InformationWeek

May 3, 1999

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ERP Vendors Offer Integrated Analysis

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But they've got competition from third-party software vendors--more than a dozen of which provide users with analytical applications that include interfaces with ERP data. Financial-analysis software, balanced-scorecard applications, and other performance-measurement tools are available from Applix, Broadbase Information Systems, Comshare, Gentia, Harmony Software, Hummingbird Communications, and Hyperion Solutions.

Third-party tools are the only answer for some companies, because those companies have to pull data from more than one vendor's back-end system. Take iXL, an Internet services provider in Atlanta that has acquired 34 companies since its formation in March 1996. The company is using online analytical processing and Applix TM1 decision-support software to pull data from more than 10 accounting and general-ledger systems and a human resources system, to manage projects, track customers, analyze employee turnover rates, and determine if its staff roster matches its business requirements.

"We picked TM1 because it is like a Swiss Army knife," says Ben Chen, CIO of iXL. "In the Internet space, our time to market is critical--almost more important than any features we could offer our customers. I needed an analysis tool that was flexible, that I can bend and twist, and that is open so I can get to various data."

But third-party tools are less attractive to others, such as Compaq's Hashmi. According to him, when a company buys a third-party system to add value to its ERP environment, it often must make investments in several different software infrastructures. "You end up building IT teams to support very specialized tools and technologies," he says.

The ERP vendors say they'll eventually make their warehouses as open as possible so companies can cull data from any number of sources. But analysts and users say the vendors' data warehouses will be best served in their respective environments--you wouldn't use SAP's Business Information Warehouse in a PeopleSoft shop.

Detroit Edison also evaluated tried a third-party tool, but the software didn't meet the utility's requirements--mainly because it was a PC-based application. "It ends up becoming a local application," says Seefried. "And if one wants to have consistent, repeatable data or to consistently run models and compare results, that's difficult to do, because you have to draw from different PCs." With the PeopleSoft app, Detroit Edison can link models and perform comparisons right away.

Phillips Petroleum has used SAP R/3 since 1997 and has relied on two data warehouses and an Excel plug-in for decision-support analysis. But in January, Phillips went live with SAP's Business Information Warehouse because the company didn't want to expend the resources to get its two custom warehouses in sync with the SAP environment.

"All the data generated in the SAP system isn't in the same format as [that] in the old data warehouses," Hodges says. For example, the code for "customer" is different in the SAP system than in the custom warehouses. "We would have had to change everything," says Hodges.

Performance Perspective
Last October, PeopleSoft unveiled its Enterprise Performance Management Suite. The package includes Activity-Based Management, which lets companies report on activities by dimensions, such as customer, product, and channels. The goal is to let companies look at their operational data from a financial perspective. With the Activity-Based Management application, Detroit Edison employees can look not just at costs, but at the factors that drive those costs, says Seefried.

PeopleSoft's EPM suite also includes Funds Transfer Pricing and Risk Weighted Capital, analytical applications for the financial industry. Before year's end, PeopleSoft will release several more analytic applications, including PeopleSoft Balanced Scorecard, which helps organizations align their activities with their strategies, as well as several Workbench modules that help users subscribe to information stored in Enterprise Warehouse. The vendor is developing Workbenches for retail, human resources, and finance.

PeopleSoft is also partnering with other software makers to add value to its EPM suite. It plans to integrate an analytical engine from Information Advantage Inc. by year's end, as well as MyEureka!, Information Advantage's relational online analytical processing system, which can analyze data in a variety of ways.