Mark Howlett thought he was retiring in 1997 when he left DataWorks Corp., the company he co-founded and helped build into a $200 million-per-year, 1,350-employee software maker. Since the departure, the company has merged with Platinum Software, the once booming ERP market has plummeted and the Internet is uprooting many of the customers Howlett had worked with for years.
Perfect reasons, the 54-year-old says, to get right back into the game.
Howlett is coming out of retirement to become vice president for the manufacturing systems group of Epicor Software Corp., the 1,650-employee Irvine entity created by last year’s merger.
He credits the Internet for the reunion.
“I was really excited about the notion of manufacturers going forward in the new millennium,” he says. “In the software business, I think we’ve spent the last 10 to 20 years providing functional applications for manufacturers to get more control over their businesses. In the new millennium and through the Internet, customer-relationship management is going to be a whole new opportunity for manufacturers.”
Though he admits that there was a bit of a learning curve after his two-year absence, he says he already had an idea of where the global network is taking the business.
ERP, or enterprise resource planning, encompasses a variety of hardware and software used to automate disparate parts of a business operation. Such applications tie together functions handled manually or by traditionally non-connected computer systems; supply ordering and accounts payable, for instance, are good candidates for ERP integration.
Epicor’s software, designed to specific vertical markets, runs on Unix- and Windows-based systems, and soon will adopt an SQL database standard.
Two of Epicor’s largest markets are manufacturing and distribution, sectors whose distinctions are becoming increasingly blurred as distributors take on some assembly functions and manufacturers transition to a direct-sale model hastened by the Internet’s popularity.
While Howlett insists he was perfectly happy spending his retirement skiing in Utah and serving on the board of directors of the OC Performing Arts Center, he says possibilities created by the Internet and the marketing clout of the newly created software entity were too good to ignore.
Howlett advised Epicor during the merger and jumped at the chance to take a formal executive role. He says his family , which includes four college-age daughters , supported his decision to work again.
Other Epicor executives say they were just as eager to have him on board again.
“We were thrilled to bring Mark back to Epicor’s senior management team, because of his experience and proven success in manufacturing systems,” said George Klaus, the company’s chairman, president and chief executive.
But considering the upheaval the ERP market is experiencing these days, the honeymoon could be a short one.
Like many ERP companies, Epicor’s sales have dropped off in a trend many believe reflects Y2K fears. Corporations that would otherwise be purchasing ERP systems are focused on upgrading their computers to handle the date rollover and holding off on adding other variables to the mix before Jan. 1.
Over the past 12 calendar months, the company has lost $14 million on sales of $229 million, and its stock prices have reflected those results, dropping from a March 1998 peak of more than $23 per share to around $5 last week.
And Epicor isn’t alone. PeopleSoft Inc. and SAP AG, two of the biggest names in the ERP market, have experienced similar troubles over the past year.
Some skeptics say the downturn in the ERP segment has more to do with market saturation than Y2K. Most large manufacturers, they say, have an ERP system of some kind already in place.
But as more sophisticated ERP applications trickle to smaller businesses, Epicor officials have chosen to focus on mid-size operations, which are only beginning to take advantage of technology.
More important, Howlett says, are increasing customer-service demands from people who deal with distributors and manufacturers. Better access to information, such as the second-to-second status of an order, will require a host of new Internet-enabled ERP systems, he says.
“We’re going to see the traditional supply chain challenged,” he says.
Some of Epicor’s target markets will include manufacturers of discreet products and capital equipment in addition to its already strong presence in the areas of custom manufacturing, distribution and financial services.
Epicor is trying to make headway into “customer-relationship management” applications. Its Clientele application hooks into other ERP applications to help track and share customer information.
“There’s going to be a completely different set of rules in the next century,” he says. “Any vendor that relies on the past for their success in the future is going to be sorely disappointed. And I have confidence in where we are positioned to take advantage of this.”
