ERP Vendor Introduces New Windows-Based System to SMB Manufacturers

by Dan Burger

Start with the premise that most ERP systems are too complex and costly. Then take into account that many do not adequately cover the specific features needed by small and midsized manufacturers in tight supply chain circumstances. This sums up the lay of the land as seen by CMS, a company that has a customer base carved from midrange manufacturers running its ERP package on IBM iSeries servers. In the process CMS has learned that some people will never want to run on the iSeries.

That's why the Toronto-based company introduced an almost identical ERP system for Windows servers during the APICS conference in San Diego. APICS is a professional organization focused on production and inventory management, with nearly 60,000 members worldwide.

The market for ERP systems is far different than it was five or six years ago. "Changing customer demands is driving people to buy ERP today," says Brian Angle, vice president of sales at CMS. "Manufacturers want serialized barcoded labels on their shipments. They want to be able scan those shipments with an RFID (radio frequency identification) gun and integrate the shipment information into an EDI transmission. They want total traceability, so if there is a problem six months from now they can identify the source of the problem and know what other products could be affected by the problem." To its credit, CMS has focused its ERP strategy on the demand-driven supplier network, as well as the customer network, and has strong warehouse management and supply chain management functionality.

"In the discussions about ERP solution choices, the operating system platform doesn't get the discussion that a lot of people think it does. The last thing people do when evaluating an ERP package is look at the hardware configuration. It's like the color of ink you use on the contract; it's pretty irrelevant."

Conversely, for organizations committed to the Microsoft .NET framework, CMS now has a product that meets that requirement. The reality of the market is that people like the Microsoft user interface and environment.

Angle describes the ERP solutions market as being predominantly made up of large horizontal vendors that try to be everything to everybody. He points to PeopleSoft, SAP, and Microsoft's Great Plains division (now called Microsoft Business Solutions) as examples of the complex and costly systems that lack the functionality provided by the CMS solutions--m5 for Windows and i5 for iSeries. Those well-known, tier-one packages, Angle says, are used by banks and hospitals as well as manufacturers and distributors, and they build an architecture that relies on third-party plug-ins to provide functionality for vertical niches. His contention is that a general-purpose horizontal ERP solution does not include such functionality as unique order processing, barcode labeling, EDI, advanced container management, and maintenance management.

Cost-of-ownership is affected by having multiple third-parties. Dealing with multiple vendors puts pressure on IT departments to manage all the elements, and may require more staff to do so. It's not uncommon to find installations that have one vendor for financials, another for warehousing, another for barcoding, and yet another for EDI, with no supplier management in place, Angle says.

Those systems are more expensive to implement and manage. It creates a more expensive long-term ownership, Angle points out. He uses Great Plains to illustrate a slightly different point of view. "Microsoft is taking the approach that the customer gets a custom install each time," he says. "With Great Plains, they are not providing source code. They have the business partner modify and make changes. This requires the business partner to be constantly on site and working with the customer."

CMS m5 was designed to include the same functionality as CMS i5, and it benefits from the years of development put into the iSeries product. For instance, CMS i5 added multiplant processing in Version 5.0, but CMS m5 will have it engineered on day one. The user interface on CMS m5 is highly configurable. Its wizard-based configurator surpasses the interface on CMS i5, providing a real benefit to order processing procedures where many variables such as product size, shape, and color factor into numerous product options. Angle says that the configurator will be added to the CMS i5 product next spring.

Another nice feature of the CMS m5 user interface is the capability for a user to have a variety of fields on his screen at any given time, along with the capability of individually turning them on or off. It is designed to accommodate multicompany, multifacility, multilingual, and multicurrency situations.

CMS m5 is engineered from scratch specifically for .NET, and its functionality closely matches that of CMS i5. It currently includes modules for financials, inventory, product costing, EDI, purchasing, and order processing. Additional modules: phase one manufacturing and collections are scheduled for release in January. Phase two manufacturing, which includes maintenance management, quality management, and estimating and quoting, will follow at an undisclosed date. Within an 18-month period, Angle says both products will have identical functionality.

To run CMS m5 will require a Windows-based server running Windows 2003 and SQL Server 2003. A low-end server might be adequate if only a few users are on the system, but a multiprocessor unit is in order if there are 100 or more users. A "standard server" system, for example, could be thought of in terms of a single processor and three drives, including a tape drive running antivirus and back-up software. Other purchasing considerations would include broadband connectivity, a firewall, RAID5, and data safety issues.

Introductory pricing on CMS m5 comes in at under $50,000 for a 20-user license. That's approximately one half the price of the CMS i5 product. Angle says the introductory price will probably be adjusted in mid-2005, making it a bargain for early adopters.

If CMS is correct in its assessment of what the small and midsized manufacturer and distribution company wants in an ERP application, its single-vendor, vertical niche strategy should serve them well with IT departments that favor either iSeries or Intel-based servers.

"I compare our iSeries and Windows customer relationship to the election," Angle jokes. "You have good, smart, successful people on opposite sides. One is going to be an adamant Democrat and one an adamant Republican. You can't change people's mind when they are adamantly in favor or one or the other, but you want to make sure you have something that makes both sides happy. Is IBM the Republican and Microsoft the Democrat? You decide. I want to make sure I have a good solution for each. You can talk until you are blue in the face to folks who are committed to their beliefs and never convince them to change sides."