Introduction
As our spring conference journey winds up, it ends with a bang, quite literally, at Grape Escape in Chicago. Moving beyond the usual conference format, attendees went as 1920 gangsters and flappers. Here we met SYSPRO, Apparancy and other high tech companies. But rather than maintaining a code of silence, customers were quite willing to share their stories. I cover SYSPRO in this article; and we will cover Apparancy, who many of our readers are not familiar with, in the next issue of the brief.
SYSPRO Today
I was fortunate to have meetings for several hours, one-on-one, in-depth with both Brian Stein, CEO of SYSPRO USA, and Joey Benadretti, President of SYSPRO USA, which gave me the opportunity to grill them a bit about the company, its product direction, customers, and channels. SYSPRO, remarkably, is a unique player in the market in that it does not have to play technology catch-up like many other ERPs.1 The company hasn’t taken a breather or gotten lost and then needing to seek redemption, unlike some in the market who need a financial safe harbor in order to keep the lights on and continue supporting their customers.2
SYSPRO demonstrates that you don’t have to be a large ERP firm to be successful. Focusing on innovation and taking really good care of the channels and customers actually does make the difference. (Note the size of NFL vs. World Cup vs. marathon champions and you understand that big is not always better.) For ERP firms, business success is more like a marathon. It requires long-term commitment and yet speed to implement the current technology trends and keep pace with the market and a growing customer list. ERP customers expect to go the distance with their software provider, often over decades. All this has paid off for SYSPRO, who added another 1,000 customers in the last two years, and currently has over 15,000 customers in 60 countries.
In fact, SYSPRO’s channels find the relationship extremely attractive. SYSPRO has not gone after the channel share, also unlike some other ERPs in the quest for more revenue to support their dwindling license revenue. That deserved some respect from the market, I think, since companies declare their size; but peeling back the cover may reveal numbers that tell a different story about company size and influence in the market.
SYSPRO has a lucrative channel arrangement and is known for its collaborative, rather than adversarial, relationship with the channel. (See Figure 1 for channel partner program.) Again, big is not always better. The question buyers should ask is how much the provider is putting into the product. Big companies often have a bigger resource pool, but often you will find they are not focused on the products you need to be world class.
SYSPRO’s Technology
SYSPRO 7.0 arrives in the market with impressive technology as well as upgraded methodology and tools for users to migrate from V6. Highlights of the V7:
Mobile: Espresso, SYSPRO’s mobile for Apple/iOS, Android, and MS smart phone platforms.
- Visual Studio — a “no-IT,” user friendly ability that enables users to customize their own look, screens, etc. I got a demo of just how easy that was as we did a live mobile/tablet screens and reports design exercise in our meeting.
- App Store — we reported on this before,3 but it is worth repeating that the Apps are in a ‘store’; that is, users can download them without paying a fee. (Figure 2)
Today we are seeing the emergence of mobile devices replacing the ‘clunkers’ in the warehouse. Androids and iPhones (or Apple minis) are being used for receiving/data collection, which allows users to scan, look-up, communicate, use the business applications, integrate to workflows etc., as well as modernize the process with social, visual (pictures, videos, etc.) and location-based attributes. Lots of gear — readers, voice systems, and computers — may be replaced in the warehouse with tablets or smart phones, putting everything on one device. Espresso enables this transformation.
Security: Enhanced security features for mobile and retail customers. I was impressed that Brian Stein actually brought up the topic. This has been an incredibly important issue with the increase in hacking, especially in brand and manufacturing companies (not just retailers), who have recipes, formulas, product designs, and so on that are coveted by counterfeiters. Security becomes a bigger issue as firms adopt smart mobile applications and BYOD.
Micro-Vertical Enhancements: Micro vertical is the big push these days by the ERP market. However, mid-market ERPs always knew that this was their bread and butter. SYSPRO, though, has made an extra effort of late to deepen their Food and Beverage presence. This industry has seen remarkable growth with the emergence of interesting segments from organics, local, gourmet, and global sources. SYSPRO has a large share of companies in this sector and has invested in traceability4 and other features important to this sector.
Manufacturing Functionality: There are only a few mid-market players who really have manufacturing nailed.5 SYSRO supports multi-stage, multi-level BOM production, as well as process manufacturing. Later in this article we will cover a great story about a manufacturer with millions of products, and a wholesaler with thousands of orders per day. This challenges the notion that SYSPRO is only for small companies.
Rochester Electronics
Mike Murray, Manager of Information Systems, Rochester Electronics, gave a compelling talk about the transformation at Rochester Electronics due to their SYSPRO implementation. As we are both Massachusetts companies,6 I spent some time talking to Mike before his speech about his career and the origins of Rochester Electronics. Rochester Electronics builds semiconductors for products that are mature or have been designated end-of-life by the manufacturer. As we all know, a manufacturer may stop selling a product, but that does not mean the customer stops using it.
As an authorized supplier of the original manufacturing of over 70 of the world’s top semiconductor companies, Rochester Electronics has millions of parts already in stock, and can also build to order over 300,000 others. “Dazzling numbers,” says Mike. He continued, “Can you imagine the sophistication of the inventory management controls we need to do that?”
One would think a semiconductor company like Rochester Electronics would stay up to date on the latest and greatest, but when Mike Murray arrived he found a lot of manual processes and a very out of date system. It turns out they were running SYSPRO, but had not done an upgrade for over 10 years!7
It was time for change. The obvious move for many companies is to open the playing field and evaluate a lot of vendors. Mike’s background included IT stints in companies where he had experiences with Oracle, Infor, and other ERPs; but after the evaluation process, he determined that moving onto the latest version of SYSPRO was the answer.
Rochester Electronics is a build-to-order/complex manufacturing business, with global offices as well as online sales. Supporting such a complex business required, “not your father’s Oldsmobile,” quipped Mike, so this was a great win for SYSPRO. In six months, the whole company was on the new system.This allowed them to integrate and automate many processes that had been disjointed. An example Mike shared, “We were manually printing out barcode sheets, carrying them to administration, manually scanning them into one of our homegrown inventory systems, and then scanning them into our old ERP. This, of course, created a three-month backlog of inventory receipts.” If you don’t know your inventory status, it is pretty hard to commit to orders. Now their inventory is updated in minutes. In another example, Mike said, “We gave another key challenge to SYSPRO. We had a significant challenge with our inventory month-end processing taking 5-6 hours. Other SYSPRO clients hadn’t experienced this issue because no other SYSPRO customer has the amount of inventory records that we do. I pushed hard with the SYSPRO R&D and service teams and together, three weeks later, we worked out and delivered a solution that reduced our month-end processing from 5-6 hours to 10 minutes. The SYPSRO people both in the U.S and South Africa went all out for us — some resources were up with me working until 2-3 a.m. And we never heard a complaint. Let me ask you something — what ERP company do you know out there in today’s world that does things like that? SYPSRO does — and that’s probably why they have the reputation they have,” declared Mike.
Some other highlights at Rochester Electronics included:
“Through SYSPRO’s business objects, we have integrated our CRM system to SYSPRO providing live inventory and customer information.” That means the ability to quickly commit to order, increasing sales.
Mike continued, “Here’s a great ROI story based on having these insights (from SYSPRO’s BI tools) — and one that likely would have been a missed opportunity: Our services business operates at a very high margin, but previously was only a small part of our overall business model. However, we discovered through our new SYPSRO BI capabilities that we had an opportunity … Since then, we’ve experienced a 50% growth, a significant increase in revenue, from that very high margin area.”
So, Rochester Electronics has been able to do more than just improve cost saving. They have increased sales, margin, and productivity. What a great ROI!
During his talk, Mike passionately described the support he got from SYSPRO during the implementation, “ — working round the clock to support the go live and resolving all the change management issues that occur during a big ERP implementation.” He’s become a strong advocate, stating that “SYPRO is a great business partner.” One thing Mike told me after his speech, “Often, you feel like the vendor has you over a barrel. I never felt that way with SYSPRO.”
That is a story that required the solution provider keeping the lights on. And that is what our next company does.
1000Bulbs.com
Another fascinating talk was from Kim Pedersen, CEO and founder of 1000Bulbs.com. “We are an internet-based distributor of more than 30,000 products — from light bulbs (which are about 80% of our business) to state-of-the-art specialty lighting systems. We supply products from 206 or so vendors including Phillips, GE, and Sylvania,” Kim told us. So if you want to design and outfit your factory, create a hydroponic farm, or are an architect designing lighting systems for your building, 1000Bulbs would be the place you go. With over 200 employees and $90+ million in revenue, 1000Bulbs sells to over 1,000,000 customers, shipping 2,500+ shipments a day to the largest firms (like Boeing) and to the smallest companies (you can order one bulb).8 1000Bulbs needed a system they could grow with, moving up from SAGE9 to SYSPRO. They needed scalable systems, since at a 30% a year growth rate and complex ordering and customer services support, they wanted real-time, great workflow, and ecommerce integrated to the warehouse.
That integration allows them, as Kim mentioned, to analyze the business. “Some of our favorite reports — are comparisons of customer lists to cancellations, the sales summary reviews parsed by salesperson, segmentation of products by vendor so that we can see how much business we do with any given supplier, comparisons of inventory arriving at the dock and in the warehouse, product marketing reports, marketing performance tied to stock code, etc.” Data like that allows you to see where the holes may be in the business and correct them, improving customer service, inventory management, and reliable customer delivery performance.
Kim also talked about the flexibility, configurability and customization with SYSPRO. “SYSPRO [is for] a company like us that likes to do its own configuring of a solution — versus spending a lot of money on outside resources. — That is very unlike what I’ve seen with other solutions, like SAP. In the past, when we had SAP installed at other companies I’ve worked for, you had to have an SAP programmer with SAP experience. Period. This is huge for us … saving money [on development costs] and [saving time] in problem solving.10
I always enjoy it when the benefits customers derive are more than just cost savings, so I lit up when Kim talked about their ability to increase sales.
“SYSPRO helped us to see where sales on specific higher-margin product classes were dropping. We could slice out where those higher margin products were dropping, whether promotions for them were non-existent or failing, and we could redirect our sales and marketing efforts accordingly. Without SYSPRO’s analytic capabilities, there would otherwise have been a lot of hunch-playing versus action based on accurate information. We do this kind of weekly analysis regularly now — and can capture the best market opportunities for our products on a regular basis.”
Conclusion
My main takeaway from these presentations and those of other SYSPRO customers I have talked to is that pegging SYSPRO as a small-company-only ERP may no longer be accurate positioning. Yes, their pricing and easy-to-implement technology are a great fit for a complex small business, yet they can scale. Many of the lite-ERPs on the market just can’t go the distance.
Another mis-positioning is to categorize SYSPRO as only a manufacturing-centric ERP. Customers like 1000Bulbs demonstrate the strong ecommerce aspects as well as the distribution back end that can support almost any business model the enterprise has. Thus, we have seen many defections — from a variety of ERPs that have not continued to evolve — to those, like SYSPRO, who have been keeping up.
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1 We have been doing analytics of the mid-market ERPs for some time now, and SYSPRO’s focus has really given them an advantage over time. Read Path to Greatness or earlier Updates on SYSPRO. — Return to article text above
2 A quick look at history — where are all those Big ERPs that once roamed the land? In my old job at Benchmarking Partners, the battle between Oracle, Baan, SSA, JD Edwards, QAD, SAP, and the up-and-comer PeopleSoft occupied a lot of our evaluation time. Miss a technology wave and it can get very tough later on as SSA, Baan, and so many others experienced and as Oracle and Sage are now experiencing (read Oracle Profits Decline — Wall Street Journal) — Return to article text above
3 http://www.syspro.com/news/syspro-app-store-benefits-cited-by-leading-analyst — Return to article text above
4 Brian participated in a panel that ChainLink ran at the Council of Supply Chain Management Professionals on food traceability. http://www.syspro.com/news/syspro-supports-chainlink-research-panel-on-food-safety-issues — Return to article text above
5 Other companies may serve wholesalers or have lite manufacturing functions, but are missing the deeper functionality like multi-level BOMs, strong Procure to Pay, transportation, and sophisticated demand forecasting and pricing. — Return to article text above
6 I used to work in the semiconductor industry. — Return to article text above
7 To note, many companies run on old — or ancient — revs of software that work just fine. However, by doing that they do exclude themselves from the many benefits of current solutions. — Return to article text above
8 I ordered four just to try out their ecommerce, delivery, and customer experience. — Return to article text above
9 An example of an application that just wasn’t keeping up with the market! — Return to article text above
10 Bracketed info is the author’s addition. — Return to article text above
To view other articles from this issue of the brief, click here.