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Softworld: Battle heats up for mid-market ERP

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25th Dec 2005
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Visitors to Softworld Accounting & Finance at the NEC, Birmingham on 20-21 October are likely to encounter intense competition for their attention from companies exhibiting mid-market enterprise resource planning (ERP) solutions.

Since the mid-1990s, ERP developers such as SAP, Oracle and PeopleSoft have dominated the financial software industry with huge application suites designed for the corporate market.

Now, it appears, suppliers are queuing up to bring similar facilities to mid-size UK companies. Established mid-market developers including Sage, Exchequer and Access are all adding ERP capabilities to their core products to serve the needs of vertical markets including manufacturing, construction, retail and non-profit organisations.

If you are already familiar with these products, then take some time to search out some less well known ERP developers. Topaz, for example is bringing new versions of its Topaz Financials and Topaz EMS systems to the Softworld event.

Topaz EMS is a combined payroll and HR offering that links to its companion Financials suite. Using analytical features in the underlying Microsoft SQL Server database, Topaz has added a Data Warehousing module to the Financials application allowing users to generate complex financial performance reports in minutes.

The developer has also forged links with products such as Tempest Time & Bill, which has seen it achieve success in the recruitment market.

Another ERP vendor to watch is Norwegian developer Mamut Business Software. Its application combines accounting with customer relationship management (CRM) and sales force automation tools along with modules for product management, project management, logistics, e-commerce and HR (including payroll). All of this can be yours for just £399, plus £180 per user per year maintenance.

Mamut Business recently passed the examination required by the ICAEW's product accreditation scheme and impressed reviewer John Oates, the information systems partner with Baker Tilly.

"Mamut Business Software is a very user-friendly, integrated business administration package that is likely to be popular with many small businesses in the UK as it has been in mainland Europe. It is competitively priced yet offers an impressive array of functionality in a single product," he said.

The ICAEW certification confirms that Mamut Business Software complies with UK legislation and regulations relating to accounting systems.

Hansa is another Scandinavian developer worth watching. Its HansaWorld Enterprise family can run on PCs, Macs and Linux systems and provides a huge variety of modules including core financials, document management and specialist applications for restaurants, point of sales, time billing and job costing. Version 4.2 will be unveiled in Birmingham.

Old industry hands often complain that the market is too crowded for so many developers to survive and that a big shakeout is looming on the horizon. But they've been saying that for years and every time Softworld comes around, there are almost always new ERP product families to review.

In his recent series on ERP software selection, IT Zone consultant editor David Carter argued that there is life beyond Microsoft Business Solutions, Pegasus, Sage, Oracle and their like.

"Just because these are the only names that people talk about, they are not the only suppliers you have to choose from," says Carter. "It is well worth seeking out some of the smaller, independent suppliers. You will find that talking to them opens your eyes to what is possible."

He also warns not to fall into the trap of thinking that you can't get a decent ERP system for less than £10,000.

"Software pricing is peculiar. While a software package might be priced at £100,000, the marginal cost of a single copy is only a few pounds ' the packaging, disks and manuals. All the cost lies in developing it in the first place.

"In practice the price of software is simply what the market will bear, and that in turn usually depends on the price of the hardware. The more expensive the hardware, the higher suppliers can set the price of the software. A software package can often be as good as or better than another package that costs twice as much. If the supplier looks good, and you've met some of their customers and they are happy, go for it."

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Replies (5)

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Dennis Howlett
By dahowlett
24th Sep 2004 16:48

Software pricing - again
Dear oh dear Mr Carter - you really do miss the point about the market. It simply is not true that software pricing is largely dependent on the platform - it MAY be true in relation to maintenance and it MAY have a part to play in relation to TCO, but it certainly is not the major factor and hasn't been so for some years now.
If it was true that all software is the same then you would have a point but the truth is that all software is not the same - not by a long stretch. That's why we have a global industry estimated at $18 billion and hundreds (if not thousands) of players...and in all the years (21+) I've been consulting in this area, I have NEVER seen anyone who put price as their first question on an ITT/RFI.
But...that's not to say that software companies cannot develop innovative pricing models - it's just that it hasn't been done to any extent where users get excited enough for it to become a disruptive force in the market place. That may change - watch this space - as they say.

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By David Turner
24th Sep 2004 17:38

To our friend from Oracle...
as we all know in the sector, it is alleged that you can get 50 users of Oracle financials for free if you buy the database. Sorry, not free - for £1. But then allegedly, many companies have spent literally millions on implementation (and then sometimes failed)... maybe you get what you pay for!

But as Dennis says, there are many software suppliers and much richness in diversity, and long may it live... unless Larry gets his way!

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By David Carter
24th Sep 2004 14:18

Am I missing something?
Neither of the comments made by Dennis Howlett and David Turner seem to me even to address the points I made about software pricing, let alone to refute them.

The fact is that the price of a software package is determined largely by the cost of the hardware and operating system it runs on. Buyers should not assume that because one package is more expensive than another, it is necessarily any better.

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By David Turner
23rd Sep 2004 12:42

Isn't it funny how journalists...
like to point out that software just costs the price of cutting a CD. Do they go into Starbucks and argue that the cost of one more cup of coffee is just a few pence, so that's what they'll pay for it?

Dennis is absolutely right; and the exclusive focus on up front licence cost has led hundreds of organisations into all sorts of disasters - highly costly implementations that never deliver; products that don't get properly supported; products that don't have the investment in R&D to keep up with changes in legislation and technology, as so on...

The reality is that the finance function today is under greater pressure than ever before, with increasing legislation, pressure to keep the cost of admiinistration down, and the need to support the business like never before. Developing and supporting software to support this complexity is not easy and is not cheap. But a pure focus on licence price won't take that into account.

Interestingly, picking up on Dennis' point on alternative licensing, we offer all sorts of innovative pricing but find that almost all buyers end up wanting 'traditional' cost per user/seat pricing.

Dave Turner, CODA

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Dennis Howlett
By dahowlett
23rd Sep 2004 11:54

Software pricing
Sorry David but I completely disagree. Licencing is a lot more complex than a combination of 'what the market will bear' and the cost of development. Software is a lot more than debits on the left and credits on the right. It is now a case that all but the smallest SME customers want much more than a transaction recording engine - you could do that with virtually anything. Today's products are incredibly complex with highly sophisticated capability that delivers value well beyond the finance department. Also, a number of players have developed best practice process solutions that meet industry specific requirements. These cost money, require domain expertise and carry a rightful premium that is more than offset by the value delivered. And that's before we get to discuss scalability and reliability...
Hsving said that, there is a strong case for alternative licencing models that would be more attractive to buyers but the case for that has yet to be made in earnest.

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