Bunfight at the ERP corral

Software companies took a pasting over their hyping of ERP. So could ERP II be the silver bullet, or should it be run out of...

Software companies took a pasting over their hyping of ERP. So could ERP II be the silver bullet, or should it be run out of town?

ERP stands for enterprise resource planning and, basically, is an all things to all men software suite, a bit like a Microsoft Works' elder sibling. ERP enjoyed fashionable iconoclastic status in the '90s, fell a bit by the wayside, and is now back in town.

That, at least, is what is being said by the major players, generally accepted to be JD Edwards, Oracle, SAP and PeopleSoft. This is not a point of view shared by all, and that includes UK and France head of Computer Associates' InterBiz James Jones who speaks of "widescale dissatisfaction as the ERP empire just keeps on absorbing resource. Companies which have invested huge sums of money in traditional ERP products are becoming disillusioned and dissatisfied with the outcome."

Mr J's opinion is shared by industry analyst Martin Butler, one of whose recently declared opinions is that "many organisations that implemented ERP now regret it", and James Jones warms to his theme by adding that "CEOs have often been the last to know about time-sensitive business events, and middle managers are often a filter between reality and what they want the CEO to see."

Business as usual then, as with many IT systems the real take on ERP seems often to be that the whole thing would have worked perfectly well if only people had stopped making nuisances of themselves and getting in the way. Gartner claims, versus little dissent, to have coined the term ERP and to be working towards its follow-up which, with the imaginative leap undoubtedly patented by someone in Hollywood, is to be called ERP II.

Nigel Rayner is a Gartner research director, and goes along with the statement that the '90s saw "a load of hype and getting ready for things that weren't going to happen culminating in the year 2000 panic". Absolutely, as redundant preparations for UK year 2000 were not unlike the man asked why he was scattering torn up newspapers in Leicester Square, and who said it was to keep the elephants away (reminded that elephants were not habitually resident in Leicester Square he said 'see - it's worked').

Rayner describes ERP as having gone through a trough of disillusionment whence his considered opinion is that it will arrive at a plateau of productivity, whereby "both customers and suppliers", he says, "have made mistakes from which they should learn, and suppliers in particular have grasped the advantages of becoming less monolithic and more open. People want best of class and they're no longer prepared to put up with "we ain't got it, so you don't need it".

Dropped out
Gartner puts the current major ERP players as JD Edwards, Oracle, SAP and PeopleSoft - "Baan was a major player in the '90s, but it seems to have dropped out and Geac never really was a major player". Baan, Geac and PeopleSoft weren't available for comment, but Oracle e-business applications marketing manager Colin Addison was both available and, unsurprisingly, agreed with the Gartner summation.

"Customers," says Addison, "were buying a load of stuff and, in effect, just chucking away about 50% of it. These are complex systems, and we're not talking plug and play. The successful players have changed, and they'll go on changing; it's not there yet, and it probably never will be, nobody said perfection was attainable, but I never heard anyone say it wasn't worth trying."

Addison believes the advent of e-business has precipitated a "mindset change", and Gartner's Nigel Rayner is of a similar opinion, in that departmental, not to mention cross-company collaboration, is more likely to happen. Both reasonably point out that supply chain management is a core ERP function and that a major pitfall has been the lack of simple human interchange.

So, are the hearts and minds changing, are there more and different people involved, or is it a bit of both? The general agreement is a bit of both, and this is endorsed by SAP head of solutions marketing Andrew Munday. SAP (Software Applications and Programs) is German, and was founded some 28 years ago after ICI asked IBM for a purchasing system and four of the programmers involved in the implementation went to the Big Blue board with this idea for a complete system.

It went all the way through, from purchasing to HR, which was still called personnel at the time. The board said great idea but no. SAP started on small organisations, discovered large ones could use the same basics, and was soon into Coca Cola and BMW.

One for all?
The basics may be the same, buying is buying and selling is selling, but you cannot, says Munday, "churn out the same old thing for one and all". SAP, he attests, has majored in placing "specific solutions over the vanilla system", but he emphasises that SAP will not stand in the way of those wishing to incorporate solutions from its competitors. It begins to sound as though collaboration is the order of the day, and that goes for the suppliers too.

Peter Radford and Giorgio Sartori spoke for IBM where it was agreed "there have been waves in the market" but Mr S is strongly of the opinion that "Baan is on the way back". The ERP market, they said, is maturing, the traditional suppliers are coming full circle to an integrated approach, and the emphasis is now best of breed.

Most of which makes sense, particularly if you're IBM and, whoever it is, they're more than likely to run it on your boxes. What made a lot of sense was the notion that IBM itself had gone through the ERP experience, and that it too had learned. "You cannot," says Peter Radford, "just stick in a black box between departments and thus expect them to communicate. It does need a change of attitude, and our own experience is that "such a change has started to happen, and it's continuing to happen."

JD Edwards is rarely slow in coming forward, and the company's Trevor Saloman and Stewart Plain homed in on flexibility - "ERP", said Mr T, "was always something that required the ability to hook in best of breed, and we've recognised and done that from day one". Mr P agreed. He would, wouldn't he, but it is fair to say no-one disagreed.

It is also fair to say JDE wasn't slow coming up with case studies, of which an edited pair are presented herewith.

Case study 1 Bioglan is a £100m (2001) pharmaceutical company specialising in dermatology treatments, and markets over 70 products in more than 100 countries around the world. Acquisitions have been fundamental to its growth.

Following the 1998 flotation of the company, Bioglan decided to implement a new ERP system which would be responsible for bringing together the manufacturing, distribution and finance capabilities across seven of its operations in the UK, Ireland, France, Germany, Sweden and the US.

The business processes "formalized", Bioglan configured and installed a new hardware infrastructure comprising Microsoft NT, Microsoft SQL Server 7.0 and Hewlett-Packard servers and, with the foundations in place, the implementation of JD Edwards OneWorld of which every site will receive the finance and distribution modules. Four sites will also have elements of the manufacturing module including shop floor control and manufacturing accounting. Entrepreneurial creativity The European collaborative service Steel combines entrepreneurial creativity, perfected physical logistics and leading-edge business systems, to supply 10 automotive industry consigned stock warehouses with steel coils. The virtual business partnership "Steel" is using JDE software to estimate its customers' demand for steel coils with precision, cost-savings and in collaboration with suppliers and partners to deliver the goods with zero defects.

The Steel exchange claims as customers "most of the leading German automotive manufacturers" plus "Fiat in Italy" and "Skoda in the Czech Republic". Morgan, presumably, is still holding out.
The software went live in May 2000, and Steel considers it has "accomplished a significant improvement in its performance and in the degree of reliability and quality of delivery in its supply chain".

Read more on Business applications