But while SOA and Web services are driving the vendors' ERP redevelopment efforts, they draw a yawn from some IT managers, particularly those at small companies like Tasty Baking. "It really doesn't mean anything to me right now," CIO Bayles says. "I don't have 100 applications I'm trying to integrate."
SOA is low on the IT priority list at some large companies as well. Ingersoll-Rand's Libenson calls service-oriented architecture "the buzzword of 2006," adding that his company doesn't have detailed plans for adopting Web services. He sees them mainly as a way to link ERP applications to legacy systems, adding, "My goal is to find a way to get rid of our legacy systems."
Libenson is more interested in what Oracle is doing with BPEL in its Fusion applications, as a way of reengineering business processes and simplifying the job of implementing ERP software. But Forrester's Wang says BPEL provides only general standards today; the ERP vendors will have to provide their own industry-specific definitions. How well Oracle and SAP do that will determine how useful business process management technology will be in simplifying ERP installation and management.
Improving the user interfaces of their ERP software and their links to familiar desktop applications is also a major element in the vendors' overhaul plans. "If you can't get people to use the software, it doesn't matter how well the business process has been designed," says James Utzschneider, who oversees Microsoft's Dynamics products.
SAP, whose applications were once notoriously user-unfriendly, last month began shipping Duet, software developed with Microsoft that connects SAP processes with Microsoft desktop applications. That integration lets users access SAP HR management tasks from Outlook, for example, or pull HR data into Excel.
That's a big deal for Bayles. Managing IT for a small company, she has to pay close attention to holding costs down by keeping things simple. Tools like Duet break down barriers between enterprise and desktop apps, improving productivity and reducing costs.
SAP also is improving the usability of its applications by developing role-based interfaces under what's known as Project Muse. The GUI technology, developed with Macromedia using its Flash authoring software and Flex methodology for building interactive Web sites, will be rolled out for a variety of industries over the next 18 months. Oracle and SAP also are adding visual-modeling tools that will make it easier for users to make workflow changes to the applications rather than having to rely on IT to do it for them.
A big part of Microsoft's ERP redevelopment is making its Dynamics applications look and navigate more like the Office desktop tools. Microsoft is tailoring reports, forms, and other documents in Dynamics to more than 60 business roles. Oldcastle Precast Group, which makes precast concrete products, is installing Dynamics AX 4.0, and CIO Bill Blyth says links with SharePoint and SQL Server Report-ing Services "give us a whole different way of publishing information."
All three vendors are rushing to get their SOA-based applications out the door. "This is a mind-share marketing game right now," analyst Wang says. IT managers should resist any pressure to upgrade until they've assessed their needs and given the new applications time to mature.
With ERP vendors taking different approaches to SOA, IT management also must understand how those approaches fit, or conflict, with their own SOA direction, says Christopher Beiswenger, who leads CSC Consulting's federal ERP practice. He warns against buying into the idea that SOA is a panacea. "Software-as-a-service can go only so far," he says. "ERP systems still require a lot of configuration and changes as businesses change."
That's not to say ERP isn't worth the effort. Some of the heavy-duty process changes Tasty Baking had to make, such as adopting SAP's more disciplined approach to inventory management, proved to be valuable, Bayles says. "The things that were the most difficult," she says, "were the things that have paid off the most."
But wouldn't it be nice to have the payoff without the pain? That's the challenge ERP vendors must now deliver on.
Illustration by Mick Coulas