Jeeves—Thriving Organically as a Humble Servant

Jeeves—Thriving Organically as a Humble Servant
P.J. Jakovljevic - April 17, 2006

1.	Introduction
2.	Jeeves Who?
3.	Product Development Focus

Introduction

The maturing enterprise applications market should not overlook the lesser-known vendors which deliver the requirements users are increasingly demanding, such as interoperability, or intuitive interfaces. For more information on this market trend, see Driving Factors in the Enterprise Applications Market. Prominent among these small specialist providers is Jeeves Information Systems AB (JIS), based in Sweden. In essence, Jeeves develops and supplies flexible and technologically advanced business systems. This is meant to enable smarter business practices (bringing to mind the “Jeeves knows the answer before you know the question” motto) for enterprises in the manufacturing, wholesale and retail, and service and maintenance sectors. This note elaborates on the discussion begun in Competition from a Small Vendor.

The company was founded in 1992 by Assar Bolin, and was reportedly the third enterprise resource planning (ERP) system developed by the visionary. The flagship Jeeves Enterprise product was first installed in 1995. Today, the vendor has about 1,200 corporate customers and more than 20,000 users (not including some recently acquired products), and the company has been publicly traded on the Stockholm Exchange O-list since 1999. Bolin relinquished the chief executive officer (CEO) role in 2002, although he remains as an executive board member and product development leader.

This is Part One of the series Jeeves—Thriving Organically as a Humble Servant.

Until its recent acquisitions, which we’ll look at shortly, Jeeves’s business model was exclusively indirect, since most of its employees were working on product development. Its revenues are thus sourced from licensing and maintenance fees. Sales, installation, modification, and servicing are effected through nearly 400 partner professionals worldwide, which gives Jeeves a presence in about 50 locations in 18 countries, primarily in Europe. Jeeves’s partners are represented in twenty locations in Sweden, which remains its breadwinning market.

Jeeves Enterprise’s main product is a broad-ranging business system aimed at small to medium-sized businesses (SMBs). These SMBs have between 10 and 1,000 users, in both Microsoft Windows client/server and web environments, making the business system a good e-commerce platform. The system is built on Microsoft Windows NT/2000/XP/2003 and Microsoft SQL Server technology platforms, and includes a range of functions, from accounting, production, logistics, field service, and time and project management, to customer relationship management (CRM) and supply chain management (SCM), as well as workflow management and document processing. This plethora of different applications comes with preconfigured integration. The suite was built from scratch to support multitasking and multirecord keeping and integration. The latest additions and enhancements to the application suite are the product configurator, workflow, e-commerce, human resource management (HRM) and electronic document management (EDM) modules.

As a factor in its success, Jeeves cites its long readiness to harness the Internet. It will continue to embrace Internet technologies, including web-based client interfaces and device-independent interfaces. Jeeves products for collaboration, e-commerce, workflow, and HRM are largely founded on Internet-based technologies like Java 2 Enterprise Edition (J2EE) and Microsoft.NET. On the technology side, Jeeves Enterprise embeds a flexible user interface that enables custom design and a proprietary macro language, for customer modification and integration with other systems. Additionally, the product’s distinctive design (which will be described later on) retains all customer modifications when upgraded. Reportedly, for all the above reasons, Jeeves’s customers are highly loyal. Since Jeeves’s inception, there has been (on average) an annual customer defection rate of 1 percent. These defections have occurred primarily when fundamental conditions have changed beyond Jeeves’s control, as in the case of mergers and acquisitions (M&As) or liquidations. Loyal Jeeves users are characterized by their need for a system which is quickly and easily adaptable to changes in processes and demands.

In the fall of 2005, the vendor announced that Jeeves Enterprise was fully integrated with Microsoft Office 2003, using Microsoft Office Smart Client, the new technology that Microsoft had recently developed for integration of Microsoft Office with third-party vendor business systems. This made Jeeves Enterprise one of the first business systems in the world to be completely integrated with Office.

Jeeves Who?

Understandably, some might question the motivation for talking at great length about Jeeves, because of such apparent weaknesses as its marginal market share in the global scheme of things. After all, many (at least outside Sweden) are likely to associate the name of the company with P.G. Wodehouse’s famous butler character, or at best with the renowned AskJeeves search engine and portal. Indeed, it should be noted that, with less than $10 million (USD) in annual revenues, Jeeves still operates at a far smaller scale than many of its competitors, and its partners often call Jeeves the best-kept secret in the industry. Only time will tell whether, to what extent, and where the vendor will make the secret known. In the midterm, the vision for Jeeves is to become the top choice in business systems selection tenders, not only in Sweden, but in the whole of Europe.

Yet there are several reasons for us to look at Jeeves, starting with its ongoing stellar financial performance, which some might confuse (or nostalgically associate) with the ERP market salad days of the late 1990s, which are yet to be repeated in earnest in the somber 2000s. The company has been growing constantly ever since its inception, and has also been very profitable since 2002, outperforming almost every competitor (including mighty SAP) in terms of some financial metrics like revenue, or profit per employee.

For instance, in 2004 Jeeves won 110 new customers, whereas turnover grew by approximately 13 percent to 57.5 million Swedish krona (SEK) (about $8 million [USD]), with a 10.4 million (SEK) (about $1.5 million [USD]) profit. Profit grew an impressive 76 percent year over year, which to some extent compensates for the fact that Jeeves fell short of its ambitious sales growth objective of 15 to 20 percent (well above the market average, in any case). By way of consolation, its 18 percent profit margin vastly exceeded its profitability objective of 10 percent. Moreover, Jeeves shares gained 104 percent during 2004, and by December reached the initial public offering (IPO) price of 1999, a milestone shared with very few information technology (IT) companies. At the time, this made Jeeves shares the best-performing IT shares of the twenty-first century on the Stockholm Stock Exchange.

This trend has continued throughout 2005, during which most of the Jeeves markets have shown signs of improvement. This includes Sweden, its single largest market, which has shown both increased sales and improved business prospects. Revenue for 2005 increased by 45 percent, to 94.1 million (SEK) (about $12.5 million [USD]), of which approximately 83 percent consisted of licensing and maintenance revenues, which showed a whopping 54 percent annual increase. The revenue contribution from Microcraft’s Garp product, which was acquired in March 2005, was 20.4 million (SEK) (about $2.7 million [USD]), and the mother company share was the remaining portion. Profits after tax amounted to 9.2 million (SEK) (about $1.2 million [USD]); Microcraft’s contribution was 3 million (SEK) (about $400,000 [USD]), and the mother company share made up the rest, reflecting a merger of kindred, independently profitable parties with similar corporate cultures.

Based on current market trends, Jeeves’s board recently maintained a forecasted goal of a 10 percent net margin, and an organic increase in software revenues of 15 to 20 percent remains. Prior to acquisition by Jeeves, Microcraft had 36 employees, annual revenues of about $3.5 million (USD), and nearly 1,900 customers. Microcraft has since become a fully owned subsidiary of Jeeves, and will initially operate independently in the market. This acquisition was a part of Jeeves’s strategy to expand its operations and strengthen its market position. Garp is one of the most successful business systems for smaller retail, distribution, financial services, and manufacturing businesses (with up to 100 concurrent users) in Sweden, while Jeeves has a corresponding position for medium businesses. Both of the merging companies have the same, well-established partner model. They sell indirectly, via partners who conduct sales and implementation, and both remain product development companies, fundamentally.

Over the span of less than twenty years, Garp has developed into the third-generation, modern business system it is today, with a market-leading position in certain branches, such as the garment industry. Like its bigger Jeeves Enterprise sibling, Garp runs in Windows, and provides the opportunity to also use Linux/Unix as a server platform in the future. The two products have other features in common: user friendliness; several ready-to-use functions, procedures, and operational flows; short starting runs; and a system update philosophy which assures the quality of maintenance and administration.

Product Development Focus

This brings us to the fact that lately, product development at Jeeves has focused on development of an independent platform solution (in addition to the integration with Microsoft Office, as mentioned above), and on localization of the product for markets outside Sweden. To that end, in late 2004, Jeeves struck a strategic partnership with IBM, whereby Jeeves became a Premier ISV Advantage Partner to IBM. Accordingly, Jeeves joined IBM’s ISV Advantage Initiative, a program designed to provide independent software vendors (ISVs) with technical and marketing support to help meet specific SMB information technology needs. This worldwide program is designed to help software developers reach broader markets, lower their costs of doing business, and take their products to market faster. It is administered by PartnerWorld for Developers, the developer resource for IBM business partners.

Towards its goal of developing an independent platform solution, Jeeves will soon offer Jeeves Enterprise for Linux and IBM DB2 Universal Database, as a complement to the Windows platform. This will make the system much more transferable and independent. Enabling Jeeves Enterprise on DB2 Universal Database running on Linux and IBM eServers like xSeries and pSeries should indeed help both Jeeves and IBM to expand further into the SMB market. Prospective user companies will be offered the opportunity to be platform-independent, both on the server and on the client side, and will also have the possibility of changing platforms in the future. The IBM DB2 family includes products that are designed and priced specifically for SMBs—they are easy to install and manage, scalable to business growth, rich in functionality, and based on open standards to allow integration with existing software and hardware platforms (see IBM Express-es Its Candid Desire for SMEs). To expand its visibility in targeted vertical industries, JIS has also pledged to work closely with IBM in various co-marketing and sales activities.

A Successful Player

The intriguing Jeeves formula for success, which will be explored in the next article of this series, has apparently been working well in an industry where many other players, if not most of them, fail sooner or later. Till the recent Microcraft Garp acquisition, the basis of the vendor’ business concept had been unchanged since its founding in 1992. Namely, the vendor had faithfully retained the concept of having a single product with characteristic features: a high level of technological innovation; broad and reliable (bug-free) functionality; and an open, integration-friendly architecture, which will be explained shortly. Garp is built on architecture similar to that of Jeeves Enterprise, and thus, in the midterm, Jeeves expects to be able to coordinate technology and product development for each product. Later, however, the aim is to have one source code for both, without either of them having to be replaced or discontinued.

Jeeves’s strongest market by far is the domestic market in Sweden, which is known for its functionally and technologically fastidious and forward-thinking users, and also for a number of other excellent domestic products, such as Intentia, IFS, and IBS. “Imported” products such as Microsoft Dynamics NAV and AX (formerly Navision and Axapta), Unit 4 Agresso, Exact Software, Visma, Hansa, XOR Control, Tieto Economa, Maconomy, Oracle, Epicor iScala, and SAP are not to be neglected either. The mere fact that Jeeves has a significant market share in this market (which constitutes 85 percent of its revenue) should tell us that the vendor has been doing something right.

According to DataDIA’s recent independent research, Jeeves has about 900 corporate customers (about 14,000 users, not counting Garp), and has the largest market share in Sweden for enterprises with less than 1,000 users. This impressively outperforms several higher-profile products such as Intentia Application Suite (IAS, formerly Movex), iScala, SAP, IBS, IFS, and any legacy systems developed in-house. Along with this Swedish domination, Jeeves Enterprise is also an international product, with sales in another thirty countries, most of them in Europe. In Sweden, 46 percent of its customers are in manufacturing, 30 percent are in wholesaling and retailing, and the remaining percentage are in service and maintenance. SYSteam is the largest domestic partner, with six subsidiaries accross Sweden.

The most important markets outside Sweden are the remaining Nordic countries, France, Slovakia and the Netherlands, all of which amount to about 180 systems (26 installations are in the US, India, and Asia). As in the other western European countries, these important markets are mature, with an abundance of competing products (much like the Swedish market). Yet in eastern Europe and among the new members of the European Union (EU), Jeeves is anticipating a growing market, and has particularly invested in Russia and Poland since early 2004. It takes time to build a well-functioning partnership, but the effort is now starting to pay off; Jeeves is increasingly well-known in those markets, where growth is expected to reach 20 percent per year (compared to a measly 3 percent for the western European countries, and compared to similar growth in North America). A large part of the effort in Russia and Poland has gone into localizing the product.

With a presence in Belgium, France, Germany, Holland, Ireland, the UK, Sweden, Norway, Finland, Poland, Slovakia, Russia, Turkey, Singapore, and the US, Jeeves has lately been striving to strengthen its position as a leading supplier of ERP systems in Sweden and western Europe, while also expanding in the US and eastern Europe. As mentioned above, besides the product itself, Jeeves’s business model revolves around partnerships built on specialization at every stage, and recently the existing partners have generally had prosperous years with Jeeves. Also recently, the vendor has worked to further enhance and strengthen its partner cooperation, whereby a dozen or so new partnerships have been established, a significant majority of which were international. Jeeves has accordingly restructured its organization and business processes to improve its training ability and to quickly leverage new partnerships.

Internationally, the partnership structure is critical to boosting sales, and focused efforts in Poland and Russia in particular have lead to several new partnerships. Consequently, Jeeves expects visible sales results in the foreseeable future, primarily in Poland. The Russian market has great potential, but localizing the product there has provided a greater challenge than expected, and we may have to wait until at least late 2006 before any sales breakthrough is seen. Since the product was localized in the Slovakian market a few years ago, over twenty replacement installations have been made by the partner Softip to their own existing clients. Another promising venture, as mentioned above, is a completely new partnership agreement in France, signed in April 2005. Together with this partner, Jeeves has established a co-owned French company to drive sales in cooperation with local French partners, with direct access to clients. As France is Europe’s second-largest market for business systems, the potential is vast, and sales have reportedly already started.

This concludes Part One of the series Jeeves—Thriving Organically as a Humble S

The Formula for Product Success: Focus on Flexibility and Cooperation
P.J. Jakovljevic - April 18, 2006

1.	A Pleasing Product, for Starters
2.	Benefits of “Modify It Yourself”
3.	The Technology Platform

A Pleasing Product, for Starters

This note, which elaborates on the discussion begun in Competition from a Small Vendor, began with Jeeves—Thriving Organically As a Humble Servant.

This is Part Two of the series Jeeves—Thriving Organically as a Humble Servant.

One pillar of the success of Jeeves Information Systems AB (JIS) is the way it has developed its main product from scratch. While most competitors work painstakingly to rewrite or merge their many (often recently acquired) complex and rigid systems, Jeeves has always had a product with built-in open and flexible architecture. Recent studies by an independent market research company, DPU Research, show that Jeeves Enterprise repeatedly receives the highest rating among European users in terms of ease of use, value for money, functional breadth and depth, and so on. Jeeves Enterprise tries to emulate the user thought process, and to accommodate multiple ways of building systems, according to needs. It is modular, flexible, and customizable, with an integrated, broad-scoped, functional footprint catering to many business processes and industries.

Often, Jeeves can match requirements without the hefty price tag usual for the industry. Its modular structure, with preconfigured modular integration, enables users to pick exactly what they need, when they need it, without having to pay for unnecessary features. Other notable characteristics include a web interface for the entire product, integrated workflow management (with escalation capabilities), and full search capabilities. The product also supports multiple records and companies, and eighteen languages. There is only one version of Jeeves Enterprise, for all markets and all languages. Although the system is multilingual, administrators can change the language for the whole system with one click on a menu option.

As its name might imply, Jeeves aims to please—the system can easily be adapted to existing (or future) business processes. To that end, the product contains a single location for all user customizations, and unless users have played with what they were not supposed to play with (meaning source code), the vendor will never alter these customizations when enterprises upgrade to newer versions.

In sharp contrast to the older peer enterprise systems commonly used today, all adjustments and adaptations are kept separate from the core system in the Jeeves site repository. The purpose is to make the system easy to install and upgrade, and at the same time, easy to integrate, through its open architecture. All business data, business logic, and customizations are stored in the database in the form of structured query language (SQL) procedures, whereby for every table there is a trigger which makes consistency checks on all data fed into the database. This open architecture enables users to integrate and communicate with other systems via Microsoft-compatible technologies like dynamic data exchange (DDE), open database connectivity (ODBC), object linking and embedding (OLE), ActiveX, extensible markup language (XML), and so on.

The distinctive construction of the interface makes all information searchable, in all fields, in any combination of fields, and on multiple levels, without limits. Jeeves’s business model is based on the ability of partners or customers to modify the system themselves. Accordingly, the modifiability is embedded in the system. This is one of the system’s prime strengths, and in many cases, it represents the system’s superiority over competing systems. Jeeves Enterprise’s macro language is the key to its modifiability, and through use of this tool, unique modifications and new functional capabilities can be developed. Cosmetic modifications which have recently become easier to implement (without having to resort to touching the source code) include the addition of designing forms, drop-down lists, reports, and user-specific functions.

Smart design, with source code availability (if required) and a macro language, makes it easy to change or develop business logic. In an ever-changing environment, this is vital for almost any business aspiring to agility, as it allows them to maintain flexibility and minimize consulting hours. If users are accustomed to another system, Jeeves can even imitate the incumbent user interface and workflow, thus minimizing additional training costs. The user interface can be tailored according to what the customer is accustomed to. This is a strength that has emerged progressively, and that has been recently enhanced. The long-term objective is to be able to mimic other systems entirely. This opens up major opportunities, given that businesses can thereby swap their old systems for Jeeves without extensive training initiatives or organizational involvement. Moreover, with all business data, logic, and customizations being stored separately, specific modifications migrate automatically during upgrades. This means that the costs and efforts coincident with upgrades can be minimized, while retaining numerous integration opportunities.

A Pleasing Product, for Starters

This note, which elaborates on the discussion begun in Competition from a Small Vendor, began with Jeeves—Thriving Organically As a Humble Servant.

This is Part Two of the series Jeeves—Thriving Organically as a Humble Servant.

The Technology Platform

The system’s technology platform, which provides the foundation for the wide assortment of modules in Jeeves Enterprise, currently consists of a Microsoft Windows NT/2000/XP/2003 operating system and a Microsoft SQL Server database. The focus on a 32-bit application based on the Microsoft standard has so far been successful, since it provides an inexpensive, mass market platform, with a solid relational database. But as mentioned in Part One of this series in connection with IBM, the idea is to expand the platform choice to Linux in the next version of Jeeves Enterprise. The current database is distributed (with a two-phase committing process), and responsive (all business logic is handled by stored procedures; there are triggers for consistency checks on all data fed into the database, and a separate site repository stores adaptations).

Additionally, by using native online analytical processing (OLAP) capabilities in Microsoft SQL Server, or by using other business intelligence (BI), software users should have solid analysis tools. Recently, Jeeves entered into collaboration with a fellow Swedish BI provider, QlikTech, whereby Jeeves Enterprise will be extended with a new analysis tool, Jeeves Business Intelligence, which should simplify analysis and reporting for Jeeves customers. This tool introduces new conditions regarding data analysis; built on patented technology, it gives the user unlimited access to analyses of large amounts of data. Dimensions and output can be changed in a matter of seconds, and the response time is virtually instantaneous. Some Jeeves customers, such as Ridderheims Delikatesser, Mora of Sweden, and HL Display, already use QlikView for analysis and follow ups on purchases, deliveries, invoicing, and various business ratios. Jeeves Business Intelligence will be sold via Jeeves’s European and US partner network.

Furthermore, server configuration is scalable as needed. As all modules are Internet-ready via low-bandwidth transmission control protocol/Internet protocol (TCP/IP) communication, users can access the system via a two-tier fat/rich client at the office, a three-tier thin client for in-house or remote connection, or a web interface.

The vendor has also integrated a native security system for both data integrity and data protection, in order to keep all transactions safe. This system is also based on Microsoft-compatible security standards, although Jeeves admits that some customers have issues with the security of Microsoft products (and therefore with the future expansion to Linux as well). Security issues are handled at different levels, providing users with a secure environment (whereby data integrity is protected by database logic, or triggers), since the data in the database is secured by the Transaction Rollbacks feature in case of errors.

Data is transferred using a proprietary protocol based on TCP/IP, and compressed and encrypted with a 128-bit key. Additionally, all data communications are doubly secure, with (in addition to Jeeves’s own encryption algorithm), IDEA’s 128-bit secure sockets layer (SSL) algorithm, which is a symmetrical block cipher developed in Switzerland at Eidgenossische Technische Hochschule (ETH), the Swiss Federal Institute of Technology at Zurich. Also, Jeeves Client Broker secures Internet traffic routed via the firewall and proxy server, whereas Jeeves Access Control System handles user- and program-level security. The system can limit and restrict users with respect to data access, on the module, program, function, and field levels, while integrated security within the operating system provides single-sign-on capabilities too.

Differentiation in Focus

This brings us to another pillar of Jeeves’s ongoing success: its butler-like servicing and nurturing approach to partners and customers. We will explore the Jeeves vision of partnership in more detail in the final installment of this series. There is basically nothing to prevent its reselling partners from creating their own packaged ready-to-run solutions for industry verticals, as a platform for further adaptation to each individual client’s business. A considerable number of such industry solutions built upon Jeeves Enterprise are in fact available today. Thus, Jeeves might be offering the better of two worlds; that’s to say, a measured balance of packaged and adaptable solutions.

As Jeeves Enterprise is easy to modify, install and upgrade, Jeeves believes that it can replace virtually any other business system in its segment, while the converse is not very feasible. Indeed, a number of recent announcements from Jeeves refer to the replacement by Jeeves of some well-known competitive products, or to poaching partners from these vendors’ camps. For example, in 2005, eQstend Business Solutions GmbH chose Jeeves to target German manufacturing companies with a process-oriented enterprise resource planning (ERP) solution based on Jeeves Enterprise. Also in 2005, Jeeves and Belgian’s ICASA Consulting Group formed a strategic partnership covering Belgium and Luxembourg, regarding sales and implementation of Jeeves Enterprise (ICASA had chosen not to pursue Microsoft Dynamics NAV). Prior to that, Jeeves started a subsidiary in France and recruited several key top-ranking managers from Microsoft Business Solutions (MBS) to lead operations, which all goes hand in hand with one of the highest levels of customer satisfaction, and the lowest churn rate, in the market.

It is no big secret that focus is the key to the success of any business, but Jeeves’s notion of focus is in sharp contrast to the “entire applications value chain” or “as much as possible” approach that illustrates the business model habitually preferred by most of its competitors. Conversely, Jeeves prefers to focus only on product research and development (R&D) and sales support, while completely leaving lucrative sales, customization, implementation, training, and support to trusted and competent partners. This resembles the model of Lilly Software Associates (now part of Infor Global Solutions) and of the recent MBS Industry Builder or SAP PartnerEdge initiatives, albeit with Jeeves giving partners much more leverage to develop and own the intellectual property of their own tailored industry solutions.

The market Jeeves creates is nearly ten times the size of its own turnover, since partners with experience and skills operate critical links of the software value chain, such as sales, modification, and installation. These kinds of revenue scales and ratios could only be wishful thinking for other vendor ecosystems, not to mention for the internal competition amongst the hundreds of resellers covering the same market segments.

Additionally, since Jeeves protects existing solutions or product instances (all modifications are stored in the database and are not affected by upgrades; the practicality of this feature cannot be overemphasized), upgrades purportedly can take less than a day, with sufficient preparation. It might be sometimes easier and cheaper to switch to Jeeves Enterprise than to upgrade the existing system, which Jeeves believes puts it in a solid position to actively contribute to further consolidation of the industry. Extensive product development, with systems modified for a particular sector or type of business, is another trend which is going in the opposite direction of mere corporate-wide consolidation and system standardization (see Standardizing on One ERP System in a Multi-division Enterprise). At the very least, the software is well suited (future-proof) for replacing obsolete, internally developed systems. Accordingly, strong local or national players with large install bases and aged technologies could save product development costs by offering Jeeves Enterprise as an embedded original equipment manufacturer (OEM) product to their customers.

A Focus on International Markets

The vendor has made great strides towards creating a concept for a new market launch, which it hopes to be able to reuse in other countries. Although recognizing the daunting task of penetrating the crowded North American market (currently representing only several Jeeves customer sites), Jeeves believes there will be great opportunity there, albeit only in the long run. In Sweden the total turnover by all Jeeves partners comes to about $100 million (USD) annually, and there are 15,000 target companies in that market segment. Almost each US state is a bigger opportunity than all of Sweden, with the top two markets being California and Texas, respectively.

Jeeves North America, Inc (JNA) was established in 1997 and is a subsidiary of JIS. The vendor has other subsidiaries in Germany, France and Sweden (via recent acquisitions of Reveny and Microcraft). In addition to distribution, marketing, and sales support for partners, JNA markets and distributes Jeeves Enterprise on the US market as a master reseller, with reseller establishments in Orlando, Florida (US), which is where JNA’s headquarters are located, and in Chicago, Illinois (US). The subsidiary also provides services like project management, implementation support, training, and help desk support.

Globally, Jeeves Partner Group is a cooperation between the major Jeeves resellers, with the focus on users’ business needs and on increasing product quality. The Jeeves sales and implementation process is based on the premise that building relationships is the key to success. The group has adapted its project management model through years of extensive and successful implementations, with focus on quality throughout the whole process. The process starts with an initial contact, followed by a web-based demo, an on-site demo, and negotiations in case of a good outcome. Once the deal is closed, a preliminary study follows. And after that, there is project setup; technical installation; “power-user” and end user training; product configuration, modifications, customizations, or integration of conversions; and, finally, workshops and realistic (to the degree possible) live simulations. After going live in reality, there is usually support, along with continued process improvements (CPI).

The most important phase is the so-called preliminary study—an extensive analysis whereby Jeeves and the partner go through the user’s processes, requirements, and needs, so as to decide how Jeeves will best support business development. The starting point is a focus on the existing ways in which the user conducts business (for example, with respect to workflows or business processes, or with respect to areas which are functioning well or poorly). Then the focus shifts to the user’s goals for the future, whether they be strategic goals (what do we want to achieve?), or operational or tactical goals (how do we want to work?).

Finally, the preliminary study analyzes the relationship between Jeeves Enterprise and the solutions needed to achieve these goals. Perhaps the existing workflows in Jeeves and its assortment of functional capabilities (supplemented by the partner’s vertical solution) will suffice; or perhaps the customer will still have to develop unique solutions. The preliminary study is the foundation for the project plan, the project budget, successful implementation, and continued improvements of the system in use. Jeeves recently started operating a quality assurance (QA) system, mainly for product development and support. The main purpose of this phase is to assure quality in different activities, and to make project management more efficient (which is important, since virtually all product development is done on a project basis).

This concludes Part Two of the series Jeeves—Thriving Organically as a Humble Servant.

Getting It Right: Product, Quality, Timing, and Price
P.J. Jakovljevic - April 19, 2006

1.	The Functionality of Jeeves Enterprise—Not To Be Undermined
2.	Focus on Communications
3.	Integrating Production with Information Systems

The Functionality of Jeeves Enterprise—Not To Be Undermined

Jeeves Enterprise has long consisted of a number of autonomous modules for all key business processes; new modules have been gradually developed and added by Jeeves partners, and have often been tailored for a specific sector or type of business. In 2003, Jeeves devoted significant efforts to developing, refining, and supplementing its product. Jeeves Enterprise Version 9 is the latest offering, and it was launched in mid-2004. Before delving deeper into some modules, it would be beneficial to review the genesis of Jeeves.

This is Part Three of the series Jeeves—Thriving Organically as a Humble Servant.

Based on the analysis in The Formula for Product Success: Focus on Flexibility and Cooperation, Jeeves Enterprise can be described as a toolbox, emanating from the client’s own, unique business processes, to which the system in turn can be adapted. This is quite a different approach from what is generally provided on the enterprise applications market today, such as regimented “best practices” or “processes-in-the-box.”

As mentioned earlier in this series, Jeeves in its current form was founded in 1992, when Assar Bolin authored a graphical financial system for personal computers (PCs) in a client /server network. The first delivery agreement was signed in late 1992, and the very first accounting system went live in 1993. In 1995, Jeeves signed a master agreement with Alfa Laval Thermal, whereupon several new modules were launched, including Order, Stock and Invoicing, Procurement, Assignment Management, Marketing, Service, and Material Requirements Planning (MRP). Jeeves then became a more complete business system, and was renamed as Jeeves Enterprise. The Alfa Laval partner made its first installation in Nevers, France, which at that time represented Jeeves’s first installation abroad, of about fifty systems sold in total.

In 1996, a universal language translation tool was integrated into the system; ICL Data Oy became the first foreign partner; and the number of systems sold reached 130. In 1997, the MRP and logistics applications were enhanced, and Jeeves Enterprise 5.0 was launched. ICL Data Oy sold this system to Academica in Finland, which was the first transaction by a foreign partner, of the 260 systems sold at the time. In 1998, Jeeves Enterprise was supplemented with the Graphical Planning, Net Requirement Calculation, Reporting, and Fixed Assets accounting modules, as well as integrated electronic data interchange (EDI) functionality, which marked the Jeeves Enterprise 6.0 launch. By that point, 460 systems had been sold.

In 1999, Jeeves went public, and Jeeves Enterprise 7.0 was launched, and adapted for mobile communication and e-commerce. Also, partners started up in France, Italy, Finland, and Spain; the euro currency management was added to the system; and Jeeves marked a total of 620 systems sold. The year 2000 brought about the three-layer client/server architecture with thin clients and Internet communication. Also, collaboration agreements were signed with some application service providers (ASPs) and business systems providers (BSPs,), and with new partners in Finland, the Netherlands, Belgium, France, the UK, and Ireland. The total number of systems sold by that point was 680. In 2001, Jeeves Enterprise 8.0 was launched with Workflow, Document Management, and other smart tools (the workflow application for web-based authorization of supplier invoices was developed together with Sweden Post Outsourcing). More foreign partner start-ups, primarily in European core markets, were initiated; 2001 marked a total of 750 systems sold.

2002 marked product development to continue to enhance product quality and introduce new functionality in Workflow and web-based applications; Reveny was Jeeves’s first major acquisition (now one of their subsidiaries in Sweden). Agreements were signed with new partners in Slovakia, Russia, and other countries. Nicolas Ehrling was appointed as the CEO, and the total number of systems sold came to 900.

In 2003, the Sales & Product Configuration module was launched in collaboration with Tacton Systems, and the vendor has initiated a presence in Poland. With 980 systems sold at the time, Jeeves Enterprise was named Sweden’s most widely used business system, by DataDIA. As mentioned earlier, 2004 was also quite a busy year: collaboration with IBM for delivering Jeeves Enterprise for Linux was initiated, and new partnerships started in Russia and other countries. Also, as will be further detailed, Jeeves acquired HRM Software AB to strengthen its offering in human resources (HR) and wage management; 1,090 systems had been sold at the time. Finally, as mentioned earlier, during 2005 the vendor added 102 Jeeves Enterprise customers at 132 sites, bringing the total number of installations to 1,536.

Focus on Communications

Since any modern enterprise resource planning (ERP) system must enable all people in the user company’s entire complex network to handle information in a way that supports the business, Jeeves Enterprise is positioned as a catalyst for improved communication. A user company network, in addition to all the typical enterprise-wide functions like financial management, production control, service and maintenance, and so on, also involves remote sales offices (which need to be able to access sales and marketing modules via thin clients). Mobile users such as service technicians, consultants, and sales personnel have to obtain wireless access to applications via personal digital assistant (PDA) solutions. Furthermore, suppliers and other trading partners need to participate in a number of effective information exchanges using either web-based or thin clients.

Customers, on the other hand, increasingly want to communicate with their business-to-consumer (B2C) or business-to-business (B2B) web applications via different public e-commerce or supplier sites to view catalogs, place orders, access reports, check the order status, and so on. Last, but not least, the idea is that parent companies and their subsidiaries must easily integrate with Jeeves Enterprise even if using a system from another supplier. To that end, Jeeves has long been Internet-ready, and has B2B and B2C e-commerce solutions. As Jeeves-native modules, they are fully integrated with the rest of the system (and should be fairly easy to implement, since all business logic is already set up within the database).

Thus, the functional focus of the product is not necessarily on financial management modules, although they are of central importance to all user companies and thus also to Jeeves Enterprise. In other words, while extroverted, the product certainly cares about what is going on inside the enterprise. To that end, the Jeeves Accounting module manages all the business data required for ongoing accounting and booking, budgets, and forecasts, as well as for internal and external reporting. This module, together with the modules for accounts payable (A/P), accounts receivable (A/R), general ledger (GL), inventory management, and fixed assets, enables Jeeves Accounting to manage several companies in a single database. The system handles multicurrency management, whereby users can change currency and companies via a drop-down menu or by entering the company code.

As for ease of use, users receive strong support in their daily work, with automatic posting rules, templates, and relationship checks. For automating routines and repetitive tasks, there is also a set of different tools (such as automatic posting and allocation, with a user-defined rule system for every type of transaction throughout the suite). Since all financial modules are integrated with the rest of the system, it is relatively easy to track all events and transactions using drill-down analysis, since changing from one to another is as easy as choosing from a drop-down list.

Users have the option of using Jeeves’s multidimensional classification of business events, given that transactions can be linked to seven different account segments as well as to projects. Again, posting rules can be defined for each segment, and users can also define relationship checks for each segment; there is also a budgeting and forecasting system containing the revisions facility. There are also many standard reports within Jeeves Enterprise (such as income statements and balance sheets), and they can be modified or personalized with Jeeves Report Editor. One can also use Crystal Reports and integrate these reports into Jeeves. Once users have defined what they want to see in the report, and have defined any calculations on the data, a program puts all the data into a separate reports database that can then be accessed by authorized users. The same holds for import or conversion of external transactions.

Integrating Production with Information Systems

Integrated ERP systems came into existence when business people realized that there were great advantages and opportunities in integrating a production system with information systems (for example, for orders, and inventory and purchasing management). Nevertheless, the scope of integration today has widened, since the same people want to obtain the same advantages along the entire value chain (from end customers via intermediate customers, to suppliers, suppliers' suppliers, and so on). Despite the advent of technologies like computer telephony integration (CTI) and wireless application protocol (WAP), electronic data interchange (EDI) still forms the basis of modern logistics and supply chain management (SCM) applications, in which the entire value chain (up to the final customer) can be coordinated to achieve efficiency and competitiveness (see The Pain and Gain of Integrated EDI).

With Jeeves EDI, a user company can receive orders, order changes, delivery plans, and dispatch notifications, and then send information on prices and items, order confirmations, and invoice and transport confirmations. Because the same information is no longer registered manually, the exchange of information is typically better automated, faster, more secure, and, above all, cheaper.

Purchasing decisions can be decentralized or automated in Jeeves Purchasing, and the purchasers thus have more time to focus on both internal and external logistics issues. The most important competition factor in industry is no longer the mere price of the product. The purchaser’s task has increasingly become to obtain the right product of the right quality at the right time—and all that at the right price. The purchasing function has the task of controlling the whole spectrum of costs, since processing, stock keeping, transport, development, and environmental costs are all taken into consideration. Jeeves Purchasing aims at fulfilling the need to keep stock minimal while satisfying customer and manufacturing requirements for delivery quality, since the integration with inventory, sales, production, and accounting enables automation and better purchasing decision-making. Inventory management, on the other hand, is all about establishing which items are to be stocked, as well as their quantity policies and delivery assurance. To that end, inventory location, bin, and individual items can be identified using Jeeves Inventory, and there are programs for advanced requirement planning, scheduling, receiving and dispatching, management of manual inventory transactions, and physical inventories.

Going Beyond Core Enterprise Resource Planning

The Jeeves Enterprise features represent a fairly comprehensive ERP system. For one, the suite is fully workflow enabled, and by using Jeeves Workflow, users can streamline their business processes, increase automation, decrease throughput times, and improve follow up and management of any outstanding issues. For example, users can create to-do lists for everyone involved in the business process, whereby the user starts at the top icon, initiates the activity, and executes each task in the flow. For example, if the user double-clicks on the Arrival Entry icon, the corresponding underlying session program in Jeeves will enable the user to execute the arrival entry action, and then to go back to the flow when finished. Since all tasks are logged, additional benefits include using workflow as a documentation tool and installation tool, as well as for process analysis, simplified training, graphical status information, and individual performance measurement.

The Internet and integrated enterprise systems have resulted in customer relationship management (CRM) becoming a much more feasible concept, and Jeeves has been aiming at the automation of sales support, marketing, and service, in a way that is adapted to each individual customer. The vendor acknowledges that CRM is not applicable solely to the marketing department, since the approach to nurturing customers has to eventually permeate the whole organization. It is a basic requirement that there be a common and uniform customer emphasis in all company departments, and Jeeves Marketing attempts to make this possible by integrating the company's database with other parts of the company administration, based on a link to the rest of Jeeves Enterprise.

Furthermore, given Jeeves Enterprise’s aforementioned adaptation possibilities, the Jeeves Sales module allows a user company to easily modify the personalized program menu, the order form, the customer registration process, and so on, all based on the company's own order routines as well as individual preferences. It is obvious that the most important partner in a company's network is the customer, and that all aspects of customer relations must be fully controlled in an integrated manner. Thus, integration with other applications within Jeeves Enterprise gives direct access to information on customers, inventory, credit, ledger, service, purchasing, and manufacturing. Better, faster, and more secure information in all customer-oriented processes should result, with better service and better delivery quality, which in turn results in increased customer satisfaction and loyalty.

Finally, in line with an increasing focus on the need for companies to have well-functioning customer service, both externally and internally, Jeeves Service is a tool for setting up service and support processes, thereby increasing the level of service, and creating long term service contracts and profitable business relationships. Process flows, routines, and rules for the service and support function can be maintained with the aid of Jeeves Workflow, so as to intensify and automate customer relations and marketing efforts, and to adapt sales service and support to each customer.

The Jeeves Sales and Product Configurator

Related to the above CRM modules is the Jeeves Sales and Product Configurator, which aims at helping users find the optimal configuration or product variant for their needs. Integrated with Jeeves Enterprise, it gives salespeople the tool to quickly suggest an optimized product solution to the customer, create a proposal, and place a customer order directly into Jeeves Enterprise. If used as an e-commerce solution, users can rather interactively guide themselves to the best product solution, based on their needs. The product has a graphical modeling environment, making it intuitively easy to create and maintain configuration models.

The best example of the need for integration, indeed, is product configuration, which requires a tremendous amount of integration deep in the guts of an ERP system, since it leverages the item master, bill of material (BOM), work operations (i.e., routing), costing or pricing, work order management, sales order, and sales quote management. Configurators need, for example, to add or change an operation, change the work center where the operation is performed, change the run rate on that operation, and change the set up time; and they also need to produce special instructions or comments on the work order, sales order, or invoice (see Product Configurators Pave the Way for Mass Customization). To that end, since mid-2004, Tacton and Jeeves have also made Jeeves Enterprise available to manufacturing companies with complex or build-to-order products. By connecting Tacton Configurator to Jeeves Enterprise, it is now possible to quote and order a customized product solution. The configurator collects price and product information from the Jeeves Enterprise database, and produces a list of material for production. The integration is seamless to the end user.

For Manufacturing: Jeeves Production

Given that the majority of Jeeves customers are in manufacturing, the Jeeves Production module is included as an intrinsic part of Jeeves Enterprise, and is used for various types of manufacturing, such as process and discrete manufacturing, and production-to-order or production-to-stock. With the system adaptation tools pervasively included in Jeeves Enterprise, this module too can be easily adapted to support a wide range of work processes and routines in the manufacturing process, including independent working groups, production lines, kanban signals for lean or just-in-time (JIT) environments, sub¬contract manufacturing, and so on. Its main capabilities include material and net requirements planning; visual capacity planning; shop floor reporting; costing; serial number and batch traceability (with barcodes, if desired); product configuration with product data management (PDM); and external computer aided design (CAD)/computer aided manufacturing (CAM) systems integration. Jeeves also supports shop floor automatic data capture (ADC) to pick up actual production times and provide real-time progress updates.

Jeeves Production users can also define items, operations and BOMs, but also, if required, time, throughput, costing, tools, queuing, and work crews. It is also possible to indicate if there is a subcontracted item and under what conditions subcontracting is used (for example, when in-house capacity is exceeded). Work orders can be created manually, or automatically (through requisitions or through a connection to a specific sales order). In turn, work orders control material reservation or allocation, issues, and the labor and tools required to produce the finished item. As in most other peer systems, when finished items are produced, used material, labor, and overhead are reported, and goods can be received into finished goods stock. All inventory transactions are logged for future reference, whereas all order transactions or economic data is collected automatically and updated in the general ledger.

There are other similarities with other systems: an important planning tool in Jeeves Enterprise is the Planning Lists module to summarize required activities; sales, purchase, work, and service orders are all included to give a bigger picture of reservations or allocations for a specific item. In the top right-hand corner of the screen, users can click on the MRP button to produce a suggested material ordering pattern, and the same can be done for capacity requirements planning (CRP) when all the variables of capacity have been defined.

However, an additional option for use together with the Production, Project or Service modules, is the Jeeves Graphical Planning System (JPS), where users can control all their planned activities, resource use, and workload, by leveraging a graphical interface with drag and drop editing capabilities. Production data is loaded from the Jeeves Enterprise database to JPS, so that users can run what-if simulations and if necessary revise planning of activities and resources to optimize utilization. Users can do this intuitively, with drag and drop editing facilities, and when they are satisfied with the new plan, they can download it back into the database and update the appropriate planning and scheduling data in Jeeves Production.

Furthermore, the resource tree and the activity tree are displayed together with the planning area, where users can also see a window for subactivities linked to selected resources. The resource usage window shows how resources are booked, together with the capacity curve, and it is also possible to identify bottlenecks and select single resources for closer analysis (i.e., drilldowns).

It’s a well-known fact that in most project-based assignment activities, time is the commodity that everyone has to deal with, whether the activity calls for unique specialist competence, or for simple assistance. Services can be packaged and sold at a fixed price, while the responsibility for fulfillment during a certain time bracket can be spread between employees and employers by means of an agreement. Regardless of how this responsibility is spread, it is desirable to be able to account for and control the time and activities devoted to the project. Also, as invoicing is such a mission-critical function, it is logical that planning, project control, and management come from the business system, whereby it is possible to automate invoicing routines with an advanced pricing module.

To this end, Jeeves Project offers a platform for obtaining control over projects and assignments, to plan and keep track of all activities, to track internal and external time and expenses (T&E), and to manage internal costs. Users can use the project code throughout the system to integrate the entire value chain up to the final customer, and they can also use wireless technologies like WAP or simple message service (SMS) to communicate with Jeeves Enterprise and to log project, time, or service reports directly into the system. Road warriors like field technicians and sales representatives can also retrieve information from the database.

This concludes Part Three of the series Jeeves—Thriving Organically as a Humble Servant.

A Small Enterprise Resource Planning Vendor: The Vision and the Challenges
P.J. Jakovljevic - April 20, 2006

1.	Back to Challenges
2.	Partner Strategy Advantages
3.	Direction of Future Development

Back to Challenges

This note concerns the vision of Jeeves Information Systems AB (JIS), and the challenges ahead, in addition to the ones covered in previous notes: Competition From a Small Vendor; Jeeves—Thriving Organically As a Humble Servant; The Formula for Product Success: Focus on Flexibility and Cooperation; and Getting It Right: Product, Quality, Timing, and Price.

This is Part Four of the series Jeeves—Thriving Organically as a Humble Servant.

Taking the Long-term View

Simply put, the company’s long-term objective is to establish enough power to create and control its own future. To that end, Jeeves collaborates very closely with experienced and skilled partners, and it is important that partners and customers perceive Jeeves as their top choice amongst a plethora of available business systems. The company has achieved this status in Sweden, and sees the possibility of further cementing its position in Europe, apparently not at the expense of its earnings. Jeeves recently declared its ambition to become one of Europe’s leading business systems providers, in maintaining a minimum annual growth of 25 percent, with a minimum operating margin of 10 percent. Growth is a vital sign of success in this sector, which as a whole is stagnating; demonstrating a combination of growth and profitability for over a dozen quarters makes Jeeves stand out from the crowd.

The model of reaching the market through partners has apparently been working well, and is an important explanation for the company’s expansion and positive earnings performance. Accordingly, Jeeves not only is sticking to its strategy, but also looking ahead. It plans to start up in a significant number of new markets each year, and to create market growth with focused initiatives. Jeeves chooses markets and partners in line with the company’s product position and prioritized market segments. Identification of new markets is based on a business plan which runs for three-year periods; but longer-term plans are also taken into account. When a market is selected, basic localization is effected, whereby the nominal product is translated to the relevant language, and adaptations to local conditions are made. All this can be done through a partner, and normally partner qualification is prepared once the need for a localized product is demonstrated.

For partnership, there are stringent requirements, mainly regarding competence, size, and business concept. After a partnership agreement is completed, training and support are supplied in the start-up phase, but after a few installations have been performed, the partner is deemed to be self-sufficient. After this phase, the vendor helps mostly with marketing support. For product development, Jeeves partners have collectively devoted an undisclosed amount, which is invested in projects, based on market and customer needs. The latter includes the development needs Jeeves learns about through the support process; Jeeves regularly surveys the quality of its product by performing surveys of partners and customers every other year at least. These surveys also measure customer satisfaction, with respect to the product, and with respect to Jeeves as a company. The vendor also has a quality council, with members from the company’s major partners.

Partner Strategy Advantages

Jeeves cites several advantages of its partner strategy, starting with a lower business risk for both parties: while partners may resize according to cyclical market needs, Jeeves’s extensive customer base implies a stable revenue base through maintenance and upgrades. Further, specialization is maximized at every level, since partners often have specific industry skills and deep domain knowledge in various business processes, which in turn provides qualified feedback input for Jeeves’s product development. These partners are selected industry specialists who can tailor Jeeves Enterprise to fit virtually every customer’s need. Over 80 percent of the partners have more than 5 years of experience with the product, which in theory means that customers gain expert advice and support. Some expect to see growth amongst business services providers (BSPs) that combine software with market- or vertical-specific business process intellectual property and services, further increasing user choices, and enabling improved business efficiencies.

In general, it is probable that the growth of component-based service-oriented architecture (SOA) will generally bolster joint venture application development between vendors and their resellers. By adding assemble as an alternative, Web services and SOA will probably change the traditional "build versus buy" debate and application decision: sometimes, both software and service providers (partners) will join forces with innovative early-adopter customers to develop process-focused templates, often with an industry-specific flavor (see Buy, Build, or Somewhere Between and Build versus Buy—A Long Term Decision). With limited research and development (R&D) resources and even fewer time resources for bringing new products and services to market, almost every vendor is leveraging offshore development resources. However, this does not necessarily address the concurrent time-to-market and innovation issues, whereas owning a solution built atop the vendor’s own software by an early-adopting savvy customer or partner does both.

Thus, since the work is shared intelligently with about sixty trusted partners in twenty countries, Jeeves can focus its resources on cost-effective product development, in order to add functionality that leads to a lower TCO for the customer. This focus, along with the system’s structure, makes Jeeves one of the world’s most functional business systems in terms of incurred product development time. In relative terms, Jeeves spends four times more on R&D than its main competitors (that is, approximately half of total revenues; about half of its workforce are developers). Still, although employing only about 90 mostly all-rounder people, Jeeves can claim nearly 400 professional co-workers in the Jeeves ecosystem, if one includes partner staffers. This virtual workforce, which is a lean advantage in itself, can give the false impression (to those who misunderstand its business model), that Jeeves is small and insignificant. However, given that direct contact with customers is important for understanding their situations and needs, in 2002 Jeeves acquired their former partner Reveny System AB, thereby opening a direct channel to customers (Reveny, acting in a subsidiary role, deploys operations which encompass direct support and consulting services). This direct channel, along with Jeeves’s traditionally close collaboration with its other partners, implies sustained complementary prospects of capturing market needs. Jeeves wants to enhance the structure of partnerships to facilitate new partner start-ups and to enhance the motivation of its existing partners for developing their business around Jeeves Enterprise.

Direction of Future Development

Jeeves intends to develop its product in at least two directions. On one hand, product localization (according to the needs of prioritized markets) and partner collaboration for vertical solutions will continue. On the other hand, Jeeves pledges to make its product even more flexible, with widened offerings of native functions, further deepening of certain existing functions, continued investment in Internet technologies, and freer choice of hardware, operating systems, and databases.

Another trend which has influenced product development lately is the increasing demand for a more versatile product which contains additional functionality besides the core of the business system. Thus, as mentioned earlier in this series, in 2004 HRM Software was acquired, enabling Jeeves to offer more complete integrated human resources (HR) functionality as an add-on to interested clients. HRM Software was founded in 2000, and has since developed the HRM web-based system for staff and workforce planning, and for incentives management. The system includes functionality for organization administration, scheduling/staffing, time, incentives, recruiting, competence, and incentives revision. Its customers are midsized and large Swedish companies within both the private and public sector.

As for other major product partnerships, in addition to Tacton, Jeeves has successfully partnered with Tekki, a Sweden-based provider of security compliance modules to enterprise applications vendors; Mercur, a supplier of similar systems for budgeting, forecasting, and following up (within the business control realm); and Inobiz, for more complex and versatile Internet integration capabilities.

For starters, the trend and growth for business systems lies within extended enterprise resource planning (ERP) application areas, and Jeeves will thus have to strengthen its offering in systems for product lifecycle management (PLM), enterprise asset management (EAM), sales tax management, and business intelligence (BI), to name a few. In addition to bearing the costs of doing this, Jeeves will have to conduct these activities carefully with partners. In other words, partners will have to be in a position to know whether to develop their own solutions atop Jeeves Enterprise, or to wait for the vendor to do so (internally or via an acquisition).

Bundled with this is the need for perspicacious communication of Jeeves’s and partners’ vertical expertise, and their markets. To date, this information is unclear, judging by the vendor’s catalogs and its partners’ web sites. It is simply generic and horizontally-biased to say that the install base is in manufacturing, distribution, or service industries—a cry far from saying, for example, that partner x in region y has established expertise in perishable food manufacturing and retail distribution, say, or in heavy duty air compressor servicing.

Again, Jeeves will have to overcome challenges that are mainly of perception—that is, if there is even any perception of Jeeves at all. The vendor will have to build much more recognition and market share within its targeted markets, possibly by advertising in publications focused on and related to particular industries. Recent successes should be publicized. The same holds for explaining the adequacy of its technology strategy for its target market. Furthermore, Jeeves is still admittedly largely dependent on the highly contested and limited opportunity market in Sweden, which has long represented more than 80 percent of its customer base. While non-Swedish markets are growing for Jeeves, many are not yet large enough to offset any major slowdown in the Swedish business (the Swedish portion of the customer base is now down to 73 percent).

Size can be a decisive factor in many selections, and in recent years the organic growth of Jeeves has been faster than the market. But its need to acquire Reveny in July 2002 and Microcraft in March 2005 might be interpreted as an indication of Jeeves’s organic growth slowdown. Those takeovers were principally aimed at increasing the customer base, granting access to a wider market segment in Sweden, and strengthening the product offering in all markets. Yet, this mix of direct and indirect models might cause some consternation amongst the partners, and fears that their businesses may be cannibalized down the track. Thus, to be successful at this new approach to partnering, and to make it a repeatable business strategy, the vendor will have to better articulate development and deployment plans and norms for existing and potential developer-partners, with a flexible and equitable licensing or purchase approach for the partners. Also, Jeeves will have to further strengthen their distribution network, including a sales force adept at the focused “solution sale” for highly targeted segments.

On the other hand, recent successes will draw the wrath of numerous competitors, who will now keep Jeeves on their radar screen. They will certainly try to instill fear, uncertainly and doubt (FUD) into the mind of prospective users, not only regarding Jeeves’s size, but also regarding its “overly liberal” approach to system modifications. Namely, they might contend that, in situations where modifications to Jeeves Enterprise are necessary, the solution might result in a significantly higher total cost of ownership (TCO) over time. This logic is based on the idea that it is generally costly to make initial modifications to the package, and expensive to maintain them during the entire life of the system, despite the impressive Jeeves approach to controlling costs. Indeed, some less avant-garde or more regimented environments may still prefer other vendors’ packaged “best practices” (which have more imposed control and rigidity), rather than embark on the flexibility that might lead to chaos in less-disciplined environments.

Last but not least, some prospective customers outside Sweden (and particularly outside Europe) might be unimpressed with Jeeves’s budding reference sites of peer enterprises in their region. The lack of presence in the Asian Pacific and African regions means many missed opportunities, especially in light of the fact that many companies (even among Jeeves’s existing manufacturing customers) are likely outsourcing their operations or starting up new plants in these remote, labor-cheap regions.

User Recommendations

Prospective customers in Jeeves’s target markets should evaluate Jeeves Enterprise, especially if they are in the current geographies that the vendor covers. Factors to consider include evaluating whether they would also benefit from the vendor’s inherent broad extended enterprise resource planning (ERP) footprint and decent scalability (up to several hundred users). Prospective customers should always insist on a contractual time frame for delivery of a solution, and seek reference sites (preferably in their vertical market space) which have been successful with the product suite. Customers outside Jeeves’s successful geographies may certainly want to exercise due diligence and check its regional support before making a decision.

The enterprises which will find Jeeves Enterprise functionality the most appealing are probably technologically savvy companies which are competitively differentiated by unique business processes, and which want to avoid expensive upgrades. Jeeves Enterprise is a modern, flexible business system, responding to ever-faster flows of information and changes. With it, customers can even mimic other systems, thus lowering resistance to a change of business system. As long as users do not change the standard procedures, Jeeves provides an upgrade guarantee that users do not have to reprogram anything when upgrading to later versions.

Existing Jeeves customers share the common feature of medium size and the desire to have a business system that is modifiable according to their business, rather than the reverse. The desire to have something more than an off-the-shelf system has meant that in many cases, customers choose Jeeves after being disappointed with other, often better-known enterprise systems that need significant “feed-and-care” resources for adapting the system (if not for merely operating it). Potential local competitors or system integrators and consulting firms with vertical savvy and leadership in some local markets, that are in need of an advanced underlying “organic” ERP product platform, might want to look at Jeeves for the potential of mutually beneficial partnerships down the track.

This concludes the series Jeeves—Thriving Organically as a Humble Servant.