E-business rollouts continue despite tough economy

Despite the downturn affecting the IT industry, manufacturers are continuing to roll out enterprise resource planning (ERP),...

Despite the downturn affecting the IT industry, manufacturers are continuing to roll out enterprise resource planning (ERP), supply chain and other applications, according to delegates at the Collaborative Manufacturing and Supply Chain Strategies conference in Boston, USA.

For some companies, the faith in e-business remains strong. "The bloom is off the rose of business-to-consumer [projects], but for business-to-business, it's as strong as ever," said Simon Ellis, supply chain futurist at Unilever Home and Personal Care, a division of London-based consumer product maker Unilever.

Ellis' division is currently adding SAP's order-to-cash application to its R/3 ERP system. The SAP software, which will replace an existing homegrown system that is becoming increasingly difficult to maintain, is expected to yield an increase in speed of order cycle times, he said.

Other companies are also launching e-business projects. Boeing, for instance, is now at work on a proof-of-concept for a Web portal that will be able to connect suppliers directly to the company's manufacturing systems, speed up production cycle times and improve product quality, according to Gary Giles, manager of manufacturing systems and measurement technology for the aeroplane maker's manufacturing and research and development division.

Boeing has been working on the project for the past two years, he said, and the portal - most likely based on software from San Francisco-based Plumtree Software - could become a companywide initiative. There's nothing now in place that would allow that kind of data sharing, he said.

While manufacturers continue to install business-to-business software, they are more cautious now and the days of big bang rollouts are over, said John Moore, an analyst at Arc. "The vendors can't get away with selling vision anymore," Moore said. "They have to do a much better job testing products, partnering with users and making sure these things work. In the past, there was such demand the suppliers were pushing faulty products into the market."

The downturn in IT spending is actually a change that customers can use to hold "vendors' feet to the fire" and make them accountable, said Moore.

In a bid to automate its retail operations, San Francisco-based ChevronTexaco is adding SAP's order-to-cash, business warehouse and MySAP portal applications to its existing North American R/3 financials backbone, according to Sam Parino, CIO for the company's refining division.

Currently, ChevronTexaco uses its own in-house order-to-cash systems. Simultaneously, it's in the middle of rolling out a global network, to be completed by the end of 2003, to enable partners to connect directly to these applications over the Web instead of using various legacy systems and interfaces.

The company plans to go live with the order-to-cash system on 1 January 2003. ChevronTexaco also plans to eventually to roll out other systems, including those for customer relationship management and supply chain management, Parino said.

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