Following on from the latest run of WhichPLM articles on end-to-end solutions, WhichPLM opens the floor to some of the vendors who offer both ERP and PLM systems for their view on how the two systems can function together.
In the next instalment in this series, Rob Smith meets with Andrew Dalziel, Marketing Director, Fashion and Food Industries at Lawson Software. Founded in 1975 Lawson Software has been developing and providing industry focused end-to-end solutions for the apparel industry and they are one of the top ten ERP vendors. Its solution portfolio includes ERP, SCM, PLM, CRM and Business Intelligence to mention just a few.
WhichPLM: With the recent downturn in global economies, are you finding that your customers have recovered quicker than some other industries with less resilient products portfolios and what do you believe are your customer’s key business drivers now moving forward?
Andrew: We see a different picture in different geographies. Asia Pacific started to recover some time ago and growth in China is being driven by the domestic market and emerging middle class. The US is showing a patchy recovery, as is Europe.
In the Western countries, apparel and accessories companies face rising sourcing costs, a need to find new channels to market (multi-channel) in search of growth in low growth economies, pressure to control inventory in the supply chain better than ever before and to better predict and react to volatile consumer demand and shifting trends.
WhichPLM: As a rule of thumb, we would look to lifecycle of around 3-5 useful years from an enterprise system (whether it be ERP, PLM, EPOS etc..), do you think we are going to see this “value window” being forcibly extended by consumers from their implementations? Do you think enterprise systems can still deliver a beneficial value over 5 years from go-live in the current market?
Andrew: We see a much longer lifecycle for enterprise systems with our customers/companies. We have fashion companies that have been running Lawson for almost 20 years and are still getting significant value. To continue to derive beneficial value or a competitive advantage from their enterprise system, companies need to stay up to date on the latest version. Software maintenance fees entitle customers to updates of modules they already own as well as fixes. It is important companies leverage this if they want to get the most out of their investment.
The Lawson ERP and PLM solutions are configurable, so they are flexible to enable reconfiguration as a fashion company’s business model evolves without the need for coding.
WhichPLM: What regions/areas are Lawson themselves forecasting or experiencing strong demand for PLM and other enterprise level IT solutions? Why do you suspect the market is buoyant here ahead of other regions?
Andrew: Demand for PLM remained fairly strong across all regions through the economic recession. Our PLM is configurable, easy to implement and offers a short time to benefit. A potentially short return on investment means it is attractive to companies while capital expenditure budgets are tight.
The ERP market slowed during the recession. However, Asia Pacific has picked up and there are early signs of recovery in the US and some European countries. Fashion companies are recognizing that they need to invest in technology to meet the challenges of a competitive market place. This includes delivering new collections faster, ensuring effective sourcing, minimizing inventory in the supply chain and supporting multichannel sales to gain a competitive advantage.
WhichPLM: …so how are you helping to deliver these customers better value from an enterprise system now against the market pre-2007?
Andrew: Lawson has delivered two major ERP releases since 2007, as well as acquiring and adding Fashion PLM to its portfolio and developing a retail assortment planning and replenishment solution to get closer to the vision of supporting from concept to consumer. The strategy has focused on delivering:
a) Packaged industry-specific solutions to help reduce the costs of implementation, time to benefit and help mitigate risk. These include value added content and solutions such as Lawson QuickStep for Fashion and Lawson Analytics for Fashion;
b) Tools to help make users more productive such as the acclaimed Lawson Smart Office rich client user interface that interfaces with Microsoft Office and Mashups. The latter allows the combining of various Lawson programs and 3rd party applications into one screen;
c) Functionality and data migration tools to simplify upgrading and help move customers towards the Lawson PURE vision of zero modifications.
WhichPLM: The media is rife with case studies of catastrophically failed ERP and PLM projects, (albeit 1st generation projects) do you think running a full end-to-end system implementation project is a better value proposition than running separate projects independent of each other?
Andrew: Every project is different and needs to be planned based on the customers’ goals, resources and budget. A lot has been learnt by vendors and customers since the 1st generation projects and today solutions such as Lawson QuickStep Fashion help reduce implementation costs, time to benefit and help mitigate the project risk. QuickStep allows companies to get up and running quickly and then to run further projects to add other applications and enhance their configuration.
A Lawson QuickStep ERP project can take as little as 5 months or less. PLM implementations typically take around 4 to 6 months.
WhichPLM: Do most consumers have the available capacity (both financially and at a resources level) to run dual projects? Do you think consumers are fully aware as to what their own capabilities are for running enterprise level projects?
Andrew: There is a large variation in the readiness of organizations to plan and execute enterprise level projects. Some have the mindset, management support, budget, process owners and resources to cope with large projects from which they anticipate large benefits. Other companies are less mature and need to take more of a pragmatic or phased approach.
WhichPLM: …but surely not every consumer has the correctly aligned company strategy and board leadership to implement such widely encompassing changes?
Andrew: Change management is a major component in Enterprise solution deployment unless it is a straightforward system replacement. Willingness to change, good communication, strong leadership and champions for change can help make a positive difference and lead to a successful project whether the company is large or small, established or young.
WhichPLM: So what specific benefits can a consumer expect from integrating Lawson PLM and ERP end-to-end ahead of the competitors in this space?
Andrew: At Lawson, we believe the future is in integrating processes from concept to consumer. The complexity and effort in maintaining disparate systems, duplicate entry of data and development and support of custom interfaces adds cost, time lags and increases the risk of costly errors. Having one vendor and standard interfaces helps improve efficiency, reduce costs and increases agility.
WhichPLM: …would it not be better for a consumer to look at the market and say “what’s the best ERP for my size, what’s the best PLM, what’s the best EPOS (or any other system segment) Etc…?” and plumb them together? Surely the database or data warehouse behind the scenes is equally accessible for all?
Andrew: Some companies will choose to pursue a best of breed approach and large companies may be able to afford this luxury. Others may be able to cost justify it. However, the risk is that you may optimize part of the overall process, but it is sub-optimization rather than end-to-end process optimization, which ultimately delivers the greatest benefits.
WhichPLM: …but do you not think it’s risky for a consumer to be fully dependent on one supplier? Doesn’t familiarity breed contempt after all?
Andrew: The costs and effort to maintain relationships with multiple different vendors and to then get them all working together by developing custom interfaces should not be under estimated. Each time either separate system is upgraded, significant addition work will normally be required to modify and re-test the interface.
WhichPLM: At the technical level, is the Lawson end-to-end system: one complete single system; separate systems seamlessly integrated or modular systems operating on a common platform? What influenced the design decision for this over the over options?
Andrew: The core transactional applications in the Lawson for Fashion system are one common integrated system that is made up of various modules which are developed in Java. Some planning modules around this central core such as PLM and Assortment Replenishment Planning are developed in .Net and are connected using standard interfaces. These different technology stacks are suited to different user types and data volumes.
WhichPLM: Finally (and perhaps crucially), if you had a very immature client who had neither PLM nor ERP, and only had the resources to run one system project, which would you advise to start with and why?
Andrew: This depends on many factors, such as existing system, current business pains and potential return on investment, the business model, the size of the company and others. We would recommend some form of opportunity analysis first to identify where business process improvement will have the biggest impact on profitability and other goals. Sometimes we start with PLM, other times with ERP.
Read Rob Smith’s articles on this subject matter: