ERP Embraces the Internet

The client/server architecture that ushered in the ERP industry is about to be left behind for good.

Consider that organizations spend half-a-trillion dollars every year maintaining software code on the client. A 1998 Meta Group study on workgroup computing strategies found that the cost reduction for an enterprise moving from a PC/LAN-based environment to a Web-based environment was nearly U.S.$3000 per client.

In the 90s heyday of ERP implementations, major software vendors made good use of client/server architecture to grow very quickly. To a great extent, however, technology acted as a barrier to global deployments. With client/server systems, it was necessary to install, maintain and upgrade client software on each computer, a time-consuming and expensive process. Because of these restrictions, ERP implementations would often be difficult to scope in terms of time and budget.

These days a client/server-based architecture is just too complicated and too expensive to rollout across an enterprise. There isn’t time or resources for 18 month-2 year implementations followed by constant desktop training and support. There is a need for cost-effective enterprise solutions that can be easily implemented and readily accessed across the enterprise.

An Internet-based enterprise software system cuts training and maintenance costs. Using a standard Web browser as the user interface means these complex systems look and behave like any Web-based application, so it’s easier for people to learn. Another big leap forward with HTML coding is that it lets an organization’s people access information easily.

Here are three major advantages of a pure-Internet software implementation:

1. Ubiquity

CIOs must be able to extend services and business processes out to both current and prospective customers, partners and suppliers. To achieve this, access must be available using technologies that are already in place in these organizations. It is not acceptable to impose software or technology constraints on others because of architectural limitations of your systems. Today’s enterprise needs to reach a global audience without creating an operational or support issue for those being reached.

Pure Internet enterprise applications can be easily extended to employees, partners, suppliers and customers regardless of geographies and languages.

2. Usability

Almost everyone in an organization has used a Web browser. By making enterprise applications available in this consistent and intuitive format, an IT executive has two immediate benefits: lower training costs (which lower the software’s total cost of ownership), and increased user acceptance (which greatly improves the project’s chances of success).

To maximize use and minimize training costs, the enterprise applications should be available in a consistent fashion to everyone wherever they are. Whether in the office, or on the road, the full suite of applications should be available with the same functionality and navigation.

3. Integration

Integration costs make up about 40 per cent of the average installation. An Internet architecture can greatly help to reduce the costs of traditional complex integration. The architecture should integrate using technologies such as HTTP and XML, and support standards such as J2EE and standard application servers such as WebSphere and WebLogic to maximize the potential collaboration between the new

and existing corporate systems. If the architecture uses one mechanism to integrate between its own elements and another to integrate to third parties, it suggests a hybrid architecture where the Internet elements are ‘bolted on’, and not part of the architecture.

Becoming A Real-time Enterprise

A real-time enterprise is an organization that has moved business processes to the Internet and connected all people that touch its business directly to these processes in real-time.

This connectedness will help businesses in several ways:

n Real-time performance tracking lets you continuously monitor your business processes (sales cycle, supply chain, financial operations, staffing, etc.)

n Real-time relationships give you access to information at the point of customer interaction

n Real-time decisions allow you to react instantly to business changes.

The benefits of a pure Internet enterprise software implementation extend well beyond cost-effective deployment and maintenance. It is the only effective route to creating a real-time enterprise, which equates with increased revenues, reduced costs and enhanced profitability.

Once a CIO moves business processes to the Internet and connects people to business processes in real-time, she is able to accelerate actions and improve business decision-making.

Peter Smith is Regional Vice President, PeopleSoft Canada Global Services, a provider of business enterprise software and consulting services.

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