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"VISIBILITY.net is a fully integrated
Enterprise Resource Planning (ERP)
solution for complex product manufacturers."
Source : Visibility
ERP Industry Consolidation: A New Trend or an Ongoing Process?
ERP Industry is also known as :
ERP Industry Wise,
ERP Community Industry,
Free Open Source ERP,
ERP Industry Trends,
ERP Business Analyst,
ERP Software Industry,
ERP Software Solutions,
Manufacturing ERP Industry,
ERP Industry Info,
ERP Cost Effective Industry,
Apparel Industry ERP,
ERP Service Industry,
Enterprise Resource Planning,
ERP Industry Analysts,
ERP Industry Resources,
Industry Practices ERP,
ERP Support Industry,
Industry Specific ERP,
ERP Applications.
Introduction
The ERP market, over the last two decades, has
grown and consolidated with rhythmic regularity
creating uncertainty in the user community. The
ERP software market will likely continue to
consolidate at the hands of the largest of software
vendors. It is also equally fair to say, there will
continue to be new entrants to the market as well
as, growth of current industry (niche) specific
software companies who focus on select markets.
Although ERP Software Industry consolidation is
nothing new, it constantly changes market
dynamics, generating questions about its impact
on product lifecycles, supportability and ERP
ROI's. You could say consolidation creates both
new potential and contributes to old problems.
Consolidation - Goods and Bads
A market with consolidation generates questions
some of which are focused on vendor and product
viability. This applies to both the Consolidators
(tier 1 largest of Vendors) and all others.
Change can be good and with changing market
dynamics as described above the end client
comes out on top. An example is with fewer ERP
software products it provides a clearer software
landscape for prospective buying clients. This is
better and less confusing for the customer, means
less competition for the Niche vendor.
With fewer ERP software alternatives to choose
from, clients can dig deeper and be more
selective. When that happens, Niche ERP
solutions surface as winners in most cases, due to
their clear focus and market driven software
differentiation.
Consolidation - Goods
- Software choices become clearer to the
business consumer due to a smaller field of
niche players.
- Specific software applicability surfaces
through the smaller field, allowing business
consumers to distinguish application
functionality more effectively.
- Focused or Niche vendors, surface as
comprehensive, industry specific business
solutions.
Consolidation - Bads
- Consolidated products many times get lost in
the mix with the larger vendors multi-product
menu of product offerings.
- Focus diminishes as the Consolidator spreads
its resources across many products creating
uncertain support and product direction.
- End of life cycle accelerates for many of the
consolidated software products leaving the
business consumer in an unclear and
potentially costly position.
- Support of an acquired product can become
less effective, as consolidation generally
includes staff reductions in product support
and related help desk areas.
The Consolidator Vendors
The capabilities of the larger consolidating ERP
vendors can be a both a blessing and a curse.
Advantageously, their general multi-market
segment is broad in modules offered, industries
served, countries supported and perceived staffing
levels. However, they also have overhead
associated with integration and support of consolidated ERP products and are challenged
with product direction decisions which may be
counter to the original vendor's plans and the
customer's. The challenge for these vendors is the
integration process of many overlapping products
all of which are in varied stages of their product life
cycle. Other challenges can involve industry
expertise spread thin which in many cases may
not translate into a strong vendor/client
relationship with the consumer.
The Niche Vendors
Companies requiring specific industry functional
capabilities and/or who desire a closer vendor
relationship including influence on product
direction may be candidates for what a Niche
vendor delivers best. These vendors although
generally smaller in staffing, focus 360° of their
efforts on providing strong market and product
expertise. The results produce a high level of
customer interaction, industry specific
functionality, responsiveness, product influence
and access to senior management.
Jeffrey Lang, Visibility's Chief Solution Officer
observes, "Niche vendors work hard and operate
efficiently, meeting their customers changing and
growing needs. For these reasons the Niche
vendors will continue to strive and survive. Niche
vendors are also most commonly among the first
to embrace and deploy the latest generation
technologies."
In a consolidating ERP market, Niche vendors can
end up winners because of the following reasons:
- Consolidation means fewer competitors - An
example of reduced competitive ERP solutions
due to consolidation is MAPICS. Five years
ago they offered three ERP solutions; XA,
Point.Man and Frontstep. Today, they are no
longer around, having been acquired by
INFOR in 2005. Today, two of the three former
MAPICS ERP products have virtually
disappeared from the ERP software market.
This is common when consolidation takes
place, many products get retired.
- Walk the Talk - Because Niche ERP software
companies focus on a single market they are
specialists. All staff members are immersed in
a single business type and understand in
detail business issues and solutions
associated with that specific market.
- Business health specialist - Similar to
personal healthcare, when looking to correct a
health issue you go to a specialist. They understand your specific area of need and
offer the expertise. Why would you not do the
same with your business? That's where Niche
vendors offer great advantage.
- Less software overhead means optimized
methods - ERP products are very complicated
business solutions which integrate all aspects
of a business. ERP software that is focused
does not require features intended for another
type of business. It is therefore optimized by
design for its target market and is developed
efficiently with deeper yet specific market
functions. Software set-up during
implementation is already streamlined due to
its inherent clean market specific business
logic
- Market specific focus - As an ERP business
consumer, companies want to see the product
remain in tune with their direction and trends
in their industry. Customers of a Niche vendor
are generally part of a smaller user community
and one that collectively has common
interests. Those common interests provide
much of the R&D input insuring appropriate
product direction. For some customers it is
also important to have access to the vendor's
senior management which in a Niche market
organization is usually very accessible at the
most senior levels.
Visibility Corporation - a Niche Vendor
Visibility Corporation is an example of an
experienced Niche ERP vendor serving the needs
of mid-size manufacturers of complex products
since 1987. This segment, which demands
industry specific functionality, is sometimes
referred to as, to-order and includes project based
and mixed-mode manufacturers.
In 2006, Visibility culminated a multiple year heavy
R&D investment with the release of
VISIBILITY.net ERP. This was a complete
technically focused re-write of its legacy version
incorporating all previous industry specific
business functions using Microsoft's .NET
development environment with Microsoft SQL
Server and Oracle database options. According
to Steve Carson, Visibility's Executive VP of Sales,
"My experience with industry consolidations in the
past has shown that many Niche ERP providers
gain competitive advantages as the ERP software
market consolidates. A less complicated software
landscape enables Niche vendors to more easily
differentiate themselves. As a niche vendor, we view consolidation as a very positive evolution that
enables us to stand out."
Conslusion
The ERP market will continue to consolidate while
at the same time Niche vendors will grow and
thrive. Companies selecting a new ERP vendor
and system will have to ask themselves what type
of vendor and product best meets their needs by
understanding the benefits and challenges of both
options
Contact Us
Corporate Headquarters
Visibility Corporation
200 Minuteman Road
Suite 202
Andover, MA 01810
Phone: (978) 269-6500
Fax: (978) 269-6501
sales@visibility.com
www.visibility.com
European Headquarters
Visibility Europe Limited
3rd Floor, 1 Ashley Road
Altrincham
Cheshire WA14 2DT
Phone: +44(0)161 927 2500
Fax: +44(0)161 928 9700
Esales@visibility-europe.com