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Thought-Provoking Commentary for the Lawson Software Community
Even though I didn’t attend Lawson CUE this year in San Diego, I did receive my usual eyewitness reports. I also viewed the video feeds of keynotes and listened in on the executive/analyst briefings. And, naturally, I do have my opinions.
First though, let’s take a moment to digest this news item (see http://biz.yahoo.com/e/070306/lwsn8-k.html):
Form 8-K for LAWSON SOFTWARE, INC.
Costs Associated with Exit or Disposal Activities
Item 2.05 Costs Associated with Exit or Disposal Activities
(a) On February 28, 2007, the Company’s management completed a roadmap for aggressively optimizing our productivity by enhancing our global sourcing capabilities and resources. We currently anticipate that over the six quarters ending May 31, 2008, we will be rebalancing our resources between various locations primarily in the United States, Europe and our global support center in the Philippines. This rebalancing will result in a reduction of between 325 and 375 employees primarily in our US and European operations, as we continue to build our staff and facilities in the Philippines. All areas of our organization will be affected, predominantly in consulting and research and development. In accordance with Statement of Financial Accounting Standard (SFAS) No. 112, Employers’ Accounting for Postemployment Benefits, we will be recognizing a charge of between $11 million and $13.5 million for severance and related benefits in the third quarter ended February 28, 2007. All terminations are expected to be completed by the end of fiscal year 2008, with substantially all related payments to be completed by the end of the second quarter ending November 30, 2008. As management concludes on the details of the actions to be taken in pursuing these goals, additional charges related to this roadmap which are not in the scope of SFAS No. 112 may be recorded in future periods, but the timing and extent of these charges are not currently determinable.
Wow. I do find it interesting that they released this on the big SeaWorld “event night” at CUE. Perhaps Lawson figured that could temper the blow?
Lawson is hyper-focused on offshoring what I would term the “repeatable part of consulting”. In my mind this isn’t consulting–it’s commodity services. Call it remote installation, training and billable support (always a contentious subject). I would contend that in order to do heavy-lifting and innovative organization changing, etc. requires a client presence and can’t be done offshore.
Therefore, I see the “Lawson services ecosystem” evolving into two camps: 1) repeatable services, with Lawson becoming the primary provider by offering these services remotely, and 2) process-reengineering and software tailoring organizations who offer higher-end consulting, customized training, and process-oriented services wrapped around Lawson’s products.
Now, on to my thoughts on this year’s CUE:
Here are my CUE take-aways:
One thing I always have to remember (and remind all of you): This is Lawson’s show, and that is what it is-a show. After the party’s over, execution is always the bigger challenge.