Midrange Stuff, OS/400 Edition

Have you heard the story about the company that just bought its first iSeries? Probably not. IBM doesn't draw a lot of attention to any specific platform ever since it went down the eServer road. But the conversion of any company from "the dark side" to the iSeries will usually bring the loyalists to their feet like a home run in the bottom of the ninth.

The iSeries is hitting home runs, albeit out of the bright lights, in what you might call a league of their own--manufacturing ERP. It's a field where the iSeries continues to shine against its competition. One of the reasons is a relatively small ERP vendor by the name of CMS Manufacturing Systems.

It makes sense that an ERP vendor could demonstrate the value of the iSeries. What's a bit surprising is that in a field of giant, tier-one companies, it's a company like CMS that stands out.

In the first quarter of 2002, CMS persuaded eight new customers to become first-time OS/400 users. One of those companies during the next 18 months plans to install 35 iSeries boxes in factories around the world. Since its inception in 1986, CMS has sold nearly 400 iSeries systems, primarily to small and midsize companies. "As time goes on, a higher percentage of our customers are new IBM accounts," says CMS vice president of marketing and sales Brian Angle.

"One of our recent sales was to a company—Tinnerman Palnut Fasteners in Brunswick, Ohio—that replaced Oracle." That company, Angle says, had spent billions putting in, customizing, and struggling with an Oracle implementation. With CMS400 and the iSeries, Angle says, this new customer received more function in a single package, with a much lower staffing requirement. Additionally, the factories were able to complete the implementation in one-fourth of the time they had devoted to wrestling with the Oracle solution.

CMS' accomplishments have not gone unnoticed by the top echelon of iSeries brass. At the COMMON conference in April, General Manager of MidMarket Servers Buell Duncan and iSeries marketing vice president Kim Stevenson presented Rudy Joss, president and founder of CMS, with the Eagle Award, which recognizes outstanding achievements by iSeries international business partners.

"The way to sell AS/400s (iSeries) is to lead with it," Angle says. CMS only runs on iSeries, and Angle surmises that people are buying iSeries because CMS shows them why its product only runs on the iSeries. In brief, Angle's explanation covers the reliability issue, the lowest cost of ownership, and then he says CMS provides "a list of happy customers—in the same type of business—who until recently never thought of using the iSeries."

It's interesting to note that IBM has made a great effort over the past four to five years to recruit ERP companies that agree to port their products to the AS/400. CMS runs up against these companies in competitive sales situations. "The reality is that most of those companies are not selling the AS/400s," Angle says. "In the case of Navision, it amounts to sending out an [Windows] NT dealer to make the sale. Why would they [the Navision sales team] bring up the iSeries? They probably don't know how to implement or support one. They have no customer references."

CMS is in a niche market—manufacturing. About half of its customers are in automotive-related manufacturing. Angle describes the market as companies that are operating in a very tight supply chain relationship with a focus on issues such as electronic data interchange, barcode labeling, and stringent quality control. Tight margins are the rule, and IT solutions that provide inexpensive implementation and low staffing requirements are noteworthy. CMS is riding the coattails of a change in perception about the IT marketplace, namely that it's not the software and computers that cost the most money; it's the staff that is expensive in the long run.

"The AS/400 dovetails very nicely with the customer mindset—everything is in a single, integrated system," Angle says. "You don't need to buy multiple parts and pieces from different vendors. You don't need the overhead staff." Angle says the ease of management issue plays well with manufacturers, as does the elimination of multiple maintenance agreements with multiple companies that is afforded by CMS400. The cost of ongoing contract programmers and outside consultants to keep a solution running knocks out a lot of ERP vendors in the manufacturing segment.

For the most part, CMS is delivered without tier- or user-based pricing. According to Angle, 95 percent of the customers buy unlimited user licenses. "Once you buy CMS, you've got it for life," Angle says. "Every time we bring out a new module, the user gets it at no additional charge. We're not a company that is going to nickel and dime you to death." He says 90 percent of CMS license fees are from new accounts, not from new fees to existing accounts. One exception, he notes, is if an existing CMS customer acquires its largest competitor. In that case the new people would require licensing.

Unlimited licensing fees include all the modules in the CMS400 suite and all subsequent upgrades. In December 2001, Version 5.0 of CMS400 was released with more than 300 enhancements.

Since the December introduction of 5.0, CMS has also added four new features to CMS400. Those enhancements include a Domino-based event monitor that provides an automatic alert to both on- and off-site users when specified events have transpired, and a Java tool kit that includes three new products designed for shop floor personnel.

The tool kit contains a drag-and-drop, spreadsheet-oriented whiteboard scheduler; a bidirectional lot-tracking tool, which identifies products that contain problem materials; and a shop floor dashboard that has icon representation of every machine on the floor and provides a snapshot of how well the shop floor equipment is running.

In this manufacturing business, the answer to "How well are you running?" has a lot to do with the AS/400, DB2, and CMS400. Ask the converts for their opinions.