December 2004

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September Webinar Report :.

ERP: New Competitive Weapon for Small and Medium Business

Architecting Solutions with PeopleSoft -- September 28th

Key’s September webinar explored the use of an ERP system to remain competitive in today’s world. Dwight Klappich, VP and ERP expert at META Group described how ERP is helping small and medium businesses (SMB) succeed in today’s highly competitive environment. Dwight pointed out that larger organizations are gaining advantage over SMBs by using their greater financial resources to exploit technology. In addition, customers are taking full advantage of their growing position of power to mandate rules of engagement with their suppliers and this is challenging SMBs.

Scott Lutz, Director of Product Marketing at PeopleSoft, described how PeopleSoft application solutions are helping to solve these issues using integrated ERP solutions.

For an archived recording of this and all past KEY Webinars, go to: http://www.keyinfo.com/resources/web_arch.htm. Portions of the content of this webinar are summarized below.

Dwight Klappich
Dwight Klappich is from META Group, a technology/research advisory group. One of their areas of advisory focus is ERP for small and medium businesses. Dwight noted that the SMB market space has been the fastest growing part of META Group’s business in the past few years.

Currently, large organizations’ IT strategies have several characteristics:
  • Leverage their IT spending to improve their business position
  • Have a high adoption rate for ERP and advanced applications like SCM transportation planning
  • Have significant financial resources to spend
  • Can partner up with larger organizations
    • Their internal skunk works allows them to play around with new technologies to better understand their value. Finally, they are automating applications for their competitive advantage and really thinking about IT strategically including the use of web portals and other new developments.

    Currently, small and medium businesses (SMBs) are working to keep their IT cost structure lean and at the same time remain customer-intimate and flexible. Across the board, SMBs have trailed significantly behind large companies in adopting contemporary ERP and business intelligence applications. Many have aging IT applications that are highly customized with fragmented application portfolios. SMBs are supplementing their IT with mid-market tools that can be plugged into their homegrown application to add some functionality. Many are using outdated and older computer languages and older ERP tools for their application software and have less money to spend on upgrading their software. They are constrained in terms of budget and manpower that dampens their ability and appetite for IT improvements.

    Large companies are utilizing the newer ERP software to facilitate the current shift back to focus on the customer and to squeeze suppliers to provide needed services. In fact, larger companies are pushing even their smaller suppliers to only do business with them via web-based EDI. These larger companies are using ERP to gain some of the advantages that smaller companies excelled at in the past, including flexibility and cost control.

    Dwight said that META Groups research shows that SMBs must develop countermeasures to better meet the demands of larger customers and to better utilize their suppliers. They need to look at better partner integration with their customers and suppliers via better connectivity and integration with their apps. They need to find out how to adopt CRM capabilities and advanced supply chain apps. Dwight observed that SMBs can not take a Lego (piecemeal) approach to adopting these capabilities.

    ERP isn’t just for global conglomerates any longer, and offers some of the capabilities that can allow SMBs to leverage the more advanced IT resources now used by larger organizations. SMBs should evaluate ERP as a strategic investment for their future.

    Scott Lutz
    Scott Lutz, Director of Product Marketing at PeopleSoft, mentioned that with the addition of J.D. Edwards in the PeopleSoft organization they are now the 2nd largest ERP vendor in North America and have 7,000 customers around the world. PeopleSoft is finding that SMB organizations face similar IT problems and challenges as larger companies, yet have limited resources.

    Currently, SMB IT departments have had three choices: adopt small business software and niche applications, use a large-scale solution that was designed for the Fortune 500, or do nothing and continue with antiquated, inadequate systems. Buying an appropriate business solution should not be a bet-the-company situation, observed Scott.

    Any solution for strategic applications for SMBs must exhibit three characteristics: 1) comprehensive capabilities to meet your current needs, 2) affordability and 3) flexibility to meet your future needs. Scott then described the PeopleSoft products and how they match to these essential characteristics.

    PeopleSoft offers 3 distinct product lines: PeopleSoft Enterprise, a suite of best-in-class applications built on Pure Internet Architecture® and designed for the most complex business requirements; PeopleSoft EnterpriseOne, a complete suite of modular, pre-integrated, industry specific business applications designed for rapid deployment and ease of administration on a Pure Internet Architecture; and PeopleSoft World, leading enterprise software for the IBM iSeries platform which provides companies a reliable, functionality-rich, web-enabled solution.

    Across the product lines, PeopleSoft addresses industry-specific requirements for companies in manufacturing, distribution, real estate, and many others.

    PeopleSoft applications are fast and easy to install, and don’t require large amounts of IT personnel time to operate and maintain. Business processes within the applications can be changed without using a programmer. Also, scalability and flexibility of the modular applications means the solution continues to work for companies as they grow.

    The PeopleSoft EnterpriseOne Rapid StartTM solution contains a full-blown version of their EnterpriseOne software modules, accelerated implementation services, training, recommended hardware and financing to provide a total solution and ensure foreknowledge of the financial costs over time. A typical financial and distribution solution can start at a cost as low as $80-100,000 plus $150,000 for implementation.

    In response to attendee questions, Scott noted that the IBM iSeries is a very important platform and PeopleSoft will continue to develop and support applications on this platform so long as IBM supports the iSeries. This assures a long life for any PeopleSoft applications running on the iSeries.

    Scott said that PeopleSoft has aggressively invested in the PeopleSoft EnterpriseOne and World product families, both former J.D. Edwards product sets, and they are committed to continue this development. He stated that R&D expenditures by PeopleSoft for these products are currently higher than when J.E. Edwards was a separate company.

    IBM’s WebSphere Portal continues to ship with the PeopleSoft EnterpriseOne product line. With the announcement of the WebSphere partnership between PeopleSoft and IBM, this portal will continue to be a key part of PeopleSoft solutions.

    For more practical advice on how to use ERP solutions to meet competitive challenges, review the archived version of this webinar available on Key’s Web site: http://www.keyinfo.com/resources/web_arch.htm.

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