Oracle helps midsize businesses achieve a fast return on investment.
by Ann C. Logue, May 2009
Growing businesses, especially startups, often assume that they’re too small for enterprise business applications and that simple, spreadsheet-based systems will work just fine to meet their needs. But growth can happen unexpectedly, and a company that had been managing “just fine” may suddenly find its systems—and its people—overwhelmed. Facing both operations headaches and looming systems conversions, many growing businesses—even startups—are looking to true enterprise applications packages as the right solution. The fast return on investment (ROI) from improved business processes, long-term support, and scalability create competitive advantages to support fast growth.
“I think that I’ve paid for half of the software just with receivables I’ve collected that I might have had to write off before,” says Tom Frederick, CFO of Arcanum, Ohio-based Creative Cabinet Systems. “These weren’t bad debts,” Frederick continues, “just billing and payables discrepancies that tend to get ignored if they’re not dealt with in a timely manner.”
For any company, every problem with billing, collections, and orders that can be identified and resolved quickly leads to more money for the bottom line. The DOS-based system that Creative had used for decades couldn’t spotlight problems until they were too old to be effectively addressed.
Replacing legacy systems is not an easy decision, because the market has lots of standard solutions for midsize business, ranging from spreadsheets to packaged products. But those standard solutions can lead to nonstandard business processes and can limit scalability. “An enterprise resource planning [ERP] system makes sense for companies that can look ahead and see that if they’re successful, they’ll be on a very fast growth path,” says Lee Kroon, senior industry analyst with Andrews Consulting Group in Cheshire, Connecticut. “Some companies have uneven growth trajectories that can make them outgrow off-the-shelf systems at unexpected times, creating chaos when the business least needs it.” This is especially true for companies that have seasonal businesses and hot products or that do custom work.
Getting executive support for these investments isn’t the challenge it once was, Kroon says. “Entrepreneurs increasingly realize that technology isn’t something that gets in the way,” he adds. “They realize that they have some clear needs and that technology is going to be a critical factor.”
eZono: Doing It Right from the Start
eZono, based in Jena, Germany, is a startup company about to launch a new, affordable ultrasound imaging system that can be used by nontraditional ultrasound users such as anesthetists. eZono competes against some big companies, so it needs to maintain cost advantages to keep its market edge. “We couldn’t afford to have the traditional medical technology supply chain,” says Andre Jaekel, CFO at eZono. While most ultrasound imaging systems are based on hardware components, eZono’s product is differentiated through its software, not its hardware. The hardware is assembled from standard components, allowing eZono to maintain a smaller inventory than its competitors. “We essentially are a medical technology company with the supply chain of a PC peripheral company,” he says.
Jaekel once worked at a larger technology company that had made an ERP migration in order to standardize data structures and gain scalability, and he still remembers the headaches involved. “The longer you wait, the more complex these projects are and the more costly they become,” he says. The eZono executive team wanted to prevent that, so they brought in Pyxis Consulting Group of Hofheim, Germany, to help them build an information technology system. Jaekel had used Oracle systems in the past, so eZono didn’t have to spend a lot of time looking before choosing Oracle’s JD Edwards EnterpriseOne.