Avoiding the icebergs with SunSystems
by Hugh Ashton

As Japanese corporations continue to slide beneath the waves one after the other like so many Titanics, the captains of the surviving corporate ships are learning to keep a sharp lookout for business icebergs. Any company selling iceberg detection gear is therefore in a strong position to help. And that's exactly what Systems Union, UK-based maker of the SunSystems corporate accounting package, is doing.

Mark Wolfendale and Simon Hubbard

As Mark Wolfendale, Asia Pacific CEO of Systems Union explains, "Ten years ago, we were just an accounting package. Now we're providing business intelligence" -- in other words, an early-warning system alerting ships to the icebergs ahead. Central to this strategy is a product called Vision, which provides information onto the executive's desktop from the SunSystems accounting database system, and integrates it with spreadsheet software for further management analysis. Even though it has not traditionally been Japanese management practice to get involved at a finely detailed level -- and it has certainly not been common for Japanese executives to use computers at all -- the situation is changing. It's becoming more and more obvious to Japanese organizations that it's better to have the captain on the bridge scanning the horizon for threats than wining and dining the first-class passengers. However, compared to other countries (Singapore, for example), Japanese management still has a long way to go in the use of automated reports and detailed information.

Going native
Many other factors have combined to produce last year's year-on-year growth of 38% for Systems Union in the Asian market, currently one of the world's economic disaster areas. This growth includes the Japan market, and also represents an increase in markets outside Systems Union's traditional areas of strength. In the past, SunSystems solutions have usually been implemented in the Japanese branches of non-Japanese companies, or in Japanese companies with overseas operations, thanks to the multi-currency and multilingual capabilities of the system, which allow the head office and overseas branches to integrate and share data. Now SunSystems is increasingly becoming a part of Japanese-only companies. Why?

There are a number of reasons. Of course, the panic factor generated by Japan's current slump is driving many Japanese companies' office operations into the 20th century (not, you'll note, the 21st) and this is helping to boost sales of systems that provide executive information, as mentioned above.

Next, Japan is moving towards world standards on the technical front. Where expensive (many would use the word 'overpriced') ofucon (office computers) and proprietary minicomputer systems once ruled in the mid-sized Japanese company, the Japanese market has now moved into line with the rest of the world, primarily using Microsoft products on servers as well as on the desktop. For the underlying relational database, the SunSystems suite can use either Oracle on Windows NT, or Microsoft SQL Server, again on NT. Both solutions are within the financial and technical grasp of Systems Union customers, who implement around 12 SunSystems seats per installation, on average. In addition to these platforms, another industry standard, the low-cost Novell Netware/Oracle server platform, is now supported. All these products, like the SunSystems suite itself, are designed to be virtually maintenance-free, so that the need for a dedicated full- time database administrator is gone. Furthermore, the hardware to run these systems costs a fraction of what equivalent processing power would have only a few years ago, and is readily available from a wide variety of vendors.

Likewise, the adoption of the Microsoft/PC architecture as a standard has allowed the deployment of one standard client desktop, which can be localized as required. Systems Union is justly proud of the technology that allows the same data to be viewed in many languages (27 are currently supported), depending on the needs of the moment. Though thin clients (semi-dumb, or "intellectually challenged" terminals) have yet to make a major showing, Systems Union feels that this concept will be of importance in promoting the use of SunSystems information throughout an enterprise, especially as PCs are often used primarily in this way in Japanese companies. (See "Fat Rollout Expenses Slimmed by Thin Clients" in the May CJ -- Ed.)

Wolfendale points out that along with the adoption of global technical standards, Japanese accounting is also moving in the direction of global standard practices, and a package such as SunSystems can now be deployed in a Japanese organization with relatively little modification. Although SunSystems has been for some time not only multilingual and multi-currency, but multi-cultural as well in the sense of conforming to local accounting standards, it is now easier for a Japanese company to take an off-the-shelf package and use it, due to the recent standardization of business methods.

Matching the company to the software
Previously in Japan, corporate software purchases were often a question of commissioning custom software to accommodate the individual quirks and oddities of the customer's workflow, with all the attendant problems of specification, implementation and maintenance usually associated with such a solution. It is now possible, says Systems Union, to get a typical SunSystems solution implemented for a customer within three to six months. This is a speedy implementation relative to the competition in this market of multi-user client-server accounting software, which can often take up to a year to get ready for live use. For 1999, this delay can have a particularly interesting effect as the millennium rolls towards us. At the time of writing (May), it was possible for a Y2K-compliant SunSystems installation to be up and running before any of the critical dates, whereas a system commissioned from Systems Union's competitors would almost certainly miss these deadlines. As a footnote, the general perception within Systems Union is that Japanese companies are much less Y2K-ready than their Asian counterparts (maybe 90% of Singaporean SU customers are Y2K ready, for example).

Some things don't seem to change, though. One of the primary reasons why a Japanese company makes a purchase decision for one particular software solution over another is the company's relationship with the distributor, rather than based on a technical evaluation of the software, unlike European or North American countries, which tend to purchase on merit.

There are, in fact, good reasons for this. When the financial health of a company depends on guaranteed continuous access to accurate information, the support and maintenance of the software providing that information must be a key consideration. Japanese companies of the size targeted as potential SunSystems users typically lack the in-house expertise of their non-Asian counterparts, and are forced to rely more on their suppliers for support. Accordingly, sales to Japanese-only customers are being channeled through a different distribution network from that used in the past to supply Japanese companies with overseas affiliates. In order to cope with the demands of Japanese customers, pre- and post-sales support as well as help desks have to be trained and brought up to speed.

Though Wolfendale claims that the importance of the relationship with distributors is an Asian phenomenon, he admits that Singaporean customers, for instance, are much closer to the Western model than Japan or the Philippines. Another area where Japan is also perceived as being behind the rest of the world is the adoption of the Internet for business purposes, whether this is the sharing of accounting information, or the development of e-commerce channels.

SS Japan Inc. shifts course
However, this is rapidly changing as traditional Japanese keiretsu patterns begin to erode. SunSystems, using encryption and security technology, allows the financial data in a global enterprise to be visible from any point within the enterprise using the Internet as a transport medium. Simon Hubbard, the Asia Pacific technical director, is understandably coy about going into details regarding the technology used, but assures those who have worries about corporate information being read by cyber-eavesdroppers that the security systems are state of the art. Many Japanese companies already have WANs in place, and so the move to the Internet is not a quantum leap in ideology for them. Indeed, one major Japanese electronics manufacturer is already using the SunSystems suite with the Internet for the cash management of its operations, moving money between branches and the head office as required in order to improve the efficiency of the group as a whole. Over the next few years, as international business becomes more essential to major players, this concept of "information anywhere, no matter where you are" is expected to become a key point in management information systems. "No matter where you are" also includes China, where Japanese and Hong Kong-based enterprises are taking computer accounting into this vast untapped market.

In addition to this, Systems Union will shortly be introducing an e-commerce solution to integrate with the SunSystems package (this should be on show at the AMS exhibition at Tokyo Big Site in July). On-line ordering of a company's product line through a website will be possible, and the orders and customer details will be automatically entered into the appropriate ledgers and database system. Not only does this middleware provide a bridge between the Web interface and the back-end engine, but the middleware object will also incorporate business logic and intelligence, tailored to the needs of the organization. As deregulation slowly starts to take effect, and as the use of traditional cost-accumulating Japanese distribution methods diminishes, e-commerce will increasingly play an important role, in company-to-company business as well as end-user sales.

All in all, even though there are still dangerous icebergs all around Japanese enterprises, and are likely to be for the foreseeable future, there is now a method to detect and avoid them. While management information on its own cannot save the ship, the provision of such information helps companies to avoid the mistakes of the past, and to steer a course through the problems of the current recession.

Comments or suggestions?
Contact cjmaster@cjmag.co.jp