Glovia unit says SaaS plus services will meet the ERP needs of underserved small manufacturers

While the success of CRM vendor salesforce.com is well known, use of software-as-a service (SaaS) as a delivery model for enterprise resources planning (ERP) solutions has yet to hit full stride.

A bet is being placed, however, by a formidable technology vendor that—backed by the right mix of functionality, implementation services, and infrastructure—discrete manufacturers with revenues ranging up to $50 million will find SaaS the best way to get needed systems without large capital outlays, or resorting to outsized IT support staff.

That technology vendor is Glovia International, a subsidiary of Fujitsu, which announced in October the formation of Glovia Services, a provider of SaaS solutions for small and midsize manufacturers; and the introduction in the U.S. of GSInnovate, a solution based on Glovia International's flagship ERP system, but streamlined for the midmarket and delivered using SaaS.

SaaS applications are accessed via Internet browser, eliminating the up-front costs of hardware, licenses, and technical staff required to maintain these systems.

What's different here, says Bill Lyons, VP of sales and marketing and an ERP industry veteran, "is that other SaaS vendors don't offer the services needed to support ERP business-process definition and implementation required, regardless of the delivery model."

More generally, midsize companies are loath to commit themselves to open-ended implementation engagements during which consultants have been known to wear out their welcome.

Glovia Services will solve this conundrum, says Lyons, by guaranteeing a 90-day or less implementation supported by Glovia Services employees at a set price, assuming the manufacturer meets an agreed-upon set of responsibilities. Glovia also has business-process templates that point to best practices as a means to support pre-implementation process definition.

The 70 modules found in Glovia International's flagship product are reduced in GSInnovate to just 22, in the areas of customer, supplier, manufacturing, product, financial, and business intelligence management. "The product is backed by 30 years of ERP development work," says Lyon.

T-Systems will provide the hosting infrastructure for the single instance, multi-tenant system, with separate databases and localizations for individual customers.

The minimum monthly fee for GSInnovate is $5,000 for five users, plus a one-time service charge, with a 99.5-percent service level guaranteed.

For manufacturers looking to benefit from SaaS efficiencies, says Lyons, "We are backed by a $40-billion company that sees this as a unique opportunity to make the SaaS delivery model work, but we also have a dedicated organization to guarantee needed focus."

The opportunity may be large as well as unique. Glovia cites studies out of Boston-based AMR Research indicating that 47 percent of manufacturers with fewer than 50 employees have no ERP, and 20 percent are evaluating systems for the first time. Glovia is initially targeting companies in complex manufacturing, electronics, and automotive suppliers markets.