The search for results
The fact is, e-commerce didn't kill ERP. It only increased the need for integrated back-end systems to Web-based front-end processes, experts say. A survey of 60 IT managers by PA Consulting Group showed that while 92 percent of IT managers were dissatisfied with results achieved to date, more than 80 percent of organisations surveyed are investing more money in their ERP systems, hoping to gain value from their existing investments.
The level of those commitments to extend and Web-enable ERP systems won't equal spending on initial ERP deployments. Still, experts say, they will be significant. AMR in October estimated that spending on ERP applications, which averaged 42 percent of IT budgets last year, will represent about 37 percent of IT budgets next year.
After dragging their feet, traditional ERP vendors, including SAP AG, J.D. Edwards, PeopleSoft and Microsoft Great Plains Business Solutions, a division of Microsoft, are beginning to take advantage of renewed enterprise interest in ERP to support e-business. All have already rolled out Internet-enabled modules and versions of their software platforms.
And, while it remains to be seen if the big ERP vendors have rearchitected their strategies and products fast enough to satisfy customers, their efforts in some cases are beginning to pay off in improved financial performance. PeopleSoft, after faltering badly last year, recently reported a first-quarter earnings increase of 228 percent over the same period last year. SAP in the first quarter announced a similarly substantial increase.
Some organisations didn't bother to wait for their ERP vendors to get around to delivering Web-based versions of their products.
Consider Turner Industries. Turner is a large, diverse construction corporation with over 100 job sites and 14 regional offices. Thompson purchased the AS/400-based World ERP platform from J.D. Edwards in 1993 primarily to streamline the operations of two businesses, the company's construction services line and its fabrication services line. Combined with Primavera Systems's P3 scheduling applications and custom-built project control and estimating systems, the ERP package was part of a systemââ,¬"-dubbed Interplan-ââ,¬"that Turner Industries used to run its construction, turnaround, shutdown and maintenance projects.
In 1996, Thompson and other Turner Industries executives decided to give customers real-time online access to information in the Interplan system. Rather than communicating with Turner Industries via fax or even email, customers could access information more quickly themselves. As part of an upgrade to the OneWorld next-generation J.D. Edwards suite running on IBM Netfinity Web servers and AS/400s, Thompson used proprietary middleware to extend his ERP system to the Internet, translating World character-based screens into a GUI.
Last year, Thompson chose to take this interim strategy one step further by moving on to the OneWorld Xe Web-based platform to increase collaboration with customers and suppliers.
Using OneWorld Xe and a business intelligence software from MicroStrategy, Thompson plans to build a portal that will allow managers to access information about particular projects. Through the portal, employees on remote job sites will be able to set thresholds and receive early warning alerts when a job is in trouble.
"You can't have collaborative commerce without ERP," Thompson said. "ERP is the backbone, the back office of the organisation, but it's also become more of the storefront and the front office as well. If you don't have good ERP, then chances are your collaborative commerce will be up against some big odds."
Thompson estimates the company spent $2 million on its initial ERP deployment. Compared with that original investment, the cost of subsequent enhancements has been "nominal," he said.
