ERP_Software_In_The_Multichannel_World by NiceTime

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									Title:
ERP Software In The Multichannel Wor
ld

Word Count:
1686

Summary:
Multichannel business managers freq
uently voice the desire to have one
 system or software package that is
 capable of managing the entire ent
erprise, encompassing all functiona
l areas. Enterprise resources plann
ing (ERP) systems have been availab
le for years. Because the multichan
nel phenomenon_traditional brick-an
d-mortar businesses reaching into d
irect marketing, and traditional di
rect-to-customer companies developi
ng brick-and-mortar stores as well
as a Web presence_is so r...
  Keywords:



Article Body:
Multichannel business managers freq
uently voice the desire to have one
 system or software package that is
 capable of managing the entire ent
erprise, encompassing all functiona
l areas. Enterprise resources plann
ing (ERP) systems have been availab
le for years. Because the multichan
nel phenomenon_traditional brick-an
d-mortar businesses reaching into d
irect marketing, and traditional di
rect-to-customer companies developi
ng brick-and-mortar stores as well
as a Web presence_is so recent, it
has in many cases outstripped the a
bility of software vendors to keep
pace.

Having a single computer system con
trol all functional areas in a busi
ness and use a common customer, inv
entory, order, and item database ma
kes perfect sense, and the potentia
l synergy between channels and the
ability to maximize the customer ex
perience are clear opportunities. U
nfortunately, the search for and im
plementation of such a solution has
 frequently proved difficult.

The push to provide an overall mult
ichannel solution has generally man
ifested itself in two ways. Traditi
onal ERP vendors, whose genesis was
 in manufacturing, have tried to de
velop functionality geared to the s
pecific needs of multichannel compa
nies. Existing niche vendors in the
 direct-to-customer or retail world
s are trying to broaden their offer
ings to include more functional are
as and look more like true ERPs. Bo
th approaches have met with limited
 success so far. In general, niche
or best-of-breed solutions fit more
 complex environments, while the ER
P solutions better fit the very bro
ad but less complex environments.

Size matters
There are many interpretations and
definitions of _ERP_ floating aroun
d. One of the clearest is that an E
RP is a business management system
that integrates all facets of the b
usiness, including planning (mercha
ndise, staff, growth), manufacturin
g, sales, marketing, inventory cont
rol, fulfillment and replenishment,
 customer service, finance, and hum
an resources. The system attempts t
o integrate all departments and fun
ctions across a company into a sing
le computer system that serves inde
pendent departments_ needs.

Many existing ERP packages are gear
ed to larger businesses with multin
ational or broad business control n
eeds. Many ERP systems have come fr
om the manufacturing world and are
now being developed to handle the v
ery different operational requireme
nts of the multichannel retail worl
d. The relatively unique and comple
x nature of multichannel retail, co
mbined with the large numbers of sm
all and medium-sized multichannel b
usinesses, has helped to create a v
oid between traditional, deeply fun
ctional niche systems vendors and t
he functionality provided by ERP ve
ndors. Finding an ERP solution with
 deep niche functionality geared to
 a medium-sized multichannel busine
ss can be an enormous challenge. Bu
t conversely, finding a niche playe
r with deep functionality that can
manage an entire multichannel enter
prise is an equally difficult propositio

Recent ERP market trends
ERP vendors face several obstacles
in their effort to address the oppo
rtunities seemingly presented by th
e multichannel business market. The
 focus of ERP marketing has traditi
onally been on large companies will
ing to invest significant funds.

ERP vendors trying to enter mid-tie
r markets in retailing have been me
t with resistance from potential cu
stomers concerned about the level o
f service attention they will recei
ve after implementation and about t
he lack of industry expertise on th
e part of the ERP vendors. There ar
e many examples of ERP implementati
ons failing_for many reasons. Consi
derations of scale, cost, and the t
ime required for implementation hav
e led to customer resistance to ERP
 vendors. Companies commonly fail t
o realize the level of discipline r
equired to implement and use an ERP
 successfully. Most ERP installatio
ns follow a _Big Bang_ approach, si
nce the functionality is usually fa
r reaching and encompasses many fun
ctional areas. Another drawback is
that the installation time for majo
r systems can be 12 to 18 months or
 even longer. (For example, two rec
ent installations of ERPs in the fo
od industry were so difficult that
the businesses missed major selling
 seasons and product sales were mon
ths behind schedule.)

A good fit for an ERP would be in a
 far-reaching company with somewhat
 basic requirements desirous of hav
ing a single system to fully integr
ate all company information and dat
a. Many ERPs are developing feature
s that acknowledge the need for nic
he software by making it easier to
integrate the two.

What about the competition? The she
er pace of recent acquisitions and
consolidations in the software indu
stry have made it difficult for nic
he systems vendors to effectively i
ntegrate suites of products into on
e unified approach with a clearly d
efined target market. Niche vendors
 who have deep, specialized functio
nality are beginning to compete suc
cessfully against the larger, more
all-encompassing ERPs in the mid-ma
rket arena. And a recent trend in t
he systems market is for multichann
el businesses to combine the niche,
 best-of-breed approach with an ove
rall ERP solution.
Enterprise solutions

SAP
SAP, the world_ largest business so
ftware company, has an ERP Retail s
olution that incorporates e-commerc
e with its customer relationship ma
nagement (CRM) solution that allows
  users to analyze sales by channel.
  For direct marketers who also util
ize catalog as a sales channel, how
ever, SAP seems to have a disconnec
t related to specific functionality
  that is needed for catalogs. The s
olution lacks the list segmentation
, source coding, catalog, drop, mer
chandise, square inch, contribution
  to profit functions required to an
alyze the success of mailing files,
  house and rented, and catalog prom
otions.

There are multichannel retailers, i
ncluding ones that sell through a c
atalog, that are using SAP but they
 are also using specific direct-to-
customer (DTC) software to set up,
manage customer orders, fulfill, an
d analyze catalog promotions.
SAP also has an integration product
, NetWeaver, with many different ty
pes of functionality, including the
  ability to link disparate systems.
  This would be one way to integrate
  sales from another application, su
ch as catalog, and have this data f
low into the SAP Retail solution fo
r merchandise analysis. However, Ne
tWeaver does not address a key elem
ent that catalogers measure, which
is demand. As SAP and other ERP sys
tems continue to evolve, in order t
o be true multichannel solutions th
ey will need to adapt their softwar
e to include the functionality that
  is needed by those multichannel re
tailers who have a catalog sales ch
annel.

SAP has another ERP software offeri
ng, Business One, for small to mid-
sized companies. With SAP_s acquisi
tion of Triversity point-of-sale (P
OS) software and its integration to
 Business One ,which also includes
an e-commerce module, a small to mi
d-sized company has a real solution
 to explore. Once again, however, i
f your company has a catalog sales
channel there is no specific functi
onality to support this sales chann
el. Since Business One integration
with Triversity is relatively new,
it will be interesting to see how i
ts catalog functionality progresses
 as new clients embrace this software.

Datavantage/CommercialWare
These two companies, along with the
ir parent company, MICROS Systems,
are taking a unified, integrated ap
proach to bringing together all of
their many retail and direct applic
ations. In 2006 CommercialWare, one
 of the leading direct-to-customer
software providers, was acquired by
 Datavantage. Datavantage is an ind
ustry leader in retail and point-of
-sale applications. Between these c
ompanies the objective is to fully
integrate their application suites
(CWSerenade, cross-channel and dire
ct; Xstore, JAVA-based, open standa
rd, database-agnostic; Enterprise J
AVA Merchandising, Web-based mercha
ndise management solution with merc
handise planning, purchasing, and d
istribution; Relate Retail, with CR
M functionality for marketing and l
oyalty clubs; XBR Analytics). Imple
mentation will involve a pre-planne
d set of parameters that will allow
 the user company to install an int
egrated set of applications more qu
ickly than best-of-breed applicatio
ns have been installed in the past.
 The company expects to have its fi
rst user live this summer. In the f
all, all of the related companies w
ill adopt the MICROS name.

Escalate
Escalate Retail_s vision is to cont
inue to develop specialized applica
tions with a focus on direct busine
sses, e-commerce, retail management
, and point of sale that can be imp
lemented either as stand-alone appl
ications or fully integrated. Conti
nued development of service-oriente
d-architecture (SOA) will allow Esc
alate Retail to develop functionali
ty, such as payment processing, shi
pping, pricing and promotions, that
  can be utilized by any or all of E
scalate_s suite of products. The ai
m is not to be a broad-based ERP ap
plication, but to be a best-in-clas
s application for multichannel busi
nesses with direct (Ecometry), reta
il (GERS), and e-commerce (Blue Mar
tini) channels that wish to enhance

								
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