Spring 2008

Microsoft's Dynamics platform is emerging as an appealing new option for multi-channel fulfilment software, though the individual developer's name may be the one you notice. F&E considers what it has to offer

Suppose you're an online retailer or a fulfilment company working for one, and you need to upgrade your IT systems to cater for the latest in multi-channel retail. Do you think to yourself: 'I need to find the right multi-channel fulfilment suite'? Or do you think: 'I need to upgrade my ERP system'?

It's a telling question, and it could dictate the way your research goes as you look for the right solution.

In case you've forgotten, ERP stands for 'enterprise resource planning', and it sums up the kind of broad management suite that underpins the commercial and organisational activities of most large companies, as well as many medium and small ones. It might well include basic financial management, human resource management, order handling, customer relations management, even production planning and execution. And it may well also include supply-chain management.

 

Rightly or wrongly, major ERP suppliers are always prey to accusations of being too generalist in their perspective - which is partly why the retail market, and particularly the e-commerce and multi-channel retail market, has spawned a whole industry of 'vertical' software suppliers who specialise in the somewhat complex discipline of multi-channel fulfilment solutions. You probably know the big names in this field; they are mentioned frequently in the pages of F&E.

However, there's a further option. You can buy software that sits on an ERP platform, but is tailored to the needs of the multi-channel market: the best of both worlds, in other words. And an increasingly popular way developers are finding to do this is to base the product on the Microsoft Dynamics ERP platform.

Usually this kind of product retains its own third-party branding and characteristics, so you might not even think of it as a Dynamics solution as such. Indeed, Microsoft isn't the only ERP supplier to present this opportunity; you can also buy bespoke fulfilment solutions based around ERP systems from the likes of Oracle and SAP.

Where Microsoft has played its hand quite rather cleverly is in keeping a modest profile, and letting the third-party developers take the marketing lead. So end users can still take reassurance from feeling they're buying what seems essentially a bespoke product - one supplied by developers who are immersed in their market - even though in reality it is based on a robust common industry platform.

Microsoft also has certain other key benefits to offer, too. One is the self-evident fact that Microsoft is responsible for Windows itself, and also for some of the most widely-used software running on it: Office, Sharepoint (for running intranets), Biztalk (for mediating digital communications), SQL Server for industrial-strength database capability - you name it. So when it comes to integration with its ERP product range, no one has a better range of options.

Talk of 'Microsoft ERP' is perhaps over-simplifying the company's offering in this market space. Actually Microsoft has steadily built up its capability in this area, acquiring a succession of established developers with existing product ranges. Among the more notable were Axapta, Great Plains and Navision.

Separate product streams

Nowadays these products are strongly Microsoft-branded, but interestingly, they remain separate product streams. As Steve Farr, UK product manager for Microsoft NAV (formerly Navision) and GP (Great Plains), points out: 'There's no plan to make the products converge. They all address slightly different markets.'

In some respects the differences are subtle, but essentially they cater for different market segments, with AX (formerly Axapta) perhaps tending to address companies with higher numbers of users and order volumes.

One of the longest-established multi-channel developers working on the Dynamics platform in the UK is K3, which previously had a long-standing relationship with Navision. 'Our strength is our all-round experience of the retail market,' says director Steven Hampson. 'Whether you're talking about in-store purchases, online selling or call centre sales, we can channel them through the same system.'

K3 particularly targets what Hampson called 'the medium segment of retail', and has a variety of clients, with particular emphasis on fashion retailing. Classic names include the White Company and Agent Provocateur.

Ready-made toolkit

So what is the big selling point of the Dynamics platform? 'It provides a ready-made ERP toolkit out of the box,' Hampson says. 'Basic functions like looking up a stock record are readily available, so we don't have to reinvent them. This makes it much quicker for us to create an integrated product that suits customers' needs.'

Harry Manley, founder and chief executive of Omnica, a new company which has been set up specifically to offer Dynamics AX-based solutions, makes a similar point. 'It's a better toolbag to have,' as he puts it.

'The main advantage of AX is flexibility,' Manley believes. 'If you buy bespoke software from developers who build it from scratch, and you want to change it or add functionality later, usually the only option is to go back to the original supplier. What's more, this inevitably takes time. Dynamics AX, by contrast, is intended to be customised. It's easy to separate out the underlying technology from the customised elements.'

A typical example of this sort of customisation might be the process for taking orders for wine. 'This presents special requirements that wouldn't necessarily be present in *vanilla' multi-channel software,' Manley says. 'It could take days to customise a bespoke suite to cope with this, whereas in Omnica it can be done in hours. This makes a huge difference to the total cost of ownership.'

He says it should even be possible for users to get a developer other than the original supplier to provide further customisation in future, 'though obviously we'd prefer to do it ourselves.'

Omnica has been going through the implementation phase with its four first customers, and several were due to go live just as the current issue of F&E was going to the printers. We weren't able to publish their names at the time we went to press, but hope to be able to report on some of them in our next edition.

Fiona Nolan, Microsoft product manager for Dynamics AX, echoes Manley's point about flexibility. 'AX is highly flexible and adaptable,' she says, adding: 'It has a development environment built into it.' She draws a distinction here between Dynamics and rival ERP products. 'With other ERP systems,' she says, 'configuration can be a painful process. AX is the best solution out of the box, but also allows developers to build applications easily on top of it.'

Harry Manley says configuration is even accessible enough to allow non-developers to do it. 'Simple changes can be done at user level - for instance, the information that appears on an input form.'

Among the attractions of this type of approach to multi-channel software is that it lends itself well to use by specialist fulfilment companies, who may need to integrate their IT systems with those of several different clients. 'It's also very effective for integrating with carriers,' says K3's Steven Hampson, adding that his company has several clients in the fulfilment market. And Omnica reports that one of its first batch of customers is a fulfilment business.

One UK-based fulfilment company, Capita Fulfilment Services, has just gone live with an AX-based system called JunctionRES from another Microsoft Dynamics developer, Junction Solutions. Features include the ability to handle complex customer call centres and fulfilment centres with rich order management and fulfilment, customer relationship management and enhanced warehouse management functionality.

Capita's divisional managing director Paul Simpson says the implementation 'is key for the future development and growth of not only the fulfilment business, but also of the Capita Communications Division as a whole.'

Junction Solutions has just relaunched its Junction Solutions for Retail suite, adding over seventy new features, and catering particularly for the needs of cross-channel retailers by storing data for all channels in a central database.

One thing multi-channel retailers are likely to need is a web front end, which understandably is not necessarily a built-in product of standard ERP systems - even Microsoft's. However, as you would expect, Microsoft offers a range of resources to smooth the process of integrating web-based storefronts with back-end systems. K3, for instance, offers an integrated ASP-based product including many ancillary features such as email marketing and web analytics.

Omnica for its part has developed a product called Omnica Webstore for AX. It's not exactly an AX product as such, but uses AX business rules and integrates tightly with it. It's actually built in Microsoft's .NET web technology, and uses web services and other technologies included in Microsoft's Application Integration Framework.

'But we don't insist that our users take this product,' Harry Manley emphasises. 'We're happy to integrate Omnica with third-party web storefront systems.'

BOX: Dynamics - the next phase

One of the key selling points of the Dynamics suite is that it shares the look, feel and general usability of familiar Microsoft products such as Outlook, and can actually integrate with these products. This means for instance that appointments related to a Dynamics-based suite are stored in an environment that doesn't just look like Outlook, but in effect actually is Outlook.

This didn't happen by accident. In is tried and tested fashion, Microsoft did massive usability studies 2002 and 2003 to establish how customers interacted with both ERP and Office-style products, and realised there was then a significant lack of integration. In the light it its findings, the company went to great lengths to address that situation.

Now Microsoft is taking the harmonised look and feel aspects of Dynamics to the next level, introducing the style of its Office 2007 system into the Dynamics environment. This has already been applied to some Dynamics products, and will appear in AX 2009 this summer, then across the rest of the range soon after that.

Look out also for the incorporation of other leading-edge Microsoft developments such as 'presence', which describes the ability of multiple users to communicate about and work on the same document or system at the same time. 'It will include email, instant messaging, phone calls, the lot,' says Steve Farr.