InformationWeek: The Business Value of Technology

December 18/25, 2000

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By Steve Konicki

More on ERP:

sidebar:ERP Vendors' New Watchword: Easy Application Integration TechWeb: Verano Acquires Agilent Business (12/4/00) TechWeb: Companies Warned To Integrate E-Sales, CRM (11/01/00)

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But one product that Ontario Store Fixtures needs to use isn't pre-integrated into J.D. Edwards applications. The company will soon begin a project to tie the ProEngineer computer-aided design software from Parametric Technology Corp. to its J.D. Edwards software. Fletcher says that no one has ever integrated a CAD package as tightly with ERP as Ontario Store Fixtures will attempt with ProEngineer; it's planning to work closely with both Parametric and J.D. Edwards on the integration project, using J.D. Edwards' XPI interoperability framework. "At the end of the day, you resolve back to the transactional engine," Fletcher says. "There always will be legitimate debate, but there has to be one core, and, as far as possible, I try to keep the ERP solution as the core."

Most of the major consulting and systems-integration firms, such as Arthur Andersen, KPMG, and PricewaterhouseCoopers, agree that customers should focus on a core ERP suite and integrate just a small number of other applications for special business requirements. Michael Herzog, KPMG managing director and senior VP for high-tech solutions, says the idea of looking to a single vendor to provide all the software functionality that a customer needs doesn't work. But the other extreme, a leading-edge approach where as many as a dozen different vendors may be involved is, he says, an "onerous" problem. He recommends that software buyers look for an ERP system that can provide 60% to 70% of what their company needs, and then integrate critical software from two or three other vendors.

Pete Koltis, an Arthur Andersen Business Consulting partner, says his firm generally advises its clients to pick an ERP vendor that fills most of its needs first, and then to look at specific applications that provide deep functionality in particular areas. "For a lot of reasons, it's better under most circumstances to go with a single vendor approach, but you have to look at it on an application-to-application basis," he says. For example, a company that depends heavily on an efficient sales force might need to integrate a sales-force-automation application from a vendor such as Siebel. David Zinn, a partner at PricewaterhouseCoopers Financial Services Consulting, points out that companies in the financial sector can't look to ERP vendors for their specialized needs. For example, regulatory reporting requirements vary widely by state or nation, and ERP vendors can't begin to provide software to cover those bases.

However, EDS urges its top-tier customers to wholeheartedly take a best-of-breed approach because they need cutting-edge functionality in a wide range of areas. The systems integrator says that integration is no longer the stumbling block it was even a few months ago. "Enterprise application integration has evolved to where plug-and-play is more real," says Robb Rasmussen, EDS's VP for E-solutions in the digital value-chain practice area. In addition to the capabilities ERP vendors themselves provide, middleware software vendors such as CrossWorlds Software, SeeBeyond, Tibco, Vitria, and webMethods provide adapters that integrate specialized applications with ERP systems and with legacy systems, too, he says.

That's the way Siebel sees it as well. Relying on just one software vendor to build and provide everything, says Siebel senior architect Skip Bacon, is a recipe for disaster: "One neck, one noose." Bacon says Siebel often encounters customers that have between a dozen and three dozen applications from various vendors; that doesn't necessarily add up to problems, he says, as long as a smart integration strategy is in place. Siebel provides for integration at the user-interface, object (COM or Corba), and abstraction-layer (which passes XML data and messages between applications) levels. Siebel also offers prebuilt connectors for SAP's R/3, J.D. Edwards' OneWorld, and Great Plains' enterprise applications. The company is also developing a connector for its next release that will link its applications to Oracle's 11i E-business suite. Siebel can be integrated with other vendors' software, including many legacy apps through middleware products.

While Oracle reciprocates with prebuilt integration of applications from Siebel and SAP and lets customers use XML to integrate with other apps, the company doesn't have quite as sympathetic a view of wholesale integration with its 11i suite. The future of business software is one vendor, one suite, says Oracle senior VP and chief marketing officer Mark Jarvis. Ten years ago, a number of PC software applications dominated the market--Lotus 1-2-3 for spreadsheets, WordPerfect for word processing, dBase for database software. "But Microsoft found a way to make all those apps work together and called it Microsoft Office, and the suite is much more useful than the separate parts ever were," Jarvis says. "What you saw Microsoft do with Office, you now see Oracle do with business applications."

Are Oracle customers biting? Gary Hensley, IT director for juice and food-bar company Odwalla Inc. in Half Moon Bay, Calif., says his company wanted a totally integrated system, which is why it signed up for Oracle 11i's financial, reporting, and manufacturing applications. Yet Oracle isn't providing every core component. Odwalla's store-delivery applications, which manage more than 80% of its revenue, are to be provided by Numeric Computing Systems after a search that included several other companies. Integrating the new application with Oracle doesn't worry him, Hensley says. "Part of the evaluation was for these folks to integrate with Oracle," he says. "One of Oracle's strong points is building interfaces to just about anybody."

Depending on how critical an application is, some companies might even be willing to overlook the fact that it doesn't integrate well with core ERP software. That's the case at $6 billion GKN Automotive Inc. of Timberlake, N.C. Neither Kronos Inc.'s software for time and attendance, employee scheduling, shop-floor labor allocation, activity tracking, and labor analytics nor Computer Associates' Manman Manufacturing, which includes production management and financials applications, easily integrates with GKN's PeopleSoft 7 human-resources apps or with the PeopleSoft 8 HR apps it recently installed. The reason: There are no open APIs or other common integration points in the third-party software. But, says project manager Ted Bishop, because these products are so important to the company, any problem integrating applications is simply overlooked and workarounds have been developed.

At the end of each business day, payroll and benefits data from the PeopleSoft HR apps is exported to the Kronos software, which is used as the company's primary financials system, and at the end of the week information from the CA and Kronos apps is imported into PeopleSoft. Software connectors have been set up that enable the import and export operations to be completed when an authorized person executes a software command. "It would be nice if all the systems' architecture was similar so that manual intervention wasn't needed for the import and export operations," Bishop says. "It's an issue of how the other applications handle data. We're looking for them to make data easier to get at."

A spokesman for CA says the best way to integrate Manman with PeopleSoft and other applications is to use its new BizWorks E-business-intelligence suite, which includes enterprise application integration connectors for PeopleSoft 8. The BizWorks suite starts at $125,000. Richard Young, Kronos director of service solutions, says newer versions of Kronos' products offer XML integration, and the company publishes its APIs to simplify deep integration.

GKN's priority is now building an interface between the PeopleSoft HR apps and PeopleClick.com, an Internet employee recruiting service that handles much of the details of hiring for GKN, and between PeopleSoft HR apps and an outside provider (which GKN hasn't yet selected) to handle management of employee 401(k) plans. Bishop says PeopleSoft's Web-based architecture makes integrating such services a "non-issue." The interfaces will be quick and easy to build, he says.

As Marathon Oil Co. looks to a future in which mySAP.com will be the engine behind its worldwide operations, it's counting on the software's business APIs and XML integration capabilities to make it easy for the company to connect numerous systems in use around the globe to the ERP platform. Marathon, which last month closed a 1,450-seat deal for SAP software that analysts say is worth between $7.5 million and $10 million, requires integration of its mySAP.com apps with Tobin International land-management software, Schlumberger's GeoQuest Systems geoscience, engineering and drilling applications, and Landmark Graphics' oil and gas reservoir management apps--all key tools for Marathon scientists, engineers, and oil-field managers.

Marathon will use mySAP.com's B-to-B capabilities to manage transactions with customers and suppliers, says Gary Newberry, the executive managing the SAP deal. The idea of being locked into SAP never occurred to Marathon, he says. "One of the primary reasons we chose to implement SAP at this time is it will allow for seamless flow of information within the company from users throughout the world using various tools," Newberry says.

One thing is clear: It's becoming increasingly possible for companies to achieve the seamless flow they desire, whether they're relying primarily or solely on one vendor or are looking to a handful or more of third-party companies to help them deliver on their E-business aspirations.

--with Alorie Gilbert, John Rendleman, and Rick Whiting

Illustration by Normand Cousineau
Photo of Bishop by Jerry Wolford
Photo of Hensley by Alan Blaustein

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