Made2Manage Systems 'One Year After': Reenergized and Growing
Part One: Event Summary
P.J. Jakovljevic - February 22, 2005

Event Summary

Over the past year or so, we have had a fair share of mixed feelings about the change of ownership at Made2Manage Systems Inc., a former public provider of broad enterprise business systems for small and mid-size discrete manufacturers. Namely, going private originally seemed as a promising move for the small innovative but hardly known globally enterprise software provider in its bid for securing the future amid still ongoing takeover and makeover feats in the market. To refresh our memory, what looked like an honorable exit strategy from the public eye happened in early June 2003, when Made2Manage announced it would be acquired by Battery Ventures, one of the leading venture capital firms focused on technology investments, which manages nearly $2 billion (USD) in committed capital and has a twenty-year history in successfully making investments in software companies (see Examples Of How Some Mid-Market Vendors Might Remain Within The Future Three (Dozen)?).

Yet, soon after the transaction closing, although layoffs and headcount cuts are nothing new and uncommon in the software market, particularly after an acquisition and at the general and administrative (G&A) staff level, the extent of the former Made2Manage top management and some sales, marketing, and product development staffers’ exodus in August 2003 seemed quite severe, given the vendor had not been a real money-burning machine prior to the acquisition (see Battery Power Shakes Up Made2Manage).

At that time, the company’s officials confirmed to a doubtful and consternated user and analyst community that a restructuring of the company had been made with three objectives in mind:

1. to align the organizational structure with current characteristics of the market (i.e., to produce a more tightly focused target market and results-based new system sales and marketing operations; and to maintain emphasis solely in practical product and services development while protecting technology investment);
   
   
2. to improve stability of operations and the staying power of company (i.e., to achieve profitable growth, financial strength, access to capital, and operational excellence; and to maintain consistent profitability and positive cash flow—a feat which the public independent company had not accomplished since 1998); and
   
   
3. to increase the focus on adding value primarily to existing customers (i.e., to institute redefined product management and development priorities; to focus on enriching a software ownership experience rather than a software buying experience; and to continue with vertical and niche product enhancements, albeit with focus on quality rather than speed, product performance and stability, depth of functionality, and customer needs).

To that end, the company’s customer support hotline and other customer service functions were not really affected, nor were the development and maintenance of its current product line. The cuts were reportedly spurred by the new management’s above review of the company’s operations, not by any specific events in the software market.

Now, a year after the analyst tour and our meeting with new executives in the fall of 2003, the time has come for them to prove their strategy right in terms of improved customer satisfaction levels, financial results, and operational performance since being acquired and taken private. To that end, in the fall of 2004, Made2Manage Systems announced five consecutive quarters of enviable profitability, cash flow, and operating results as of the third quarter, ended September 30, 2004. Fiscal year to date, Made2Manage Systems has also executed two acquisitions (to be detailed later on) and continues to lead the industry with strong operating results.

The management believes the improved performance reaffirms the vendor's strategy to deliver increased value to its more than 1,700 customers (excluding new acquisitions). The vendor believes enterprise software is now a mature market where the grow-at-all-costs strategies of the ebullient 1990s simply do not work any longer, and yet, most of its competitors are still focused and spending most of their resources on acquiring new customers instead of delivering real value to the customers they already have. As a result, the overall software industry has very low levels of customer satisfaction and financial performance. Conversely, possibly unique to enterprise resource planning (ERP) solution providers within the small and mid-size enterprise (SME) market, Made2Manage Systems' strategic goal remains focusing more resources on servicing existing customers than on attracting new ones. Its balanced approach to success is supported by several key initiatives across the business, which are driven by actual customer needs versus vendors’ needs imposed upon customers.

Accomplishments

Made2Manage Systems has become focused on enriching the software ownership experience for its customers—to the point where they even volunteer to influence prospective buyers. Small and mid-size manufacturing companies across the US and Canada reportedly continue to join the Made2Manage Systems family of customers based on the vendor's ability to better cater to the specific needs of manufacturing operations within specific vertical industries and deliver sound professional services. As a result of setting this strategy in motion, Made2Manage Systems has since seen virtually unprecedented performance. Namely, through various customer-centric initiatives, Made2Manage Systems has reportedly achieved the highest net income levels in the company’s nineteen-year history. On January 26, the company announced it has also achieved its sixth consecutive quarter of profitability, with a 34 percent increase in revenue over the fourth quarter of 2003. For the year, operating income increased by $4.0 million (USD) over 2003 and generated $8.7 million in positive cash flow from operations. Other significant operating metrics for both the year and Q4 2004 would include

• 24 percent increase in purchases of software by existing Made2Manage customers over 2003 results.
  
  
• 32 percent increase in purchases of professional services by existing Made2Manage customers over 2003 results.
  
  
• 46 customer win-backs (or customers that have chosen to reinstate their annual maintenance contracts) in 2004.
  
  
• 84 new system implementations and a 94 percent “very good” to “excellent” consulting service satisfaction rating by Made2Manage customers in 2004.
  
  
• 11 percent staffing increase within service, support, and research and development (R&D) departments in 2004.
  
  
• Significantly improved customer satisfaction and loyalty metrics over 2003 results, such as a 10 percent improvement (Q304 over Q303) in a number of support queries (via phone and web) resolved on first contact with customer.
  
  
• More than 50 manufacturers added to a 2,000-strong customer base in 2004 across a variety of vertical manufacturing industries, including industrial and commercial machinery, electronics, and fabricated metals.
  
  
• Won 50 percent of all purchase decisions entered into in the fourth quarter of 2004.

The above feats have not come at the expense of product development, given the end of 2003 delivery of reportedly the highest-quality release of Made2Manage software to date, Version 5.5 of the Made2Manage Enterprise Business System, which included more than 200 customer-driven enhancements built directly into the core product to improve production, financial, and supply chain management (SCM) functionality. In addition, several new standalone and vertical industry-specific features have been added to help small manufacturing organizations streamline operations and optimize their existing enterprise software investment.

Accordingly, key enhancements found in version 5.5 support the improved system management of shop floor resources, inter-facility materials, inventory, job orders, bills of material (BOM), sales commissions, and shipments. New features and functionality (some of which may seem insignificant to be analyzed in a research article, but that have proven to be meaningful to existing customers) include, but are not limited to

• Form editing and customization tools, which is the M2M FastForms product
  
  
• Automated shipment of high-quantity orders (multiple shipment queue)
  
  
• BOM reference designators
  
  
• Extended split commission options
  
  
• Yield management by operation
  
  
• Alternate resource and work center allocation
  
  
• Add-and-carry shippers and receivers
  
  
• Enhanced multi-facility capabilities

Also found in version 5.5 is M2M FastForms, a fully integrated editing tool that allows users to personalize and tailor the enterprise system to meet the distinctive needs of their manufacturing organization. It allows manufacturers to reasonably quickly and easily edit, create, and modify standard forms and fields found in the system without disrupting system availability, contacting Made2Manage for assistance, or paying for pricey technical resources.

Addressing Vertical Markets

New Made2Manage leadership has plans to further develop its solutions to cater to specific vertical markets, as the future direction for Made2Manage remains the spotlight on required functionality, with the product quality in the background. While the Microsoft .NET technology adoption initiative is still judiciously underway, the vendor has become aware that the customers in its market are not necessarily asking for it in the near term. Therefore, the vendor will not build technology just for the sake of technology, but it rather plans to center on the true needs of its customers and those of the prospective buyers in the target market, while only sensibly applying technology enhancements that protect its customers’ investment in business solutions.

Therefore, Made2Manage Systems’ going-forward technology strategy will center on a phased implementation of a service oriented architecture (SOA), which should enable improved application-to-application (A2A) and business-to-business (B2B) relationships via a systems environment that is specifically architected to leverage freestanding, self-describing units of functional code (or web services), each possessing a published interface that 1) does not require knowledge of the programming language used to create and deploy it, and 2) is able to communicate with other services about specific activities within an information technology (IT) landscape or business process (for more information, see Understanding SOA, Web Services, BPM, BPEL, and More). A phased approach to implementing an SOA should allow Made2Manage Systems to take advantage of infrastructure changes as they are applied, rather than having to wait until the entire product is SOA-enabled.

Although it will be invisible to the customers, the vendor believes that the implementation of an SOA will offer them a number of tangible benefits including

• Improved product quality and reduced number of change requests
  
  
• 40 percent reduction in release delivery timeframe, reductions in time needed for quality assurance (QA)
  
  
• True application programming interfaces (API), whereby the open architecture facilitates improved integration with the software of Made2Manage Systems’ third-party business partners.

Another important benefit of an SOA might be the vendor’s ability to manage, maintain, and enhance multiple product offerings on disparate platforms. As Made2Manage Systems plans to continue to grow through acquisitions and new system sales, an SOA should help it streamline development processes and create synergies among products.

As for examples in terms of product functionality, version 5.5's new reference designator feature could confirm Made2Manage Systems' continued focus on meeting the vertical market specifications of its customer base. The reference designator tool, which allows manufacturers to assign specific components to their geographical locations on a circuit board (sometimes referred to as “bubble numbers” on drawings), is fully integrated with the system's BOM functionality and should appeal to the company's strong electronics manufacturing customer base.

M2M Sales Center

Further, M2M Sales Center, a new browser-based, manufacturing-specific customer relationship management (CRM) solution, has accompanied the release of Made2Manage Version 5.5 and thus provided enhanced account, contact, and opportunity management functionality within the standard Made2Manage Enterprise Business System offering at no additional cost. M2M Sales Center uses a secure web interface to give remote sales management and sales support personnel crucial CRM functionality and near real-time access to the customer data contained within the Made2Manage Enterprise Resource Planning (M2M ERP) back-office system.

Using a connected client via Made2Manage Systems’ technology infrastructure, M2M Gateway, manufacturers should now be able to access M2M Sales Center from basically any location at any time to retrieve critical CRM data, including account status, field service information, shipment times, product pricing, and product catalogs. With this product, sales personnel should thereafter also be able to store and retrieve opportunity information, such as stage, potential, probability of close, products, activities, and contacts. In addition, M2M Sales Center provides remote employees with complete quote and sales order functionality, including a built-in product configurator that helps manufacturers perform detailed, complex quoting. Users should also benefit from the solution’s integration with Microsoft Outlook, which enhances the management of contacts and activities.

The release of M2M Sales Center in October 2003 may show Made2Manage Systems’ ongoing strategy to sensibly leverage technology as to meet the differing CRM needs of both small and mid-size manufacturers across varying customer sizes. Namely, M2M Sales Center is designed specifically to meet the requirements of small and mid-size manufacturers with limited IT resources and little tolerance for operational disruption. Because it is built on the same data platform as the existing Made2Manage application, there are no data integrations to manage and little to no setup, training, or administration required. On the other hand, M2M Sales Center does not replace the company’s original equipment manufacturer (OEM)-like integrated Best Software’s SalesLogix solution through CRM Connect, which appeals to larger manufacturers that need forecasting, unfettered access, automated work flow management, and other advanced features. Instead, M2M Sales Center is designed to serve smaller manufacturers that require less complex CRM functionality but increased visibility into their enterprise-wide customer data.

M2M Shop Floor Data Collection

Along similar lines, Made2Manage Systems announced in October, 2003, the availability of M2M Shop Floor Data Collection (SFDC). Also incorporated into version 5.5 of the Made2Manage Enterprise Business System, M2M SFDC uses leading wireless transmission methods, including bar code, radio frequency (RF), and local area network (LAN)/wide area network (WAN), to collect real-time data from the shop floor and integrate it into the enterprise system for improved operational efficiency and a more efficient manufacturing environment by replacing paper-based reporting and manual data entry with wireless technology capabilities.

The solution enables the retrieval of receiving, inventory, shipping, and labor functions at the source, as well as automated synchronization of this mission-critical data with the Made2Manage Enterprise Business System. As a result, M2M SFDC should provide greater visibility into the enterprise, enhanced communication with suppliers and business partners, and overall process improvement that typically translate to cost savings. Hardware independent, M2M SFDC supports input terminal devices from Symbol, Intermec, and Zebra that utilize a thin-client architecture to collect and transmit data. In addition, the M2M SFDC intelligent login module initiates a user’s menu either in English or Spanish, based on assigned access rights.

Future Direction

Made2Manage Systems Inc., a former public provider of broad enterprise business systems for small and mid-size discrete manufacturers, decided over a year ago to go private under wealthy Battery Ventures. The vendor has produced tangible benefits for existing customers (e.g., the vendor’s stability and sensible delivery of product functionality with increased product quality). While the company’s target market remains small and mid-size discrete manufacturers, that sweet spot has first been refined and then expanded in part by recent prudent acquisitions.

To refresh our memory, what looked like an honorable exit strategy from the public eye happened in early June 2003, when Made2Manage Systems announced it would be acquired by Battery Ventures, one of the leading venture capital firms focused on technology investments, which manages nearly $2 billion (USD) in committed capital and has a twenty-year history in successfully making investments in software companies (see Examples Of How Some Mid-Market Vendors Might Remain Within The Future Three (Dozen)?).

Made2Manage Systems focused on enriching the software ownership experience for its customers—to the point where they even volunteer to influence prospective buyers. Small and mid-size manufacturing companies across the US and Canada reportedly continue to join the Made2Manage Systems family of customers based on the vendor's ability to better cater to the specific needs of manufacturing operations within specific vertical industries and deliver sound professional services. As a result of setting this strategy in motion, Made2Manage Systems has since seen virtually unprecedented performance.

Another major customer-driven product release is expected around early 2006, given that admittedly Made2Manage Systems has slowed things down to ensure building increased quality into the product and refine its product (and services) management and development processes to allow customer input at every phase.

Further, having achieved the first major objective of profitability, Made2Manage Systems’ next logical focus has been on growth, both organically and through acquisitions. The vendor is proactively targeting small to mid-size enterprise resource planning (SME ERP) companies with far less than $100 million (USD) in revenues, that are for sale, and that can be seemingly integrated into its organization and business model. The intent is to conduct between one and three like acquisitions per year.

To that end, most recently, in September, Made2Manage Systems announced the close of its acquisition of certain assets of ADS Software LLC and ADS Information Systems, Inc. (ADS), its former value-added reseller (VAR). Under the terms of the agreement, Made2Manage Systems acquired the intellectual property rights to Made2Manage-centric products formerly owned by ADS, which were designed to augment and extend the Made2Manage Enterprise Business System. Specific ADS-branded products include Interactive Form Editor (IFE), IFE Plus!, Enhance!, Enhance!Plus, and General Ledger Detail Audit (GLDA).

Made2Manage Systems has taken the time to analyze its customers, and it has discovered in the process that customers working with resellers and services providers were not as happy as the customers working directly with the vendor. Consequently, the above acquisition is merely execution on the vendor’s strategy to become more intimate with its customers in order to ensure they are getting what they need to improve their businesses. This idea of customer intimacy is another way how Made2Manage Systems intends to differentiate itself from its peers.

Therefore, a more significant acquisition took place in August, when Made2Manage Systems expanded both its domain expertise within the plastics industry and breadth of solution offerings for its plastics processing customers by acquiring virtually all assets from DTR Software International, which has been a privately held provider of manufacturing, distribution, and financial management software designed for the industry-specific needs of plastics processors. Made2Manage Systems hopes to now have a nearly 2,000-strong customer base through DTR’s 175 customers at about 600 sites.

DTR Acquisition

DTR was founded in 1981, and it had an estimated $4.4 million (USD) in revenues in 2003. Its signature product, currently called The Manufacturing Manager (TMM), a comprehensive manufacturing, distribution, and financial management software system, will supposedly be re-branded as a Made2Manage Systems product in the future, but both will be maintained and enhanced as a separate version of the Made2Manage Enterprise Business System, given TMM’s use of the Progress platform. The two products will be made available separately to both current and prospective Made2Manage customers across the plastics processing industry. Still, although the products are to be maintained and enhanced on separate tracks in the long term, some efforts might be made to create synergies that can enhance both products down the track.

Made2Manage Systems also thereby pledged to look to support and enhance both product lines based on customers’ needs rather than requiring existing DTR customers to migrate to a single Made2Manage product, as the vendor’s long-term product strategy is to continue building and acquiring product and service capabilities that meet the unique market specifications of key manufacturing industries without disrupting the businesses of the existing customers. Under the terms of the agreement, DTR has been operationally folded into Made2Manage Systems and many former employees of DTR have joined the organization. The increased resources across research and development (R&D), services and support (S&S), sales and marketing (S&M), and finance and administration should help Made2Manage Systems continue to meet the needs of former DTR customers (reportedly most of them with a high level of customer satisfaction), as well as positively impact existing Made2Manage customers in the plastics industry, who should also benefit from ongoing solution enhancements that could be applied to both TMM and the Made2Manage Enterprise Business System.

Further, these new Made2Manage Systems customers will have access to hotline support and first-time 24/7 on-line support via Made2Manage Systems' customer web portal, M2M Expert. In the near future, Made2Manage Systems will reportedly focus on enhancing M2M Expert's customer resource center, which features case management, change request management, a self-help knowledgebase, downloads, and more, to accommodate its newest customers. In addition, former DTR customers will be able to take advantage of Made2Manage Systems' professional services offerings, including customizations, consulting, and on-line education and training. DTR's former headquarters in Jacksonville, FL, has meanwhile become a new Made2Manage Systems office location, while Made2Manage Systems' existing executive team members have remained in their current leadership roles.

Prior to the acquisition, DTR had been supplying management software specifically for the plastics industry for more than twenty years, with an ongoing development strategy that the product has constantly been enhanced to cater to inevitable changes in the industry, new advances in technology, and emerging markets. The vendor had a ‘Customer for Life’ policy that meant that all users would automatically be sent new releases of the software on a regular basis, thereby, like its new parent, trying to protecting the customers’ initial investment and ensuring that they continue to use the very latest in plastics specific software.

Version 9 of The Manufacturing Manager

Not long before being acquired, DTR introduced Version 9 of The Manufacturing Manager (TMM v.9) to deliver improved inventory management, information analysis, and operational efficiencies for business management requirements of plastics processors. The product features a wireless personal digital assistant (PDA) technology to deliver improved inventory management by incorporating lightweight, impact-resistant PDA technology for warehouse management. Integrating PDA software should help improve shipping accuracy and inventory movement, while it is a cost-effective alternative to traditional radio frequency (RF) devices. Further, with the use of bar coding, TMM v.9 wireless PDA software and devices should make shop floor production input even simpler, thereby reducing labor costs. Users should gain more complete control over what enters and leaves the plant by implementing PDA technology for picking, shipping, and receiving materials, whereas bar codes can be created on work orders and user-defined product labels can be utilized.

The introduction of wireless PDA technology further enhances TMM v.9’s already powerful inventory control module, which ties multiple units of measure (UOM) to each inventory item, which are available at purchasing and sales order entry, while the software automatically calculates conversion quantities and relieves inventory in the base UOM. TMM v.9 provides entire control—as well as instant information through queries and standard reports—of raw materials (including blends), assembled work in process (WIP), finished goods, and other items to ensure optimal reorder points. TMM v.9 also offers multilevel pricing and maintains fixed and variable standards, averages, and last costs of all inventoried items, whereby users can also employ several options for the period-end inventory closeout process to match the way individual processors conduct business.

TMM-CRM

The product release has also introduced a fairly comprehensive customer relationship management (CRM) tool, TMM-CRM, that aims at providing plastics processors with seamless management of business intelligence (BI) to ensure successful data sharing throughout the entire organization, from the shop floor to customer service. It was developed by Made2Manage Systems as a tightly integrated complement to its ERP counterpart TMM v.9, with the idea to enable plastic processors to maximize customer relationships by streamlining interdepartmental information flow through the organization with the integration of every area of business that touches the customer, such as production, marketing, sales, customer service, and field support. TMM-CRM offers the following features to plastics processors:

• order management with virtually real-time access to manufacturing status
  
  
• easy access to a customer’s near real-time payment and credit information
  
  
• easy access to historical sales information for marketing analysis and up-sell opportunities
  
  
• available-to-promise (ATP) dates at sales order times

In turn, users should be able to realize many benefits from TMM-CRM, such as improved customer response time, reduced miscommunication within the organization, elimination of duplicate data entry of customer information, and consistent, coordinated management of prospects and customers by all members of the organization. Made2Manage Systems touts that TMM-CRM should not only help improve customer service, but also reduce service costs, as the module gathers and continuously updates knowledge about customer needs, motivation, and behavior. It measures both input across all operational functions and output in terms of customer revenue, profit, and value. TMM-CRM also allows processors to continually flex the balance between marketing, sales, and service inputs against changing customer needs to maximize profits.

Quotation Support

As possibly the best example that generic ERP software systems fail to account for the unique issues facing plastics processors at the quotation stage, “The Bag and Film Quoter” feature in TMM by Made2Manage Systems recognizes that each processing type within the wider plastics arena has its own specific functionality requirements. The feature was designed specifically for companies requiring a detailed quotation tool that can accurately combine the processing costs of blown extrusion, slitting, printing, and other associated operations with the various ratios of raw material blends and bag dimensions.

To that end, “The Bag and Film Quoter” takes into account the material density and bag dimensions including headers, lip, gusset and trim, etc., together with any reinforcements or artwork required, whereby a detailed cost per bag, roll, or weight unit is calculated. The system automatically applies three predefined margins to the quantity breaks selected (again based on bag, roll, or weight) to create a detailed pricing matrix. Selected values can then be automatically pulled into a user-definable quote template and virtually instantly e-mailed, faxed, or printed.

Since the feature is a fully integrated component of TMM v.9, sales orders can be created from within the quotation page, and customer information updated, without the need for any duplication of data entry. Incidentally, TMM v.9 allows users to go directly from a quote to the BOM, and users can develop unlimited quotes for each customer (and extensive what-if quoting scenarios) and produce customizable quote letters and reports.

Additionally, production scheduling in TMM v.9 allows plastic processors to access information on all jobs at all levels on a single screen. Users can perform tasks with almost instant response drag-and-drop scheduling and right away view late jobs, other workstations, and available tools. Forward finite, queued, and just-in-time (JIT) scheduling is provided for all workstations and secondary operations, while through the product’s material requirements planning (MRP) functionality, processors can project the requirements for all materials based on scheduled production, sales orders, and back orders, and thereby reduce the cost of inventory while ensuring critical materials are in stock.

INSIGHT

Also new in TMM v.9 is INSIGHT, a BI tool that allows executives and management to immediately identify bottlenecks in the supply chain before they affect business. The tool might also help them improve operational efficiencies, identify opportunities for inventory reduction, and bring all shop floor operations into focus. INSIGHT is a module designed specifically for executive management personnel who may or may not be hands-on users of the core TMM v.9 system. Without any knowledge of the underlying file structure, or even a working knowledge of TMM v.9 itself, they should be able to quickly see in graphical or summary report format a range of performance indicators from across their business operations. Thus, executives are now no longer dependent upon staff to present to them key information about company operations.

For example, one analysis presents the following nine important key performance indicators as to the status of the company on one screen simultaneously:

1. Total value of products shipped yesterday
2. Total value of all open orders
3. Month-to-date sales orders
4. Percentage of on time and complete deliveries
5. Yesterday’s manufacturing efficiency percentage
6. Yesterday’s non-run hours
7. Yesterday’s scrap percentage
8. Yesterday’s sales orders
9. Average days of past due receivables

Also included within the INSIGHT module is a flash report that shows on one page the up-to-the-minute financial position of the company including cash position, sales orders, inventory valuation, purchase liabilities, and production valuation. The graphical report writing capabilities within TMM v.9 have always allowed for an in-depth data analysis of any fields within the core system, since the product allows users to run queries to quickly access filtered data that can be analyzed on screen, whereas drill-down features allow access to further explanation. However, for the executive who is not a user of the core TMM v.9 system, INSIGHT now provides a number of summary reports and graphs for financial, manufacturing, vendor performance, and sales performance. If the summary information warrants further examination, simply by clicking on the relevant graph, the user can drill down to the required level of detail.

TMM Version 9.2 (v9.2) is currently in the beta process and slated for general availability by early 2005. Once it is released, Made2Manage Systems will follow its new product management process to apply ongoing updates and enhancements to TMM. The version will include significant enhancements to the TMM core product, including improvements in CRM and output options. Key features to look forward to in TMM v9.2 would include:

• Language Localizer–This component will help TMM users build more reliable communication into each stage of the manufacturing process, regardless of language barriers. As a standard tool within TMM v.9.2, Language Localizer will enable users to translate labels, messages, menus, and other essential text elements within the application.
  
  
• Masteer Scheduler–TMM v9.2’s advanced planning and scheduling (APS) tool will build upon the American Production and Inventory Control Society (APICS) framework to provide increased flexibility and control. Included within Master Scheduler will be the capable-to-promise (CTP) functionality.
  
  
• PinPoint Browsers–Beginning with a feature-rich browser as a foundation, PinPoint Browsers will include fairly easy-to-use filters to select, sort and manipulate data, whereby users will have the capabilities of a query and reporting tool from the familiar location of a browser.
  
  
• Advanced Communication Tools–These new features within TMM v.9.2 will enable easier and more complete communication and information sharing throughout the plant and front-office. Users will have the following three ways to communicate:
  
  
  1. NotePower: Notes can be attached to individual data records to be displayed within TMM according to a prescribed set of rules.
     
     
  2. Comprehensive Alerts: To send messages to employees not active within TMM, rules can trigger messages sent by e-mail to an individual or a distribution list.
     
     
  3. Instant Messaging: TMM users may send instant messages to other users.
     
     
• Quote Manager–new to TMM v9.2, the module will enhance quote management and win/loss analysis functionality. In addition, it will simplify the quoting of products, both new and currently in production, and allow users to go directly from a quote to a live BOM.
  
  
• Accounting–Enhancements to accounting functionality within TMM will allow users to view past accounting years, direct deposits, and the Kronos keeper interface. Users will also be able to cross reference accounts within the general ledger.
  
  
• Electronic Data Interchange (EDI) –Through partnerships with Innovis and Arrow Products, TMM users will have the ability to automate communication and file exchange with their supply chain partners via EDI.

Market Impact

Made2Manage Systems Inc., a former public provider of broad enterprise business systems for small and mid-market discrete manufacturers, decided over a year ago to go private under wealthy Battery Ventures. The vendor has produced tangible benefits for existing customers (e.g., the vendor’s stability and sensible delivery of product functionality with increased product quality). While the company’s target market remains small and mid-size discrete manufacturers, that sweet spot has first been refined and then expanded in part by recent prudent acquisitions.

In August, Made2Manage Systems expanded both its domain expertise within the plastics industry and breadth of solution offerings for its plastics processing customers by acquiring virtually all assets from DTR Software International, which has been a privately held provider of manufacturing, distribution, and financial management software designed for the industry-specific needs of plastics processors. Made2Manage Systems hopes to now have a 1,900-strong customer base through DTR’s 175 customers at about 600 sites.

Although not necessarily unique to Made2Manage Systems (if one is to be reminded of SSA Global, Infor, MAPICS, Epicor, Sage/Best Software, Catalyst International, etc.), the strategy of taking a deep breath and reflecting upon how to proactively better serve existing customers, and building upon that with a combined organic growth and growth via acquisitions, seems to be a recipe for success these days. The enterprise applications market is indisputably a mature and fairly saturated field, and all players must accordingly adjust their investment strategies from those of the emerging and growing market in the 1990s.

Thus, Made2Manage Systems has lately concentrated on selling to its installed base, which, although not huge, is comfortably sizeable, given the vendor has no aspirations (if not even illusions) about any too aggressive growth or about becoming a global ERP force in a foreseeable future. Part of Made2Manage Systems’ acquisition strategy includes taking on a more global presence through acquisition of non-US companies that offer software, services, and support, particularly companies that sell direct into non-US countries, although not limited to that. Its growth strategy states that it plans to grow organically via new system sales, customer sales, and customer retention, and also growth via acquisition.

To that end, the vendor has conducted a thorough stocktaking of its strengths and weaknesses in addressing its existing customers’ needs. Battery Ventures has selected Made2Manage Systems as a long-term investment, focusing on enhancing the value added to both current customers and prospects by first and foremost improving the profitability, stability, and operations of the company. Prior to the acquisition, Battery Ventures had indeed conducted a detailed analysis of the vendor’s operations, finances, and all services, support and product initiatives, while, like in any acquisition’s due diligence exercise, it had looked at several of the alternative enterprise software companies before choosing to acquire Made2Manage Systems.

Impact of Battery Ventures

However, following the acquisition, a major difference in philosophy immediately emerged between the former and existing management teams on how to execute strategies going forward. Namely, while the former management deserves credit for stellar growth during the early and mid 1990s and for a delivery of functionally and technologically sound product (which has since 1986 evolved from a traditional Microsoft DOS-based MRP software to a nearly ‘one-stop-shop’ enterprise business applications on contemporary Microsoft technologies), many errors had been made during the last few years prior to the acquisition.

For one, there was the fairly little $30 million (USD) or so in revenues. Made2Manage Systems struggled to keep revenue stable enough (let alone growing) during the IT spending slump of the early 2000s, while it also was hard pressed to keep the balance between product-enhancements-induced costs (often without a proper validation of true customers’ requests) and desirable financial metrics. Therefore, while the formerly public vendor had not apparently held back on the product functionality and technology aspect, profits long eluded it. Conversely today, under new management, the vendor touts better results in terms of relative profit margins and cash flow than hardly any publicly traded company in the space.

Further, pre-Battery, the products would often be delivered with expediency rather than a tried-and-true product quality and stability in mind. Enter the poorly trained and half-hearted non-exclusive VARs, and one could imagine a number of less than impressed customers. To make things worse, the product development folks would continue to enhance the products with the “winning new customers” mindset rather than with focusing on closing the dissatisfaction gap within the existing install base.

Consequently, the new management has instituted redefined product management and development priorities, with a focus on enriching software ownership experience (e.g., an improved ease of use or truly needed functional enhancements) rather than a flashy buying experience (and frustrations afterwards). This strategy is in tune with the general feeling of low customer loyalty and staying power of enterprise applications providers, which has forced even much bigger and mightier players to espouse their equivalent customer-retaining strategies with catchy names, such as PeopleSoft’s “Total Ownership Experience (TOE)” (whose fate is now dubious under Oracle) or Lawson Software’s “1,000 Days Manifesto”. On the lower end of the market, WorkWise would be another object case of shoring up the install base (see A User Centric WorkWise Customer Conference).

One of the most significant decisions the new Made2Manage product management team has since made is to stop spending time and effort in futile “technology arms race” (i.e., trying to match its competitors on a feature-by-feature, one-upmanship basis). Namely, after conducting a thorough soul-searching exercise via surveying its customers, Made2Manage Systems has found out that this path only leads to functionality with limited appeal, and features that look nice on a marketing brochure or a PowerPoint slide show, but are short on substance. The vendor instead wants to focus going forward on delivering functionality that makes a difference to the majority of its customers and truly mirrors and supports their business processes in the most efficient manner.

Market Opportunity

Made2Manage Systems should thus have a good opportunity within its target market, which is still without a dominant vendor. Although the larger, Tier 1 and Tier 2 vendors have long been moving down-market, Made2Manage Systems’ target segment is still largely below their radar screen. To again give the former management some credit, the new-coming management found great intellectual capital with which to work. Indeed, in the lower end of the discrete engineer-to-order (ETO), make-to-order (MTO), assemble-to-order (ATO) and make-to-stock (MTS) manufacturing realm, former Made2Manage management had found a market with good opportunities, and it developed most of the part-and-parcels it needed to defend its turf.

That is to say that former independent Made2Manage had, gradually, mostly by developing internally, and partly through acquisitions (i.e., a former supply chain management (SCM) vendor Bridgeway in 1999) or partnerships (i.e., Powerway for several quality management applications described below; Best Software for SalesLogix CRM, Abra HR Suite, and Abra Payroll Suite; ADP for payroll functionality; FRx Software, part of Microsoft, for financial reporting, forecasting, and budgeting functionality; Clippership and WorldShip for UPS and FedEx shipment capabilities; Pitney-Bowes for TranScape transportation management system [TMS], Synoptix for its Drill-Down Analyzer for financial controllers, and so on), garnered a line of integrated collaborative e-business, CRM, BI, data collection, and advanced planning and scheduling (APS) components within its core ERP solution.

In fact, the Made2Manage Enterprise Business System now offers a broadly integrated application solution for automating business processes including selling (including estimating and quoting) and product design; finance and human resources (HR); procurement, customer service and support; production and shop-floor control (including quality management); and scheduling, distribution, and logistics. Basically, it contains most of the functionality that any company would expect even from a top-tier enterprise applications provider.

Its SCM capabilities, which have initially stemmed from the Bridgeway acquisition, have meanwhile been extended beyond APS to cover near real-time forecasting, demand planning, and infinite and finite capacity planning and scheduling. M2M SCM 5.01, released early in 2003, offers enhanced planning and scheduling capabilities based on the proverbial Theory of Constraints (TOC) authored by Eli Goldratt, giving customers the ability to synchronize demand with the capacity to meet that demand, while remaining cost-effective. The method is particularly applicable to custom-built and custom-configured manufacturing environments often seen in the industrial and commercial equipment sector because their long lead times and high precision processes often produce bottlenecks and are not amenable to lean manufacturing practices (for more information, see Pull vs Push: a Discussion of Lean, JIT, Flow, and Traditional MRP).

To that end, TOC contends that every business operation has, or should have, one bottleeneck (capacity constrained resource) that determines the overall operation throughput. By exploiting that resource and by adding buffers to “feed” it and keep it highly utilized, a business should increase its overall throughput, and, if it does while concurrently maintaining or reducing expenses, it will logically improve profit margins. Accordingly, M2M Advanced Scheduling uses an associated drum-buffer-rope (DBR) scheduling approach to help identify a facility’s bottleneck resource (work center or drum), buffer or feed it to keep it running, and subordinate (rope) other resource’s or work centers’ schedules to that bottleneck. By leveraging powerful optimization algorithms and intuitive Gantt chart facility, users can optionally confine schedules by the addition of resources in the bottleneck work center, by adding any number of secondary work centers or by recording the availability of any kind of purchased items. The capable-to-promise (CTP) would be another major feature of the advanced scheduling module.

However, although not necessarily being at the forefront of providers for flow manufacturing with heavy production line or cell balancing and design capabilities, Made2Manage Systems has still garnered a number of applications that are adept for planning-heavy, scheduling-light environments with lean manufacturing prowess, and which have embraced the generally accepted lean practices, such as supporting standardization of work (through, for example, a graphical BOM builder to design “flatter” BOMs and thereby eliminate excess steps and movement of parts on the shop floor), focusing on quality (to be elaborated below), eliminating non-value-added activities and reducing inventory (e.g., special orders can receive raw materials directly into job and the finished product is shipped directly from the job against the sales order, without unnecessary issuing from and posting to inventory), vendor management (through, for example, open or blanket orders and automated data and file exchange), supporting demand-driven production (through Made2Manage Demand Forecasting module), fostering continuous improvement and visibility (through a number of BI and mobility tools, such as M2M Executive Information System or M2M Events & Actions [EA], which all help pinpointing problems and opportunities, drill down to the details, and take corrective actions if necessary), and so on.

Quality Management Processes

Made2Manage Systems Inc., a former public provider of broad enterprise business systems for small and mid-market discrete manufacturers, decided over a year ago to go private under wealthy Battery Ventures. The vendor has produced tangible benefits for existing customers (e.g., the vendor’s stability and sensible delivery of product functionality with increased product quality). While the company’s target market remains small and mid-size discrete manufacturers, that sweet spot has first been refined and then expanded in part by recent prudent acquisitions.

Although not necessarily unique to Made2Manage Systems, the strategy of taking a deep breath and reflecting upon how to proactively better serve existing customers, and building upon that with a combined organic growth and growth via acquisitions, seems to be a recipe for success these days. The enterprise applications market is indisputably a mature and fairly saturated field, and all players must accordingly adjust their investment strategies from those of the emerging and growing market in the 1990s.

Thus, Made2Manage Systems has lately concentrated on selling to its installed base, which, although not huge, is comfortably sizeable, given the vendor has no aspirations (if not even illusions) about any too aggressive growth or about becoming a global ERP force in a foreseeable future. Part of Made2Manage Systems acquisition strategy includes taking on a more global presence through acquisition of non-US companies that offer software, services, and support, particularly companies that sell direct into non-US countries, although not limited to that. Its growth strategy states that it plans to grow organically via new system sales, customer sales, and customer retention, and also growth via acquisition.

To that end, the vendor has conducted a thorough stocktaking of its strengths and weaknesses in addressing its existing customers’ needs. Battery Ventures has selected Made2Manage Systems as a long-term investment, focusing on enhancing the value added to both current customers and prospects by first and foremost improving the profitability, stability, and operations of the company.

As to accommodate the quality management processes of its customers (whether as a part of lean initiative or not), Made2Manage Systems has teamed with Powerway, a leading provider of quality management software for the manufacturing industry that complies with the widely established QS-9000 Quality System Requirements, including Advanced Product Quality Planning (APQP) and its obligatory Products Part Approval Process (PPAP). Powerway Suite 2000 comprises sixteen software modules and the Powerway Desktop command center, while Made2Manage customers can benefit from several solution sets, such as the Document Control, Engineering Advantage, Factory Floor Performance, and Quality Solutions tools.

For example, users should be able to automate paper-intensive revision processes with the Document Management solution, whose tools should help employees gain real-time visibility into the key documents so that the right people can view the right documents as changes occur. On the other hand, for visibility into quality processes at the component level, users can use the Engineering Advantage module, which helps users to link and manage APQP-process related component-level documents. For example, one can access and maintain gage repeatability and reproducibility (R & R) studies to identify and reduce measurement variation, capability studies, set up instructions, or computer aided design (CAD)/computer aided manufacturing (CAM) files and forms, and, with timely information, one can thereby reduce data entry efforts and identify substandard quality much earlier and keep the customers happy.

Then, Quality Solutions tools include content-rich template packs developed by teams of Registrar Accreditation Board members, certified auditors, and leading environmental management consultants, and which should tremendously reduce the time it takes to interpret and comply with appropriate quality standards requirements. Last but not least, to help manufacturers reduce scrap, rework, variations, and defects, the Factory Floor Performance module provides real-time statistical process control (SPC). These quality management tools collect, manage, and analyze an organization’s gauge and machine data to fairly quickly identify out-of-tolerance processes, whereby users can automate time-intensive data entry through real-time integration with their gauges and machines.

Business Collaboration Tools

In addition, Made2Manage offers business collaboration tools, all of which are running on the web-based Microsoft .NET platform, including an enterprise portal (M2M VIP) and an integration layer (M2M Link) that enables automated data exchange between disparate systems via extensible markup language (XML) and web services technology. Wireless and mobile technology and web-based training and support have also become Made2Manage Systems’ landmark capabilities (see Made2Manage Affirms Its Technological Astuteness). Finally, the ongoing Microsoft .NET transition has resulted with M2M Business Intelligence and M2M Mobile Manager tools (in addition to M2M VIP and M2M Link) all running on the .NET platform, while the M2M ERP backbone will slowly be converted via the aforementioned phased implementation of a SOA.

Any earth-shattering new enhancements should not be expected any time soon, whereas the next major product release, that is likely to be delivered in early 2006 will feature customer-driven and –designed enhancements along the lines of manufacturing execution systems (MES)enhancements, such as scheduling whiteboard, paperless dispatching, and expanded data collection options, a more comprehensive CRM solution, and a web-based upgrade of the product configurator module, all with incremental pragmatic customer benefits in mind.

Another difference in philosophies between the two top managements has come from the challenge that the product’s vertical-specific functionality across the board, although broad and well balanced, has thus far not been recognized as a differentiator in the market. Even though the product did support several manufacturing environments, such as to-order, to-stock, etc., it was still in a horizontal manner, without, for example, a set of criteria for electronics or plastics. Specifically, the former Made2Manage Systems had chosen to maintain a flexible, but single version (i.e., code base) of the Made2Manage Enterprise Business System in order to cater to the needs and challenges of manufacturers across certain industries. As a result, it would deliver an extensible, flexible solution that could be modified to support a specific operation, as well as meet the needs of an organization as it grows. The product is completely Microsoft Visual Basic for Applications (VBA)-enabled and the vendor’s developers used to write VBA scripts to extend the functionality of the package to work in markets adjacent to its sweet spot, while there was a separate development group that used to do the core system’s customizations if the requirements were extensive and very complex.

Catering to Vertical Markets

Conversely, the Made2Manage Systems of today has plans to further develop its solutions to cater to specific vertical markets, and the future direction for Made2Manage Systems will be to focus on functionality in terms of finding out within which verticals the vendor has thus far had success and why. While the .NET initiative has not been derailed (as shown by the delivery of the collaborative, mobile/wireless, and BI modules on the modern technology), the vendor has decided to adopt a more selective, piecemeal approach to .NET adoption instead of the ‘big bang’, resource intensive “complete rewrite” one of the former leadership, and particularly if it would be without any apparent benefit for the customer. In other words, through the use of web services and .NET applications like Microsoft Visual Studio.NET 2005, the vendor has been implementing a phased SOA-based solution.

Namely, the vendor has become aware that the customers in its market are not asking for it in the near term. Therefore, the vendor pledges not to build technology for the sake of technology, which is justifiable if the VBA-based functionality is doing the job properly. Instead, Made2Manage Systems plans to focus in on the true needs of its customers and those of the prospective buyers in the target market, while applying forward-looking technology enhancements that protect its customers’ investment in business solutions.

To that end, the new management has been vigorously analyzing markets in their quest to further pinpoint the sweet spot, and to focus and sell only into this albeit narrower area in the future. Namely, although former Made2Manage Systems had not offered specific versions of the suite developed for specific verticals per se, more than 50 percent of its customer base falls within the following three Standard Industry Classification (SIC) groups: 3500s (Industrial and Commercial Machinery), 3400s (Fabricated Metals), and 3600s (Electronics). One should also note that the rubber and plastics manufacturers and processors now comprise, after the acquisition of DTR Software, nearly 15 percent of the total customer base, which means that the vendor now truly serves four industries quite well. The new owners’ focus on mainly targeting these industries hinges on reducing the need for customization.

The first steps have been taken toward leveraging the rich functional features inventory into vertically orienting the offering for these three industries, including new justified enhancements such as the above-mentioned BOM reference designators (bubble numbers) or long-standing drag-and-drop M2M Product Configurator for the electronics industry. Similar examples of a developed feature list from the business process perspective can be found for the other two verticals too, such as the “supporting non-standard parts” business process enablement through a customizable BOM builder feature for the industrial and commercial machinery vertical.

On its hand, the fabricated metals industry’s process of “meeting precision requirements” would be handled by the above-depicted quality management features, while the “managing multi-dimensional inventory and lot control” process would be handled through multi-dimensional inventory (MDI) capabilities, whereby users can specify requirements in multiple dimensions, types, sizes, and alloys of component materials that need to be measured and capture inventory transactions in alternate UOM (one can even track unconsumed sheet metal, as well as remnant, drop, and salvage materials with different dimensions and UOM throughout the production cycle, and even “loan out” these materials from inventory to manufacturing and accept reclassified items back into inventory for improved visibility and accuracy; the materials may then be back-flushed against corresponding jobs). The above approach prudently coincides with our advice of a balanced emphasis on both features and business processes when selecting an enterprise solution (for more information, see Evaluating Enterprise Software—Business Process or Feature/Function-Based Approach? All the above, Perhaps?).

Summary

Made2Manage Systems Inc., a former public provider of broad enterprise business systems for small and mid-sized discrete manufacturers, decided over a year ago to go private under wealthy Battery Ventures. The vendor has produced tangible benefits for existing customers (e.g., the vendor’s stability and sensible delivery of product functionality with increased product quality). While the target market remains small and mid-size discrete manufacturers, that sweet spot has first been refined and then expanded in part by recent prudent acquisitions.

Although not necessarily unique to Made2Manage Systems, the strategy of taking a deep breath and reflecting upon how to proactively better serve existing customers, and building upon that with a combined organic growth and growth via acquisitions, seems to be a recipe for success these days. The enterprise applications market is indisputably a mature and fairly saturated field, and all players must accordingly adjust their investment strategies from those of the emerging and growing market in the 1990s.

Thus, Made2Manage Systems has lately concentrated on selling to its installed base, which, although not huge, is comfortably sizeable, given the vendor has no aspirations (if not even illusions) about any too aggressive growth or about becoming a global ERP force in a foreseeable future. Part of Made2Manage Systems acquisition strategy includes taking on a more global presence through acquisition of non-US companies that offer software, services, and support, particularly companies that sell direct into non-US countries, although not limited to that. Its growth strategy states that it plans to grow organically via new system sales, customer sales, and customer retention, and also growth via acquisition.

To that end, the vendor has conducted a thorough stocktaking of its strengths and weaknesses in addressing its existing customers’ needs. Battery Ventures has selected Made2Manage Systems as a long-term investment, focusing on enhancing the value added to both current customers and prospects by first and foremost improving the profitability, stability, and operations of the company.

For the above reasons, many add-on modules that have recently been delivered and not yet truly pushed into the client base represent a true opportunity for new license revenues. There are strong indications from the announcements detailed in this note that the vendor has been strongly reconnecting with its installed base and has been having notable success in cross-selling and up-selling additional products, such as advanced planning and scheduling (APS), customer resource management (CRM), financial reporting tools, M2M VIP collaborative portal, and enhanced bill of material (BOM) functionality in the electronics industry. Given that success breeds success, after admittedly slower new sales immediately following the acquisition, the vendor has lately attracted even over sixty brand new accounts despite reduced (albeit more focused) sales and marketing expenses.

The vendor’s emphasis on challenging its prospects to calculate their potential return on investment (ROI) by conducting what-if scenarios of benefits like reduction in administrative costs, better customer service (and thus higher revenues), more efficient shop floor personnel, lower material costs, and improved pricing (higher resulting margins) versus total costs of purchase (i.e., initial and future costs of software, services, hardware, and miscellaneous) might further resonate with the risk-adverse market and play well to Made2Manage Systems’ confidence in its capabilities.

Yet, the vendor’s rationalization strategy to have a clear single solution for each industry it targets might be best realized with the recent acquisition of DTR, which, although being a small, niche player, certainly has an appeal and stronghold within small plastics manufacturers. This is attributable to its specific functionality for finite scheduling and other above-mentioned issues unique to plastics, such as the ability to schedule tools and fixtures separately from the injection-molding machine. This is an obscure niche that has not been traditionally well served, with only a few dedicated players beside DTR, IQMS, and SYSPRO being some. Although a key success factor for small software application vendors is to focus on one or two narrow vertical markets, DTR could not have done it in the long run with its limited resources of only thirty to thirty-five employees. Therefore, if Made2Manage Systems, although itself a small player but with a mighty financial backing, seriously intends to provide better marketing, continue product development (by keeping most of DTR's staff in place), and increase support for current DTR customers, look for brighter future and growth of the former DTR business.

Made2Manage Systems also understands that it is more economical nowadays to obtain new customers by acquiring existing ones from a competitor than by pursuing brand new accounts via a pricey and time-consuming direct sales model. On the other hand, while customers want their enterprise applications providers to oblige them with new products and technologies, vendors in turn feel compelled to increase revenues and market share as to be able to justify funding of new product development.

Challenges

However, the above notable actions are only a harbinger for more serious development endeavors in order to remain competitive in the future. While the company’s focus allows it to keep pace with trends in technology and customer requirements in its target niches, too narrow a focus comes with its liabilities as well. At least, some existing discrete mixed-mode manufacturing customers that might not now belong to the Made2Manage Systems’ recently sharpened focus on the above four segments (i.e., the vendor has so far garnered some notable install base within other SIC groups too, such as 3800s—Instruments and Related Equipment, 3700s—Transportation Equipment, and 2500s—Furniture Fixtures) might feel somewhat neglected by the future product developments, and the vendor will have to walk a fine line between satisfying these customers and not losing its focus and overstretching its limited research and development (R&D) funds. The mitigating factor in this regard might be that Made2Manage Systems’ refined product management process is open to all its customers, whereby the vendor balances the needs of its top four segments with the input it receives from all customers.

Further, in addition to its inferior size compared to most competitors, which may imply a negative viability perception these days when many believe that “bigger is better” despite impressive results of late, lesser financial resources, low visibility, and brand recognition (which are almost non-existent outside North America), and the product’s limited global capabilities are the challenges the company has yet to overcome.

At least, one Made2Manage product is becoming multilingual capable, since the TMM product will soon include the earlier mentioned new feature called Language Localizer. As for the Made2Manage application, portions of the product support other languages. For example, the M2M Shop Floor Data Collection tool supports Spanish. To date, most non-English-speaking users have addressed the need for multiple languages through customizations or available personalization tools.

While this narrow focus has resulted in the delivery of the capabilities within the compact single product line depicted above (before DTR), it may still result in missed opportunities as companies are increasingly seeking true global providers for their supply chain management and collaboration requirements. Made2Manage Systems might lose many deals because of its inability to fully support prospects outside North America and in languages other than English.

It still remains a good practice for manufacturers that are selecting solutions to factor in costs, the financial viability of the vendor, local support, and many other criteria, which might not go to the vendor’s favor, given a slew of bigger and more global competitors. Namely, Made2Manage global market awareness and presence remain quite insignificant, but it is not likely that the new management team will provide incentives to attract new committed resellers. On one hand, VARs typically come in handy to expand the vendor’s multinational capabilities, localization, industry specialization, and provision of vertical extensions. On the other hand, there is the Made2Manage conundrum of poor experiences with VARs in the past and its conflicting decision to serve the customers more directly (and intimately) from now on. Thus, the more likely strategy would be to acquire an enterprise applications company in Europe with a direct sales channel. The new management maintains that the key to product development will be making the functionality needs of its customers and target prospects a first priority, which includes providing support for multiple languages, since this requirement exists in North America as well as for global opportunities.

Further, the DTR acquisition will stop Made2Manage Systems’ traditional privilege of not wasting any time and duplicated resources on rationalizing multiple products, given its single product and single technology (i.e., Microsoft) strategy thus far, although the above SOA strategy should help in this regard.

Still, TMM it is currently limited to the Progress Relational Database Management System (RDBMS). Although it is one of the leading embedded databases for business applications around the world, with notable scalability and reliability, a lost opportunity due to some prospects’ IT department religious insistence on the Microsoft SQL Server database cannot be neglected. Still, given that small manufacturers tend to stick to tried-and-true technologies, the dependence on Progress should not be a terrible liability, given Progress’ recent bullish posture and notable technological advancements. This is bolstered by the recent moves of other prominent manufacturing ERP vendors that leverage Progress technology (i.e., Epicor, Encompix, and QAD), which have decided to allow their customers to keep their existing IT investment, while evolving at their pace.

For example, by adding the power of the Progress OpenEdge platform to a native Microsoft .NET UI, Epicor believes customers will be able to leverage the familiarity of the Microsoft UI, while benefiting from the flexibility and power of OpenEdge’s operating system independence, low total cost of ownership (TCO), and support for multiple databases. Time will only tell whether this will be Made2Manage Systems’ direction too, particularly if it is to conduct some limited product convergence and synergistic cross-product development going forward.

At the end of the day, while the gradual Made2Manage Systems product development strategy might be safer in the short run for both the customers and the vendor because it minimizes investment and disruption, the evolutionary strategy has limits in how much can be accomplished. The existing product becomes a limit on the amount of innovation that proves practical. There are no definitely right and wrong answers at this stage, and every vendor has to conduct its own soul-searching and justification exercise for the direction it chooses (see Rewrite or Wrap-Around Old Software?).

User Recommendations

Made2Manage Systems’ restored financial stability and its ability to enhance its products (both in-house and via acquisitions) and its determination on executing sound product and technology strategies deserves commendation. Current users are advised to follow the vendor's new product introductions and keep an eye on its future product strategy. The positive sign is the company’s more manageable and narrower focus, as demonstrated by its most recent results. Still, the time for existing Made2Manage customers and partners to act is now, especially if they suspect that they might not remain within the vendor’s core competencies, while they also foresee much growth and the need for enhancements on their side fairly soon. Still, the new owners’ motivation in buying the product and vendor must have been the install base. Thus, showing interest and being vocal about the needs is these customers’ part in keeping the relationship the way they want it.

Made2Manage Systems’ offering should have an appeal to small and mid-size enterprises (SME) that are discrete manufacturers operating in mixed-mode, as well as with not terribly complex projects and repetitive manufacturing functional requirements. Its sweet spot so far has been manufacturers with revenues from $5 to $50 million (USD) (50 to 250 employees, although the system has recently been tested with up to 500 users). Preferably but not necessarily, single-site North America- and UK-based discrete engineer-to-order (ETO), make-to-order (MTO), make-to-stock (MTS), and assemble-to-order (ATO) manufacturing companies and their divisions with up to $250 million-a-year (USD) revenue range and up to 200 concurrent users per site, should evaluate the company's value proposition. Further, the organizations from the above industries seeking a web-based solution and out-of-box functionality with little or no re-engineering effort may want to inquire about the vendor’s hosted application service provider (ASP) offering. Fast expanding, multinational, and companies looking for a cross-platform support and deeper vertical functionality may benefit from evaluating other products at this stage.

Certainly, manufacturers in the plastics industry should now find a deep vertical functionality within Made2Manage Systems. Existing TMM users should meet the new owners, and talk with the new management to make certain they know existing customers’ expectations and plans, and as to ascertain the vendor’s commitment to support their IT investment for a specified time (e.g., the support status, the long-term product alliances, product development, migration strategy, etc.). Both existing and prospective plastic processor users should keep a close eye on the vendor’s actions, given that product enhancement and service and support strategy can sometimes change as early as three to six months after the acquisition, although Made2Manage Systems seems unequivocally committed to actively selling and enhancing the product at this stage. They should also try to understand the combined or not product strategy and look for opportunities in the new prospective product portfolio.

Generally speaking, in a highly volatile market, existing and prospective enterprise software users need to understand every new owner’s strategy toward them. While you should talk to sales people and vendor executives, also look for more than mere words. Ask about why certain items you think you need are not available as standard offering. Ask about headcount changes, product release schedules, release contents, partnership programs, the future of exiting original equipment manufacturer (OEM) third-party products, etc.

More on a general note, existing customers of both languishing-once-troubled-but-now-stable or always-stable vendors alike, should address their concerns directly to the management and put contingency plans in place for ongoing support. Potential customers should proceed cautiously, buying components in a tactical manner and with a tangible, quick payback or ROI rationale. Stick to a series of smaller projects targeted at streamlining a specific business process. Keep it simple and smart (KISS), and be aggressive while negotiating risk allocations, price parity, and general terms and conditions. Fixed project prices (as opposed to time and material pricing), milestone payment schedules linked to deliverables, and a penalty clause for late deliveries (as well as a profit sharing incentive for early completions) should be a matter of course.

Very detailed functional and technical information about the Made2Manage Enterprise Business System 5.5 is contained in the ERP Evaluation Center at www.erpevaluation.com.