Enterprise resource planning, common wisdom held, didn't fit e-business. Not only were most ERP software suites still based on outmoded client/server technology, they focused on improving internal processes such as finance and accounting rather than using the Web to reach outside the enterprise to customers and suppliers. So, much to the chagrin of big ERP vendors such as SAP AG and PeopleSoft, many enterprise customers that had spent much of the 1990s on big-bucks ERP deployments began to shift their IT spending elsewhere.
But not Turner Industries. While others were burying it, Turner, led by CIO Patrick Thompson, was breathing new life into ERP. Even before the company's ERP vendor, J.D. Edwards & Co., had rolled out a fully Web-based version of its software suite, Thompson and Turner Industries built their own Web front end to Edwards' World ERP product to give customers real-time information from their systems via Web browsers. Now, he's working on allowing Turner Industries employees to access and collaborate with the company's human resource systems over the Web.
The payoff? It's been huge. By allowing customers to do business with it more easily, the ERP-to-Web extension project has contributed to the construction company's growth from US$290 million in revenues in 1994 to an estimated $800 million annual rate today. Now Thompson is in the process of migrating Turner Industries to J.D. Edwards' full-blown Web-based ERP release, OneWorld Xe, over the next four years.
"ERP is the kind of project that never dies," Thompson said. "My feeling is that a company without ERP is like a Mercedes without tiresââ,¬"-you aren't going far without it. Extending ERP has proved to be our competitive advantage."
Thompson's move to embrace and praise ERP, not bury it, is becoming more common, experts say, as companies realise that the business management system is crucial to conducting collaborative commerce online. Companies such as Turner Industries, Owens Corning, Super Discount CDs & DVDs, and Crestone International LLC, having spent millions of dollars and years deploying ERP, are now building on their initial investments and making ERP a critical component of their e-business strategies. Their goal: to link ERP systems to the Webââ,¬"-either by migrating to a new generation of Web-based ERP products or extending existing ERP suites themselvesââ,¬"-to open traditionally closed systems to partners and customers. In the process of moving to what market research company Gartner calls ERP II, many e-businesses hope to create true online collaboration and responsive supply chain processes.
Not that IT and e-business managers are entirely satisfied with every aspect of their past and current ERP investments. Deployments can still be complex and costly, and many ERP vendors still lag in their efforts to roll out fully Web-based versions of their products. Still, experts say, the trend at many companies today is to reinvest in ERP and pull it into the mainstream of e-business.
"ERP will play a large role as the foundation for a lot of things," said John Bermudez, an analyst at AMR Research, in Boston. "The corporations that put in a lot of time and effort into ERP will benefit because they'll have things in electronic format, improved business processes and cleaned-up data. This will allow them to move into e-business much easier than those with a haphazard collection of systems that don't work that well."
