Thanks to Twitter, I have started to follow the blog by Forrester Research’s Ray Wang. He seems to have coined a term project-based solutions (which we might start to use to segment our software), and tracks software companies in that segment.
So I am surprised, and pleased, to see a number of start-ups in the project space. They seem to be more in the IT and workforce project management space – eProject (now Daptiv), Tenrox, Augeo, QuickArrow, and OpenAir (NetSuite); interestingly, SaaS offerings are quite common.
Until now, EPM (enterprise project management) has been almost an underground software offering. Noise about it started with the acquisition of Primavera by Oracle earlier this year. But the other major vendors that I am aware of – Microsoft’s Project and Portfolio Servers, CA’s Clarity – seem to follow a ‘stealth marketing’ approach to their products.
With the rise of the project start-ups, I wonder if the majors are going to sit up and take more notice of this segment of the software market? As we start to expand our opportunities in the project ERP space, I hope that the attention and focus around EPM grows.
From an SA online news article, SAP claims that its Kick Start and Go solution for SMEs can be implemented in two days; and its Fast Start pre-configured CRM, financials and hardware solution in 8 weeks.
Comment from a local SAP consultant is that it takes 2 days to configure SAP – so how does Kick Start and Go work? We are implementing at a large manufacturing company (target segment for the Fast Start program) and the complexity of an organisation like that makes an 8 week timetable look totally unrealistic.
I assume that SAP comes in and tells the company how its financials will be structured and how its processes will operate in future.
Nearly a year ago I wrote what it felt like when my son left home to spend 6 months in Cape Town with Youth With A Mission at DTS (discipleship training) . Back then I said it was going to constitute his ‘gap year’ before going to university. So much for that idea!
He came back in June and soon announced that he wanted to go back to YWAM - but as a leader. That shook me for several weeks, it did not match ’my plans’ for him. But I soon learned that he had set his mind on it and would not be swayed.
So after a few months of him being at home, and doing odd jobs to earn money, we said good-bye to him again today. Our church (Rosebank Union) has agreed to provide some financial support, as have various friends from the church, and he was given an official sending at the morning service.
He is going to WYAM with great enthusiasm, and a level of maturity he didn’t have a year ago, and we hope these next six months will give him a clearer idea where he should go with his life.
That’s not to say that my ideas for him have completed changed. I still believe that a university degree is a good thing and would stand him in good stead. But I am beginning to accept what he sees as his direction in life. I also realise that I have to put my trust in the Lord that He will guide and protect my son.
In the ERP manufacturing space, the term ‘order fulfillment‘ refers to the process that manufacturers follow to make goods for customers. The options are:
Make-to-Stock (MTS) The product is built against a sales forecast and put into stock, from where it is sold to customer; e.g., the retail sector.
Make-to-Order (MTO) The product is based on a standard design, but component production and manufacture of the final product is linked to a customer’s order specifications; e.g., high-end motor vehicles.
Assemble-to-Order (ATO) Similar to MTO but the product is comprised of modular components and is built to customer specifications from a stock of existing components; e.g., the Dell approach.
Engineer-to-Order (ETO) The product is designed and built to customer specifications; this approach is most common for large construction projects and one-off products
Accepted practice with these processes is that a material requirements plan is put together using the Bill Of Material (BOM – the components, production operations, inventory and lead times) of the product, following which a master production schedule (MPS) is developed from the order, inventory and production information available.
The company I work has, for a number of years, been growing its experience and expertise in the custom-production areas of the order fulfillment process; what some would call ETO. We have been finding that although ETO-type manufacturers never build the same product twice, and may have many unique orders being built simultaneously, they consider it sacrilege to go against the concept of a BOM; even though a BOM is only really applicable and useful if you can re-use it.
I have encountered manufacturers who think that they have to a BOM to make their products. But when you probe deeper you discover that what they make is unique (ie, project-driven) and therefore requires a new BOM everytime.
A few companies, however, are starting to follow a new practice – what we have called for the moment, Project Manufacturing (PM).
“For organizations that are project-based … there is a great need to integrate project management with ERP … the project schedule is (or should be) the master production schedule. Requirements for material, labor, outside services, and other resources are directly tied to the work breakdown structure. ERP systems based on a traditional MRP approach simply do not work. Project-based organizations are relatively under-served by enterprise system vendors.”
These project-oriented manufacturers follow the PM approach – using project management software applications to do their detailed manufacturing planning, rather than an MPS. The labour and material allocations that conventionally are done via the BOM are managed via the work breakdown structure (WBS) of the project plan. Frank’s comment that these types of manufacturers are ‘under-served’ is an under-statement. None of the standard and well-known ERP vendors provide this type of functionality.
We have had the privilege of working with a few leaders in the PM space in South Africa, and help them to develop the integration of project management and ERP. It can be quite a culture shock for someone coming from a standard manufacturing process to adapt to the PM approach, and in my case it took over a year to develop a deeper understanding of the processes and technology involved.
The purpose of this blog article is to introduce the concept of PM, and find perhaps a better acronym. In later blogs I will go into more detail about how PM differs from the other order fulfillment options, how to allocate labour and materials in the WBS and then link it to the ERP system, how it works from a software and process perspective, and what it involves for project implementation. In the meantime, comments would be most welcome.
I was recently on holiday on the east coast of South Africa on the Indian Ocean, near a town called Scottburgh. Thanks to my marine biologist brother-in-law, I was able to go diving with one of the top divers in that area – Mark Addison.
The dive area is known as Aliwal Shoals, and is one of the world’s top spots for shark diving.
During one of our dives, Mark took this photo of us diving with black tip sharks (I’m in the foreground):
From the BBC news site - Work gyms ‘lift mood and stress’. An experiment by Bristol University has confirmed what some of us have known for a while – “Employees who can exercise at work are more productive, happy, efficient and calm.”
As someone who likes to get to the gym, I am glad to see this. But the study highlighted other things I know:
However, their work … did find employees struggled to fit exercise around their work and felt guilty about being away from their desks … They also felt they might be criticised by colleagues for taking time out from their desk jobs.
A few years ago I was getting to the gym three times a week, and sometimes more. Now my goal is twice a week, and I am usually glad that I actually make one visit. My workday is now so busy that I might plan some time around lunch to get to a nearby gym, but when it comes to the time there are deadlines and deliverables to attend to.
I have learnt that sometimes it really does help to take that break. As the study points out - ”If people try to fit an active break into their working day, they might also experience the added bonus of their whole day feeling much more productive. And that always feels good in our busy lives. The study also begs the question whether employers can afford not to be encouraging active breaks.”
Two recent blogs by Michael Krigsman discusses how high IT project failure rates are, and some of the key reasons.
I am friends with a number of professional engineers – civil, mechanical and electrical – and I don’t believe they would dare to operate if the failure rates of their projects was anywhere near as high.
Michael identifies issues relating to lack of skills, knowledge and competency as the key factors leading to failure. Skills, knowledge and competency are what training and education programs are supposed to develop. People go to university to acquire skills and knowledge. But for professionals like doctors (my wife being one) and engineers, a university degree only starts the process. The engineering companies I know expect to train young engineers for several years before they are ready to be let loose.
But when it comes to IT, customers often think they have the in-house capacity to for projects. I think many people also look at software like Microsoft Office and think that implementing and using software is easy.
Many years ago in South Africa, there was a debate in the Computer Society about whether IT should become a profession. At the time, the proposal was defeated. After reading Michael’s blog, I am wondering whether we should re-look at the proposal. The next step would be where do you start, and would IT vendors, consultants and users see this as beneficial?
In engineering, aircraft engineers must be a relatively recent addition as a profession. So how did they go from being a bunch of techies to having their own professional status?
BTW, I suspect that the information Michael uses comes from projects in the more well-resourced developed economies, so I wonder how the projects perform for those of us in developing countries?
While I am one of those who likes the value of (some of) Microsoft’s proprietary standards in software, I learnt the value of open standards in motor vehicle spares when we went on holiday.
When we went on holiday to the Kwazulu-Natal coast (by the Indian Ocean) we took my wife’s Toyota Condor because we had a lot to transport. A few hours out of Johannesburg, in the middle of the Free State province and 40km from the nearest town, the car suddenly lost electrical power and stopped.
Two and half hours later, though, we were back on our way to the coast. The problem was with the car’s alternator, and while it took nearly an hour for the Automobile Association (AA) to get a tow truck to our location, and a half hour to get the car towed to a garage, it took hardly anytime for the repair – the reason is that Toyota parts are readily available in South Africa.
Toyota assembles cars in South Africa and has the largest share of the passenger motor vehicle market. With its local assembly it has also opened the parts market to several manufacturers, effectively making Toyota parts an open standard. Even though we were in a small town in rural South Africa, getting the spare Toyota alternator we needed was not a problem.
Compare that to the situation of people driving several (of the less popular) American or European cars in this country. The only places that can repair those cars – Chrysler, Renault, Volvo, etc – are in the major centres, and it is only there were you can get parts. A break down of those cars in the middle of nowhere means you are well and truly stuck, and will probably require a long and expensive tow.
The experience has made we realise that in this country it is far better to drive one for the cars that are assembled and have larger market share here – Toyota, Nissan – than a fashionable car, like a Lexus or the Renault I used to drive.
I have to complement Microsoft, therefore, on the way it has made its users dependent on its proprietary software. What will it take for other software vendors to get local customers to appreciate the value of open standards in software?