Automation ERP Projects Part V with Wrap Up and Guidance

How does ERP fit with e-commerce?

ERP vendors were not prepared for the onslaught of e-commerce. ERP is complex and not
intended for public consumption. It assumes that the only people handling order information will
be your employees, who are highly trained and comfortable with the tech jargon embedded in the
software. But now customers and suppliers are demanding access to the same information your
employees get through the ERP system—things like order status, inventory levels and invoice
reconciliation—except they want to get all this information simply, without all the ERP software
jargon, through your website.

E-commerce means IT departments need to build two new channels of access in to ERP systems—
one for customers (otherwise known as business-to-consumer) and one for suppliers and partners
(business-to-business). These two audiences want two different types of information from your
ERP system. Consumers want order status and billing information, and suppliers and partners
want just about everything else.

Traditional ERP vendors are having a hard time building the links between the Web and their
software, though they certainly all realize that they must do it and have been hard at work at it for
years. The bottom line, however, is that companies with e-commerce ambitions face a lot of hard
integration work to make their ERP systems available over the Web. For those companies that
were smart—or lucky—enough to have bought their ERP systems from a vendor experienced in
developing e-commerce wares, adding easily integrated applications from that same vendor can
be a money-saving option. For those companies whose ERP systems came from vendors that are
less experienced with e-commerce development, the best—and possibly only—option might be to
have a combination of internal staff and consultants hack through a custom integration.

But no matter what the details are, solving the difficult problem of integrating ERP and e-
commerce requires careful planning, which is key to getting integration off on the right track.

One of the most difficult aspects of ERP and e-commerce integration is that the Internet never
stops. ERP applications are big and complex and require maintenance. The choice is stark if ERP is
linked directly to the Web—take down your ERP system for maintenance and you take down your
website. Most e-commerce veterans will build flexibility into the ERP and e-commerce links so that
they can keep the new e-commerce applications running on the Web while they shut down ERP for
upgrades and fixes.

The difficulty of getting ERP and e-commerce applications to work together—not to mention the
other applications that demand ERP information such as supply chain and CRM software—has led
companies to consider software known alternately as middleware and EAI software. These
applications act as software translators that take information from ERP and convert it into a format
that e-commerce and other applications can understand. Middleware has improved dramatically in
recent years, and though it is difficult to sell and prove ROI on the software with business leaders—
it is invisible to computer users—it can help solve many of the biggest integration woes that plague
IT these days.

How do on-demand and software-as-a-service ERP applications work?

A small but growing number of vendors now offer on-demand or software-as-a-service (SaaS)
ERP applications. These HR and finance applications are hosted by a third party, so there's no
software to install on your company's servers and PCs. Instead, users access the ERP applications
via a Web connection, and on-demand/SaaS vendors are trying to make their applications more
"user friendly" than traditional on-premise applications. (Though, to be fair, traditional on-premise
ERP vendors are also trying to make their applications easier to consume.) The three main selling
points that on-demand/SaaS vendors employ are:

faster implementation times (there's no software to install on-premise, and that literally
shaves months off installation periods);
easier and more frequent upgrades (they can happen automatically because the vendor
manages the applications and can roll out patches and bug fixes more regularly); and
cheaper up-front costs (the software price tag can be much cheaper than traditional on-
premise applications because of subscription pricing that is on a "per user, per month"
basis as well as big reductions in integration and consulting fees).

Many businesses and their ever vigilant IT departments still have concerns about keeping their
mission-critical and highly sensitive ERP data on a third party's servers rather than on their own.
An October 2007 CIO magazine survey of IT executives who currently had an ERP system
installed found that just 9 percent reported using a non-traditional on-premise model. Those
alternatives included SaaS, open-source tools and various in-house applications. Nearly 54
percent of those responding to the CIO survey said they probably or definitely would not consider
moving to an alternative ERP model. And while 35 percent of CIOs said they would probably or
definitely consider trying something different, they're not actually doing it yet.

The majority of early adopters of the on-demand/SaaS ERP alternative are small and midsize
businesses, though large companies, perhaps burned by a costly or lengthy ERP rollout, have
started to experiment with on-demand/SaaS rollouts in certain areas or departments at their
companies.

How do I know my ERP data is any good?

When you start talking about data integrity and just how "clean" your enterprise data is, you'll
usually hear about the goal of getting to "one version of the truth" with your ERP data. As usually
is the case, the bigger the company, the more systems it has with more employees that need to
touch those systems, and the more complicated it becomes to keep data accurate and timely.
Most of time, companies don't want to know just how dirty their data is. But when companies do
start "peeling back the onion" in an attempt to remedy their data ills, what they typically find is a
hodge-podge of systems and anywhere from a dozen to hundreds of financial and HR data
sources. Therefore, the job of new data management techniques, such as master data
management (MDM), is to rectify those inconsistencies by creating an integrated and standards-
laden system that automatically fixes data discrepancies. (Beware: It's not easy.) Because ERP
systems are the backbones of most businesses, they are a key piece of any data-management
overhaul. General ledgers, financial data repositories, reporting applications, purchase orders,
invoices, customer contact information, inventory data, performance management tools—they will
all be apart of any company's data management initiative.

Just how important have ERP systems become?

An October 2007 CIO magazine survey of nearly 400 IT executives who had an ERP system
installed found that more than 85 percent of them agreed or strongly agreed that their ERP
systems were essential to the core of their businesses, and that they "could not live without them."
Though there has been recent IT scuttlebutt that ERP systems are now shrugged off as legacy
inside 21st-century businesses, almost 80 percent of those surveyed disagreed or strongly
disagreed with the statement, "My company views ERP systems as legacy systems and no longer
invests in them." And when asked if their company would be able to live without its ERP systems
within the next five years, more than 80 percent disagreed or strongly disagreed. For better or
worse, ERP systems are here to stay.

At the End of the Day - Can you plan and execute a successful ERP project? YES!!!

We use PERA in our planning of ERP Projects. It can be located at www.pera.net

It is a free download and we have had great success with this ERP planning tool. In addition, we
have trained many of our consultants to the level of certified ERP System Execution
Implementation consultants through CIBRES training. We highly recommend this training and the
elements within for certification albeit a certification is not really the goal. The goal is having the
enhanced skill sets to plan and EXECUTE a successful ERP project!

More ERP System Project Guidance