Customer Solution Case Study
ERP Software Provider Offers Added Value to Customers Through Application Hosting
Overview
Country or Region: United States
Industry: Information Technology; Manufacturing
Customer Profile
With more than 2,200 customers worldwide, Indianapolis-based Made2Manage Systems, Inc., delivers enterprise resource planning (ERP) software and services to more than 30 manufacturing sectors.
Business Situation
To meet growing market demand, Made2Manage Systems wanted to establish a robust, scalable hosting environment for its ERP application.
Solution
Made2Manage Systems deployed an integrated set of management and application hosting tools from the Microsoft® Solution for Windows®-based Hosting for Applications.
Benefits
n Customer provisioning time cut from 12-16 hours to 5-10 minutes
n Lower total cost of ownership
n Added value to customers
n Accelerated time to market
n Potential new revenue streams / “With the Microsoft Solution for Windows-based Hosting for Applications, we were able to make a strong business case for our new hosted ERP offering, which our customers really need and are asking for.”
Jeff Tognoni, Chief Executive Officer, Made2Manage Systems
Made2Manage Systems has established a thriving business providing enterprise resource planning (ERP) software to small and midsize manufacturers. The company’s current flagship product is a client-server application, but demand has been increasing for a hosted solution. After exploring available options, Made2Manage Systems discovered that the Microsoft® Solution for Windows®-based Hosting for Applications offers the systems, tools, and support the company needed to efficiently and cost-effectively convert to a hosted application model. By implementing the Microsoft solution, Made2Manage Systems increased its operational efficiency and can now offer its customers greater value for an equivalent price. The company also now has the opportunity to realize additional revenue by hosting more of its customers’ business-critical applications, made possible through the Microsoft Services Provider License Agreement.
Situation
For the last 20 years, Made2Manage Systems has provided enterprise resource planning (ERP) software to small and midsize manufacturing companies, attracting more than 2,200 customers worldwide. As its flagship product grew in sophistication, it required more computing resources, evolving from a desktop application into a client-server system. Yet the company found that a number of its customers (small and midsize enterprises) do not have the resources to purchase and manage a database server, and so chose not to upgrade their applications, representing a lost opportunity for revenue. In addition, Made2Manage Systems found that many of its customers are looking for other system capabilities they cannot implement on their own.
“We’ve seen a growing need among our customers for the hosted model of application delivery,” says Jeff Tognoni, Chief Executive Officer for Made2Manage Systems. “They want to be relieved of the IT burden. They want access to their software 24/7. And, in light of the recent natural disasters we’ve seen, they want to move business-critical applications and data to a safer, more reliable environment.”
Made2Manage Systems began experimenting with providing a hosted offering by offering access to its application via Microsoft® Windows Server Terminal Services. But the company found that this early hosted solution was not sufficiently scalable or customizable. “Our original architecture was designed to support one customer per database server,” explains Doug White, Product Manager for Made2Manage Systems. “Therefore, hosted customers were sharing one implementation of the product and did not have their own individual settings. We wanted to offer a secure, full-featured, customizable hosted solution that we could house in a multitenant environment, which was critical to making it cost effective.”
Solution
The Made2Manage Systems product development team evaluated the available options for hosting its application. “We looked at third-party hosting options but didn’t find anything we were comfortable with,” says Ryan Kreag, Director of Information Technology for Made2Manage Systems. “Then we heard about the Microsoft Solution for Windows®-based Hosting for Applications, and discovered that it would be much more cost effective and give us a better return.”
The Microsoft Solution for Windows-based Hosting for Applications provides a centralized and automated infrastructure to help independent software vendors (ISVs) such as Made2Manage Systems improve service levels, reduce costs, and increase margins. Tested and supported by Microsoft, the solution provides systems, tools, best practices, and step-by-step guidance to help ISVs efficiently deploy and operate hosted software offerings on the Microsoft Windows operating system. The solution’s integrated modules offer flexibility to help ensure that an ISV can deploy precisely the components needed to meet its specific customer requirements. Made2Manage Systems is using the following solution modules:
n Service Provisioning
n Monitoring and Reporting
n Update Management
n Centralized Management
n Data Hosting
Implementation
Made2Manage Systems based its new hosting environment on the Microsoft Windows Server™ 2003 operating system, the foundation of Microsoft Windows Server System™ integrated server software. “We chose Windows Server 2003 Enterprise Edition because it was the most robust server platform available to us,” says Kreag. For the database infrastructure, Made2Manage Systems deployed Microsoft SQL Server™ 2000 Enterprise Edition in an active/passive failover cluster. The company then installed the Made2Manage ERP application, which customers can access remotely through Microsoft Windows Server Terminal Services.
Made2Manage Systems worked closely with Microsoft to enable its application for a multitenant hosting environment. “Without changing the application itself, we were able to adjust database parameters and tables so that the database tier of the application could have multiple customers on a single server,” comments Michael Miller, Program Manager for Microsoft. “We also had to make some adjustments to the profile tier to make it multi-instance.”
“Because we were able to enable the application for hosting through an operations-based process, without touching the actual code, we realized significant savings in quality assurance and were able to get to market much faster,” explains Doug White, Product Manager for Made2Manage Systems.
Automated Service Provisioning
The team then deployed Microsoft Provisioning System (MPS) as an orchestration engine to perform nearly 100 complex customer configuration steps, including:
n Creating an organization in Active Directory® directory service for each customer
n Adding users to each organization
n Setting up the profile for each customer in the file system
n Setting up the database layer in the database tier
“Microsoft Provisioning System helps to ensure that the process we have thoroughly tested and validated will be repeated every time,” says Kreag. “And, because MPS is transaction-based, it gives us the built-in safety of knowing that if anything goes wrong, we’ll know exactly what happened, and we won’t have a lot to clean up.”
To further support its multitenant architecture, Made2Manage Systems implemented Active Directory, which works seamlessly with MPS. Active Directory provides a foundation for centralized management of servers and resources, and helps to ensure security enhancements for customer data. “Active Directory allows us to support multiple entities under one active domain structure and maintain strict security,” comments Kreag.
Operational Efficiencies
Made2Manage Systems is facilitating management of its hosting environment through additional components of Microsoft Solution for Windows-based Hosting for Applications, including Monitoring and Reporting with Microsoft Operations Manager (MOM), and Update Management with Microsoft Windows Software Update Services (SUS).
“Microsoft Operations Manager helps us to manage our environment more proactively and know what corrective actions we need to take before problems emerge,” explains Kreag. “The resulting performance improvements enable us to offer a better Service Level Agreement to our customers. SUS allows us to deploy our Windows Service Packs and security patches from a single console, and to easily track our update status.”
“The Microsoft solution presented us with operational best practices that we could leverage immediately without going through the pain of developing them on our own,” Kreag continues. “The combination of MOM and SUS will save us significantly on IT labor and give us the operational efficiency to be able to scale our hosting environment rapidly and manageably.”
Benefits
Made2Manage Systems is preparing to launch its new hosted solution in the second quarter of 2006. The company is anticipating many significant business benefits from the solution, including increased operational efficiency, enhanced customer value, increased business agility, and new revenue streams.
Customer Provisioning Time Cut from 12–16 Hours to 5–10 Minutes
By implementing MPS, Made2Manage Systems reports that a provisioning process consisting of nearly 100 manual steps that previously took 12–16 hours now takes just 5–10 minutes. And, automating the process with MPS has reduced the risk of manual error along the way.
“Without automating the provisioning process with MPS, it simply would not have been possible for us to implement our hosted offering because of the risk and labor costs of manual provisioning,” comments White. “MPS helps to ensure that our application delivery is consistent, efficient, and secure.”
Lower Total Cost of Ownership
By establishing a security-enhanced, multitenant environment for its application, Made2Manage Systems enables its customers to share resources, reducing total cost of ownership per customer. “The security model from the Microsoft Solution for Windows-based Hosting for Applications allows us to have multiple customers sharing groups of servers, so we can leverage economies of scale,” explains Kreag. “This is critical to our return on investment.”
Because the new offering makes it easier for small companies to upgrade their applications, Made2Manage Systems expects to see its operational effectiveness improve due to less support demand for legacy installations.
Added Value for Customers
The new hosting option can provide Made2Manage Systems customers with many added benefits, including:
n Increased security-enhancements. The company is hosting its application from a Department of Homeland Security–certified datacenter with biometric scanning. “This hosting environment provides a disaster recovery capability that many of our customers wouldn’t be able to develop on their own,” says Kreag. “And, at the application level, having Active Directory as a central security engine lends further clout and credibility to the safety of our system.”
n Self-Service capability. The Microsoft Solution for Windows-based Hosting for Applications provides delegated administration, so the company’s customers can add users, adjust permissions, and customize the application to suit themselves. “It’s key to the success of this offering that our end-users have self-sufficiency,” comments Kreag. Made2Manage Systems expects that Delegated Administration can significantly reduce service requests to its call centers, lowering the company’s overall support costs.
n Enhanced performance. The new hosted environment offers a higher class of database server and greater redundancy than most customers can afford on their own. “A typical customer purchases one database server and doesn’t have access to clustered fail-over capability,” explains Kreag. “We have built a redundant infrastructure with load-balanced clustered servers that will deliver better performance and a higher level of fault-tolerance at a lower price.”
n Reduced IT demands. Customers opting for the hosted application don’t have to make an upfront investment in server hardware, manage the ongoing software upgrade process, or keep a SQL Server expert on staff.
n Universal availability. Customers can access the hosted application from anywhere at any time, increasing their internal productivity and mobility.
Accelerated Time to Market
Using this approach, Made2Manage Systems succeeded in enabling its application for on-demand delivery in just a few months. “Developing a new hosted application using a traditional approach would have taken a year or longer, and a much greater commitment of resources,” says Kreag.
Now that the company has automated its customer provisioning process with MPS, new customers can be brought online virtually immediately. “Now, we can tell customers that they can have a fully functioning environment available immediately after their order is confirmed,” comments White. “This is a huge competitive advantage for us.”
Potential New Revenue Streams
This new hosted offering enables Made2Manage Systems to better address a potentially significant customer segment: manufacturers without the IT resources to acquire and maintain a server infrastructure. Made2Manage Systems expects that the new solution will encourage many of these customers to upgrade from legacy systems, generating a fresh stream of revenue.
In addition, establishing a hosting environment provides an opportunity for Made2Manage Systems to open an entirely new revenue stream: hosting other applications. This additional offering is made possible by the Microsoft Services Provider License Agreement (SPLA), which enables ISVs who offer a hosted solution to license Microsoft products to end customers on a monthly basis.
“SPLA has made application hosting attractive as an added revenue stream,” says White. “We have learned through customer interviews and focus groups that comprehensive hosting is something a lot of our customers want, so they can be free of IT demands. Eventually, we can take their whole desktop, including their Microsoft Exchange Server messaging systems and Microsoft Office System, and host it from our datacenter. As a result, customers will have anytime, anywhere access to the latest tools—without having to deal with the licensing, installation, hosting, and upgrades themselves. In this way, we can be an even better partner to our customers, helping to keep their systems running smoothly so they can focus on their core business processes.”
Conclusion
Encouraged by the initial success of its hosting environment as well as by market trends, Made2Manage Systems already is making plans to expand its hosted offerings. “We will capitalize on our accelerated time to market to develop future offerings that are natively designed for delivery as a service,” says White. “Once our flagship application is launched, we will be widening the scope of our hosting environment to include all of our vertical-specific ERP packages. Then, we will move toward hosting other applications, so we can deliver a complete remote desktop to our customers.”
“With the Microsoft Solution for Windows-based Hosting for Applications, we were able to make a strong business case for our new hosted ERP offering, which our customers need and are asking for,” comments Tognoni. “The Microsoft solution enabled us to develop a hosted offering with minimal risk and the potential for a strong return on investment.”
Microsoft Windows Server System
Microsoft Windows Server System is a line of integrated and manageable server software designed to reduce the complexity and cost of IT. Windows Server System enables you to spend less time and budget on managing your systems so that you can focus your resources on other priorities for you and your business.
For more information about Windows Server System, go to:
www.microsoft.com/windowsserversystem