Where to now for ERP?
Where to now for ERP?
In the wake of Y2K, in what form will ERP endure, and how will it interact with other technologies?
The year 2000 problem gave organisations an opportunity to look more closely at their enterprise operations, if only so that they could best survive compliance issues by developing a sound operating base.
With these compliance projects now wrapped up, organisations which have spent millions on enterprise resource planning (ERP) systems are now looking to draw an actual benefit from them by introducing projects based around it that may provide a return on their investment.
"There is already a large number of products used in combination around ERP to gain value from it," said Microsoft enterprise data systems marketing manager, Terry Clancy. "These include knowledge management, e-business and line of business applications. There is lots of interest in these technologies as organisations move beyond Y2K lockdown."
Mr Clancy said that ERP technology itself has experienced a downturn of late, as complementing technologies like customer relationship management (CRM) and business intelligence (BI) have gained popularity and have become a greater focus for organisations. "However, ERP is and will remain most intrinsic to business," he added.
"The merge of software is inevitable."
CRM and competitive intelligence technologies have gained momentum amid a constantly changing business landscape coloured by mergers and partnerships, said Chris Meldrum, SSA Pacific solution director for the southern region. "Organisations want to understand these changing markets so that they can penetrate them," he said. "CRM is the next phase for many organisations, as a natural extension of BI. They need to understand and deliver to their clients, automate their sales force, and aim to increase their market share."
As ERP is the basis around which many of these intelligence systems are built, Mr Meldrum said that not only will the technology continue to be needed, but it will also become the basis of more vendor partnerships to offer a number of solution alternatives. The key to this process is integration.
SSA has worked to allow seamless integration between the products of itself and its partners - CorVu, Cognos and Business Objects - to meet this user demand and open new market networks for the company.
"We're starting to see that organisations may use one vendor for one aspect and then require these to integrate," said Mr Meldrum. "The merge of software is inevitable."
Microsoft, meanwhile, has focussed much of its business solutions approach on supporting SAP, Baan, PeopleSoft, Great Plains and others to add value to its SQL Server.
HOUSE BUILDING
There is far from a consensus on whether integration is the surest direction for ERP. "Integrated ERP doesn't fit into a modern world," said Peter Bissett, Computron's general manager for Asia Pacific. "It's fine in theory, but it's not as flexible as individual applications can be. When you look at factors such as the time to implement an integrated system, it's not viable for many organisations."
Instead, Mr Bissett proposed a 'best of breed' approach, which he said offers greater flexibility as applications are linked by interfaces. Computron has adopted this perspective with its own implementations, and Mr Bissett believed more organisations would tend in this direction after trying to integrate ERP.
"It's like building a house. When you first create it you can have it how you like it, but as soon as it's built and set, you lose all flexibility and it's more expensive to change," he said.
Mr Meldrum was more cautious of moving to a 'best of breed' framework with its solutions. "You should offer a number of solutions to organisations," he said.
Mr Clancy agreed. "Any ERP system that doesn't integrate isn't doing what it should for customers," he said.
"It's time to be more pragmatic about infrastructure environments."
Organisations should also look for solutions with an object-oriented interface, so that they can integrate and customise an ERP system to suit their requirements, said Mr Clancy. He also believed that XML schema support in ERP systems would prove vital for organisations that wanted to format messages between businesses, which will be increasingly useful as the supply chain concept drives more enterprise processes.
"This support is vital for business to business transactions, as it allows workflow to be automated," said Mr Clancy. "ERP systems use relational databases for modelling, which are optimised for transactions."
ERP research and development is reaching this capability for some products, while vendor consortiums, such as the one Microsoft has formed around its BizTalk technology, are bringing developers and experts together to tackle the technical issues.
While vendors are taking varied approaches to ERP's development, all agree that it will continue to be vital to business, after moving from the technical department's responsibility.
"It's time to be more pragmatic about infrastructure environments. Changes to ERP with Y2K exercises have not added to the bottom line," said Mr Bissett. "It's time for managers to be conscious of the return on their investment, and to question efficiency."