Forrester Market Overview Projectbased Erp For Service Delivery Professional Services

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January 13, 2012

Market Overview: Project-Based ERP For Service Delivery Professionalsby China Martensfor Application Development & Delivery Professionals

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For Application Development & Delivery Professionals

ExECutivE SuMMARyA growing number of organizations delivering project-based services to customers seek business apps that more fully reflect that project focus and apply it to business-processes-powering project management, including project costing, time capture, and billing. Application delivery pros also often need apps that integrate and harmonize project management functionality with the financials and human capital management capabilities of enterprise resource planning (ERP) apps. This report highlights solutions from a group of ERP vendors providing these capabilities and identifies a number of project-based ERP customer best practices.

tABlE OF COntEntSProject-Based Service Organizations Face Increasing Pressures

Project Managers need Apps that Help them Meet their Business Challenges

Reality Check: Many Professional Services Firms Are Hampered By their Current Apps

ERP Works Best For Project Managers When It Is Imbued With Project Thinking

vendors Offering Project-Based ERP include Market incumbents And newer Entrants

Emerging Requirements For Project-Based ERP include Mobile, usability, And Collaboration

Best Practices: Provide Adequate Training And Deployment Time

Plan Ahead For technology Change

Anticipate Significant Cultural Change

RECOMMEnDAtiOnS

Project-Based ERP Helps Firms Gain More Control And Insight Into Projects

nOtES & RESOuRCESForrester interviewed ERP vendors, including Deltek, netSuite, Oracle, SAP, and unit4, and more than a dozen customer companies including DHi, EORM, itC infotech, larsen & toubro infotech, nascent Systems, PricewaterhouseCoopers (PwC), Q Research Solutions, and Reinertsen AS.

Related Research Documents“innovative technologies Will Drive Enterprise Applications And ERP to A Bright new Future” June 30, 2011

“the State Of ERP in 2011: Customers Have More Options in Spite Of Market Consolidation” May 2, 2011

“For Service-Driven Resource Organizations, PSA is Still Here And Still Relevant”September 29, 2010

January 13, 2012

Market Overview: Project-Based ERP For Service Delivery Professionalsby China Martenswith Mike Gilpin, Margo visitacion, and Shannon Coyne

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© 2012, Forrester Research, inc. Reproduction ProhibitedJanuary 13, 2012

Market Overview: Project-Based ERP For Service Delivery Professionals For Application Development & Delivery Professionals

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PROjECT-BASED SERvICE ORGAnIzATIOnS FACE InCREASInG PRESSuRES

Managing varied external projects is a balancing act. Service delivery professionals (a group comprising professional services firms and other organizations that deliver project-based services to customers — including internal application delivery teams that bid on work in competition with external suppliers) strive to achieve balance in customer size, location, and project complexity across the mix of projects they handle as well as in the resources — human and material — they assign to those projects.1 Project managers also strive to keep each individual project in balance across time, cost, and allocated resources. The whole process is akin to trying to walk a tightrope in a windstorm while balancing an umbrella in one hand and a drink in the other, with a host of internal and external factors — emotion, the elements, the unknown — threatening to knock one or more projects off balance.

“There’s a difference between using human resources and selling products. If you don’t use a product today, you can put it on the shelf and sell it tomorrow. You can’t sell hours tomorrow. Being able to optimize resources can really make the difference.” (Director, European financial services consultancy)

In today’s uncertain economic climate, service delivery professionals have to deal with even more risk than before as shifts occur in their business and among the customers they serve.

“The economic downturn experienced a few years ago had a major impact with respect to competitive pricing. Client affordability dropped, and there is great pressure by our customers to reduce prices. Competitors call clients offering to do the same work for less (sometimes for clients we’ve had for many, many years). This has resulted in looking at ways to deliver solutions with ever-increasing cost-effectiveness.” (Director, US financial services consultancy)

Service delivery professionals need to be able to:

· React quickly to be competitive. Firms have to be adept at pulling together attractive bids on projects and then rapidly assembling teams to staff those projects. They also need to respond speedily to changes in project scope. In the event of losing a deal, firms need to be able to quickly move back into competition should the customer return to the bargaining table.

· Identify key revenue-generating projects. Service delivery professionals have to be able to rank projects in terms of which ones are making them money and which ones have become the equivalent of money pits. They can then use this information to determine their future strategy as well as to plan how to deploy resources.2

· Optimize resources, particularly staff. Firms need to ensure that they are making the best possible use of their full-time and contract staff so that employees are neither underutilized nor overextended.3

© 2012, Forrester Research, inc. Reproduction Prohibited January 13, 2012


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· Provide customers with consistent experiences. While some engagements may be one-off projects, many service delivery organizations repeatedly serve the same customers across a range of different projects. The ability to offer a uniform, high-quality deliverable is therefore particularly important in ensuring that customer satisfaction drives customer retention.

· Learn from past experiences. Service delivery organizations need to be able to both replicate successes when projects have gone well and avoid missteps when projects have had a poor outcome.

· Quickly assimilate acquisitions. Particularly in a down economy, consolidation is a way for professional services organizations to grow locally, internationally, and vertically. To take advantage of all potential synergies that exist between an acquirer and its target purchase, a firm must act fast to bring those two organizations together.

· Think and act globally. As service delivery organizations expand, they have more need to be able to run project management software across a variety of regions and be able to view their entire operation, potentially involving a variety of subsidiaries, as a single global entity with shared customers, projects, and employees. For global firms working with a mix of internal and external partner firms, this necessitates teaming up with international professional services peers and allowing staff at those partner firms to interface with project management software.4

Project Managers need Apps That Help Them Meet Their Business Challenges

Project managers want all the information they need to do their job at their fingertips along with insight into the status, staffing, and likely outcome of each project they’re managing (see Figure 1). This data flows from a wide range of business processes — including project accounting, time and expense, and billing — that typically span a number of different applications. As the destination for all this up-to-date project information and insight, a project manager should be able to function as a data-hungry spider occupying the center of a connected web of information.

In order to respond to all of the business pressures they face, service delivery organizations need to ensure that their firm and their project managers have access to: 1) a single version of the project truth; 2) accurate and up-to-date project data; 3) usable project management software; 4) a two-way flow of data between project-related apps; and 5) a broad set of project-related metrics.

Given economic, competitive, and internal business pressures, service delivery organizations are now more likely than ever before to seek a near-real-time view of profitability for individual projects. In recent years, firms have gradually shifted away from viewing project management software simply as a transaction system to log project actions, costs, and resources and toward using these systems to gain insight into which projects are generating money for the firm (or at least not losing money) and when those projects become profitable ventures.



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Figure 1 Project Managers need Easy Access to An integrated view Of All Project-Related Data

Source: Forrester Research, Inc.61075

Projectaccounting

Projectmanagement

Projectreporting

Financialreporting

Projectcompliance

Risk mitigationand management

Resourceallocation

Taskmanagement

Time/expensePurchasing

Customer relationshipmanagement (CRM)

Business processmanagement (BPM)

Payroll

Billing Human capitalmanagement (HCM)

Scheduling

Reality Check: Many Professional Services Firms Are Hampered By Their Current Apps

Unfortunately, many service delivery organizations face the challenge that the apps they use to manage external projects aren’t tightly integrated with each other. Smaller organizations may be overly reliant on a mix of spreadsheets, individual documents, and email, while larger companies struggle with disparate business apps.5 Different pieces of important project information reside in individual applications, such as customer relationship management (CRM), human capital management (HCM), and financials (see Figure 2).6 Organizations also face challenges with poor or little communication — flow of information back and forth — between those disparate apps.

At the same time, these organizations seldom or never use standard templates for data entry, an oversight that creates more opportunities for errors to creep into project information and increases the time their employees waste manually transferring files, reporting information, and ensuring information quality.7 In this scenario, service delivery organizations and their project managers have to deal with the tradeoffs that can result from using a mix of disparate apps with limited connectivity to each other (see Figure 3).



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Figure 2 When A Project’s Business Processes Stretch Across Apps, Project Data is Often Siloed


• Opportunity management• Sales orders

• Project costing• Resource management• Skills tracking

• Time sheet management• Expense management

• Project accounting• Revenue management

Client invoicing/billing

BI

CRM

HCMERPForecasting, dashboards,reporting, collaboration



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Figure 3 Deploying Disparate Project Management Apps Can Contribute to negative Outcomes


Issues caused by poorly integratedproject apps

No single, uni�ed view of project data Firms lack a clear picture of each project andof their overall project business. Theytherefore have no solid information basis fordecision-making.

Inaccurate, outdated, and duplicated data Errors more easily creep into projects,making it more likely that teams miss projectmilestones.

Project management software that is toohard to use

Sta� members do not fully use the projectapps and instead rely on individuallymaintained sources of data. Systemworkarounds become commonplace.

Project managers who must spend too muchtime on administrative tasks, such asentering and re-entering data

Project managers have less time to engagewith customers and prospects as well asto actively manage their projects.

No clear sense of project-related metrics Lack of insight into project and sta�performance makes it hard for a �rm to fullyoptimize its resources and attune them tothe needs of a changing business.

Consequences of using poorly integratedproject apps

ERP WORkS BEST FOR PROjECT MAnAGERS WHEn IT IS IMBuED WITH PROjECT THInkInG

Given project managers’ challenges and needs, the business apps and processes they use to manage their projects should have a project focus baked into them from the start.8 Project-based ERP aims to marry CRM, project management, HCM, and financials to embedded business intelligence, ensuring tight integrations and two-way data flows between the different apps (see Figure 4).9 In deploying project-based ERP, service delivery organizations can expect to achieve a range of positive outcomes (see Figure 5).

Equipped with project-based ERP, service delivery organizations will be better able to:

· Display in-depth project data on their financial general ledger. This functionality gives companies the ability to provide a breakdown on the revenue and costs associated with each project. It’s a way to highlight for CFOs and other executives which projects are profitable for their organization and which ones are losing money.

· Handle a mix of revenue types. More organizations are finding that they have to be more flexible when it comes to the way projects are structured. They find themselves having to deal



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with a variety of revenue types, including time and materials, fixed cost, percentage complete, and milestone-based. In addition, project-based ERP can help organizations deal with tiered discounting and tiered pricing.10

· Look at their projects in many different ways. Project-based ERP enables firms to view their projects according to a wide set of criteria, for instance, by role, project status, and skill set. It also allows firms to roll up project views to gain an overall global picture of their entire project business.

As more professional services organizations do more fixed-price engagements, they want to compare actuals with the alternative financial picture as if they had billed based on time and materials. This off-balance-sheet information will help them know better how to structure future deals. Being able to record all project activity and store that data in a single central place can also help professional services organizations recapture one type of “lost revenue” — work that’s done for a client but never entered into the project management system and therefore never billed.

“The financial aspects of engagement management are a big help. Time entry gets valued, becoming WIP that the firm then bills to clients and loads into a data warehouse for analysis and reporting. Ultimately, the implementation resulted in providing better data more quickly to the practice to help manage engagements.” (Director, US financial services consultancy)



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Figure 4 Project-Based ERP integrates Business Apps And Applies Business intelligence


Source: Adapted from Deltek

Dashboards

Dashboards

Reports

Reports

Analysis

Analysis

Frontoffice

Plan

Respond

Improve

Customer relationship management (CRM)

Resource management

Project management

Project creation

Purchasing

Project budgeting

Time and expense

Planning and staffing

Invoicing

Work order management

General ledger

Finance budgeting

Accounts receivable

Revenue management

Accounts payable

Fixed assets

Talent management Learning management

PayrollProfile management

Human capital management

Financial management

Backoffice



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Figure 5 Project-Based ERP Offers Many Benefits


All project data held in a single central place

An integrated view of project management data

More clarity and depth on revenue recognition

Better visibility into project-related business metrics

A clear audit trail for individual projects

Improvements in realizing optimal resource scheduling

vendors Offering Project-Based ERP Include Market Incumbents And newer Entrants

Some ERP vendors actively target service delivery organizations with solutions for project-based ERP. The nature of these solutions varies: In some cases, an ERP vendor has a specific product line for project-based solutions, whereas in others it has configured a general-purpose app with project-specific capabilities to support professional services customers.11

Some of the project-based ERP market incumbents include:12

· Deltek. The ERP vendor focuses exclusively on project-based businesses, providing products for professional services organizations and government contractors.13 Maconomy is Deltek’s on-premises, web-based, modular ERP software aimed at service delivery professionals.14 Maconomy includes tightly integrated CRM, project management, resource planning, human resources, project accounting, and analytics. For more-sophisticated resource management and business intelligence capabilities, respectively, Deltek offers its People Planner and Maconomy Business Performance Management software. Both of these offerings integrate into Maconomy’s project-based ERP.15

· Microsoft. The software vendor has four on-premises ERP apps families — Microsoft Dynamics AX, Microsoft Dynamics GP, Microsoft Dynamics NAV, and Microsoft Dynamics SL — with Dynamics SL specifically focused on meeting the needs of small and midsized project-based organizations, such as government contractors, professional services firms, and construction companies.16 Dynamics SL has tended to target US customers rather than serve an international audience. Microsoft also has its own CRM software, which integrates with each of its Dynamics ERP apps families. Microsoft differs from some of its ERP peers in that it is also a player and market leader in project portfolio management (PPM) with its Microsoft Project software.17



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· NetSuite. The software-as-a-service (SaaS) apps suite vendor has three potential entry points for service delivery professionals: 1) project management extensions to its NetSuite SaaS ERP, CRM, and e-commerce apps suite; 2) NetSuite OpenAir, a specific professional services automation (PSA) app; and 3) NetSuite SRP (services resource planning), which is an integrated solution of OpenAir and NetSuite ERP and CRM apps.18 All three offerings are SaaS.19 Customers can also purchase a version of NetSuite SRP that includes NetSuite OneWorld, the vendor’s global financial consolidation module. Over time, NetSuite has brought OpenAir and its own ERP apps closer together to create a more integrated experience for its SRP customers.

· Oracle. The ERP vendor provides project management capabilities in a number of its on-premises apps. Its PeopleSoft Enterprise Service Automation (ESA) and the Oracle Projects modules of Oracle E-Business Suite have a particular focus on meeting the needs of service delivery professionals. Oracle also has a standalone PPM offering thanks to its purchase of Primavera. The vendor is also highlighting project-based ERP in the project management modules of its new Oracle Fusion Applications, which became generally available in May 2011 and are available as on-premises or on-demand offerings.

· SAP. The apps vendor targets service delivery professionals with an industry version of its enterprise-oriented, on-premises SAP Business Suite. SAP is also looking to appeal to midsize service delivery professionals with its SaaS ERP apps suite, SAP Business ByDesign (ByD). The vendor is eager to add vertical functionality to ByD, and its first stop has been the professional services industry. SAP began down that path with ByD 3.0, which debuted in July 2011, and plans to add further project-based ERP capabilities in future versions.20

· Unit4. The apps vendor targets a very defined segment of rapidly changing service delivery professionals in midsize and larger organizations as one of the markets it addresses.21 The project capabilities of Unit4’s Agresso Business World (ABW) ERP software provide a combination of finance, project management, and HCM modules as well as integrations into third-party CRM software. ABW is available in a variety of deployment options, including on-premises, private cloud, and cloud-based shared services.22 Unit4 is also the majority owner of FinancialForce.com, a SaaS-based accounting vendor that has built its software for small to midsize businesses on salesforce.com’s Force.com PaaS offering. FinancialForce.com is making its own Force.com-based SRP play by integrating its project accounting and its PSA software with Salesforce CRM.23

New entrants to the project-based ERP market are increasingly likely to be SaaS providers. For instance, SaaS accounting and financial management vendor Intacct is advancing a best-of-breed SRP approach for small to midsized project-based businesses. Intacct is offering its project accounting software in combination with partners salesforce.com for SaaS CRM and Clarizen for SaaS project management and planning. Turning to enterprises, SaaS HCM and financial management apps player Workday is gradually building out a comprehensive SaaS-based ERP suite, which it plans to aim specifically at professional services organizations.



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Emerging Requirements For Project-Based ERP Include Mobile, usability, And Collaboration

Looking ahead, service delivery organizations are investigating ways to enhance their current project management approach by:

· Introducing or expanding support for mobile and smart devices. Many service delivery organizations want more support for mobility, but most are only starting to explore what’s feasible, typically with a pilot phase for time entry and expense submission via iPhone, iPad, BlackBerry, or Android devices. Firms are also seeking offline project-related data entry, if they don’t already have it.

· Further improving usability. ERP applications often have usability challenges, and this forms an obstacle to adoption and therefore data quality. Beyond moving information capture closer to the point of business delivery by using mobile front ends, service delivery organizations are tending to select new solutions as much for their usability as for their functionality. Functions have no value if nobody uses them. Newer market entrants are using this opportunity to disrupt the market with products that are often easier to adopt and use, challenging established players to deliver apps that are useful, usable, and desirable.24

· Bringing in additional collaboration capabilities. Some firms are a bit leery of the security implications of embedding a full-on social collaboration platform in project-based ERP, while others are more aggressive in making use of collaboration platforms.25 But most service delivery organizations are keen to build on the shared work spaces employees are presently using within project-based ERP.26

BEST PRACTICES: PROvIDE ADEquATE TRAInInG AnD DEPlOyMEnT TIME

Professional services organizations that have already deployed project-based ERP typically made the move because they were frustrated with their previous ERP solution. They had plenty of advice for their peers to follow in pre-, mid-, and post-implementation phases.

Plan Ahead For Technology Change

Whether moving from a manual, spreadsheet-based environment or a mix of business apps, it’s important to prepare well for the move to project-based ERP. The key lessons? Take time to get to grips with the software and its capabilities, and view the deployment experience as a gradual learning curve.

While preparing to implement project-based ERP:

· Scope out your business processes first. Carry out your own in-depth look into the needs of your service delivery organization before assessing what project-based ERP can offer your firm. Then, once you’ve made a decision to go with project-based ERP, maintain that level of involvement with the delivery process from scoping through implementation.



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“If you leave too much of the set-up work to third parties, then you won’t know how to handle the system when they give you the keys to the castle.” (CFO, European environmental consultancy)

· Don’t rush into customization. Make sure that you take time to review what functionality project-based ERP will provide out of the box and examine where you may need to tailor the solution to your organization’s specific needs. Be careful that you don’t replicate the old system’s ways of doing things.

“Flexibility can hurt. Use the system first, and then build the scripts. You may find out you don’t need to do the customization.” (Director, consumer product research company)

· Make sure all the necessary work is complete prior to migration. In particular, work on data cleanliness and close out any old projects before moving from your old system to project-based ERP. All that work upfront should make the migration itself a lot less painful.

“We were very motivated to go live. I wouldn’t go as fast as that (again); we paid for it afterwards.” (CFO, US environmental consultancy)

· Ensure one or more evangelists for the new system. To set the stage for everyone to use the new system, set expectations by having a single or several individuals who are promoting its benefits. At the same time, be careful not to oversell project-based ERP’s benefits. It’s not the be-all and end-all solution for all project-related problems, but it should help relieve some substantial pain points in project management business processes.

“We had a significant change management focus to the project, with senior business leaders championing the effort and a large involvement of business resources on the project — many of whom then became ‘experts’ and key users of the system after we went live.” (Director, US financial services consultancy)

Anticipate Significant Cultural Change

Service delivery organizations that have had to get by with a mix of poorly integrated apps that aren’t usable tend to have the most system workarounds. Employees often grow to trust and rely upon the personal Excel spreadsheets they regularly maintain for the specific projects they’re working on, which are not plugged into the project management apps. Moving to standardized processes can be a major cultural shift for an organization, especially in striking the right balance between introducing a more disciplined approach to project management and ensuring that project managers retain some of the autonomy and flexibility to which they’ve become accustomed.

During and after implementing project-based ERP:



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· Work to eliminate all previous system workarounds. It can be very hard to convince employees that they no longer need to create and rely upon data hoards of information they know to be accurate once the organization has made the move to project-based ERP. You may have to adopt something of a carrot-and-stick approach to getting rid of Excel spreadsheets, so consider actively rewarding strong utilization of the new project-based ERP system while also calling out those individuals and teams who’ve yet to start fully using the new software.

“We do have to use what project managers call ‘counterproductive measures.’ We’ve no choice but to gate keep and to start challenging people with data. They have the sense of a watchdog outside, so they don’t resort to parallel reporting in Excel.” (Senior vice president, global IT service provider)

· Be aware that some employees may fear a loss of control. When employees have become comfortable with manual processes, introducing a large amount of automation may not be initially as welcome as you might expect. You need to show how automation can free up people’s time so they can take part in more interesting tasks and spend more time with customers and prospects. Do check at regular intervals that users are as fully conversant with project-based ERP functionality as you believe them to be.

“Project-based ERP becomes the bearer of all information. It does take time to make that conversion — it’s a cultural change.” (Director, consumer products research company)

· Don’t underestimate how long it will take to deploy project-based ERP. Getting to grips and then becoming comfortably familiar with a new system, particularly if this is the staff ’s first experience with full-blown ERP, can take time. Revisit project-based ERP training on a regular basis, and don’t assume that one blast of training prior to system deployment is sufficient. When training staff, do make sure that you have a mix of skill sets on the training team that reflects your target training audience.

“People will always try to stick to what they have. It’s safe. The best system is always the one they had before. Willingness to change takes time.” (Director, European financial services consultancy)



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R E C O M M E n D A t i O n S

PROjECT-BASED ERP HElPS FIRMS GAIn MORE COnTROl AnD InSIGHT InTO PROjECTS

ERP apps work best for project managers in service delivery organizations when those apps are imbued with project thinking from the start. investigate the approaches different ERP vendors are taking with project-based ERP, and determine which one best suits your current and future business. When adopting project-based ERP:

· Don’t carry over old workarounds and thinking from the previous system. try to start fresh; first re-examine all your current business processes and whether they need to change, and then examine project-based ERP solutions’ out-of-the box functionality. Finally, consider where you may need to customize the software to fit your business’ specific needs. Be very clear with staff that the project-based ERP system is now the one repository of all project-based data and that data hoarding in spreadsheets is no longer necessary and doesn’t benefit the organization as a whole in its goal to provide readily accessible and accurate information.

· Don’t underestimate the change management challenge; provide regular training. Be very clear about the benefits you expect from implementing project-based ERP, both for the individual employee and for the company as a whole. the solution you choose should empower and inform users as well as free them from manual data-entry tasks. taking a broader view, the solution should also provide better insight into which projects are generating real money for the organization as well as indicate when a project may be going off the rails, enabling the project manager to quickly step in to rectify the situation and get the project back on track.

EnDnOTES1 For the purposes of this report, the term “professional services organizations” equates to firms engaging

in external projects for customers. These companies include systems integrators, tax agencies, etc. Project management as provided by ERP vendors tends to have a fairly strong vertical focus, so some vendors concentrate on serving professional services organizations, while others may go after other industries, such as architecture and engineering, construction, legal, public sector, and nonprofit.

2 Some professional services organizations are seeing a change in their customer mix as their focus shifts to larger, more complex, and longer project engagements with a limited number of clients and away from numerous engagements with a large number of smaller businesses. Such professional services firms need to determine whether or not it’s still financially advantageous to continue serving their traditional customer base.

3 Multinational professional services organizations are also looking to strike the right balance between cheaper and more-expensive project team members when putting together competitive bids for new projects.

4 For instance, a professional services organization could give its international partners access to its project management software so those partners could enter time and bill customers for the specific projects they’re involved with. There’s also more interest in global resource management and gaining more insight into utilization rates across different geographies and between professional services organizations and their partners.



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5 A US telephony services provider, prior to implementing project-based ERP, maintained all of its project information in spreadsheets. An individual project spreadsheet could have perhaps three to four additional spreadsheets attached to it, and the company ended up trying to manage hundreds of spreadsheets.

6 Many service delivery organizations fielding multiple teams that do similar work on similar projects at the same client or with similar clients are unable to compare the performance of those teams because they lack accurate data and information flow between apps. This inability to carry out team comparisons can hamper a firm’s ability to improve staff utilization by moving individuals or teams to different sites.

7 At the same time, lack of standard templates may also play a contributing role in accounting for one type of lost revenue: Firms may miss the opportunity to ensure that onsite workers record opportunities they observe to provide additional services to a client. If such data isn’t recorded, an organization has no way to estimate lost revenue on what could have been potential extra business.

8 Forrester first defined project-based solutions (PBS) as a new category of software several years ago. See the May 10, 2007, “Introducing Project-Based Solutions” report. Aimed at a variety of industries, PBS aims to manage and support project-based business processes, which span a number of applications. Also see the May 7, 2007, “Sizing The Project-Based Solutions Opportunity” report, and see the February 29, 2008,

“Trends 2008: Project-Based Solutions” report.

9 Project-based ERP can be seen as one particular flavor of project-based solutions, one that is provided specifically by ERP vendors.

10 This practice is popular among some Indian professional services organizations. For instance, after a services provider has delivered the first 1,000 billable hours in a project, there’s a discount on the project, of say, 10% — one way of ensuring that a project stays on its agreed timeline.

11 It’s worth noting that there are also vendors that don’t describe themselves as ERP providers but that provide much of the project-based ERP functionality — for instance, Tenrox, which describes itself as a project management software vendor.

12 There are a number of ERP players with a strong project focus but with a stronger market presence in verticals other than professional services, for instance, IFS and Meridian Systems.

13 Deltek Costpoint is Deltek’s flagship on-premises or cloud-ready project-based ERP software for government contractors. The ERP vendor also has offerings for small to midsize government contractors — Deltek GCS project accounting and Deltek First, SaaS ERP software. Deltek Vision is Deltek’s project-based ERP for architecture and engineering firms.

14 Deltek acquired Danish company Maconomy in July 2010 as a way to expand its markets on both a geographic and industry basis.

15 Looking ahead, Deltek is set to introduce a new user interface for Maconomy based on Eclipse Rich Client Platform. The ERP vendor also plans to expand Maconomy’s collaboration capabilities and to add further regional and multilingual support for project-based ERP in Asia-Pacific.

16 Microsoft Dynamics AX is positioned for enterprise organizations that are project-based.






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17 Project portfolio management (PPM) is software that helps organizations manage projects, particularly internal development projects, and assess the impact of those projects on their IT investment and their IT labor needs. Forrester has written a great deal about the PPM market. For instance, see the March 15, 2011, “What’s Ahead For PPM?” report, and see the November 11, 2011, “PMOs: Stop Being The Office Of ‘No’” report.

18 Professional services automation (PSA) tends to refer to the combination and integration of project management and resource management, while services resource planning (SRP) often indicates the combination and integration of PSA, accounting, and CRM. See the September 29, 2010, “For Service-Driven Resource Organizations, PSA Is Still Here And Still Relevant” report.

19 NetSuite has made two major acquisitions in its entire history, both of them in the professional services automation space. NetSuite purchased OpenAir for $31 million in July 2008, creating a wholly owned subsidiary, and then bought smaller PSA player and OpenAir rival QuickArrow for $20 million in April 2009.

20 Forrester published a report that examines ByD, its likely future directions, and its emerging use cases. The report also positions ByD within the rest of SAP’s software stable and assesses its potential influence on that product portfolio, particularly now that SAP is actively building other apps on the ByD platform. See the October 18, 2011, “The Road Ahead For SAP’s Business ByDesign” report.

21 Unit4 strictly prequalifies organizations and deals against a set of rapid-change criteria via its “Businesses Living IN Change” (BLINC) criteria.

22 ABW’s private cloud and cloud-based shared services are supported by Unit4’s changeable Vita Cloud Angel architecture. Looking ahead, Unit4 has plans to add workspaces into ABW as well as the ability to further refine resource management. The vendor will also be debuting BLINC Business Solutions, a new line of analytics apps that will be available in an app store download environment. The apps will target specific tasks within ERP and aim to provide a rapid-install turnkey template solution that is 90% complete at the start. Some of these new apps will be relevant to the needs of service delivery professionals.

23 FinancialForce.com’s PSA software is the result of its December 2010 purchase of the PS Enterprise product from SaaS services provider Appirio.

24 In the next five years, enterprise apps will be transformed, disrupting preconceived notions about ownership and support costs, process flexibility, insight, and speed of delivery. Usability is one of seven key trends that will drive this transformation. See the June 30, 2011, “Innovative Technologies Will Drive Enterprise Applications And ERP To A Bright New Future” report.

25 Many people believe that you cannot run distributed Agile projects. The Agile Manifesto itself points to colocation as a key characteristic of Agility. But ThoughtWorks is an Agile systems integrator that is applying the practices of Agility on large, distributed projects. To survive in a distributed world while delivering great software using Agile, ThoughtWorks has had to concentrate on adding practices to Agile to ensure that distribution does not get in the way of success. ThoughtWorks has concentrated on sharing context, building the right team and tools, and making sure that face-to-face communication is not totally ignored. The result? Distributed projects that have a strong degree of intimacy, shared knowledge, and collective culture. See the January 27, 2011, “Case Study: ThoughtWorks Makes Distributed Agile Work” report.












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26 Some early use cases of social collaboration are emerging within ERP apps, including the emerging technology’s applicability for helping manage projects. See the December 23, 2011, “Emerging Trends: Social Collaboration Is Poised To Accelerate ERP Business Processes” report.



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