’s Architecture

The extended enterprise resource planning (ERP) product was originally written in the now almost esoteric Delphi environment (from the client-server era) on top of an Oracle Database. The suite features a two-tier architecture, with all business logic (i.e., rules and transaction processing) residing on the Oracle database server.

IQMS chose Oracle’s database technology (Internet-enabled via an Apache Web Server) for its reputed safety, security, and high performance. However, the vendor packages and abstracts the database in an embedded way (via a silent installation routine) that mitigates the traditionally high price and heavy administration downsides of Oracle.

Repeated IQMS user surveys confirm that the database is easy to administer and maintain this way, with no need for intensive Oracle programming. Following a silent installation routine, the server works like a refrigerator (or some other white appliance): all users have to worry about is the quality of what they put into the system and how to properly use its output.

The EnterpriseIQ product has meanwhile been largely rewritten in Microsoft Visual Studio.NET (VS.NET), which makes it compatible with Microsoft .NET Framework. ASP.NET is used for the client-side technology (except for Microsoft Windows CE in the warehousing module), while Oracle Database remains as the back end. This combination of Microsoft and Oracle technologies somewhat resembles IFS’ approach.

IQMS strongly believes that this unified “same DNA” suite (even if on a seemingly out-moded two-tier client-server architecture) results in online transaction processing (OLTP) that is very fast; much faster than if IQMS had adopted a service-oriented architecture (SOA) as other contemporary vendors do to stitch together disparate applications.

The OLTP and decision support systems (DSS) processing speed has reportedly been an important criterion for customers selecting IQMS. As Randy Flamm, IQMS’ president and founder, said during our recent exchanges:

“At IQMS we have always believed it is easier to develop and nurture a product rather than attempt to integrate to another company’s package. Essentially this is what SOA is about – integrating many packages for use across an enterprise. For the most part, our opinion is “SOA what!” We don’t need to build on this platform because we handle almost every function within our own database.

Is there a need for some partnering? Yes. We understand there are report writing and spreadsheet automation software packages out there (Crystal Reports and Global Software) that handle this better than an ERP system ever should or could do. We utilize these to tie into our package for extracting and presenting data, but that is where the need for SOA in our package starts and stops.”

For user friendliness and intuitive navigation (e.g., with jump-around and drill-down features), IQMS has chosen a Microsoft platform for the client side. In addition to transactional performance, other advantages of the two-tier architecture are data integrity and user interface (UI) independence. Namely, there is a whole host of UI choices: traditional graphical UI (GUI), .NET client (including the variant for mobile users), portals, and Telnet client for warehouse workers. IQMS uses Terminal Server and Citrix for wide area network (WAN) links to its UNIX or LINUX back-end servers.

My belief is that the reliance solely on Oracle’s database might, in the long term, limit IQMS’ market opportunity, especially within smaller companies that are standardizing on Microsoft SQL Server. The vendor claims that prospective customers are more focused on the solution than on the technology, and that the database system doesn’t matter.

Fine, but maybe also offering an on-demand and software as a service (SaaS) solution could help in that regard (think of Plex Systems, formerly Plexus)? At this stage, IQMS does not see the justifiable demand to take the SaaS plunge (i.e., the gut-wrenching product rewrite).

More of EntepriseIQ’s Traits

Despite being tightly woven and with an extensive footprint, EnterpriseIQ is a reasonably open system and is also modular. Users have to go for a basic core ERP package, and can decide on optional modules to extend the enterprise as business and demands grow. Therefore, of the more than 20,000 concurrent user licenses, below is the breakdown of licenses per modules:

* Over 10,000 concurrent core ERP system user licenses,
* Over 3,600 concurrent customer relationship management (CRM) user licenses,
* Over 3,300 concurrent shop floor system licenses,
* Over 3,000 concurrent wireless warehouse management system (WMS) licenses.

In addition, IQMS has also sold over 15,000 RealTime Machine Monitoring (mentioned in Part 1) licenses. While the system’s scalability comes inherently from Oracle database, after adding French language capabilities to EnterpriseIQ in late 2008, IQMS now supports the following eight languages: English, French, Spanish, German, Mandarin Chinese, Simplified Chinese, Dutch, and Swedish.

In addition to multiple languages, IQMS claims support for multiple enterprise entities/plants (on a single database instance) and multiple currencies. The double-byte character set (required to support Chinese), the ability to specify language by user in a single system, and other global requirements were also driven by customers, as even small manufacturers in this time and age need to operate as parts of a global supply chain.

Pre-empting the Dreaded “I” Word

IQMS claims that its single-source offering resonates well with the companies that are wary of any hidden and unneeded expenses, especially these days. These smaller manufacturers are particularly “allergic” to hearing about the need for any interface.

Indeed, multiple products and interfaces come with the burden of continuous management and upgrade coordination and an increase in IT support staff. Also, one has to deal with multiple software vendor maintenance contracts and worry about the financial stability of multiple software providers, each of whom will likely have different business strategies.

Moreover, when different applications require their own databases, it becomes quite problematic to write holistic reports over multiple databases. Complex SOA-based configurations also come with speed and performance issues. Last but not least, there are many ongoing support issues that come with multi-vendor solutions, starting with each vendor’s decision to provide offshore support rather than a more intimate local call center. When support and customizations come from value added resellers (VARs), whom should the customer call first in case of a problem?

But EnterpriseIQ is certainly not meant to be all things to all people. I concur with Frank Scavo’s recent post on IQMS on his Enterprise Spectator blog:

“…Now, having said that, I’m sure there are major gaps in IQMS functionality for some clients, especially once you get outside of its target niche. But that’s the beauty of a niche strategy. IQMS doesn’t have to be all things to all customers. It only needs to be all things (or most things) to a few customers…”

R&D Work Never Ends

IQMS’ management is aware of how much more capability the company needs to develop, and the idea is to particularly intensify research & development (R&D) these days. The intention is to further distance itself from (or leapfrog) competitors that seem more concerned with cost-cutting and survival tactics.

Accordingly, in mid-2008, IQMS delivered EnterpriseIQ version 7.4.1.20 with over 1,000 built-in reports and 400 enhancements to areas such as quality management, electronic data interchange (EDI), WMS, product lifecycle management (PLM), security, and forecasting. Earlier in 2008, IQMS announced its enhanced support for the process manufacturing industry with the release of the Master Batch manufacturing capability. Master Batch is aimed at companies such as compounding or formula-based manufacturers that are focused on heavy mixing and blending operations, and require the ability to handle multiple operations in a single routing.

To best support process manufacturing needs, ERP systems should give manufacturers the flexibility to enter process bills of material (BOMs) based on formulas where the components either total 100 percent or they can be added based on volume or weight quantities. Comprehensive BOM/formula functionality also has to provide co-product/by-product capability, flexible packaging alternatives, flexible batch sizes, yield/scrap calculation, grading and re-classification of products, alternative and substitute formulas (and routings), “what if” costing scenarios, and more.

On the other hand, the most recently released Assembly Manufacturing type is designed especially for manufacturers seeking consistent quality and greater traceability within assembly processes via enhanced tracking of complex routing structures. Potential benefits of this assembly structure include the ability to identify product availability and costs at each stage of production as well as the option to choose between either dispatch lists or finite scheduling.

Some companies might also benefit from the detailed lot traceability, operator certifications and training, and tool tracking functionalities. The Assembly functionality is IQMS’ response to an ongoing trend toward imposing more requirements for machine shops, metal fabricators, and process-related operations, especially in the medical device field, which has strict traceability concerns and constraints.

Offering an Entry-level Product

To attract the lower-end of the market, in 2007 IQMS delivered the EnterpriseIQ LE (Limited Edition) version to provide a lower-cost entry-point ERP solution. The product is packaged to meet the needs of single-site manufacturers and smaller supply chain environments (in terms of lower EDI volumes).

IQMS achieved the lower price benefit by packaging just the functionality most often used by manufacturers with single-plant operations. EnterpriseIQ LE version gives small manufacturers the same set of core ERP capabilities found in the full version.

Functionality such as manufacturing and inventory management, quality control, sales and distribution, and financial and accounting management are all included in a single database and at an affordable price. Certain features that are customarily used to support larger operations are not included, such as those used for multi-plant operations.

By choosing EnterpriseIQ LE, customers who operate only one plant and currently have no ERP system in place should gain an initial modular, single-source ERP solution that can be tailored to fit their business needs and designed to scale up with optional modules that work seamlessly within the core system. IQMS is also offering a migration path with this LE version for companies that might eventually grow into multiple locations.

Ingredients of a Comprehensive Retail Suite for SMBs

To achieve success in today’s retail industry, retailers that are small to midsize businesses (SMBs) need to effectively meet their customers’ needs on time, with the right price, in the right quantity—and at the right place, with the right promotions. All of these things can be very overwhelming for a retailer. To get them, retailers require tools that support effective and precise operations. In this volatile global economy, every retailer is trying to beat the competition and win over the customer base. The winners in this race are the retailers that can provide customers the supreme (winning) combination of product, price, and customer service, and do it without affecting profitability. For a retailer to make gains over its competition, it should incorporate one of the best business solutions created by experts in the retail software industry. Retailers need solutions that have capabilities to help them serve their customers better than their competition, and that don’t cost them an arm and a leg to do it. As retail operations are becoming as complex as its supply chain, retailers are not only trying to stay competitive, but also face challenges of short product life cycles, sudden changes in product demand, and new evolutions in technology.

Retail operations consist of more than just one store, but large chains of stores with numerous amount of inventory and thousands of pricing decisions to be made with ease and flexibility. Retail management software needs to have numerous modules that can help retail operations be more efficient and lucrative. A comprehensive solution for the retailer’s specific industry—i.e., food, consumer goods, apparel, etc.—is beneficial for success.

Bringing all operations under one comprehensive system will facilitate retail organizations to make decisions based on actual information about the product’s position, price, and market trends. As well, retail organizations will be able to locate and move products in a leaner way, by which they will be reducing product cost and delays in delivery to the customer.

It’s all fine and dandy to think of having complete retail management software, but the question arises: what should this software include? TEC’s research analysts are currently developing a comprehensive new retail research Evaluation Center. Our main objective is to leave no stone unturned within the retail industry. But TEC analysts don’t want to create a monstrous and unwieldy number of solution requirements either for SMB retailers to deal with. In our retail research Evaluation Center, only the requirements needed by retail organizations will be included. TEC analysts will make sure not to exclude anything critical for retail operations and the achievement of their objectives. Within our research Evaluation Center, retail organizations and retail software providers will be able to match up with each other, just like an e-harmony dating service, in which individual needs are matched with potential qualified prospects meeting the predefined criteria.

So now the question is: what do retail organizations need to look at when buying a “reasonably” comprehensive retail software suite or package?

Here’s a list of the modules SMB retail organizations need in a retail software suite.

Merchandising System

A merchandising system is just like a gizmo or device with which a retailer can manage and analyze inventory by product, location, demand, price, etc., throughout the enterprise. The merchandising management system helps retail organizations with coordinating every retail process to give business maximum return on investment (ROI). The main features in a merchandising system are:

* product information management
* enterprise data management
* purchase order management
* price management
* inventory management
* merchandise planning
* warehouse management
* allocation and replenishment
* distribution and fulfillment
* merchandising reporting

Store Operations

SMB retail organizations require a system to connect internally and externally, to ensure lean operations and the best customer experience. Store management requires a variety of capabilities ranging from cash to inventory management—and everything that falls in between. The following is a list of features that are key for the store operations module:

* point of sale (POS)
* cash management and reporting
* inventory control / management
* multichannel / store services
* customer profile management
* catalog management
* back-office capability
* store planning
* marketing management
* a range of transaction scenarios
* multimode payment methods
* multimode gift registry
* loss prevention
* return process management

Supply Chain Management (SCM)

The main objective of the SCM module for retail organizations is to have enough product available in inventory at the right price to maintain the enterprise’s overall customer satisfaction, profitability, and delivery objectives. In any retail environment, it’s necessary to have the business strategy in line with business processes in order to design, develop, distribute, warehouse, and sell products (and deal with their return). There are a variety of supply chain models to choose from, depending on the needs of a particular retail enterprise. As the expression goes, “not all the figures in the hand are equal” (or, as parents know, not all children have the same personality and capabilities), and the same thing applies here: no supply chain model can exactly fit any other organization’s requirements. Some of the key modules in supply chain for retail are as follows.

* demand forecasting
* advance inventory planning
* replenishment management
* supplier management
* vendor managed inventory (VMI)
* warehouse management
* trade management
* supply chain network optimization
* supply chain collaboration

Workforce Management

Retail organizations that have the best talent matched with effective business strategies (and revenue) will move ahead of their competition. Getting the best talent is important to retail organizations, as they will be using their workforce or human capital to create customer satisfaction and customer-centricity –generating sales, profits, and repeat customer visits. Here are the main areas of focus in retail for workforce management:

* recruitment (store, field, or corporate)
* workforce performance measurement (store, corporate, distribution center, or call center)
* online training
* e-learning
* advanced employee scheduling
* workload coverage
* time and labor management

Customer Relationship Management (CRM)

A retailer’s main target market is consumers who, in the end, become their customers (given that success for a retailer is not just having the right mix of product and price, but also to retain customers). Retail organizations need to look at not only the product life cycle, but also at customer life cycles. The CRM module will help retailers keep up with the service demands of customers; also, it will be able to indentify customer’s needs. Key areas for retail in a CRM solution:

* sales pipeline forecasting
* contract management
* customer loyalty management
* lead management
* return material/product management
* call center reporting
* marking campaign reporting

Financial Management

As for any type of organization, the financial module will give retailers a picture of how the enterprise stands in terms of cash, debt, and on-hand inventory, etc. Retail organizations need a financial management system in place to understand revenue generated by store location, but also to measure profits. The financial system does not end here for a retailer; one of the major aspects of financial management is its payment system. Key areas of a financial management system for SMB retailers are:

* budgeting and financial planning
* purchasing management
* invoice matching
* margin reporting (sales, markup, gross, markdown, etc.)
* profit reporting
* inventory reporting (stock turns, shrinkage, etc.)
* labor (commission, sales per labor-hour, etc.)

These are the modules that TEC’s analysts are considering as they create the research Evaluation Center. Some apply to small to midsized retail organizations—but as we say, there is no such thing as one size fits all. Retailers may have a CRM, workforce management, or financial management system already in place, but would like to upgrade the functionality of merchandising and store operations. It will be very beneficial for these retailers to check out our new research Evaluation Center to discover the software providers for merchandising, store operations, or workforce management. Not only that, but retail organization can also run a side-by-side comparison of vendors like Celerant Technology, Epicor, Pronto, Retalix, etc.