Debunking the myths of ERP integration
MANY Australian manufacturers continue to experience major issues with ERP integration.
For many companies, integration is viewed as a 'black box', a series of inputs miraculously turned into outputs that are made compatible with downstream systems. This 'black box' mentality spawns many of the myths surrounding integration that continue to confound Australian manufacturers. By debunking some of the more persistent myths about ERP integration, a more useful framework for best practices in integration strategy can be found.
MYTH: All manufacturing companies need to be real-time enterprises.
REALITY: By definition, a real-time enterprise can share data from any application in seconds from request. The average manufacturing company has 20 systems, and even in the best cases, six of those systems are integrated with one another. The bottom line is that not all companies need to enable their processes to real-time levels of efficiency to reach their optimal level of performance.
A recent AMR Research survey shows that 44% of companies integrate an average of only three systems, which shows that while the hype over real-time continues to grow, the reality is that companies know only a few select processes need to be enabled in real time.
MYTH: For my company to achieve best practice, all data needs to be available real-time.
REALITY: Only the data needed to support core business processes needs to be online, all other data can be archived, batched and used on an as-needs basis. There is no correlation between having all data online and attaining real-time enterprise performance.
In fact the opposite is often the case. The time needed to access the required information for a given process expands depending on how much information is being cached and managed. Trimming the amount of data online actually can contribute to a company becoming more real-time in its response to customers, channels, suppliers and partners.
MYTH: Hand-coding adapters and connectors is a cost-effective approach to handling integration.
REALITY: In fact the opposite is the case. This approach for point-to-point connections between systems often doesn't scale over time as the demands of greater throughput and more complex data streams turn hand-coding connectors into bottlenecks.
These connectors are typically created to quickly integrate customer-facing applications - the most critical applications when it comes to reliability and responsiveness. Hand-coding connectors also lock companies into more dependence on hardwiring, which makes the strategic goal of Service-Oriented Architectures (SOA) the most systemic approach to integration.
MYTH: Large ERP and platform providers (eg Microsoft and IBM ) will dominate integration, forcing a consolidation of the market.
REALITY: For many manufacturing companies struggling with data integration, major ERP and platform vendors appear to be the best solution. While these companies are setting the pace of the market, the next step in integration is all about process. Look past the data integration goals of your company and pursue the processes where data needs to be applied.
Process-centric integration relies heavily on Business Process Management (BPM), and the fragmentation of needs that continue to make this market one that defies simple consolidation. The breadth of individual company and vertical market needs is too diverse, and the niches that BPM vendors serve defy quick consolidation.
Summary and suggestions
For many manufacturing and service companies, best practices in integration start when the following recommendations and steps are taken. There is no one-size-fits-all best practices cookbook to making integration work; rather it's more about making the IT platform of a company permeable and adaptable enough to strengthen and speed up processes critical to the business.
That is why getting away from static, hand-coding connections between specific parts of systems has to be planned out of existence, and a more flexible platform approach to integration must be taken.
Real-time integration is overkill for many companies. It does not make sense to have all data in your company available in real-time when ironically this can cripple responsiveness to customers. Selectively define the data repositories you need to use for supporting customer-facing and supplier-enabling processes first.
Build a roadmap for moving from hand-built adapters and connectors today. Despite the fact that it is easy to pay for hand-coding adapters and connectors since they are written by on-staff programmers, this strategy can wreak havoc with the ability of your company to be competitive in the future.
ERP integration is the best place to start.
*Louis Columbus is business development manager with Cincom .
3-Aug-2005