E-commerce for ERP requires a change in focus

Companies wanting to add e-commerce capabilities to their existing ERP systems must take on an external focus and become more specialized if they are to be successful, according to a recent panel discussion.

The presenters at Software Solutions ’99 in Toronto said some of the numerous challenges of extending ERP systems include cost, security, dealing with existing systems, interoperability, and increasing complexity. The business focus must evolve to include suppliers, customers, financial institutions, distributors and shippers.

Dave Rumer, national manager of Internet business solutions at Oracle Corporation Canada in Mississauga, Ont., said the number one issue facing IT is integration, both between disparate systems within a company and between organizations in the back end.

“An integration piece is very crucial. Once you have a solid Internet platform that can handle thousands of concurrent users both internally and externally at your company, you need to look at products [that] are Internet integration piece points.”

He said the Internet changes everything, and e-commerce has three major drivers: companies looking to expand their markets, to attract and retain customers, and to increase operational efficiencies across entire supply chains.

Nathan Pieri, product line manager for e-enterprise at Baan Canada Inc. in Mississauga, said it’s important to raise the level of visibility, understand user focus and collaborate on business processes.

“Where ERP implementations oftentimes can be internally focused, e-commerce by necessity has to be externally focused,” he said.

Nick Stankovic, technical pre-sales manager at J.D. Edwards Canada Ltd. in Toronto, sees e-commerce as an “anytime/anywhere” business process capability that encompasses two main areas: the technology implementation perspective and the post-implementation perspective.

“What’s really critical is to be able to take those business ideas and put them into action very rapidly. Without that capability, regardless of what solution or strategy you have…you are in gridlock and are unable to move forward.”

It’s important to have a clear business focus and know what you are getting into, he said, because the two hardest things to keep in synch are IT people and business people.

“There’s a lot of people out there who just slap together a Web site thinking they are going to get rich overnight. Customer intimacy requires a whole different skillset than IT, because what you are doing is reaching your market from a different media source,” he said.

Paul Standring, regional vice-president at Symix Computer Systems Inc. in Burlington, Ont., said e-commerce can increase the velocity of business transactions and automate some processes to eliminate redundancies. A standard set of tools is also important, he said.

“We are taking a very standardized approach so that all of our core applications are basically playing from the same sheet of music.”

E-commerce also changes the dynamics of business partnerships, he noted.

“Instead of one company to deal with, you have hundreds. When you enter into these things, you should take a hard look at the depth and breadth of the problem and the opportunity. Because if you don’t do that effectively, you can run into some severe implementation problems.”

It’s also important to take a good, hard look at your return on investment model, because it can often be very different than you anticipated, he said.

“You may have found when you thought you were going to be saving tremendous amounts of money, in fact it was a break-even proposition. And where, in fact, the actual return did come from, you weren’t really expecting.”

Tom Maras, technical sales manager at PeopleSoft Canada Ltd. in Toronto, said that because a lot of back-end systems may have more than just one ERP backbone, it can be a challenge trying to integrate these disparate systems. The key ingredient for integration, he said, is finding a technology which allows for database, Web-server and ERP independence.

“When you talk good integration, you can’t assume that any company you partner with on the `net – be it your supplier, your vendor or customer – will all be on [the same type of system]. It’s got to be a technology that’s going to be scalable and open to many types of technologies, applications and infrastructures.”

Maras also pointed out that ERP implementations often don’t come in on time or on budget, but e-business applications “throws steroids to that whole issue. Because now you are no longer just dealing with internal business and people, but also external organizations.”