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June 15, 1998

Extending ERP

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Still, security is always an issue. Marshall does transmit proprietary information--including inventory levels, bills of material, and pricing--to its customers and suppliers. But it also makes sure that the people who receive the data sign nondisclosure agreements to reduce the chance of information falling into competitors' hands. Also, only select individuals within a business partner's organization have access to Marshall's systems, and they're equipped with passwords and sign-ons. "Security has to be institutionalized in systems and with people," says Rodin.

There's another reason collaboration has been slow to take off. Companies have been so busy automating their core, internal business processes, they haven't had time to think about the next step. As companies complete their basic ERP projects, they're starting to look ahead. The major ERP vendors, for their part, seem ready to respond. Over the course of this year and next, they'll begin rolling out a new wave of ERP software designed to take their systems beyond a company's walls.

Baan, for instance, will release a series of Web-based applications called Baan E-Enterprise. Though still in the very early stages of development, the applications are designed to extend an enterprise's supply chain by sending mobile agents over the Web to search key suppliers for materials, check product inventory, lock in orders, notify accounting systems, and handle shipping arrangements. Baan officials say the system's first module, called Purchase Order Push, will be ready by year's end.

Dan Zirbes, manager of IT at Mercedes-Benz US International, says he looks forward to such an application. "Right now we have EDI links to about 70 suppliers," he says. "But there are still a lot of problems associated with that method. It would be great to link our systems with our suppliers' systems. That way things would get done quicker, and there would be less chance for error."

Oracle officials say a big selling point to Release 11 of its enterprise applications is the built-in "Web Store" that lets users connect with customers at one end and suppliers at the other--and delivers on the promise of just-in-time manufacturing. For instance, a customer shopping for a bicycle can log on to the appropriate Web site and with the push of a button tap into a manufacturer's ERP system to check on product availability and delivery dates. Once the order is made, the purchase requisition can be transmitted directly to the manufacturer's suppliers so they know it's time to replenish.

Carl Eberling, manager of software development at cellular telephone company Airtouch Communications, which is implementing the Oracle software, is a fan. "Customers can order phone service or review their account information anytime they want," he says, adding that the company's main suppliers, including Motorola and Nokia, will also be connected to the system. If supplies of cell phones fall below the level needed to accommodate new Airtouch subscribers, the suppliers will be notified electronically to replenish stock. "Managing the supply chain is all about removing the complexity of dealing with suppliers," says Eberling. "At the same time, it simplifies for our customer the ability to do business with Airtouch."

Meanwhile, SAP is working on cross-enterprise ERP communications. SAP executive board member Peter Zencke says SAP plans to extend its business interfaces over the Internet, essentially letting R/3 users reach outside the organization and connect their systems to the business systems of their customers, suppliers, and distributors.

"SAP will provide the infrastructure that will allow you to pass real-time data from one R/3 system to another R/3 system, or any other transactional system." The vendor is currently selecting customers for a pilot program and will release more details at its European users conference in Madrid at the end of June.

A host of third-party vendors are also hot on the cross-enterprise integration trail. These so-called processware companies, such as CrossWorld, Oberon, and CrossRoute, are tackling the integration issue by offering off-the-shelf integration among disparate systems.