Nov 29, 2004 (11:11 AM EST)
Lawson Looking for Light in EPM
Read the Original Article at InformationWeek
Lawson recently set a 1,000-day manifesto (strategy and plan) to advance the company beyond its traditional application focus, including enterprise performance management (EPM). Unfortunately, not long after this announcement, Lawson experienced a hiccup in its business performance: it failed to gain new customers and entice existing customers to purchase its complementary solutions. Now, Lawson has shifted focus again this time, back to its core ERP business, as is evident in a recent shift from a strong vertical strategy to a horizontal ERP focus, management changes including the reduction of individuals who understand EPM, and an attack on competitive ERP providers. Ventana Research cautions organizations evaluating Lawson to carefully review its short and long-term commitment to its solutions, especially EPM, until its business and strategy stabilize and translate into improved financial performance.
Lawson is a mid-market ERP solution provider that historically specialized in health care, retail, and education. Its approach was to provide vertical expertise through its marketing and sales, along with products and services delivery. Lawson's recent 1,000-day manifesto lays out a grand plan to expand its market presence through key initiatives like enterprise performance management (EPM). Unfortunately, less than one month after this announcement, it had a tough quarter, missing its financial targets. This has resulted in significant management change along with a reduction of people and competency in EPM.
Like many ERP providers who attempt to expand into new solution areas and initiatives, the slow down in the enterprise application market for transactional applications has impacted Lawson, as it has Oracle, Peoplesoft, Siebel, and others. While questions surrounding the health of the market still remain, the reality is that most organizations have already adopted applications to run their day-to-day operations. Unfortunately for Lawson, the shortfall in new ERP license revenue has hit hard, proving it should have stayed focused on its core competencies.
With focus back on its core ERP business in HR, financials, and procurement, Lawson performs a back-to-the-basics strategy by selling complementary applications to its existing customers. These applications include time management, expense management, budgeting and planning, receiving and delivery, and others. In addition, Lawson's EPM offering, comprised of Reporting Suite and Budgeting and Planning, has some core strengths for compliance and notifications, which could bring value to existing organizations leveraging Lawson. Unfortunately, Lawson is hampered by the lack and loss of individuals in their sales, services, and product organizations who understand performance management and can further its efforts.
Lawson joins Oracle, Peoplesoft, and other ERP providers who face significant challenges in maintaining or growing their core business. Efforts by many of these vendors to expand into EPM offerings have been less than successful because of their lack of complete commitment in marketing, sales, and services to their customers. Lawson's recent disruptive marketing tactics picking on JD Edwards/Peoplesoft, Oracle and SAP are interesting but distract from the core challenges the organization needs to address. Our research with finance and operations executives who own these applications has found that vendor-to-vendor attack strategies and methods aimed to de-position existing investments do not play well for building customer relationships. Organizations who own ERP systems must manage their investments to full-value and not look to rip and replace existing operational systems.
Lawson has renewed its focus on ERP applications like HR, financials, and procurement, and has refined its strategy and solution focus on complementary add-on applications. With significant changes in its managerial structure and strategy over the last three years, it is not clear where Lawson will go next. Organizations with existing operational ERP investments should stay focused on leveraging those investments and not toward purchasing a replacement strategy. Ventana Research recommends that organizations examining Lawson and its areas of EPM in reporting and budgeting/planning carefully examine its commitment and direction, and compare it to third party options to ensure a careful balance of risk/reward.
Mark Smith is CEO & Senior Vice President of Research at Ventana Research (www.ventanaresearch.com), a research and advisory services firm.