Mixmasters find an alternative to all-in-one ERP software: Page 3

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Accounts receivable was the first function converted to Geac, to assure compatibility between the division and the parent corporation. "Strategically, we wanted to be able to collect the cash, so we brought them over to our accounts-receivable system right away," says Pete Orsini, CIO of Copper Weld Industries.

But the company won't give up the J.D. Edwards payroll system until it becomes too costly to maintain. "As long as it's paying well, there's no reason to move it off of J.D. Edwards," Orsini says. "It's not strategic. It won't change the bottom line of the business."

The opposite tack is taken by Solectron Corp., the Milpitas, Calif.-based electronics manufacturer. Even though it has been growing aggressively through acquisitions, Solectron takes a single-system approach. Since 1991, the company has transformed itself from a single site with under $300 million in annual revenue into an international player with about two dozen manufacturing sites taking in nearly $4 billion yearly. "We're now using a wide variety of ERP systems because of acquisitions, but we're standardizing on Baan, and now we're deploying it throughout the company," says Ken Ouchi, Solectron's CIO. His main reason: A single system eliminates the need to create and maintain interfaces between systems. Beyond their initial expense, interfaces add up to an ongoing burden, because they have to be reworked each time an attached application gets upgraded or improved, Ouchi says.

Reaching beyond core functions

Many companies that might have preferred to stick with one integrated suite from one vendor find they have to adopt a best-of-breed approach when it comes to new applications that fall outside the core functionality of traditional ERP--financials, inventory control, purchasing, order management, manufacturing, HR, and payroll. These come-lately capabilities include supply-chain planning, product configuration, and salesforce automation.

Lessons learned in creating hybrid ERP systems

In hybrid systems, middleware that manages the interface between disparate systems affects the speed of the data-swapping process. This factor can have a serious effect on operations.
Your company's decision on whether to build a hybrid system or to go with a suite from a single vendor should be determined in part by organizational priorities. If the ease and comfort of your overarching IT department is a high priority, go with a single vendor.
If industry-specific functions of enterprisewide software are critical to the success of your business, a hybrid approach may be the only route to take.
If your company is small or medium-sized, you might not have the resources to mix-'n'-match, which means you'll have no choice but to go with a single vendor for ERP software.
Kyle Pond, research analyst for GartnerGroup Inc., the technology consulting group based in Stamford, Conn., fits these bolt-on functions under the term "eERP"--extended ERP. Extended ERP encompasses a changing ecosystem of applications, he points out, with new functions constantly emerging, and established ones getting subsumed in main-line ERP packages.

Although in the core ERP market "there is more of a trend to go with a single vendor because of short-term execution problems," such as the looming Y2K deadline, Pond says, "the trend today is to buy best-of-breed within the eERP market."

Capitalizing on industry expertise

Seattle-based clothing maker Union Bay Sportswear is currently installing a best-of-breed, hybrid ERP system to capitalize on industry-specific software available from Richter Systems International Inc. of Atlanta. Although it classifies its product as an ERP system, Richter specializes in functionality for the soft-goods industries. Richter, a supplier of supply-chain-management software, doesn't provide integrated modules for corporate operations such as human resources and financial management. Therefore, buying Richter means adopting a best-of-breed integration.

Union Bay uses Richter's SUCCESS suite for such operations as manufacturing, procurement, inventory control, and order entry. The system lets the clothing maker capitalize on Richter's expertise in retailing--expertise that, in the view of Union Bay's MIS director Kevin Evans, couldn't be acquired elsewhere. For example, Richter stays on top of industry-specific issues like customer compliance, loading its software with features that let users meet changing demands from retailers for details like unique labeling or sales-floor-ready packaging.

"Our ERP system needs to be able to react to that," Evans says. "The Richter system provided the greatest flexibility." It also provides links designed to ease integration with applications covering the areas SUCCESS overlooks. Union Bay takes advantage of one such premade integration by using the PKMS warehouse and distribution management system from Manhattan Associates Inc., in Atlanta. A partnership between Richter and Manhattan Associates accounts for the ready-made integration.

No one vendor can do it all

Such ERP partnerships and other measures supporting cross-system integrations encourage greater mixing and matching. Probably the most prominent example comes from SAP, worldwide leader in single-system ERP. Its R/3 system includes a feature named the Business Framework, a kind of super application interface that contains the protocols that other systems need in order to exchange information with R/3.

"No one vendor will have all the applications," says Andrew Zoldan, vice president for strategic initiatives at SAP America, based in Newtown Square, Pa. Accordingly, ERP packages such as the one he sells become more like an information-technology platform than a solitary system. It will provide core functions like financial management and human resources. But beyond that, Zoldan says, "it is a platform upon which you can build all your extended business functionality."

Do you have any "Lessons learned in creating hybrid ERP systems" you'd like to add to our list? E-mail them to us.
"People come up with new technologies that then need to be supported within the enterprise framework," Zoldan says. "That's going to go on forever." //

Jeffrey Zygmont writes about business and technology from Salem, N.H. He can be reached at jzygmont@concentric.net.

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