July 10th 2011 revisited
In a posting titled “Is your ERP software system a Mother-ship” or a satellite software drifting into outer space, I suggested that there would be a number of software systems that had been ‘rolled up’ and would in fact be allowed by their new owners to drift along with less support and virtually no new added functions thus decreasing the value of ongoing support fees.
Viewing the ERP landscape
In subsequent postings I said that the value for monies paid for support would reach a point that other companies would end up supporting your ERP system for no additional monies beyond the ERP supplied maintenance Many distributors would become nervous about the largest business purchase they had made to grow their business.
True to those postings, additional companies like Panorama Consulting have opened up to act as Expert Witnesses against Epicor. While it is true that Microsoft, Oracle and SAP draw an occasional lawsuit, but to have a firm that is dedicated against one company is rare. Epicor owns P-21, Eclipse, Prelude and various other ERP’s.
To add more nervousness, Epicor’s management floated what many would consider junk bonds to a pay a dividend to their private equity owners. That might be the step before Epicor sells the company or breaks it into parts. Who knows for sure what they will do. But, desperation for cash, causes a satellite ERP company to do strange things as they drift away from core functions. E9 was to be Epicor’s saving grace, but no satisfied electrical distribution user of E9 has been found to date (or distributors in other verticals that we work in).
OTHER ERP systems
Meanwhile DDI grows. Ximple Software, Xtuple, Microsoft Dynamics, Sage, SAP, and Oracle continue to roll on. Mincron appears to be in danger because of the aging of its software. Infor has re-entered the market in a big way.
INFOR
At the time that the original Mother Ship blog was posted there was concern that Infor would have a hard time re-establishing its position. So when a press release came across my desk about Infor’s growth of a 120% in 3 years (click here for the Wall Street Journal Press Release), I read it twice just to make sure of what I was reading.
Infor during that same period of time had written down its old software, controlled their expenses and bought Lawson M3. Now to my way of thinking Infor is a Mother-ship. They now offer mobility software and ION that lets you connect other software by exchanging files to your current ERP system. ION could be a way for some to move away from their current ERP without disrupting their business.
Looking at your business needs
Assuming that many distributors either started or inherited the business, most all looked to grow their business to maximum production and profitability. Many had the goal of selling their businesses. So the question is, if you have an ERP system that has aged, been bought/rolled up and has lost it’s way, what do you do to get your company back on track?
9 Comments
Eclipse has done a good job over the years.That is when it was Eclypse.
We’ve noticed the change as the Bankers and bean counters have moved in.They are not technology people that solve problems. Epicor is ruthless and threatening about fees.
We are QUIETLY looking at other options.
Looking at our distribution business needs….hmmmmm! We don’t believe Epicor can do that now or in the future. My personal thoughts are they may need to visit a bankruptcy court someplace along the way. That junk bond offering was like the last straw. We are now forced to take a look around.
As a distribution company, we need a Technology PARTNER in the short and long run. Not a banker. That partner doesn’t need to necessarily write all the programs, but we need for them to help us to let disparate programs talk to each other. I don’t know if that is the right words (disparate programs, but we run 7 different sets of programs that don’t link together. Talk about system creep. 10 years ago we had 2 systems….now 7.
You guys have provoked some really good thoughts.
Thanks
We got dazzled by P-21 a few years back. A lot of pressure. They under estimated training hours. Once that got straighten out, it was a good install.
It turns out that P-21 software is pretty thin. Looks good on the screen. For our business at that time it was good purchase.
Setting up branches and trying to grow with P-21 is very hard and expensive.
We’ll need to go a different direction before the end of this year.
Electric Distributor in PA
Thanks Fred for sending the link along.
We bought P-21 like Fred above. We thought we had made a good purchase until we went to open three branches. We thought we’d learn off the first branch and the others would come on line much smoother.
That ‘assumption’ proved to be very wrong on our part. Be prepared for them to nickel and dime you to death.
Shame on us for not checking adding new branches.
Our suggestion is that you go an see some very successful installs (out of your area) with a long list of questions.When someone from P-21 says they can do certain functions, you should make sure that you back that up with confirmation with an actual distributor who can show you how they do it. Take it from someone who got stung.
There are some limitations with what you can do with the standard P-21….so I’d look around.
Plumbing/Electrical Distributor OHIO
Jim,Burt,Bill and Fred…Thanks for all the heads up. Interesting read, especially about the branch setup problems.
We are looking at a technology provider that has what we think is a longer view.
Bill W.
OKC
Boy can we all gripe about our purchases and installs. My guess is we all made mistakes along the way.
Nine years ago I thought I had the absolute best technology that we could buy. Now we need to adapt and connect to every type of app that is on my hand held smart phone.
John
OH
The Epicor problem is the lack of financial management. My old Prophet system works and right now that’s ok.
Some of the problems were us and other are on Epicor.
I just don’t think that Epicor will be around much longer. Could be wrong. But….
Junk bonds to pay their lender???? Come on.
Connectivity for social media and mobility right now is not there.
They (Epicor)start offering P21 and then switched Eclipse. Their debt load makes me nervous.
So I called Epicor trying to gain a level of trust and confidence…didn’t do either.
I pity some of my friends who are on a Epicor product.
I just don’t know who will own Epicor next week and that is a problem for me.
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