Research on the strategy of the hottest M & A expa

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Research on the strategy of M & A expansion type intermediate ERP market suite

imagine that if your medium-sized enterprise has fully implemented ERP and the system begins to work normally, is it time to celebrate? Although most enterprises will be satisfied with the smooth and smooth deployment process, at a time when the enterprise software market is increasingly concentrated, perhaps you have just applied a system, and the news of the acquisition of the software provider comes

because the service period of ERP system, an integrated suite that can be used for almost all processes such as order receiving and production planning, is 10 years or more, the merger of software enterprises is disturbing. However, some ERP software vendors have as many as six or seven kinds of products, so when they release the product roadmap after the merger, users will face greater potential risks. For example, will software vendors develop common components

for software vendors, the advantage of the versatility of ERP suite is to help coordinate development, support and reduce marketing costs. Sanjeev Aggarwal, a senior analyst at Yankee Group in Boston, said. "As time goes on, it is unlikely to continue to invest in dozens of similar ERP products." He said, "how can you recommend so many products to customers? Positioning these acquired products will be a problem faced by software companies."

follow the roadmap

aggarwal et al. Said that the premise to continue to maintain multiple ERP Suites is that they have different functions, different markets, or software vendors further develop integrated architectures. Therefore, although there is no clear regulation on whether ERP software providers should turn to general kits; However, market concentration makes customers very concerned about the product roadmap of software vendors

george Neill, the IT director of Organic Valley family of farms, witnessed the transformation of its ERP software provider, informcompany, into the most ambitious ERP intermediate market software provider. 7、 Eight years ago, when the Wisconsin company was looking for a new ERP system, the ERP products for process manufacturers that were later incorporated into infor were still owned by a software vendor called SCT. Later, SCT sold its business, and the buyer developed into infor now. At the same time, infor and its investors began to acquire other ERP software companies with solutions for specific industry sectors. Infor is continuing to develop these ERP Suites because it believes that the target markets of these products are very different

Neill said that infor, which is currently preparing to acquire SSA global, an enterprise software provider, has many products and has little impact on him. Since Organic Valley purchased the infor process ERP suite in 2003, infor has been upgrading and improving it frequently, while retaining key personnel related to the product

"once software companies want to make mergers and acquisitions, people will naturally feel a little nervous." Neill said, "however, one of the advantages of infor is the long service life of employees. Therefore, from an operational point of view, as users, we have not been affected."

the ERP solution market for small and medium-sized enterprises is much more open than the primary ERP market. In the primary market, sap has an advantage, followed by Oracle. However, in the small and medium-sized enterprise market, especially for the manufacturing industry, some other companies are very active

the change of product strategy of software companies usually depends on the number of mergers and acquisitions or the number of target vertical markets. Some software vendors, such as Oracle, develop generic next-generation ERP suite for users to transition; Support and upgrade the purchased kits within a few years

other software vendors, such as infor, rely on ERP solution combinations for different vertical markets; However, these solutions have the same service-oriented architecture, so they can integrate business intelligence and other extended functions very closely

first strategy observer

robin Pederson, the vice president in charge of business operation and execution of infor, said that every ERP suite of infor for different industries with reduced printing fastness is an effective business platform

"we must continue to support these platforms and improve them." Pederson said, "customers are the driving force behind the rationalization of our products, and they tell us to move forward."

Neill said that the CFO of Organic Valley began to study its business model when infor began to acquire more software companies. It depends on whether it insists on improving its products, or reduces costs, earns maintenance fees, and "rushes up" its financial performance in the short term. "None of these risks have occurred." Neill said

Neill said that infor's process industry ERP suite is outstanding in the functions required by the food and beverage processing industry, such as actual weight and mass storage management. Organic Valley also adopts infor's supply chain planning solution, which Neill said is critical to solving the company's special business problems

he said that the company buys organic milk and other organic products from farmers, and then plans the production of contract manufacturers, while meeting retail needs. "We are not a typical food processing enterprise. It is more appropriate to say that we are a marketing and distribution cooperative organization engaged in actual processing and manufacturing." He said

infor's solution, Neill said, has vertical industry characteristics. It can help farmers purchase raw materials and manage their supply, formulate production plans, and fully tap the potential of organic milk. "Organic milk is relatively small. We can't casually expand our purchases in the market." He said, "after purchasing milk, we should find the best way to use it."

support a single ERP suite, or at least support opinions with high versatility, all with centralized research and development as the core

"it is difficult to configure the resources needed to develop multiple products." Sharon Ward said. He is the global manufacturing director of Microsoft Dynamics

of course, Microsoft itself is an acquirer. A few years ago, in order to gain a foothold in the market, it acquired great plains and Navision. However, according to the plan originally called Project Green and now part of the dynamics brand product roadmap, more versatility is being added to its suite

the first common areas are extended applications such as user interface and customer relationship management. However, with the help of Net development architecture, the architecture of Microsoft's four suites will eventually be unified. However, Ward said that this evolution will not be a sudden and radical change to a new suite

"for the intermediate market, nothing is more frightening than (re implementing ERP)." Ward said, "no one wants to find a bigger project waiting for him after configuring a system. That's why we insist on advancing step by step."

advantages of versatility

Microsoft ERP users, Webasto products North America (wpna) in Michigan, USA, recognized the benefits of improving versatility. Wpna manufactures car heating systems and distributes car skylights. Microsoft's dynamics GP (formerly Great Plains) suite has been used since 1996, and the version has been constantly updated. In addition, it also uses Microsoft CRM components, Microsoft office and SharePoint

top 5 ERP Sales in the intermediate market

in terms of core ERP modules, the new license revenue of sap and Oracle in 2005 ranked first and second in the intermediate market (including enterprises with annual sales of US $250million to US $1billion). The figures in the figure above do not include maintenance revenue and service revenue, nor do they include the sales of extension schemes, or the income brought by recent mergers and acquisitions

andrew fralick, wpna it director, said that Microsoft's ERP products have begun to have a common interface and feel. In addition, he said, because Microsoft has been using Net development framework to develop a new version of the suite, so users can ensure a smooth transition to a more versatile version. "Using.Net is more conducive to transition than using different development frameworks." Fralick said

the versatility of Webasto global comfort solutions is relatively easy to achieve. All its OEM manufacturers have begun to adopt Dynamics AX (formerly Axapta), and the European accessories business also adopts the same software. At the same time, wpna continues to use dynamics GP. The user interfaces of both suites are similar to Microsoft Outlook, fralick said

gp suite has adopted outlook style user interface since the previous versions, and embedded SharePoint entry information into the suite. 2018 is the connecting year for the implementation of the "1035" plan. The initial or "main" page. Wpna uses SharePoint for internal local areas and plans to adopt Microsoft business portal solutions, adding self-service processes such as key performance indicators and purchase applications

the same goal

Collaborative Procurement, office efficiency and ERP software from financially stable companies will bring clear benefits, fralick said. "It's better to use the same company's products for all software, because they must be compatible with each other." He said, "Microsoft will always exist. You don't have to worry about it disappearing."

sap, the largest ERP software provider, does not have to acquire other competitors, although it has acquired several small companies in areas such as portals. It has also developed a separate suite for small businesses, business one, with 10000 users

simon Bragg, European research director of ARC Advisory Group in Massachusetts, said that a clear and stable product line is the key factor for SAP to achieve market success. In contrast, he said, if the merger and expansion enterprises are too hasty in the transition from existing software to general-purpose suite, they may lose users. "If the upgrade package is too large and troublesome, some customers will be lost." Bragg said

for some M & A expansion software companies, Bragg said that there are large vertical industry differences between the products purchased and merged, and there is no need to develop general kits; Although most enterprises still need to adopt integration strategies to cross sell extended products. He said, "it is not feasible for these enterprises to develop a single suite and a common code base."

epicor software's strategy after the merger is to continue to support and improve the acquired suites. At the same time, develop a service-oriented architecture to promote integration. John Hiraoka, the company's chief marketing officer, said. This integration layer, called service connect, improves Epicor's development and service efficiency, but allows users to continue using the suite they originally purchased

"the user said: 'we don't want to be forced to change the system'." Hiraoka said

so far, Bragg of arc said that M & A expansion enterprises have not achieved great results in developing general ERP suite and winning a large number of users. However, he said, 2. The molding performance is similar to that of PC. over time, large enterprises such as Microsoft and Oracle will succeed

"they are all large software enterprises and have invested a lot in this area." Bragg said, "they know how to implement development standards within the organization, so they will eventually achieve high versatility." (end)

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