Financial Director: Guy Tarring, you’re setting up a best-of-breed association. What’s that all about? Guy Tarring (Computron): Well, let me start with some definitions. Computron is a best-of-breed supplier. A best-of-breed supplier is a company that focuses on one element of the value chain – for example, a company that is focused on delivering a manufacturing solution, or a company that is focused on delivering a logistics solution. In our organisation we deliver finance and accounting software. That’s all we do. We’re capable of integrating but we don’t do anything else. The other end of the spectrum is an enterprise resource planning (ERP) tool, capable of bringing together all the elements of the value chain – from order to delivery. Companies that are in mature markets focus on efficiency. They need to have absolute control. They tend to be companies that seem to see ERP packages as being a vital part of their business. Our proposition is that for companies that are seeking to remain agile and flexible and compete more effectively – and are not looking for total efficiency but are looking for flexibility – the idea of implementing best-of-breed systems is in our view the right way forward. Financial Director: Trevor Salomon, is this jigsaw puzzle approach one that’s going to be dancing nimbly around you while you lumber along? Trevor Salomon (JD Edwards): What very emotive language! I think the point has been missed. This is not an issue of best-of-breed versus, perhaps, the accounting product from an ERP vendor because, if you wander around the (Softworld) show I’m sure you will see virtually no difference between one product and another. The issue is the viability of the vendor versus the (possible) failure of the vendor. There are far too many vendors in this industry. If I see a vendor with a great product that is going nowhere because they’re not profitable, am I going to bet the future of my company on that vendor? No, I’m damn well not. There is going to be a huge failure rate in our industry. Financial Director: James Norwood: is size everything? James Norwood (Platinum): The market is becoming confused in terms of where you see an ERP vendor and where you see the mid-market. I think probably everyone at this table would say ‘We are an ERP vendor’. Everyone wants to be in ERP now. But what’s actually happening is that the larger traditional ERP vendors – such as SAP, Baan, Oracle – they’re tending to move down-market and maybe it’s because they are running out of customers at the top end. You’ve seen things like ASAP, PeopleSoft Select, where they are actually trying to can the system and get it down into the mid-market. Then you’ve got traditional mid-market players, the likes of us, Platinum, who have always been there but now we’re an ERP player as well. Financial Director: Terry Wilcox from Baan: are you running out of clients at the top of the market? Terry Wilcox (Baan Corporate Office Solutions): The answer is no! But I was interested in Trevor’s comments. What is the value proposition of the best-of-class supplier? I think historically it’s been one of focus which delivers flexibility and functionality and to a degree I think I agree with you, Trevor. I think the (product) differentiation at that level is starting to disappear. Not totally: I would still maintain that best-of-class vendors do have an edge because of their focus. But I think the value proposition is going to be in the area of quality of service and implementation – what Gartner talk about as ‘ability to execute’. We are finding that many of the larger companies have undertaken software procurement for their year 2000 requirements already, and it is the small to medium-sized enterprises that are now out in the market looking for solutions to their year 2000 and Emu requirements. So by necessity we are moving down-market, but really by pull rather than push. Sabby Gill (PeopleSoft): The ERP growth forecast for 1999 is something like about 34%; for the year 2000 it’s an additional 32%. That’s mainly coming from the mid-market and the large corporates. We’ve moved into the US with something called Select. What we’re seeing is quite a lot of the mid-market companies are very much looking for the same functionality as the large corporates (but) they have a lower IT infrastructure – so they’re wanting to be able to be able to implement those larger packages at a lower cost. Speaker from the floor: I’ve been in this industry for 25 years and not once has anybody ever come to me and said, “Are you best-of-breed or are you Wyatt ERP?” I don’t think customers really care whether you’re putting forward a best-of-breed or an ERP system: they want one that works with as little pain as possible. Geoff Holt (Scala): I agree that most packages have got the features that people want, but the ERP solution is aimed at an organisation that wants to roll the same product out wherever they are. And that doesn’t mean the UK – it means wherever in the world. So it’s not just a question of the functionality, it’s a question of, can you deliver it in Chinese, Russian, whatever. Yash Nagpal (Navision): ERP, business process re-engineering: the best con marketing words. What is business process re-engineering? “Here’s a huge package: we can’t change it, so let’s change your organisation to fit in with the package.” What is ERP? ERP is nothing else except a huge database from which you can run every part of your operation. Best-of-breed is nothing else but a small package which has got maximum functionality that you can provide for in that package. It’s great. It’s probably suitable for some companies and they are happy to go with that and they are also happy to go with the idea that they may need another four or five little packages to run their organisation. That’s a choice that must be given to the customers. But if you’re going to go back and say, “We’re just sticking with functionality” and have a discussion about ERP and best-of-breed, we’re back to the con tricks again. The industry should really recognise this. There is no such thing as an ERP. It’s just one huge database that meets a company’s requirements. Wilcox (Baan): The reality is that it’s about the level of service that you get from a vendor of a set of functionality and integration capability within that. I came from a background of best-of-class so I would applaud this initiative of Guy’s – it brings together a group of people who focus in their own particular area – but ultimately a lot of the people who join that association will extend their functionality over a period of time and ultimately they may well become what we would class today as an ERP vendor. Salomon (JD Edwards): If you analysed the customer databases of the major ERP vendors you’d be very surprised to find that the majority – with perhaps one exception – have mostly financials-only customers, and most of those customers are mid-range customers. Therefore, most of the ERP vendors have bigger customer databases of financials-only than the so-called best-of-class players. So the reality is that the market will just decide which product it wants from which vendor. This whole issue of best-of-class versus ERP as far as financials is concerned is nonsense. Wilcox (Baan): I would suggest that many (ERP vendors) may well be finding it very difficult to implement that whole range of products, or are finding that the financials are taking so long to implement that the rest of the product has just been untenable. Now, that may not be true for your august organisation, but I’m sure you would agree that for many of your competitors that has been the case. Salomon (JD Edwards): Yes, it probably has been, at least for one of our competitors. And they’re not here to defend themselves so it’s not fair – or maybe it is. The reason most of us are focusing on the mid-market now is very simple: we’ve actually always been there, it’s just that I think the media has positioned us at the top end of the market, when in fact if you analyse our customer databases, we’re not: we’re very much mid-market. Nagpal (Navision): I think it’s a great point you make about major companies only using the financials part. Who sold it to them? It’s the consultants who made a lot of money out of it. Consultants keep selling these huge ERP packages. There’s a lot of companies who have been sold these huge ERP packages that are now being replaced by smaller, compact packages which run their organisations much better where the customer doesn’t have to pay out a quarter of a million pounds, a half a million pounds, in maintenance. Matt Muldoon (Platinum): Do you think that the price point has gone down in the larger players so that they become perceived mid-market market companies? Salomon (JD Edwards): I think that what we’re finding is that at the end of the day price is a negotiation point. It is not the reason why people buy one product or another. People will not buy their second choice just to save £10,000 or £15,000. In fact, some of our competitors are coming in – where it looks like they’re going to lose the deal – with very silly prices. They are blowing their credibility sky-high. If you’re going to give me the software, I’m going to have to pay a tonne for the services – or you’re not going to give me the services. So there are some fun and games going on out there and the vendors that have been playing those games are losing their credibility. The debaters Navision Software (UK) Limited – Yash Nagpal, managing director JD Edwards (UK) Limited – Trevor Salomon, marketing director Computron Software Europe Ltd – Guy Tarring, marketing director – Andrew Yeo, head of pre-sales – David Burrows, knowledge management marketing manager Baan Corporate Office Solutions – Terry Wilcox, marketing director Scala Business Solutions – Geoff Holt, sales & marketing director PeopleSoft (UK) Limited – Sabby Gill, European financials product consultant Platinum Software Corporation – Matt Muldoon, UK channel manager – James Norwood, European sales manager Peterborough Software (UK) Ltd – Mark Howes, PS financials product manager Financial Director – Andrew Sawers, editor (chairman) The euro: a modest proposal Yash Nagpal (Navision): To a degree one of the problems is the uncertainties at government level. There’s no question about it, the UK will be going in and if we’re going in, we should be preparing for it, not today, but two years ago. Financial Director: Yash, I recall that you were critical of certain software vendors waving Emu White Papers, at a time before we actually knew what Emu was going to entail. Nagpal (Navision): Yeah. And we’ve had this point made today round the table here where people have said, “Well, we’re not very sure if we’re compliant because the standard has only come from Basda (the Business and Accounting Software Developers Association)” – but say the government comes out with legislation tomorrow that is different from what we’ve been doing. Matt Muldoon (Platinum): You’re absolutely right because the compliance rules are different from country to country right now, and from organisation to organisation. Basda has the set of rules to comply to here but they are not the only set of rules, and not everyone is going to follow them. Nagpal (Navision): This is a great time for somebody to get this organised. We, sitting in this room, are probably the biggest software vendors in the world – we should be looking at this and saying, “There’s this major problem out there.” Somebody out of us lot, or us together, should be saying, “What can we actually do to help these customers out there get over this problem?” You know, there’s enough business out there to keep all of us in a good healthy state for a long time. But if it’s an action that we jointly take together then we should be doing it. It’s a way to force the situation into the arms of the government and other people and say, “You haven’t done enough: you can’t just let down the vendors and the customers.” I think we’ve got to take some very strong action as a group to try to do something. Financial Director: An interesting call to arms, Yash. Muldoon (Platinum): The interesting dilemma is that you can have software (that complies) with the EC regulations for calculations in general terms, but which is not compliant in specific marketplaces such as the UK. Mark Howes (Peterborough): For example, the French have come up with a ‘three centime’ rounding rule. The Italians have got a different rounding rule. Belgium has never had decimal places up until the introduction of the euro. I know that in Holland they are having horrendous problems where if you have something at 0.1 of a guilder, it works out on your invoice as nought euros – so you start giving your stock away. Terry Wilcox (Baan Corporate Office Solutions): There’s a lack of clarity in each of the major European Union legislations. While Yash’s point is well made – I think it would be good if we could get together – I think that’s really what we were hoping the European Union was going to do for us. They haven’t done it.
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