ORLANDO — Microsoft Corp. will to launch updated editions of its four ERP software packages between this summer and spring of next year, promising additional functionality, an MS Office look and feel and improved usability.
Enterprise resource planning software typically deals with issues
like financial management, supply-chain management and analytics. It’s considered the “”foundation and plumbing”” without which businesses would find it tough to operate and add other technology layers like customer relationship management solutions, explained Sangeet Bhatia, a principal with Deloitte in Winnipeg. Bhatia made the comments at Convergence 2004, a Microsoft customer conference where executives are outlining product roadmaps for its Business Solutions unit.
Microsoft’s plan for ERP software is to concentrate on mid-market companies that are neglected because they haven’t the budgets of their larger cousins, said Nancy Teixeira, ERP product manager for the business solutions division of Mississauga, Ont.-based Microsoft Canada. Another focus is specific departments in large organizations.
Acquiring software companies Great Plains and Navision a few years ago gave Redmond, Wash.-based Microsoft both a strong channel to serve the small and mid-sized market and 20 years of business solutions experience, said Teixeira. She said its two other software lines are Solomon and Axapta. Microsoft has 500 customers and 700 partners for Axapta, more than 30,000 customers for Great Plains, more than 36,000 for Navision and more than 13,000 for Solomon. Microsoft has 6,000 reselling partners in total.
Microsoft’s prospects in the ERP industry are “”not different than anybody else’s,”” said Steve Poelking, an analyst at IDC Canada of Toronto. He said all vendors in this market “”have work to do”” finding partners, developing these relationships and helping the independent software vendors they’re teaming with to tailor products to clients.
One of the software giant’s advantages, however, is the fact it began targeting smaller firms from the start and is “”familiar with the demands of the marketplace, Poelking added. The saturated market for supplying ERP tools to large Canadian companies has forced vendors to look at more modestly-sized organizations, but they haven’t understood these companies want out-of-the-box functionality and less customization to suit their budgets, he explained.
IDC Canada pegged the size of the ERP market in Canada at $450 million, with 70 per cent of firms with more than 100 employees using ERP solutions.
Microsoft’s Canadian ERP customer include Clearwater Seafoods LP of Bedford, N.S., which relies on enterprise resource planning software to track fish products “”from the ocean to the plate,”” said Ken Green, director of IT.
Tracking food products is particularly important now that many countries have been gripped by fears of terrorism, forcing organizations to adhere to U.S. and European regulations that want a full history of products before letting them cross borders, he explained.
Another incentive for a strong ERP solution is the fact Clearwater has nine businesses covering several food lines like shrimp, lobster, scallops and clams, that are set up essentially as separate companies, Green said. Clearwater business managers were familiar with the business activities of their own silos but less savvy about happenings across the board, Green said.
He explained that Great Plains software, which Clearwater began using before Microsoft purchased it, has helped the seafood enterprise manage its financials and supply chain. He said his firm has also been able to extract information from the system and keep accountants up to speed, unlike other homegrown systems that weren’t “”cutting the mustard.””
A more recent user of Microsoft’s ERP software is Winnipeg-based TruServ, a co-operative working with more than 675 independent retailers across Canada. Gerry Amuthe, its director of IT, faulted existing systems for restricting his company’s aggressive plans to grow over the next few years. Tapping Axapta software earlier, which will be fully implemented by February of next year, would have allowed TruServ to bring its warehouse online in three weeks rather than six years, he explained.
Amuthe said TruServ had limited resources, but was looking for a broad, Internet-enabled system to deal with issues around transportation, warehouse functions, financials and retail aspects of the business. He said it took risks by choosing Axapta, which suffers from limited exposure in Canada and few consultants with this type of expertise, but expects the decision to help track margins better and review the performance of TruServ’s vendors.
For example, Amuthe said, goods that are distributed from the back of a truck may sometimes sit at a receiving dock for two days before being moved to a warehouse. With the new Axapta system, TruServ will know instantly the products have arrived and bring them in more quickly.