Spotlight on Midlevel ERP Software

SIMPLE SOFTWARE

Years ago, when the personal computer was just coming into its own, accounting software was relatively simple: Its single function was to automate the task of double-entry accounting and produce a straightforward balance sheet. As computers became more robust and integrated databases standardized, accounting software developers added more functions—including cost accounting, manufacturing resource planning (MRP), customer resource management (CRM), human resources (HR) and payroll. To differentiate these superproducts from the simple accounting programs, marketing-minded vendors christened the new packages enterprise resource planning (ERP) software.

Exhibit 1: Software Vendors

Product Vendor Web address Address Carillon Pettit & Co. www.carillonfinancials.com 100 N. Central Expressway, Suite 1300 Richardson, TX 75080 eEnterprise Microsoft Great Plains www.greatplains.com   One Lone Tree Rd. Fargo, ND 58104 E by Epicor Epicor Software www.epicor.com   195 Technology Dr. Irvine, CA 92618 MK Manufact’g Computer Associates’ InterBiz www.interbiz.com One Computer Associates Plaza Islandia, NY 11749 Enterprise IQ IQMS www.iqms.com 4250 Aerotech Center Way, Suite A Paso Robles, CA 93446 Progression Macola www.macola.com 333 E. Center St. P.O. Box 1824 Marion, OH 43301 ERP Plus PowerCerv www.powercerv.com 400 North Ashley Dr., Suite 2700 Tampa, FL 33602 Scala 5.1 Scala Business Solutions www.scalaworld.com 300 International Parkway, Suite 300 Heathrow, FL 32746 Solomon Microsoft Great Plains www.solomon.com 200 East Hardin St. P.O. Box 414 Findlay, OH 45840 Traverse Open Systems Inc. www.osas.com 1157 Valley Park Dr., Suite 105 Shakopee, MN 55379

Exhibit 2: Service, Support, Price, Implementation

Exhibit 3: Manufacturing Process

Exhibit 4: Core Financials

Exhibit 5: Purchasing and Sales Processes

Exhibit 6: Human Resources Process

Exhibit 7: Tax and International Processes

Many accounting software vendors, while eager to jump on the ERP bandwagon but unwilling or unable to develop their own complete ERP functionality, choose instead to license the very best special modules developed by other software companies. This option has gained popularity as advances in Windows and compatibility tools have made it easier to seamlessly link new modules to existing software packages.

Using such best-of-breed, third-party products was a boon to ERP vendors: It saved them money and made their products more powerful and more competitive. Further, it meant that the customer was getting an already proven (read that debugged) product.

Not all customers agree that plugging in third-party products is a good idea. If the licensed product malfunctioned (and what software product is perfect?), the customer now had to deal with two vendors—the ERP vendor and the third-party vendor. More often than not, when such a problem arose, each vendor tended to blame the other, leaving the customer uncertain where to turn for help. In our reviews, we have not provided separate evaluations of any third-party products.

THE NEW COMPETITION

In recent years the ERP market has undergone major changes. The high-end accounting software vendors (SAP, PeopleSoft, J.D. Edwards, BAAN and Oracle, for example) saw the potential of the midlevel market, and in order to edge into it, they’ve been scaling down their expensive and complex products. By removing some high-end functions and restricting users’ ability to customize the remaining ones, the vendors can trim prices, and, they claim, because the products are less complicated, implementation can be speeded up from an average of two years to anywhere from three to six months. For a midsize organization, that is a major plus because they usually lack the information technology staff required to customize and tweak an ERP package.

And as an added fillip to lure the smaller businesses, the high-end vendors are coming out with special preconfigured software packages for particular industries (for example, repetitive manufacturing, health care and retail). Not to be outdone, vendors of accounting software for small organizations—Peachtree, for example—are adding sophistication and special modules to their products in an effort to expand into the midlevel market.

All these moves are good news for customers: Not only is the competition driving vendors to make their accounting software smarter, easier to use and more flexible, it’s keeping prices in check and giving users more choices.

This activity is producing yet another reaction: To differentiate the new, more sophisticated accounting software products from the older ERP brands, some vendors are coining yet another name for their packages: back-office software.

GETTING HELP

Because ERP software is essentially a package of many complex interrelated modules, shopping for the product that meets your special needs is especially difficult. This complexity poses problems for the vendor, too, for rarely can one person in the vendor organization know everything about a package. Consequently, most vendors use a sales team approach, which can be frustrating for the customer who has to go from one sales specialist to another to get answers or a demonstration.

When a business begins a search for new accounting software, it typically lists all the business processes it wants the software to do and then evaluates how well each function performs. The exhibits accompanying this article constitute that list. To be sure, not everything in the exhibits will relate to your business, so examine only those functions that do.

The evaluations are based on information vendors provided as well as our own hands-on experience with each product.

Carillon
Pettit & Co.

If your business or client has special accounting software needs—beyond those of conventional manufacturers or retailers—consider Carillon. With two exceptions, its off-the-shelf modules offer primarily basic functions. The exceptions are the Financial and Contact Management modules. Because it’s bare-bones, users must customize the product to fit their needs, which is why it’s good for those with unusual requirements. It’s often easier to design what you want from the bottom up than to change existing functions.

Both the Financial and the Contact Management modules are well designed. Financial comes with a superior audit trail function that allows users to print any part of the trail, as of any period, at any time. Contact Management contains ample fields for storing mailing lists, sales leads and planned sales activities, among other things.

Carillon is a real-time system; as such, there is no batch processing to contend with, which will disappoint accountants who prefer batch processing as a control mechanism.

The package’s interface, while unusual, is efficient. For example, each module is accessed via an icon on the start menu. The interface for journal entries also is unusual, but not so efficient. The general journal entry screen contains only one line for debit and credit entry even though all journal entries require at least two lines; thus users must double-click in the account number field or use the Enter key to move to a new line.

eEnterprise
Microsoft Great Plains

The Microsoft Great Plains package, eEnterprise, works well for companies that do custom work. But it’s not as well suited for make-to-stock or repetitive manufacturers because it cannot handle standard job budgets.

The software comes with good documentation and many training options, making it easy to set up. Screens are uncluttered, well designed and consistent from one business process to another. It’s easy to build new reports or modify existing ones.

The software provides CRM functionality with a sales prospect function the user can customize by configuring the screens and developing reports to support callbacks, visits and follow-ups.

The Payroll and Manufacturing modules work particularly well. Payroll supports multiple unions, cost centers and job costing. The Manufacturing module contains inventory management and forecasting based on both sales history and sales targets.

One annoying feature: When the software generates a “Not all required fields have been entered” error message, it provides no clue to what’s missing.

E by Epicor
Epicor Software

E by Epicor is suitable for most manufacturers but is not a good candidate for certain retailers (because it can’t handle specific identification inventory) or construction companies (because it lacks retainage capability).

The software is sufficiently integrated so the user can drill down from an FRx report to the underlying journal entry and make adjustments while leaving the original entry intact for a complete audit trail. Period-end closing and recurring entries are very effective. To move from one period to the next requires just one mouse click. Recurring entries can be set up with different amounts per period to accommodate amortization entries.

E by Epicor has a consistent interface, configurable speed buttons and output options that include publishing to the Internet.

The eIntelligence modules may be the strongest argument for implementing E by Epicor because graphical analysis and executive reporting functions are built in. However, it does not contain standard financial statements; customers need to build them. While it’s not particularly difficult, it’s an inconvenience.

Third-party software products handle HR, payroll and e-commerce and aren’t included in this evaluation.

MK Manufacturing
Interbiz, a division of Computer Associates

As the name implies, MK Manufacturing is designed for manufacturers, and the functions work well. Forecasting can be based on user demand, internal consumption or sales history. Manufacturing and material requirements budgets are standard.

But for a complete ERP system, the product needs the following Computer Associates modules: CRM, E-Commerce, Human Resources and Payroll. These weren’t evaluated.

Data tables are accessible with a spreadsheet, which then can be used for further analysis. The software also lets you attach almost anything including CAD (computer-assisted design) drawings, spreadsheets, charts and text documents.

The product’s audit report is excellent, disclosing what was changed, by whom, when, the record number and the original entry.

But retailers should beware: Because of the transaction-oriented interface, a cash sale takes 19 steps, each on a separate screen. While the process at first seems intimidating, users can customize the process to display just necessary screens.

Enterprise IQ
IQMS

Enterprise IQ is designed for companies that are repetitive manufacturers. The software doesn’t need to be custom-configured no matter what kind of manufacturing the company does—extrusion, injection, stamping, outsourcing, blow molding or production of subcomponents.

The vendor also offers its own computer hardware that integrates with its software to update accounts every time a shop machine cycles. The product complies with the standards of the Automotive Industry Action Group. Another module, IQVoice, monitors and announces when machines aren’t operating within tolerance limits. It graphically displays the bottlenecks. The Forecasting module contains graphics capability.

Input screens typically are designed for production people—not accountants. However, they are consistent and easy to learn. The help menus are very effective.

The vendor generally will not customize its product for an individual user. However, if a customer request has wide applicability, IQMS will modify the software and ship upgrades to all its customers. In addition, it offers a unique one-year, money-back guarantee to unsatisfied customers.

Progression
Exact Macola Software

Progression’s standard accounting functions are quite adequate, but its e-commerce and payroll features are exceptional. The package uses Macola’s Web.Order product as an add-on to handle the business-to-customer, e-commerce functions.

Third-party vendors supply its CRM, purchasing and HR modules.

Forecasting, based on sales history, can be done using polynomial regression, exponential smoothing with trend analysis or time series analysis. Within the Distribution module, bar coding is standard, but it cannot handle personal digital assistants or radio-frequency tools. The Labor Performance module schedules work, polls time clocks and gathers information from the shop floor about scrap and units produced.

E-commerce functionality employs multimedia technology and can handle electronic catalogs and order entry via the Internet.

The help menus worked well within a screen or form, but the index or search functions have limited use because they do not use CPA terminology.

This was the only package that provided database table information (see below) on its help screens. That’s useful for programmers, but it raises attest problems because that information can be used to change data.

Standard reports use terminology that is not generally used by accountants. The detail general ledger, for example, is called General Ledger Trial Balance with Detail. In addition, some conventional reports—like a trial balance—are missing; however, they can be created by the user.

Don’t try to install the software yourself; an expert needs to do the job.

ERP Plus
PowerCerv

ERP Plus is a good choice for made-to-stock or made-to-order manufacturers. The product has built-in functionality that is extraordinary for a midlevel package. The MRP and CRM components are particularly effective. The output choices are comprehensive and easy to use.

An example of the MRP’s completeness is the inventory value report, which shows inventory in terms of both quantity and dollars; it has drill-down capability and with a single mouse click a user can see inventory for the total plant, by product class, by product line and by commodity. There is also KanBan (or parts-movement) scheduling and simulation of scheduling changes.

Not only does the software lack context-sensitive help, each screen required a different action to evoke a help function.

The package’s interface is not accounting intuitive—that is, nothing was where we expected it to be. However, required fields are easily identifiable.

Although the software lacks an HR module, users can key in employee data to allow job-cost accounting. The software also lacks a fixed assets module.

This is not software for retailers. To add a new item to inventory, for example, one has to input it in Item Master Maintenance, Item Master Production Control, Item Master Purchasing and Cost Accounting—a cumbersome process.

Scala 5.1
Scala Business Solutions

Scala is designed for retailers or manufacturers that do global business. Headquartered in the Netherlands, the vendor has offices in more than 25 countries.

It takes just one setting to change the terminology displayed on the software’s screens to match the country where it’s being used. For instance, U.S. employees would see “accounts receivable” while U.K. or Canadian employees would see the British term, “sales ledger.”

Users can set up consolidation among divisions as continuous or periodic. In addition, an optional Consolidation module can balance data from a source division to a target division, such as headquarters, and consolidate up to 34 companies at one time.

The context-sensitive user assistance is well designed, and it can be turned off once a user no longer needs it.

Scala features promissory notes and direct invoicing functions. Direct invoicing allows a customer to be billed without interfacing with inventory or production. Thus industries other than manufacturing will find Scala a suitable candidate.

Solomon IV
Microsoft Great Plains

Solomon IV is a good choice for businesses with special inventory needs. Every possible type of inventory is supported by Solomon, including Fifo, Lifo, average cost, specific ID, standard cost and user-specified cost.

Every report carries the traditional accounting name and looks exactly as an accountant would expect. The general ledger report gives users the ability to access individual accounts by double-clicking the account number in the left window of the screen.

When a user keys in a customer ID on the sales order screen, the system provides information about whether this customer is, say, a c.o.d.-only purchaser or has overdue invoices. Information about product availability can be accessed here as well. Users can schedule production or write a new purchase order without leaving the sales order screen.

The MRP and CRM modules are less satisfying—they have considerably less functionality than some of the other packages we evaluated. Nevertheless, MRP is adequate for job or project costing with cost center capability.

Multicompany transactions must be entered manually, and general ledger updates vary from automatic to batch-by-transaction type, which is a little disconcerting. There is no integration between the general journal and the subsidiary ledgers, which is essential to be sure that subsidiary ledgers agree with the general ledger.

Traverse
Open Systems Inc.

Traverse is suitable for retailers or light manufacturers, especially those that do not have the resources or inclination to deal with SQL Server or other large database management systems. By using the Microsoft Access database, it keeps its functions simple and easy to navigate.

Traverse is a single-solution ERP package—it contains all the modules needed to run a business. There is no specific manufacturing module; instead, there are Bill of Materials and Job Costing modules. Bill of Materials is designed to handle kits and kit components particularly well. Job Costing allows for payroll and overhead allocation assignments to jobs. The Fixed Assets module contains a well-designed amortization and lease/buy analysis programs.

The general journal does not interface with the subsidiary ledgers and the accounting reports are not always labeled traditionally. For instance, the general ledger is called the “activity report.”

The Payroll module is excellent and also provides good HR functionality. Pictures of employees can be attached, career planning is built in and all relevant employee information is available quickly and easily from one employee screen.

Roberta Ann Jones, CPA (inactive), PhD, is an associate professor of accounting at California Polytechnic State University at San Luis Obispo. Her e-mail address is roajones@calpoly.edu .