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Jupiter
Goes Global
By Michael Alan Hamlin
November 19, 2002
Philippine-based Jupiter Systems
isn't satisfied. Founded in 1985 by two IT consultants, the company
has transitioned from developer of DOS-based single user business
applications to builder of bona fide complex ERP solutions. For
those not familiar with ERP, it is obtuse IT jargon that refers
to enterprise resource planning solutions, which are actually a
set of integrated applications that link and share data across all
the departments of a company.
A good ERP can enable a company to
increase efficiency, productivity, and profitability dramatically,
as long as the company is also willing to adopt modern business
processes that leverage the benefits of enterprise systems. But
because they are so complex, ERPs were for many years beyond the
reach of small and medium businesses. Jupiter founders Nelson Ng
and Joseph Uy, Jr. saw opportunity in first developing affordable
business applications and later an ERP solution for the SME sector,
which certainly needs just as many efficiency and productivity boosting
tools that the big boys do.
Seventeen years later, Jupiter dominates
the Philippine market for homegrown ERPs, but that's not enough
for current president and industry veteran Fermin Taruc and his
marketing manager, Renmin Villanueva. "Today our priority targets
are Vietnam, China, Indonesia, Malaysia, Thailand - and the U.S.,"
Taruc and Villanueva told me last week. In fact, the first China
"prototypes" of its applications are already being tested.
Taruc's principal responsibility is strategy: new ventures, expanding
market share, and building the company's presence in Southeast Asia,
China, and the U.S. Villanueva provides the marketing support required
to do that.
The role of professional managers
in the company is just one of a number of indicators that Jupiter
today is a very different company from the one Ng and Uy founded
to help SMEs gain cost-effective access to basic applications. It's
principal product - Enterprise Resource Information and Control,
or ERIC - began as a PC-specific DOS program that was migrated to
Unix in the early 90s - and Windows NT soon after - becoming a truly
integrated, multi-user system. As the company grew, so did ERIC's
functionality and sophistication. Jupiter itself outgrew its original
roots, developing new skills to assist clients in implementing ERIC
and improving business processes design.
Among its clients in the Philippines
is pharmaceutical giant United Laboratories, which has implemented
ERIC nationwide to connect its distribution network. SC Johnson
- a multinational household products company - chose to implement
Jupiter's entire suite of ERIC applications. Leading packaging concern
Flexopak - which provides branded containers for a wide range of
consumer products - had Jupiter introduce modern, computer-based
manufacturing management to line workers who had never touched a
computer previously.
And in truth, Jupiter is no novice
when it comes to international operations, either. "Most of
our large export accounts are in Indonesia, including PT Avon and
PT Daria Varia," Villanueva told me. But "there is one
ASEAN-wide (Association of Southeast Asian Nations) account now
in the pilot stage for pharma distribution, which we can't name
yet. In Hong Kong, we have airport services at Chep Lak Kok, the
Sino group, and a host of other companies - roughly about 25 installations
not counting Sino subsidiaries."
The company has also recently established
two joint ventures in China and the U.S. According to Villanueva.
Its China joint venture firm, Jupiter Systems China Limited, is
working on "documentation for our first China site." That
effort involves the translation of all ERIC modules into simplified
Chinese. The US venture, San Francisco-based Jupiter Software Systems
America, is "gathering requirements for localization and product
development," although actual product development will be managed
from Manila.
The company spends a great deal of
time and energy developing an understanding of local business practices
and adapting ERIC to local conditions because that has been a principal
factor driving growth. The company has also focused on the manufacturing
and distribution sectors. That focus has provided an intimate understanding
of the key business processes that make companies in these sectors
competitive. As a result of consistently localizing its solution,
sticking with sectors it knows, and working closely with clients
on an interpersonal basis, the company has been consistently profitable
since 1998.
"Localization is a key advantage
but it's is not everything. ERIC has the right match of flexibility
and simplicity," according to Villanueva. "SME sector
users prefer clean, uncluttered interfaces where one can intuitively
proceed to the next step in (a given) process. For many transactions,
ERIC will do them 1-2-3 while most competitors are 1-2-3-4-5."
So what's the best tool for selling Jupiter's solutions? "We
have strong client references that have had great experiences implementing
and using ERIC."
Villanueva cites other advantages,
too. "On the project side, we have an excellent track record
for implementing within time frame and budget and at the same time
achieving very high utilization of ERIC functionality. Our surveys
show from 83-90% utilization. This means that when clients use ERIC,
they achieve maximum benefit."
Another strength was the founders
decision to do two important things, in my view. First, they brought
in professional management to lead the firm strategically. Ng still
plays an integral role in the firm as its chief technology officer,
overseeing and participating in product R&D. Uy is chairman,
but devotes the bulk of his time to other business ventures.
Second, the company has brought in
new shareholders, providing capital for R&D and market development.
"Jupiter is 40 percent owned by iVantage, a publicly listed
venture capital firm," Villanueva explained to me. The rest
of the company is owned by employees, key officers, and the founders.
Overseas ventures involve partnerships that bring relevant expertise
as well as operating capital to these subsidiaries.
Like a lot of Philippine firms that
hover below the horizon, Jupiter has been world-class in at least
three ways. First, it's developed a highly sophisticated, successful
enterprise solution. Second, it has leveraged customer relationships
and market knowledge to dominate the domestic market. Third, it's
launched its flagship product regionally in key markets with considerable
success.
Those things don't guarantee future
success, of course, and Jupiter acknowledges that conditions are
tough. But as long as it doesn't lose site of the need to keep scrambling
and sticking close to its core - and stays unsatisfied - chances
are good that we'll hear more that's good and encouraging about
one of the Philippines' true, value-added software developers.
(Michael Alan Hamlin is the managing
director of consultancy TeamAsia and the author of three books on
Asian economies and companies. His latest book is Marketing Asian
Places, of which he is a co-author (Wiley, 2001). Write him at mahamlin@teamasia.com.).
Copyright © 2002 Michael Alan
Hamlin. All Rights Reserved.
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