The swell of attention garnered by Internet-based initiatives such as collaborative commerce and services-oriented architectures left ERP (enterprise resource planning) vendors scrambling for the rudder last year.
Web and portal extensions, retrofitted to ERP applications in the wake of the demands for e-commerce and marketplace accessibility, helped stabilise customers, if only in the short term.
Faced with competitive inadequacies, ERP vendors have engaged in a flurry of development, acquisition, and partnering to keep pace with the times.
Since its beginnings in materials resource planning, ERP has grown to represent a far broader set of functions. But the extension of applications to support Internet-based interoperability had never been one of them. Even integrating third-party e-commerce systems remains a costly undertaking.
Although the obsolescence of ERP has been greatly overestimated, breaking the mould will take more than modest improvements from Web-enablement and portals.
To extend the monolithic designs of ERP beyond corporate boundaries and enable businesses to position themselves competitively in the value chain will require a re-evaluation of ERP in the context of the services-oriented architectures of tomorrow.
Adopting a mantra for Web services will not be an easy undertaking. Services-oriented architectures will require ERP to become far more compartmentalised and will provide more manageable APIs and provisions for better data availability among non-ERP applications.
But the result of this transformation will be broader capabilities across wider domains that integrate seamlessly with your enterprise.
The problem for ERP vendors is that such a monumental redesign would be an engineering nightmare. And customers, too, would need to withstand wave upon wave of integration testing.
But every major ERP vendor currently has some plan under way to address the inevitability of services-oriented architectures, if only modestly.
At the end of April, SAP took steps to break its product into separately deployable components, and added capabilities for private exchanges. The iBaan OpenWorld now integrates IBM MQSeries middleware for real-time collaboration. JD Edwards and PeopleSoft have each been improving e-integration within their product lines as well.
Although most ERP vendors seem to have heard last year's wake-up call, success for services-based ERP will take more than a few iterations, numerous upgrades, and some very patient customers.