Assessment

Lawson is a mid-market ERP solution provider that historically specialized in health care, retail and education. Its approach was to provide vertical expertise through its marketing and sales along with products and services delivery. Lawson's recent 1,000-day manifesto lays out a grand plan to expand its market presence through key initiatives like enterprise performance management (EPM). Unfortunately, less than one month after this announcement, it had a tough quarter, missing its financial targets. This has resulted in significant management change along with a reduction of people and competency in EPM.

Like many ERP providers who attempt to expand into new solution areas and initiatives, the slow down in the enterprise application market for transactional applications has impacted Lawson as it has Oracle, Peoplesoft, Siebel and others. While questions surrounding the health of the market still remain, the reality is that most organizations have already adopted applications to run their day-to-day operations. Unfortunately for Lawson, the shortfall in new ERP license revenue has hit hard, proving it should have stayed focused on its core competencies.

With focus back on its core ERP business in HR, financials and procurement, Lawson performs a back-to-the-basics strategy by selling complementary applications to its existing customers. These applications include time management, expense management, budgeting and planning, receiving and delivery and others. In addition, Lawson's EPM offering, comprised of Reporting Suite and Budgeting and Planning, has some core strengths for compliance and notifications, which could bring value to existing organizations leveraging Lawson. Unfortunately, Lawson is hampered by the lack and loss of individuals in sales, services and product organizations who understand Performance Management and can further its efforts.

Market Impact

Lawson joins Oracle, Peoplesoft and other ERP providers who face significant challenges in maintaining or growing their core business. Efforts by many of these vendors to expand into EPM offerings have been less than successful because of their lack of complete commitment in marketing, sales and services to their customers. Lawson's recent disruptive marketing tactics to pick on JD Edwards/Peoplesoft, Oracle and SAP is interesting but distracts from the core challenges the organization needs to address. Our research with finance and operations executives who own these applications have found that vendor-to-vendor attack strategies and methods aimed to de-position existing investments do not play well for building customer relationships. Organizations who own ERP systems must manage their investments to full-value and not look to rip and replace existing operational systems.

Recommendation

Lawson has renewed its focus on ERP applications like HR, financials and procurement and has refined its strategy and solution focus on complementary add-on applications. With significant changes in its managerial structure and strategy over the last three years, it is not clear where Lawson will go next. Organizations with existing operational ERP investments should stay focused on leveraging those investments and not toward purchasing a replacement strategy. Ventana Research recommends organizations examining Lawson and its areas of EPM in reporting and budgeting/planning carefully examine its commitment and direction and compare it to third party options to ensure a careful balance of risk/reward.