Maturity calls for new approaches
Roberto Michel, Editor -- Manufacturing Business Technology, 1/1/2003 7:00:00 AM
There were a couple of telling signs of increased maturity in the enterprise system market late in 2002. One was the announcement that mid-market enterprise system vendor MAPICS was acquiring Frontstep. The move—outlined in this month's news section—makes for an enterprise software vendor with a heavy concentration in verticals such as industrial equipment.
Shortly thereafter, Agilisys—formerly the process manufacturing software unit of SCT—acquired BRAIN, an enterprise system vendor for the automotive industry. Like MAPICS' recent move, this deal can be seen as another example of enterprise system vendors retrenching—via vertical strategy—to fight off larger multibillion-dollar rivals.
Although on first glance Agilisys is losing its 100-percent process-industry focus, Mark Angelo, vice president of global marketing and strategic planning for Agilisys, says the move is simply a doubling up of the strategy, in that BRAIN will be run as a fairly autonomous unit. For instance, he says, sales, service, support, and even most software development will remain separate. "We're not going to co-mingle the organizations in any way that would hurt their ability to execute vertically," he says.
More to the vertical point, says Angelo, much like Agilisys focuses on issues such as catchweights and disassembly of raw materials in process sectors such as food, BRAIN addresses issues such as sequenced materials replenishment in automotive. In sequenced delivery, suppliers use electronic communications tied to back-end inventory management and planning functions to deliver components to customer plants at the exact point of assembly. "We're about doing the tough stuff in process and automotive industries," says Angelo.
In both of these recent deals, it's interesting that the software companies involved were no strangers to vertical focus. Today, however, the enterprise system market is maturing to the point that vendors are taking that focus to a whole new level—doing all they can to appeal to a distinct set of manufacturers.
Enhanced vertical appeal gains in importance as users assess not only new software, but also the ability of a vendor to execute. Part of that viability hinges on how well a smaller vendor differentiates itself from the behemoths. Another key issue is evaluating how an entire portfolio of newer and legacy systems interact to support business processes.
You'll see this increased maturity reflected in MSI's coverage—for example, in how we organize articles under new groupings such as "Invest, Implement & Evolve." We're also glad to welcome Dave Caruso of AMR Research as a columnist with keen insight on the evolution of enterprise systems. We'll continue to look at applications through a supply chain process perspective, but we also realize that managing an applications infrastructure needs to be addressed.
