Net Presents ERP Vendors with New Challenges

By Pia Landergren, ITworld |  Opinion

Oracle
is offering, just like its competitors, an ERP system that is connected
to a CRM as well as an SCM system.

The biggest ERP vendor by far is Germany's SAP AG with a 35-percent
market share, according to research company Gartner Group Inc. SAP has
its own well-known version of integrated software called MySAP.com., a
suite of ERP, CRM and other products that can be linked together using
Internet portals.

That users want these types of integrated systems is illustrated, for
example, by Swedish ERP vendor Intentia International AB's recently
announced sale of its product suite Movex -- a combination of ERP, CRM
and other management software -- to Luxury Timepieces International, a
watch-making unit of Gucci Group NV.

The reason ERP vendors are now opening up their systems to be linked to
other software is that the Internet has changed the fundamental way
companies do business. Customers now demand the ability to tap into
their suppliers' management software to track orders and information,
and this has created a new generation of ERP, according to industry
observers.

In the past, ERP systems were designed to integrate various departments
within the enterprise -- typically, manufacturing businesses -- by
offering different components. These components -- such as
distribution, accounting, human resources, and factory floor automation
modules -- could all be linked in a configuration customized to
individual companies, with data flowing among the various modules. But
the integration remained within the four walls of the enterprise,
according to Nigel Raynor, a research director at Gartner Group Inc.

Now, an end user wants to go straight into a distributor's system over
the Internet and see whether a product is in stock before he orders it.
A distributor wants to see where in the manufacturing chain a product
is at each precise moment, according to SAP AG Chief Executive Officer
Henning Kagermann at a press conference at CeBIT. This means
integrating the traditional ERP modules with CRM and SCM software.

"The connection between ERP, CRM and SCM (supply chain management) must
be integrated in the software solutions," said Thomas Ochs, chief
information officer at Villeroy & Boch AG in Mettlach, Germany. The
company uses SAP's R/3 ERP system. Also, the vendor must have "a view
for the problems and business of their customers," he said.

Nigel Raynor at Gartner agrees, and stresses the importance of opening
up the information stored in integrated ERP systems via a Web-based
interface, so customers of an enterprise can view appropriate
information.

"ERP vendors must open up their systems to use XML (extensible markup
language) as the interface," he said.

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