Optimisation From Within
Malaysian Business - May 1, 2007
By Cynthia Ann Peterson

WINNING a business plan competition in 2002 was an auspicious start for a small group of technopreneurs, and they haven't looked back since. Maestro Planning Solutions Sdn Bhd (Maestro Solutions) was formed when its founders realised they had a key differentiator to set themselves apart from more established competition, albeit in a fairly crowded application space. Maestro Solutions decided to address the supply chain management (SCM) market, confident it had an approach that was fresh.

`In my previous experience in chip design, there was a lot of optimisation used. We looked at the technology, and talked to experts. We realised optimisation could be applied to SCM, and that optimisation could be taken to a new field,' explains Aris Samad- Yahaya, chief executive officer, Maestro Solutions.

Aris, as well as Vice President of Business Development, Azreen Latiff and Maisie Chui, who is the company's chief marketing officer, were all working in the US prior to setting up the company. After meeting and talking about potential business ideas, they entered the Venture 2002 Business Plan competition and won, attracting venture capital (VC) interest along the way.

According to Chui, the initial idea was to try and win the competition first and then try and pursue VC funding, but things didn't turn out as expected.

`By the time we got into discussions, we decided to self-finance our company. We had two customers in hand by then, and we were funded by the revenue generated,' says Chui.

Optimisation Push
In chip design, optimisation is key, as packing in more capability into as small a chip as possible is the goal. In a warehouse, for example, being able to utilise space as effectively as possible can help companies save substantially. Maestro Solutions says through optimisation, operational savings in general can be as much as 30%. Optimisation is the core of the company's flagship software solution called optimalOne, but what does optimisation really mean for SCM?

`The concept is usually evolutionary, meaning that over time, companies figure out what works best in a warehouse setting, for example. But, optimisation is not thought about in a mathematical sense, and used from the outset to determine the best, most optimal positioning of things. Globally, optimisation is traditionally done using known environments, but our product helps businesses optimise under uncertainty,' says Aris.

Although the concept may seem daunting to potential customers, Maestro Solutions is concentrating on communicating its positioning on it as clearly as possible to the market, and the technopreneurs say it is getting easier to approach potential customers with their concept.

US$362.8 Million Market
Maestro Solutions is looking to serve a market that is showing stellar growth, especially in APEJ (Asia Pacific excluding Japan). According to analyst Gartner, the SCM software market in APEJ is forecasted to be the fastest growing region with a compound annual growth rate (CAGR) doubled the average worldwide growth over the next five years. The region currently accounts for 6.7% of the worldwide total. The APEJ market is expected to grow 11.6% this year to reach US$362.8 million.

Despite the positive outlook, SCM's growth is still below other applications such as customer relationship management (CRM) and enterprise resource planning (ERP) in APEJ.

`Within the Asia Pacific business application software space, SCM software revenue is still much smaller than ERP software revenue, which has dominated over 60% of overall business application software. End-user organisations are still prioritising ERP deployment, specifically in emerging markets such as China, India and parts of Asean,' says Yanna Dharmasthira, research director, Jakarta, Indonesia, Gartner.

The analyst adds that vendors need to understand the users' cultural and local business processes. Understanding of these issues are part of Maestro Solution's strengths. The company says it application is designed to cater to the market, and designed from the outset to address role-based needs of different levels of users.

Taking on Bigger Players
Gartner says smaller vendors face numerous challenges coming up against global players. Geographical span and the uniqueness of individual markets can place constraints on limited resources. `For the same reasons, the smaller vendors may have fewer key end user references which may not represent each unique Asia Pacific market. In addition, mergers and acquisitions enable large suite vendors to have an advantage of selling into their installed customer base,' it says.

However, that does not mean smaller vendors cannot continue to do well. They can thrive targeting specific niche markets, adds Gartner.

Maestro Solutions tells customers what their optimal input is from the beginning, and companies can plan better if they take the uncertainties in their business operations into account. The company says incumbent software may need additional optimisation capabilities added on.

`We are on a real mission as we have a strong value proposition, and we want people to understand that,' asserts Aris.

Port Business
Maestro Solutions is currently working with Northport (M) Bhd on a project. It is still in the consulting phase, says Azreen, and the engagement with the port came about the old fashioned way.

`It was through references and word of mouth. Our customers shared their experiences engaging with us, which is how Northport got in contact with us. They have an opportunity to derive more real value with this implementation,' he says.

Maestro Solutions is indeed looking to service large entities such as logistics, port and distribution companies. The company says is approaches an area of business instead of verticals per se, and is looking at how it can help companies which have to deal with a lot of movement and variables.

`The more complicated the operation, the better we do,' quips Aris.

Cognisant of their relatively recent history, the company is concentrating on the local market for now.

`We are starting to market overseas, and we are looking to list on Mesdaq next year, which will give us the reach and funds to take the company and our value proposition overseas,' explains Chui.