Application systems in organizations today cover a plethora of functional systems and are expected to provide a unified view of information for organization decision making. The old stand-alone systems or loosely connected application systems were replaced by standardized ERPs many years ago. ERPs covered many functional areas including sales, finance, purchase, inventory, production, operations, quality, human resources etc. and all these systems were fully integrated on a on-line real time basis.
Companies however go beyond the basic ERP to meet the organization requirements. They add new systems to cover their specific needs which the ERP cannot address. Two types of applications have emerged :
- Special systems either in the form of packages or developed applications that address requirements not covered or adequately so by ERP. These include various web based systems to connect people and partners external to the organization. Since these too are business critical systems they need to exchange information with ERP.
- Additional packages covering supply chain management, supplier/customer relationship management, business intelligence, product lifecycle management etc. These packages could either come from the same ERP vendor or from other software houses. These have to closely work with ERP to execute business processes seamlessly and have to use common data to give consistent information to the management.
These separate systems are organization systems and need to interface with the ERP for exchange of data in an on-line mode. As long as the extended systems or packages come from the same ERP vendor there are no integration issues. However, solutions chosen by us usually come from different sources and this is where the problems begins.
Realizing the fact that various systems need to talk to each other, industry bodies came up with standards and wherever the software packages followed standard methods and protocols of exchange, all systems could work seamlessly. An interface is the communication and data integrity between multiple production applications. The solution is however is not as simple as it seems – to enable systems to communicate you need a middleware to make this happen. These middleware solutions come from different vendors but are prohibitively expensive and I do not understand why it should be so. Let me illustrate this with my experiences in three different situations.
Company 1 : The first phase of the ERP project covered a few modules like purchase, materials and finance and therefore the ERP had to interface with homegrown systems covering production, sales and service. The vendor suggested the SOA layer that they had just then introduced but it did not fit into our budget. Since the vendor was keen to have initial customer for this new introduction, they brought down the rates to the levels that we could agree to. We were lucky and could work on integration though had to bear consequences of being the early users and were used as guinea pigs.
Company 2 : The company had successfully implemented ERP which was running well. They extended further to put in BI system from the same vendor. At the same time they implemented a couple of other systems from other vendors and also an intranet portal which was custom built. The senior most executives were still not comfortable in using the ERP by logging in and navigating through the ERP menu screens. I suggested that they access systems through the enterprise portal which could link all systems so that they use the single sign-on and customized home page facility. Though the enterprise portal was bundled in with the ERP, it could only give access to their own products and for linking to external software packages we had to pay a hefty sum for the interface. Other vendors too were called but they too quoted a fortune for their middleware. The client then decided to defer the proposal for a later date.
Company 3 : The company has just signed off for the ERP but still has a lingering dissatisfaction of not being able to work out the complete solution. The company which is in the medical equipment business has a couple of applications covering their service, quotation and equipment demo activity which they wanted to interface with the ERP. The ERP vendor dished out the usual license fee for interface which shut the lights out of the client’s mind. He decided to revisit this requirement at a later date.
These examples illustrate the fact that online interface between diverse applications using industry standard methods is still a little out-of-reach of the normal user organizations. Increased competition may force a reasonable pricing at a later stage but the pricing as on date continues to be unreasonable. Vendors need to revisit their pricing policy if they want to increase sales and popularize this technology solution.