Net Presents ERP Vendors with New Challenges

By Pia Landergren, ITworld |  Opinion

The XML specification for
formatting data on Web pages gives more complete information about data
than HTML (Hypertext Markup Language), and can be used by different
software programs to share data over the Internet.

Also, some vendors are developing their own middleware to connect
systems together. JD Edwards, PeopleSoft Inc. and Oracle are doing
this, Raynor added.

"We are calling this ERP2," said Raynor.

In other words, a company should be able to use the systems so that a
customer who wants to order, say, 10,000 shoes from a shoe manufacturer
logs onto a CRM system over the Internet, said Enterprise Applications
Consulting's Greenbaum. The customer places an order, which is then
processed by the CRM system. The system checks the customer against an
existing database to see if the customer has any specific requirements
or outstanding debts for example. If the systems say okay, then the
order can be fulfilled, he said.

The order goes automatically on to the SCM system which checks whether
there is enough raw material in the factory to make all these shoes. If
there isn't the SCM system, or possibly the ERP system should, in
theory, be able to order more supplies so that the shoes can be made,
Greenbaum said.

Then the ERP system will process the order and prepare the shipping
papers. It connects to the SCM system again which alerts the logistics
partners to make sure the shoes will be delivered to the right place at
the right time. Then the information is linked back to the financial
part of the ERP to send out confirmation of delivery and invoices,
Greenbaum said.

"In an ideal world, this should all be automatic," said Greenbaum. "But
it will only work if everyone in the chain is completely automated,
otherwise this whole thing is going to break down."

For all of this to work over the Internet, the software vendors must
first integrate their systems offline, so that users tapping in to the
systems from the Web can get an integrated view of data.

"Typically, the way it works is that the vendor will provide you with
the integration tools," said David Boulanger, research director at AMR
Research Inc. in Boston. "SAP has its business application interfaces,
and Oracle and i2 (Technologies Inc.) have their application
integration modules. These have predefined ways to find the touch
points in other systems," Boulanger said.

Many vendors also use an external supplier's EAI (enterprise
application integration) tool, which is a programming tool for
developers who want to connect their software to other vendors'
systems. SAP for example uses WebMethods' (Inc.) EAI, said Boulanger.

Then, when the systems are connected, they need to go through an
Internet transaction server, for example an XML server, in order to be
reachable via the Internet.

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