FUTURE ENTERPRISE SOFTWARE MUST HAVE A "BOTTOM-OUT", NOT TOP-DOWN ARCHITECTURE SAYS APRISO EXEC

New Global Buyers' Market, the Internet, Deflation, and Compliance Have Forever Altered the Landscape for Most Corporations

(Palo Alto, CA - June 4, 2003) — ENTERPRISE OUTLOOK CONFERENCE — To meet the needs of today's real-time enterprises, the software used to run such companies needs to abandon its classical, forecast-driven "top-down" orientation in favor of an entirely new, event-driven, real-time "bottom-out" model, said the president and CEO of Apriso Corporation at the Technologic Partners Enterprise Outlook Conference taking place here this week.

"In today's new 'execution' economy, companies are faced with a set of pressures that they have never felt before," said Apriso's Adam Bartkowski. "The Internet has simultaneously eliminated geographic market boundaries, permitting competition to come from anywhere, unleashed a real-time business environment where I can order what I want and have it overnight, and created a perfect market of information about how my products and I perform against competitors. Moreover, customers and regulators are demanding increased compliance — which means greatly increased traceability. When you throw in increasing worldwide deflation, companies face a whole new set of challenges to remain competitive."

According to Bartkowski, these trends have created the requirement for companies to "reinvent" themselves along the lines of Dell Computer, Toyota, and FedEx, where the entire enterprise is focused on eliminating inventories, mistakes, rework, and every conceivable unnecessary step in manufacturing and supply processes, as well as finding means to achieve "lots of one" — production lots that are, in essence, a single item tailored for a specific user. "What is problematic," said Bartkowski, "is that the strategic initiatives that companies must institute to achieve these objectives are focused on the real-time, global coordination and control of 'events' occurring in the 'bottom' of the organization — in the manufacturing and supply chain, and based upon a real-time, demand-pull model. The necessary software infrastructure critical for the success of these initiatives simply does not exist."

Bartkowski maintained that legacy enterprise software has been designed to support the top-down, or "push" business model that has been predominant for most of the last century, and has been designed for people "working at desks." In the top-down model, companies create cyclical forecasts of anticipated sales requirements, and then with complex and expensive software "explode" these plans — to use the buzzword — into marching orders for purchasing, distribution, and manufacturing. If the forecasts are imperfect — as they invariably are — then many wrong products are ordered and built. Classical approaches to dealing with such imperfection, such as strategic inventories, overstocks, discounts, expediting, and long lead times invariably drive up production costs — which in a hot, expanding seller's market are simply buried in the prices that consumers willingly paid. "It's the best companies have been able to do," said Bartkowski, "and virtually all of the $100 billion or so investment in enterprise software in the last several decades has been to support this model."

Enterprise software of the future will have to work from the bottom out, Bartkowski said. Any supply process will have to communicate in real time — and with a high degree of granularity and accuracy — what it is doing "right now" and what it needs, to any other conceivable manufacturing, quality, or other management process outside of itself. And since the new strategic initiatives demand constant refinement of processes — even on a daily basis — the software will have to be able to be kept in sync with potentially every single process change, as it occurs. Such flexibility is virtually impossible with the classical business systems, Bartkowski maintained, where most of the process assumptions are built into the code, or added with customized interface modules, by experienced programmers. In bottom-out software, he said, the tailoring will occur in real time, by the very people using it.

Bartkowski's vision of bottom-out enterprise software is a real-time, Web-based distributed software architecture that surrounds all of the agents in the value chain — the workers, machines, and materials — "like air." Running on the infrastructure will be a new category of interlinked, language-independent, process-aware, "execution" applications that react to events in real time, and report results — for management and regulatory purposes — to exactly where they are needed. Unlike top-down software, bottom-out software will be capable of being installed in weeks, not years, in a very localized fashion — starting with critical processes — and then "grown" outwards "one step at a time" as needs dictate. And, if early results from the first bottom-out software suite are any indication, returns on investment will be calculated in months, not years.

"The world is changing, and enterprise software needs to change with it," Bartkowski concluded. "All the action is at the bottom."

About Apriso
Apriso is the pioneer of a significant, new class of enterprise software that for the first time enables corporations to define, operate, and monitor supply, production and distribution processes in real time, without limits. Using an event-driven, distributed services model, Apriso's software provides such fine-grained visibility and control of both execution processes and key performance indicators that it is an ideal platform for accomplishing the most pressing business initiatives of today: compliance, product genealogy, in-line production sequencing, real-time, RFID-based asset management, lean supply, successive refinement (kaizen), six-sigma quality levels, demand-driven supply (the "Dell" model), and the adaptive enterprise.

Apriso's software, known as FlexNet®, integrates quickly, easily and naturally into an enterprise's existing software infrastructure, and effectively extends the scope of systems such as enterprise resource planning (ERP) into the furthest reaches of the extended production and supply network, as required. But unlike these systems, that are based upon a top-down, plan-driven operations orientation, Apriso's event-driven, process-based architecture accommodates any operational model that is based upon real-time collaboration between execution processes, real-time visibility into performance, or the requirement to define, refine, or immediately control workflows throughout the enterprise, and across borders.

Apriso was founded in 1992, and now operates in 11 countries across the Americas, Europe and Asia-Pacific. World headquarters are in Long Beach, California. Apriso's rapidly-growing customer base of more than 140 customers and over 400 installations worldwide includes such high-profile, global companies as General Motors, Lear, Honeywell, Microsoft, Merck, Lockheed Martin, ITT, Baker Hughes, Halliburton, International Paper, Rubbermaid, Matsushita Avionics Systems, Saint-Gobain, Pechiney, and British American Tobacco.

The company has received a total of $20.9 million in two rounds of venture funding. Investors include Wall Street Technology Partners LP, CMEA Ventures, LogiSpring Investment Fund, SAP Ventures, and Brentwood Venture Capital.

Apriso and FlexNet are trademarks of Apriso, Inc. and may be registered in certain jurisdictions. All other product and company names mentioned are the property of their respective owners and are mentioned for identification purposes only.