Analyzing MAPICS' Further Steps After Frontstep Part Four: Market Impact

Analyzing MAPICS' Further Steps After Frontstep Part Four: Market Impact

For the last several months MAPICS has shown both the signs of significant changes and the persistence of a number of its historically recognizable invariant tenets of operation. Following the acquisition of its former competitor, Frontstep, (see MAPICS To Leap Forward In A Frontstep Way), MAPICS, Inc. (NASDAQ: MAPX) became possibly the largest global provider of extended enterprise applications for solving the challenges of discrete manufacturers.

MAPICS has never departed from its conservative approach of delivering practical innovations and bulletproof applications for its customers, nor from its proverbial fiscal discipline. The Frontstep acquisition has obviously provided MAPICS with a boost in terms of product choice, having solutions on both leading platforms—Microsoft and IBM. With MAPICS SyteLine 7, the vendor now boasts a notable application built on a .NET architecture. However, the loyal AS/400 install base should rest assured of MAPICS' continued support for the platform. The big news on the MAPICS ERP for iSeries product side is that version 7.3, which is slated for December, will feature Double Bytes support, and expanded Java 2 Enterprise Edition (J2EE)-based client technology.

Other developments detailed in this note are:

* MAPICS Field Service and Support (covered in Part One)

* A Global Partnership with Systems Union (covered in Part One)

* Primus Knowledge Solution Results
* Certified Partner Program

* Pacejet Logistics, Inc. is a Certified Partner

* A Revised Sales Strategy

Incidentally, a sharp vertical focus founded on strong horizontal back-office applications has long been the modus operandi of both MAPICS and the former Frontstep. In addition to their focus on the following industries: automotive/transportation, industrial equipment, and electronics, Frontstep has contributed with fabricated metals, and furniture and fixtures. Fundamentally, the new combined entity's vision seems to be sound in that it will continue to stress discrete manufacturing functionality and service and support as its primary strengths and marketing weapons. While competitive costs (low and flexible software license pricing and implementation costs) and outstanding global service (proven fast implementations and customer loyalty) will remain important requirements for success, particularly in the lower end of the market, vertical focus will be the key factor for survival.

Thus, MAPICS is retaining its vertical industry marketing emphasis for MAPICS ERP for iSeries and SyteLine, with an unfazed focus on aerospace and defense, automotive, control instruments, electronics, furniture, industrial equipment, medical devices, metal fabrication, and specialty vehicles. Both ERP products show strength in these vertical markets, although the products have seldom faced each other in head-to-head selections, largely because of the different platforms. While the products' technology platforms are indisputably different, the former competitors will be able to share a great deal of intellectual property around product designs and functional requirements for industry-specific configuration templates.

That should come in handy as to further avoid any channel conflict. Pre-Frontstep MAPICS had a proven affiliate network of nearly 150 affiliates with over 950 affiliate employees in total, and several call-centers around the world, and now has the growing in-house professional services for those strategic multisite, multinational companies that need the coordinated, standardized, worldwide approach. For the future, MAPICS plans to further realign its organization, with possibly over 30 percent of its implementation business being delivered internally within the next three years.

While MAPICS primarily sells through a reseller channel, most of the former Frontstep's sales come from its direct sales force and should therefore complement the above aspirations of MAPICS. Conversely, Frontstep had an indirect channel to supplement its strong direct sales force to better approach the lower-end of its target market. To that end, it has created a sizable indirect channel since the 1980s that currently contributes around 25 percent of sales revenues. The vendor targets enterprises with annual revenues from $75 million up to $1 billion per site/division, which are handled by its direct sales force. Consequently, look for the newly merged company to eventually sell the entire product portfolio through both channels.
Another headline is that MAPICS has been trying to leverage the best from each platform's camp to create advanced extended-ERP applications that readily connect to various enterprise system packages. These strategic extensions, such as CRM, Web portals, and e-business applications will ideally be shared by both ERP foundations. Namely, in addition to its ERP products, pre-Frontstep MAPICS also offered extensions that would be made available to both iSeries and Extended Systems ERP products, such as MAPICS SCM (from former Thru-Put), an enterprise asset management (EAM) product called MAPICS Maintenance & Calibration (former Maincor EAM) products.

Other like solutions worth mentioning include a business intelligence (BI) product MAPICS Analytics, MAPICS Portal, and MAPICS PLM software, which utilizes the Magik! product from partner CEIMIS Enterprises, Inc. Although some of these come from strategic alliances (e.g., Access Commerce's Cameleon Product Configurator, FRx Reporting, and Magik! PLM), MAPICS emphasizes that all of these are OEMed, with MAPICS owning product upgrades and support so that the origin is effectively transparent.

MAPICS has indeed maintained an active focus on additional partnering arrangements intended to help manufacturers move into a collaborative e-business land in a more controlled manner. To that end, its multiple partnership initiatives, like those with Vanguard Solutions Group for BI add-on modules, and Access Commerce have been astute.

On the other hand, the following extended-ERP broad offering from former Frontstep, which is mostly provided natively, or also in a tight OEM fashion from long-term partnerships, was comparable to the MAPICS above set: SyteLine ERP, SyteLine APS, SyteLine CRM, SyteLine Business Intelligence (partnership with Cognos), SyteLine Business Process Management (partnership with Cobre), SyteLine Workflow Automation (partnership with former Keyfile, now Lexign), SyteLine Configuration, SyteLine Data Collection, and SyteLine EDI (using Sterling Commerce translator/information broker).

Apart from this, the former Frontstep had long bet its future on its CustomerSynchronized solutions initiative, with a view to achieve dominance in the make-to-order (MTO) demand-driven manufacturing sector. Supply chain modules include Frontstep Intelligent Sourcer, Frontstep Point Promiser (the promising engine for available-to-promise (ATP) collaboration across trading partners), Frontstep Capacity Promiser (a constraint-based planning tool for cross supply chain capacity promising), and Frontstep APS, which extends to cascading supply chain synchronization. All the above components incorporate Web services technology to simplify integration and information exchanges with other systems.

Thus, the idea is to extend these to both iSeries and SyteLine users through a "develop once, deploy twice" strategy. Included in this range of functionality is the SyteLine CRM software, with already over 200 customers, and is currently available in nine languages and mapped to the initial SyteLine 7 international availability (twenty-seven SyteLine 7 customers have the CRM product too). The product is currently integrated to SyteLine 5, 6, and 7 releases, with a stand-alone sales possibility to Extended Systems and iSeries ERP products in the future. Another one is the MAPICS Field Service & Support product detailed in Part One, which is an extension of the MAPICS Maintenance and Calibration application. It is suitable for iSeries customers requiring warranty tracking and resource management capabilities, and for customers looking to manage the "project" aspects of their after-market service activities. Conversely, like the CRM counterpart, the product is not yet integrated with the SyteLine product, and time will only tell the need thereof, given SyteLine's Field Service application, which is sold separately from the ERP counterpart.

Contrary to the above two extensions that are still mainly platform-aware, the following "extension" projects are slated for the end of 2003 and should benefit the users of both major platforms. The first one is a Web-based portal application built on .NET technology that is integrated with MAPICS ERP for iSeries Release 6 and MAPICS ERP for Extended Systems Releases 7 and 8. Another one is a Web based collaborative solution that allows buyers and suppliers to accept/reject purchase orders, visibility into accounts payable and a view of future demand orders. As for the pre-Frontstep MAPICS users, mid July has seen generally available business intelligence solutions stemming from the alliance with Vanguard solutions: 1) Analytics 4.0, integrated to iSeries 6 and 7, and 2) Analytics 3.4, integrated to iSeries 6 and 7 and to Extended Systems Version 8.