Quote-to-order: A Newcomer Causes a Stir in the Market

The first part of this series (please see Quote-to-order: New Ingredients in the Recipe for Success) provided a detailed background of the still-evolving quote-to-order (Q2O) space, including historical examples to show why the market is increasingly demand driven. Part one summed up by making general observations as to how Q2O software solution vendors have addressed the market, and about the additional features and functionalities they will need to incorporate as demand shifts.

Now it's time to take a look at one of those high-flying "newcomer" providers: enter BigMachines, Inc. (www.bigmachines.com), a rapidly growing company founded in 1999, and with North American headquarters (HQ) in Chicago, Illinois (US), and European HQ in Frankfurt, Germany. The vendor also offers global customer support and hosting operations with a technology center in San Mateo, California (US), a West Coast data center in San Francisco, California (US), an East Coast data center in Sterling, Virginia (US), and an Asian research and development (R&D) center in Hyderabad, India.

According to the BigMachines Web site and associated press releases, the vendor is a provider of on-demand configurator, quoting, and proposal software and associated professional services. Its clients are in the high tech, industrial equipment, medical instruments, and software and services industries. The company's solutions help its clients' sales teams and channels to streamline their selling processes from customer inquiry-to-order. The BigMachines solution digitizes complex selling processes and captures an organization's tribal knowledge. By doing so, it provides online product selection, configurator, quoting, and ordering capabilities for new products and aftermarket parts, and streamlines configuration, pricing, quoting, proposal generation, and order management. BigMachines' rapidly growing customer base of over 100 corporations includes global leaders such as Kodak GCG, Siemens, Ingersoll Rand, and NTT Communications, as well as innovative growth companies such as ShoreTel and Aruba Networks.

Getting Cozy with Customer Relationship Management (CRM) Powers

BigMachines' Lean Front-end (LFE) solution provides reporting capabilities that help analyze sales activities, and integrates to existing enterprise resource planning (ERP), computer-aided drawing (CAD), and CRM systems, including those from Salesforce.com, Oracle CRM OnDemand, Oracle, and SAP.

For Salesforce.com and Oracle CRM OnDemand customers, BigMachines offers two different product editions: SPP (standing for selection, pricing, proposal) and CPP (standing for configuration, pricing, proposal). The SPP is an entry-level solution that does not include the configurator module. Both solutions enable users to streamline their entire Q2O processes, all within the familiar Salesforce.com CRM interface.

The CPP and SPP product pricing capability includes BigMachines' certified and packaged integration to these two CRM products above. The vendor also offers Professional and Enterprise editions which have different price points, minimum numbers of users, bundles of other BigMachines modules, and other add-on original equipment manufacturer (OEM) software. All of these product editions are part of the umbrella BigMachines solution.

For instance, as noted in a BNET article from 2006, BigMachines'

SPP solution extends Salesforce.com's functionality to enable users to generate rich and accurate proposals. SPP users can quickly select the right products to quote to the customer by searching for products using multiple search criteria, including descriptions, part or stock-keeping unit (SKU) numbers, product families, price lists, and other custom fields. Users can add the selected product(s) to a quote with one click, and the quote is automatically populated with address and customer data from the related Salesforce Accounts and Contacts tabs. Quote and revision numbers are also generated automatically and all changes are tracked.

The article goes on to say that

[r]ich proposal packages can be generated in Adobe (.pdf) or Microsoft Word (.rtf) formats, and include cover letters, product descriptions for each line item, pictures, graphs, drawings, marketing collateral, and terms and conditions. All relevant proposal data is automatically populated back to the Salesforce Opportunity… [ensuring] up-to-date pipeline data and [eliminating] manual data re-entry. Quotes can be converted to orders with one click and submitted electronically to the business system via BigMachines Integration.

According to Big Machines, more than half of its customers are "the result of a 2005 certification agreement forged between the two companies," and SPP and CPP have since been available through the Salesforce.com AppExchange marketplace of on-demand applications.

Mid-2007, BigMachines announced the general availability of BigMachines CPP for Salesforce PRM (standing for partner relationship management), a best-of-breed application designed to help companies manage quotes and generate accurate forecasts across multiple sales channels. BigMachines' CPP application is now fully integrated with Salesforce.com's on-demand PRM solution. BigMachines CPP for PRM extends Salesforce PRM by empowering channel partners to more quickly and accurately configure solutions, generate their own quotations, and sell products more easily and quickly, while capturing channel quoting activity with direct integration to the Opportunities, Reports, and Forecasts tabs in Salesforce.com.

BigMachines CPP for PRM also integrates a slew of new features to improve the sales process for channel partners.

In 2006, BigMachines announced in a press release that the integration between its on-demand LFE solution and Oracle's Siebel CRM On Demand was "successfully validated" by Oracle. At the same time, BigMachines also became a Certified Partner in the Oracle PartnerNetwork (OPN). As mentioned above, BigMachines' offerings help enable sales teams "to configure complex products, manage complex pricing and up-sell options, create quotes and proposals, and send error-free orders to ERP systems or order entry personnel." As for Oracle, "its multi-channel offerings allow organizations to manage and coordinate all customer interactions across the Web, contact center, field sales/service force, branch/retail network, and indirect and partner distribution channels."

The same press release adds that

[t]he integration of BigMachines with Siebel [Oracle] CRM On Demand allows users to populate quotes and orders directly with Siebel [Oracle] CRM customer contact data, and then link detailed quote and order information directly to CRM opportunities. This helps reduce manual data entry across multiple systems, and provides an integrated view of sales wins and losses across customers, accounts, and opportunities.

[BigMachines' solution] can be configured to customer needs using on-demand or on-premise platforms, and can integrate with Siebel [Oracle]CRM On Demand or on-premise as needed.

Feeling Good Big Time

Godard Abel, BigMachines' co-founder and CEO, states in an interview published March 17, 2008 that he "started BigMachines in 1999 to help industrial equipment companies leverage the latest Web technology to sell complex products." He continues:

My family had been running an industrial pump business for 50 years and saw many of the challenges of selling these complex pumps. I left my position with a Silicon Valley software company to capture a huge opportunity to sell Web technology to companies like my father's. The goal was and continues to be to build an enduring company that combines Web technology with deep industry and process improvement expertise.

Recently, BigMachines announced it achieved a record in 2007 with a 96 percent growth in revenues and a 66 percent jump in customers over 2006. In addition, the company launched several major product releases, adding new capabilities to its best-of-breed solution suite. This came at the heels of formerly record-year 2006 with a 59 percent growth in contract bookings and a 79 percent jump in customers over 2005. Customers added in 2006 included divisions of global leaders NTT, Emerson, Thermo Fisher Scientific, Teradyne, and Kubota Tractor.

This growth trend continued in Q2 2008, as the company recently announced. So far in 2008, BigMachines has already won 18 new customers across a number of industries, including high technology, software, industrial equipment, and telecommunications. In Q2 the company achieved a record number of new contract bookings, which were up 84 percent year-over-year, as well as a 94 percent increase in recurring revenues compared to the same quarter in 2007. In addition, BigMachines achieved several significant milestones during Q2, including release of version 8.2 of its flagship software product; launch of its industry-leading customer support program, including its My BigIdea online innovation community; and successful completion of the Statement on Auditing Standards 70 (SAS 70) Type II audit, which assesses the operational effectiveness of internal controls within service organizations.

BigMachines has successfully deployed its solutions to customers that serve a broad variety of markets (listed previously), surpassing the 100 customers milestone. Some of the approximately 40 customers added in 2007 include divisions of global leaders United Technologies and Kodak, in addition to fast-growing software and technology companies such as Merge Healthcare, Enterasys, Bottomline Technologies, and NaviSite. The profitable, privately held vendor is also reinvesting for growth, as it approaches 50,000 licensed users across customers and their channel partners.

In 2008, BigMachines' staff grew to over 100 resources globally, while the vendor continued to expand its product development capacity with additional offshore development resources. It also added (about doubled) significant customer service resources, telecommunications infrastructure, and helpdesk systems across multiple office locations to support its growing global customer base. In addition, BigMachines expanded its partnerships with other technology and service providers to include ATG, Xactly Corporation, and Right90.

Recently, the company acquired its first joint customers through Right90 and Xactly. For Right90, data coming from BigMachines quotes and orders is integrated to Right90's forecasting solution at both the quote and product-line item level. With Xactly, the same BigMachines quote and order data is used to run compensation scenarios for sales incentive planning and reporting. It is still too early to share too many details about the ATG partnership, other than to say that the joint interest is in offering BigMachines configurator integrated with ATG's leading B2C and retail e-commerce capabilities.

Of note is that BigMachines has more joint customers with SAP than with any other ERP vendor. While its product is not SAP NetWeaver–certified (see Multipurpose SAP NetWeaver), the vendor uses other middleware to integrate where necessary and has seen no technical barriers to this point. In fact, customers have simply not demanded the certification, even those who use multiple SAP products. BigMachines thus claims to have not seen enough customer demand to warrant the certification investment—at least not yet.

Global Professional Services Capability

BigMachines' most recent partnership is with Bluewolf, a global on-demand consulting firm. In a press release from March 10, 2008, the companies

announced a strategic alliance to provide [software as a service] SaaS configuration and quoting solutions and services for high tech, industrial, and medical companies. Under the terms of the strategic alliance, Bluewolf and BigMachines have agreed to participate in joint marketing and consulting to better automate the quote-to-cash process. Bluewolf will train and deploy a team of BigMachines experts to rapidly deploy [BigMachines' solution] and to ensure that customers are successfully automating their quote-to-cash processes.

The same press release states that "[i]n addition, Bluewolf will expand its trademarked Customer Success Guarantee deployment methodology to include the specific deliverables associated with a successful BigMachines deployment, including seamless integration to CRM applications such as Salesforce.com." The press release notes this about Bluewolf:

Founded in 2000, through its Customer Success Guarantee, Bluewolf is trying to reinvent the concept of enterprise consulting, one that is tailor made for the on-demand world. Bluewolf's practices incorporate three main areas: on-demand consulting, on-demand IT resourcing, and on-demand remote services.

The partnership marks the fact that the SaaS market has moved beyond just CRM, and is now offering solutions for verticals such as manufacturing to enable them to realize the benefits of SaaS. The press release also adds that "[t]he alliance will cover business in North America and Europe, Europe, Middle East, and Africa (EMEA), where both Bluewolf and BigMachines have local presences."

Along similar lines has been BigMachines' relationship with eLogic Group (www.elogicgroup.com), which, according to another press release of March 19, 2008,

provides full-service business solutions for engineered equipment manufacturers to simplify and automate core business processes… eLogic brings specialized expertise in sales channel, product, information technology (IT), and change management needed to tackle the most complex engineered product environments.

As Tom Erdle, principle and cofounder of eLogic Group states, the "growing installed base of reference eLogic and BigMachines joint customers includes leaders such as SPX Corporation, Conair Group, Particle Measuring Systems, and Thermo Fisher Scientific." The addition of eLogic adds SAP implementation experience for customers with SAP integration requirements.

BigMachines has a number of services partners to increase reach that are appropriate for different types of projects and that have also validated the quality of the solution. But in order to dispel any competitors' claim that these partnerships are due to the product's complexity, BigMachines cites several delighted customers that have implemented the solution on their own with very little spent on professional services. Video testimonials on its Web site from customers NTT Americas and SpectraLogic might validate this point. The vendor believes this is credited to the ease-of-use of its software tools.

BigMachines' Value Proposition

BigMachines unifies the select and configure, price and quote, order and fulfill (with integration to back-end business systems), and report and analyze processes. Salespersons, distributors, and customers can all log-in via the Web to select, configure, and see the "single version of the truth," since BigMachines' solution helps ensure "quick, accurate responses to customer inquiries with support from virtual experts," according to a BigMachines source. The suite is available online to engineers, contractors, manufacturers' representatives, and distributors that can build product configurations and provide customers with quotes.

The modern system can also generate key performance indicators (KPIs), as well as piping and instrumentation diagram (PID) schematics (such as valve layouts) that show how different systems connect. According to a BigMachines press release from January 2008, users can standardize on the BigMachines platform across multiple divisions of the company, as Fike Corporation found, "to improve collaboration between field and internal sales teams, representatives, and distributors, and to improve customer service by ensuring their sales teams deliver more accurate orders and professional proposals to their customers." The press release goes on to say that

the new sales platform can also more efficiently manage complex product pricing and automate workflow approvals, thus better ensuring compliance with pricing policies and audit controls. The added workflow capability is helping to reduce quote turnaround time to help the user company's teams respond faster to customers.

BigMachines' product suite has thus helped customers streamline their sales processes; generate more accurate and consistent quotes (online with native real-time sales reporting and management); improve sales efficiencies (with up to 90 percent of orders flowing from the field to ERP); reduce quoting and ordering costs; and respond to their customers more quickly and professionally, with eliminated rework. Many of BigMachines' clients have also reportedly accelerated their growth via improved gross margins of about 2 percent (via consistent pricing) and increased order values by 10-20 percent (due to up- and cross-selling).

The Latest Product Developments

In its press release from May 2008, BigMachines announced release 8.2, upgrading the user interface to use more advanced Web technology features. As the press release details,

[n]ew features include dynamic, customizable interface elements, such as the ability to scale configuration input fields on-the-fly in arrays, drag and drop quotes into folders, auto-complete fields based on partial data input, expand and collapse groups, auto-fill dates from calendars, resize columns on the fly, plus much more. BigMachines 8.2 enhances automated transaction reports that enable customers to proactively track and manage user adoption. In addition, BigMachines invested substantial development resources to upgrade its core technology platform to extend the scalability, multi-language, and security features of its software to fully meet the needs of enterprise customers who have deployed BigMachines to thousands of users around the globe.

In a press release from November 2007, BigMachines announced the general availability of BigMachines LFE 8.0. In addition to a number of new features, upgrades to the application's technical architecture aim at enhancing the system's performance. New features, as stated in the same press release, include

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native reporting capabilities to enable users to create, save, and share real-time reports and graphs
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multi-byte support for Asian language character sets
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ability to automatically upload or download parts, users, and configuration data via Microsoft Excel or comma-separated value (CSV) files to simplify maintenance
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new BigMachines Extension Language (BML), to help users create and manage advanced functions for their most complex configuration scenarios
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ability to automatically synchronize BigMachines and CRM product line items in Oracle CRM On Demand and Salesforce.com
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additional features for system administrators, including those that aid in faster user and group administration, and auto-generated reports to track system usage and user adoption
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optimized page compression and procedure algorithms to help speed system response
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technical performance improvements, resulting in up to 80 percent faster processing time for many features over previous system benchmarks

This product release came on the heels of BigMachines LFE 7.1, in which the main theme was to help users improve the speed, efficiency, and quality of their customer service and order fulfillment. According to a January 2007 press release, version 7.1 incorporated new features, including:

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easy set-up of rich home page and catalogs with user access control
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improved systems configuration and configurator usability
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easy up-selling of complimentary products and services
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enhanced security and password management features
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additional Web Service application programming interfaces (APIs) for integration to Salesforce.com's CRM system, as well as to other business systems

Mid-2006, BigMachines announced the general availability of BigMachines LFE 7.0:

[t]o speed system implementation and save administrators time, this release features on-demand administration tools that enable customers to create and edit complex configuration and guided selling rules from a single window with enhanced layout and UI generation capabilities. To make it easier to integrate with other applications and web services, BigMachines LFE 7.0 extended BigMachines Service Oriented Architecture (SOA) with additional web service interfaces.

Customers can now receive quicker turnaround for customer support by contacting BigMachines directly through a "Customer Support portal with online case management, published libraries of release notes and training materials, customer discussion forum, and upcoming roadmap features."

Innovations in Business Intelligence

The Rebirth of Business Intelligence

Business intelligence (BI) 2.0 may have been overshadowed by all the excitement around its cooler cousin Web 2.0, but it cannot be ignored. It is time to take a down-to-earth look at a few recent advances that are making BI more accessible, affordable, and relevant to businesses than ever before. The most observable changes in BI over the past two to three years have occurred in the vendor landscape. "Megavendors" (such as Microsoft, SAP, IBM, and Oracle) are rising above independent vendors (Business Objects and Cognos). In addition to IBM's acquisition of Cognos, Oracle's purchase of Hyperion, and SAP's acquisition of Business Objects, the BI road map of the software giant Microsoft poses a threat to all vendors in the small to medium business (SMB) market. Behind the myriad changes in the BI marketplace, major innovations in BI technologies have been afoot.

In this article, we look at three recent advances in particular: search technologies, software as a service (SaaS), and operational BI. In order to understand how these technologies are being implemented and made available to organizations, we must look at the vendors that provide them. A complete survey of all vendors in these technology brackets is practically impossible; what we illustrate in this article is simply that innovation is still very much alive and well in BI.

The traditional BI solution comprises a data warehouse or data marts (individual business area–specific data stores for reporting and analysis) as its foundation. Data warehouses are designed for high performance in querying operations, and often contain summaries based on business needs. Extract, transform, and load (ETL) processes bring data from operational data sources into the data warehouse periodically, the frequency dependent on latency needs. Between extracting data from sources and loading them into targets, data cleansing and data summarization are activities that take place in an ETL process. Online analytical processing (OLAP) provides high-performance access to data in the data warehouse through the creation of cubes, which are data structures that aggregate data across multiple dimensions and provide the business user with an analytical environment. Reporting and querying environments provide access to canned or ad hoc enquiries into historical data in the data warehouse/marts.

These technologies have grown over several years, and although BI is now a mature field, new ideas and approaches are still being developed, as business models change and evolve around the world.

Searching for the Truth

"One version of the truth," albeit a redundant phrase, has been almost synonymous with BI. Getting to that one version, however, requires search and query operations. Every BI environment is data-intensive, and each action (whether a simple report or a complex analysis involving multiple dimensions) involves sifting through gigabytes (often terabytes) of data in order to arrive at an answer to a business question.

Searching in traditional BI environments involves creating structured data sources (data warehouses, data marts, OLAP cubes) and applying query mechanisms that understand the data structures. For instance, structured query language (SQL) and multi-dimensional expressions (MDX) are common ways of querying data that is stored in a data warehouse or OLAP cubes.


Innovations in the search space include high-performance searching across unstructured and disparate data sources, new storage mechanisms, new approaches to user experience, and advanced multilingual search capabilities. The existence of structured and unstructured content and the high cost of maintaining a data warehouse and ETL processes are very real in organizations; new and innovative ways to search heterogeneous data are essential.

Endeca's MDEX TM technology promises a platform in which searches across data stored in relational databases, data warehouses, and unstructured content become possible. The technology is based on self-describing records where every field is an attribute-value pair. With this flexibility, a little known fact stored in a document can become part of an analysis instantaneously. The guided summarization–based search assumes that the user does not know in advance what kind of queries can be asked. The approach widens the BI audience in an organization, as the user does not need to have a detailed understanding of underlying metadata or data models.

FAST is yet another innovator in search technology. FAST's Contextual Insight uses entities that define the scope of a search. The search combines these entities (such as name, location, etc.) to arrive at an answer to a user's question. FAST also supports a natural language processing component and advanced linguistic features. Companies that deal with large documents (publishing, news, media, etc.) in multiple languages can benefit from FAST's advanced language capabilities.

Information Builders combines the search technology of Google Appliance with its own BI data integration technologies. WebFOCUS Magnify allows the user to use the universally familiar keyword search to combine an organization's Web content with its enterprise data. This can provide insight into online business activity in conjunction with BI built on historical enterprise data.

SaaS: BI à louer (for Rent)

The high cost and prolonged implementation time involved in BI projects has made BI unaffordable to many SMBs. For companies facing challenges in implementing BI, SaaS eliminates the need to build data warehouses and OLAP cubes. For companies that have BI solutions in place, SaaS makes new BI functionality available to users for a low cost and minimal implementation time.

In order to get BI using the SaaS model, data from various sources are sent to a hosted service, where ETL-type processes bring the data into a structured representation. Once an initial load of an organization's data is completed, customers of the hosted service provide incremental updates of data.

SAS Solutions OnDemand offers analytic services specific to higher education, financial services organizations, and marketing. The OnDemand Business Intelligence package provides extensive reporting and analysis capabilities based on both relational data and OLAP cubes. SAS also offers a leasing option to use its application in house.

Business Objects OnDemand includes a data warehouse and ETL process. Those familiar with Business Objects will recognize the universe, which is available as the business interface to the data warehouse. Crystalreports.com serves as the client interface that hosts various report types and dashboards.

Oco's On-Demand Business Intelligence makes it possible for users to benefit from two proprietary technologies: Connect for ETL and Intelligent Data Schema for the process of mapping business entities into data warehouses. Retail-specific solutions are also offered on the SaaS model.

Host Analytics provides a business performance management service, which can also be purchased as a license. Individual services such as this can be options for companies that are looking to augment existing BI solutions.

In the kNow—Operational BI

Data integration latency can vary based on the nature of business needs. For traditional BI reporting and analysis based on historical data, latencies of days or even weeks are common. For operational reporting and analytic applications that require near real-time data, latencies of hours, minutes, or even seconds, may be necessary. For instance, a forecasting application that predicts the re-order of merchandise based on sales and demand will require sales data that is at least hours old. A sudden increase in the sale of specific merchandise, due to a marketing initiative to offer discounts, can trigger either an automatic re-order action in the purchase order system, or send an alert to the department responsible for re-ordering. Historical information is used to predict demand patterns; however, operational data is required to detect any anomalous activities in real (or near real) time so that low availability can be addressed immediately. Operational BI is also relevant in live reporting, where data needs to be offloaded from the operational system to avoid placing query burdens on application systems.

The need to tie operational activities to BI content is becoming more important. It is essential, however, to keep in mind that not all data in a data warehouse needs to be current; a combination of real-time and analytical data integration is what best serves an organization's needs. Data cleansing has to be minimal (or nonexistent) with real-time data integration; as a result, data quality must be ensured at the point of its entry into the application systems.

IBM Cognos Now! is a product that includes a configured server with all the necessary components for operational BI. It is also offered as a hosted service through SaaS. A streaming server provides continuous data integration of transactional information with historical data. A business rules execution engine makes it possible to set up alerts based on operational activities. An analytic server includes engines for querying and analysis; aggregate data is stored in the server, eliminating the need for the data warehouse to be kept up-to-date.

Informatica's PowerCenter 8.5 specifically targets the need for real-time data. PowerCenter Real Time Edition combines batch processing features with new real time capabilities and uses techniques in parallel processing to address performance constraints. Data smart parallelism aligns the partitioning in PowerCenter with that of the database and maximizes the use of hardware resources for performance. Change data capture (CDC) provides a continuous data integration method that listens for changes in data sources to trigger the transfer into the data warehouse.

TurtleSpice ERP! (Week 9)

Just wanted to thank all the readers who voted and gave us this shortlist of ERP vendors for TurtleSpice:

Oracle (JD Edwards EnterpriseOne)
Microsoft (Dynamics AX)
CDC Software (Ross Enterprise)
SAP (mySAP ERP)
… and BigGun ERP

turtlespice_logo.png

The next steps of the TurtleSpice selection process:

* vendor demo
* on-site visits from vendors
* reference checks

And you know what? Overall, BigGun achieves top scores (I’m not making this up*, they really do), not only in terms of ERP functionality, but also in terms of demo scores, process fit, the implementation proposal, and a TCO analysis. *although the disclaimer at the bottom of this post does give me some wriggle-room for a bald-faced lie or two.

Now here’s where things get interesting.

Following successful contract negotiations with BigGun ERP, TurtleSpice’s CEO leaves TurtleSpice—only to move to another CEO position… with VenisonBland.

The new CEO of TurtleSpice? Well, Wade Sharkey, naturally. And all of a sudden he’s not so keen on the idea of VenisonBland launching an attempted takeover of TurtleSpice. He likes it at the top.

However, given that TurtleSpice and VenisonBland are running the same ERP system, integration of TurtleSpice would be relatively convenient following a takeover, and the new VenisonBland CEO knows it. He and Wade Sharkey aren’t finished just yet.

And Mike? He’s followed his former CEO, and is now comptroller for VenisonBland—where they’re looking for a top-notch BI solution…

turtlespice_logo.png

Throughout the entire TurtleSpice ERP project, Mike Chelonia has stayed the course, although it has not been without its bumps and rough patches. And in the end, he’s selected the best-fit solution for TurtleSpice.

I’m going to leave things there for now, except for the central question that’s behind this series:

Was the whole software selection process a waste of time?

You could argue, of course, that it was, since TurtleSpice chooses the solution that Wade Sharkey had originally backed.

However, by going through a rigorous process of documenting the selection, TurtleSpice has positioned itself for a successful ERP implementation—not only do they know why they do what they do (thanks to the business process modeling component of the project), but they also know how they’re going to handle the crucial change management process during the post-implementation stage. They have also gained internal insight that will be valuable in the event of future software selection projects, or even for upgrades of the BigGun ERP system.

Most importantly, TurtleSpice is now ideally placed to track the ability of the BigGun ERP system to meet organizational needs. By conducting a process of due diligence, TurtleSpice can quickly identify and resolve discrepancies between promised and delivered functionality.

Aligning a Manufacturing Vision with Processes through Mixed-mode ERP

Manufacturing organizations are under pressure to anticipate customer requirements and to quickly respond to an increasing array of changing market demands. Such organizations are meeting these challenges by implementing a variety of production strategies across multiple product lines. In doing so, they aim to maintain market share through growth and acquisition of companies that will complement their existing product offerings. As a result of this strategy, companies that have tried to integrate their legacy discrete ERP systems across their newly acquired organization have found this approach to be akin to the popular expression “like trying to fit a square peg into a round hole.”

In an earlier article published by TEC, Getting It Right: ERP Solutions for Mixed-mode Manufacturers, I described in detail some of the clear differences between non-mixed-mode ERP systems and mixed-mode ERP solutions. In this blog post, I will examine some of the problems encountered when a discrete ERP solution does not meet core functional requirements of a mixed-mode manufacturer, and how software vendors are dealing with this issue.
Why the Singular, “One Size Fits All” Approach Does Not Always Work

As stated earlier, manufacturers are facing increased pressures in the form of global competition, demand-driven supply chains, and from the challenge to remain cost-competitive by generating a wider product offering having a greater variety of product specifications and performance features. These issues have forced manufacturers to consider how they can integrate a variety of manufacturing processes using a singular approach.

This dilemma is best illustrated by examining how an organization can implement several approaches to meet the complexities of their product mix. Some products may be made-to-stock (MTS), based on sales projections. Others can be made-to-order (MTO), and still others can be engineered-to-order (ETO)—manufactured based on customized specifications. In addition to the challenges mentioned above, issues abound when trying to integrate product design and engineering changes, as well as when trying to integrate quality management systems (such as six sigma) and manufacturing philosophies (such as lean manufacturing techniques) with traditional manufacturing methods. Manufacturers are increasingly finding that one size may not fit all when it comes to implementing ERP solutions across their manufacturing landscape.
Enter the Mixed-mode ERP Solution

Software vendors have heeded the call of the manufacturing industry by introducing mixed-mode enterprise software as a solution that gives organizations the agility to carry out both process and discrete manufacturing processes, as well as the ability to integrate manufacturing styles across the organization (see complexities of product mix listed above). With the mixed-mode approach, manufacturers can facilitate planning, meet market demands, and execute and measure both production results and performance of a manufacturing work center and plant location.

An organization can see measurable payback in several areas: greater efficiency, resulting in increased customer retention; repeat business; improved service levels; and the ability to manufacture a product according to a unique set of customer criteria.
Measuring Mixed-mode Benefits

Managers will always cite transparency, visibility, and having meaningful data from across the organization as the best approach to obtaining a 360-degree view of the business’s operations. Compare this approach to one where an organization has many systems working independently of one another: here, delivering timely information to both clients and management is extremely time-consuming, and there is the risk that information may not be received when it is needed. Here are some of the additional benefits an organization can gain from a mixed-mode ERP system:

• elimination of duplicate processing of work orders’ production results
• improved inventory accuracy
• reduction in the time it takes to process orders
• measurements in inventory accuracy and supplier performance
• reports related to order delivery performance
• the ability to set parameters related to key performance indicators and to display these in a web portal
A Final Thought

If your organization has grown as a result of an acquisition or a merger, you need to harmonize disparate legacy systems into a streamlined solution that can capture a wide variety of manufacturing processes. Perhaps it is time to take a look at how a mixed-mode ERP system can benefit your organization and address your needs for greater control and visibility.

One great source of information on mixed-mode manufacturing vendors and solutions is Technology Evaluation Centers’ (TEC’s) mixed-mode vendor showcase or evaluation center. You can also visit TEC’s web site to download white papers, read articles, and listen to podcasts, to broaden your understanding and knowledge of this technology area, as well as others.

ERP & Co.: How Process Manufacturers Use Technology to Scale New Heights

In this blog post, I’ll examine how growth-oriented organizations will build their IT infrastructure around ERP, and then integrate systems in other related areas to optimize their ERP capabilities.

In the Beginning There Was ERP

The recent TurtleSpice ERP series featured on the TEC blog features a fictionalized company within the process industry going through the decision process to determine what ERP system would best meet its needs. In the case of Turtle Spice, it was deemed that an integrated process ERP system would be the logical starting point to create a technology infrastructure—the premise being that as a growing concern, production and sales volumes are increasing, and clients are placing increased demands which cannot be met without a system by which planning and order execution can be organized.

Indeed, at each stage of the business cycle the need for timely and reliable financial information is critical, as financial performance will be the driver that permits the organization to grow and develop other markets and expand its product offerings. In addition, formulas have to be recorded in accordance with production batch sizes and for the purposes of traceability in order to satisfy compliance requirements. Furthermore, it’s essential to have the ability to track both finished goods for sales and order processing and raw materials for inventory re-order and replenishment linked to a purchasing module.

Thus, the ERP system should be the central control system by which subsequent systems can exchange information as additional applications are required. The Supporting Cast Although the TurtleSpice series does not make specific mention of other enterprise system requirements, it is not difficult to imagine that a similar organization going through growth would invest in other technologies. Some of these investments might be mandated by customers, while others could be required as a cost reduction and process improvement effort. Below are some of the systems that likely would be required.

Customer Relationship Management (CRM)

CRM is a methodology and software that assists in managing how an organization interacts with its client base in an organized approach. There are three primary activities within a CRM solution:

1. Operational CRM This consists of enabling an organization’s sales and marketing team to design a sales campaign based on research into demographical and order data.
2. Enterprise Marketing Automation (EMA) Companies can use demographical and order data to develop programs around service and warranty requirements. Telemarketing sales campaigns can also be built around the collected data from the CRM system to sell warranties and accessories.
3. Sales Force Automation (SFA) SFA automates the ability to track sales leads, schedule sales calls, coordinate responses on mailings from brochures sent by direct mail, and generate reports. Many companies have used CRM to optimize marketing efforts, resulting in greater sales and increased revenues.

Enterprise Asset Management (EAM)

EAM or computer maintenance management systems (CMMS) help organizations ensure that manufacturing equipment is maintained and serviced on a scheduled basis. This is of critical importance in an organization where breakage in process machinery could result in the inability to produce product and meet sales commitments.

There are two parts to this software: enterprise asset management and computerized maintenance management. These EAM side permits you to determine whether a part is cost prohibitive to maintain and when to purchase another. The CMMS side determines when a maintenance or a new piece of equipment is scheduled for repair.

As certain equipment repairs are unscheduled, EAM /CMMS will assist in ensuring that the correct resources (both material and labor) are in place. In a recent TEC article (Use a Computerized Maintenance Management System to Improve Predictive Maintenance Performance, by David Berger), strategies were analyzed on how these systems can benefit a firm to lower overall operating costs and store valuable information about maintenance functions within the organization.

Supply Chain Management (SCM) Systems

The discipline known as supply chain management is the essential activity responsible for the movement of products and raw materials as they flow from the vendor through the manufacturing and or distribution process to the end customer. The activities within SCM include purchasing, planning, inventory management, warehousing, transportation, customer service, and demand planning.

Within these activities you can analyze sales forecast to determine demand, plan production, negotiate pricing and ordering of raw materials, and plan and schedule manufacturing, warehousing, and transportation to the customer. To gain more insight into the complexities of SCM, read TEC analyst David Bourque’s article From Manufacturing to Distribution: the Evolution of ERP in Our New Global Economy. Below are some subsystems and activities within SCM that are useful to understand.

Advanced Planning Systems (APS)

APS systems support planning activity within SCM by means of quantitative methods. APS extends the abilities of ERP by analyzing sales forecasts, demand patterns, and economic ordering patterns

Warehouse Management Systems (WMS)

WMS is a vital part of any SCM strategy, as its primary focus is to control the movement and storage of inventory within a warehouse and to process related transactions (including shipping, receiving, putting away, picking for sales order processing, and allocation of warehouse space and bins to minimize material handling costs). WMS uses various pieces of technology, including bar code scanners, mobile computers, wireless LANS, and RFID. The fundamental reason for WMS is to increase the velocity of movement in the processing of sales orders. The system works in support of both ERP and SCM. Radio Frequency Identification (RFID)

RFID technology is used within SCM as a means to track inventory. The efficiencies and ease of use of of RFID will gradually supplant barcodes. The benefits of RFID enable companies to track assets from a distance and require less human intervention. They are useful as well for tracking obsolescent inventory and for maintaining real-time data. See the TEC article The Three Rs of RFID: Reward, Risk, and ROI for more on how retail organizations use RFID as a strategic part of managing their inventories and how it can decrease warehouse, distribution, and inventory costs, and increase profit margins.

Business Intelligence (BI)

An emerging tool no longer exclusively in the domain of large corporations, BI can provide organizations with means to manage data in a strategic way. In the case of manufacturing operations, obtaining and managing historical information—and manipulating it to make sound business decisions—can be critical. Below are some examples:

• key performance indicator development in the event of compliance-related issues

• formula adjustments

• trend analysis with respect to raw material commodity purchases

• data mining of customer order patterns

Quality Management (QM) Systems

As far as regulatory and compliance requirements are concerned, process manufacturers (such as the pharmaceutical and food and beverage industries) must track the sources of all raw materials and the dates on which products are manufactured and handled. A QM system will be able to track formula approvals, raw materials sources, lot number control inspection records, product and raw material specifications and packaging components, and product label instructions and information in the event of a product recall (or for inspection requirements from a government or regulatory agency).

Process Control Systems

As production volumes increase and as new products are developed or acquired, coordinating blending, batch manufacturing, and packaging may become difficult to handle manually. A central control room should manage a stable production environment and packaging operation linked to an ERP system, through programmable logic controllers to update manufacturing records and supply chain management.

A Final Thought

Obviously, technology alone does not guarantee the profitability of your firm. As with any IT acquisition, you must manage the process that assists in implementing change. At the end of the day, people manage change: the tools mentioned here can only benefit an organization if function, process, and people are aligned.

If you would like to obtain more information about any of these systems, please visit the TEC’s Vendor Showcase, or come to TEC’s white paper library to broaden your knowledge on these and other systems.