Tuesday, June 1, 2010

User Recommendations

Lawson's offerings seem well suited to companies planning to engage in e-business - or already involved in it - who do not yet have the kind of basic ERP back-office functionality that is Lawson's strength; one exception lays in that Lawson does not provide a native support for manufacturing. Since any company planning to engage in e-commerce will want to have at least a basic financials package and will need other components of an ERP suite afterwards, the easy deployability and integration promised by Lawson is a compelling reason to consider it as part of any e-commerce initiative.

We generally recommend including Lawson in a long list of an enterprise application selection to mid-market and low end tier 1 companies (with $10M-$2B in revenue), based on its very deep understanding of customers' needs within the following industries: Financial Services; Healthcare; Professional Services; Public Sector; Retail; and Telecommunications. Organizations considering ERP applications (both web based and network dependent) should however consider all available options.

Using a full Internet based solution could save time and money on the integration. Enterprises seeking a Web-based solution and out-of-box functionality with little or no re-engineering effort may benefit from evaluating Lawson's ASP offering. Support, connectivity, ease of use, security, acceptance, and scalability are only a few regular considerations. Companies with a substantial manufacturing activity (for which Lawson does not offer a native solution) and companies with more intricate business processes may want to inquire about how Lawson would deal with the issues of customizations and 3rd-party product bundling in an ASP setup.

Lawson, by adopting XML as its internal standard and providing appropriate interfaces, claims to be able to integrate with other e-commerce systems, on either the front end or the back end, so that its customers' systems can communicate smoothly with other vendors, whether via the Web, e-mail, or even Fax, EDI, and spreadsheets. This, bundled with the fact that its product will run on almost any platform or database, prompts us to believe that its competitors, particularly mid-market ERP vendors, will be enormously pressured to replicate Lawson's value proposition. However, consideration should be given to the endorsement of "web standards." Should a different XML standard be adopted (industry wide) after installation, identify who will be responsible for accommodating the change and what measures have been engineered into the application to support evolving standards.

Users should also bear in mind that improved technological integration is seldom guaranteed by joint marketing arrangements, and only comes after the arrangement yields considerable implementation experience. Plan for this general rule to hold for the partnership in question.

Lawson Software Expands Vertically As Well

On October 12, Lawson Software, a provider of Internet-enabled business applications, announced the formation of its sixth vertical market initiative. This one is for the telecommunications industry, and joins Lawson's established vertical markets in healthcare, retail, professional services, public sector and financial services.

Lawson plans to bring to the telecommunications market the full suite of its lawson.insight Web-enabled extended-ERP Applications, including Human Resources, Financials, Procurement, Distribution, Analytics and Enterprise Relationship Management. As part of the new market initiative, Lawson has extended its alliance with partner EYT, formerly Ernst & Young Technologies. EYT will provide knowledge transfer and design services, enabling Lawson to extend its core product line to incorporate new functionality required by the telecommunications industry. Additionally, the partners will jointly develop interfaces to industry-standard billing and service/activation management systems using industry-standard middleware engines.

Additional capability being designed into the product will be embodied in the analytic extensions, where telecommunications-related key performance indicators integrate data from lawson.insight with data from other billing and provisioning systems to present a real-time view of strategic operational metrics. The relationship with EYT offers additional value, since the company also is a LawsonTone ASP partner with extensive telecommunications expertise.

"Telecommunications is not a new industry for Lawson," said Bob North, vice president of Lawson's telecommunications field operations. "We've had rapid growth in this market segment over the last three years. However, the strategic partnership with EYT extends the value of our products well beyond traditional back-office e-business solutions and will allow us to offer an end-to-end solution to the telco market."

On October 9, Lawson Software announced "the best quarter of contracting activity in the company's 25-year history". Lawson reported total revenues of $84.2 million in the first quarter of fiscal year 2001, ended August 31, 2000. The company reported license fee revenue growth of 36% over the same quarter last year in its key target markets of healthcare, retail, professional services, financial services, public sector and telecommunications. Lawson's total contracting activity rose 78% over fiscal year 2000 first quarter figures. Contracting activity from the emerging lawson.community strategy - a slew of e-business solutions powered by Lawson and delivered via the Internet - rose 173% over the same quarter last year.

"This is an incredible time for Lawson Software," said Bob Barbieri, CFO, Lawson Software. "These figures prove that our strategies are working, our employees are meeting the challenges of our industry and customers are finding the solutions to their business challenges through Lawson applications. And as positive as the recognized revenue numbers are, our contracting activity gives us cause for even more optimism."

Market Impact

While we abstain from using bombastic words like "incredible times" to depict Lawson's current situation, we definitely believe that the company is in a very good shape. Lawson continues to reap rewards and to establish itself as a leader in the mid-market for financial accounting and HR applications by continually betting on the following three pillars of wisdom for the new Internet economy:

* Early delivery of innovative, Web-enabled and componentized products, often in advance of much larger and more visible publicly traded competitors

* Very tight industry focus in the above-mentioned selected markets

* Early involvement in ASP deployment

The recent announcement of a vertically focused partnership with EYT further speaks to Lawson's achievements. The company believes that it can support companies ranging in size from only a few million to $1 billion or more. It will be concentrating its internal sales efforts on its traditional vertical markets for now and relying on partners to bring other leads. The recent partnership with EYT as well as one with Siebel Systems earlier in the year might be the sign that the company has started to address its partnerships more strategically rather than opportunistically, which has been the case in the past. Also, this partnership could provide for a readily available toolkit for making deeper functional adjustments and customizations, which the company has not traditionally had available.