ERP is born again on the net

The increasingly demanding requirements of ebusiness are changing the face of enterprise resource planning (ERP) applications, revitalising software that was until recently presumed almost dead.

As organisations' demand for systems that can handle their ebusiness needs have grown, ERP packages have likewise changed their focus from managing internal processes to integrating applications at every business level using internet protocols. This, in turn, has provided the sector with a new lease of life.

Neil Anderson, a research analyst at Ovum, said: "In its original form, ERP was not relevant to ebusiness and people concluded that it was dead. But it repositioned from there and boosted its functionality."

As a result, vendors have attempted to open up their software so it can work with third-party offerings and have layered portal-type user interfaces over the top. This enables customers to access packages using devices ranging from desktop PCs to personal digital assistants (PDAs).

It has also led to an increase in the number of people using the systems. In the past, ERP applications were mainly employed by power users, who often focused on processing financial transactions, but now, anyone with a PC, either inside or outside the company, can use the software.

"The user interface changed to look like a website, so it looks better and slicker for casual users whose knowledge of the application cannot be taken for granted," Anderson explained.

At the same time, ERP suppliers have teamed up with consultants, hardware and application providers to try to provide systems to suit the demands of ecommerce startups wanting equipment which can be rolled out quickly.

"This handed ERP a second lease of life," said Anderson. "Partnering with application providers allowed ERP vendors to offer a 'one-stop-shop' solution. SAP, for instance, was late to market a CRM [customer relationship management] offering and it was noticeable that it teamed up with Nortel Clarify to catch up."

The exception to this new-found rule is Oracle, which maintains that it can go it alone. Analysts, however, doubt this is a winning strategy, believing that no ERP supplier can carve out sufficient market share without partners.

Two's company
JD Edwards, for one, has adopted a partner-centred approach, however. As a result, Simon Rigden, the company's vice president and general manager, claimed that its new applications, which were developed with Siebel Systems and are based on IBM's WebSphere, integrate with packages from any third-party supplier, including other ERP products.

"Not all parties that want to exchange data have the same ERP vendor. Partnering enables flexible integration with JD Edwards and a free choice of applications," Rigden argued.

He believes that ecommerce has changed the face of the ERP market, because it forced companies that wanted to go online to look at how their back-office systems were organised.

"Customers wanted to move to B2B [business-to-business ecommerce] and found that their back-office applications were inadequate. It became a driving force for change," Rigden explained.

Last May, JD Edwards laid off 800 employees worldwide, but Rigden argues that the company made the move to try to make the business more efficient rather than because of any anticipated shortfall in sales.

"When analysts were ready to write off ERP about a year ago, we researched and found that our customers knew that they needed to invest in an infrastructure for B2B. Last quarter's boost in sales proves that we were right," he said.

Integration is the key
Rival vendor SAP agrees that to implement a successful ebusiness strategy, companies need to have high levels of integration between back-office processes and front-office transactions.

Nigel Ford, SAP's product marketing manger, said: "Ecommerce is changing the face of ERP by extending it into the front office and beyond."

He added that ecommerce has also produced a new type of customer. "The new type of customer understands the benefits of online procurement and consequently is demanding a new type of software such as web-enabled collaborative applications, which are likely to be hosted on internet marketplaces. The logical evolution for SAP was mySAP.com," he claimed.

MySAP.com provides users with a portal-type interface to the company's R/3 applications suite, which enables employees, customers and partners to access authorised corporate information from devices ranging from PDAs to PCs.

The product provides four views: marketplaces as a forum to handle inter-company relationships; workplaces that provide a single web-based access point for users; business scenarios to enable staff to collaborate with each other; and application hosting from the start of a project to completion.