Original URL: http://www.theregister.co.uk/2010/04/12/erp_connect_or_not/

To connect or not to connect?

More from readers on real-world ERP practicalities

By Dale Vile

Posted in ERP, 12th April 2010 10:26 GMT

Workshop Following our recent discussion of the pros, cons and practicalities of hooking up your ERP system to the outside world, we thought it would be good to tap into the views of Reg readers on the topic. So we put up a poll with an open comment facility and, true to form, almost 50 readers came back with their own experiences at the sharp end.

To recap, the topic we are talking about here is the practice of putting integration links in place between yours and someone else's ERP system, typically to automate the exchange and matching of documents such as purchase orders, invoices and delivery notes between customers, suppliers and intermediaries. This kind of business to business (B2B) integration can be achieved through traditional EDI (Electronic Data Interchange) mechanisms and/or using more modern XML based messaging. Direct hook up in this way can also be extended to handle the synchronisation of planning information, forecasting data, product specs and even design information in a collaborative development and production environment.

It all sounds very useful and there are clearly benefits in terms of lowering administrative overheads, minimising manual errors and generally driving faster and more efficient business processes. From a practical perspective, however, as some readers pointed out in the comments received via our poll, the whole thing can be a lot harder to pull off than you might imagine:

Local Government use one thing, National Press use another, some have SAP, some have Microsoft Dynamics, others have something written on a napkin. Nobody's data structure is the same and each one has a different communication flavour.

Multi-language, multi-OS, multi-platform interops are possible, but increase lifecycle maintenance so much that it should be avoided.

This is very expensive if the development costs cannot be spread over many customers

Indeed some readers felt the issues were just too great to justify getting into B2B integration at all:

We refuse to play the ERP link up game. If suppliers try to force us this way they can sod off.

Just don't do it!

As part of the poll, we explicitly asked respondents about a range of potential challenges that we in Freeform Dynamics have frequently come across over the years in this area. Looking at the results of this, it is telling that the most frequently cited issue was not to do with anything technical, but the willingness of other parties to put in the necessary effort to hold up their end of the deal (see Figure 1, below).

Figure 1

As we can see, a lot of the other issues standing out are to do with information management in one way or another – data security, quality, consistency, mapping and so on. This underlines the fact that the physical and mechanical side of the equation is the least of people's worries when it comes to pulling off a cross-business integration exercise.

Nevertheless, pretty much all of our respondents had been involved in making such initiatives happen, with activity distributed across various types of requirement looking both up and down the demand/supply chain (Figure 2).

Figure 2

What's clear from this picture is that the level of potential challenge and expense has led to a generally greater emphasis on the more strategic or high-volume trading relationships you might have, where the impact of automation is likely to be higher and the associated pay back more significant.

Building on the previous comment about commitment of other parties, this manifests itself in a need to make sure expectations are properly aligned from the outset between trading partners. Consequently, a number of readers highlighted how critical it is to be clear in specifying requirements up front:

Develop a clear idea of what you need, document it and get mutual agreement before starting the development!

Functional and technical specification are not optional steps.

Given that motivations, capabilities and the degree of commitment between parties can vary significantly, as can culture and attitude in areas such as security, risk, quality and so on, we received quite a few comments relating to the way in which an integration initiative is managed and executed.

Make sure you have a decent project manager who can coordinate all the parties involved.

If using a 3rd party tool to provide links to your ERP system (e.g. e-invoicing), make sure your tech people are able to communicate directly with their tech people - avoid being caught in 3 way relationships with fake tech go-betweens (sales people).

Make sure your integration team have required access to a) functional specialists b) network/system specialists as required

As we discussed before in the context of ERP implementations, achieving and maintaining alignment between stakeholders and domain specialists can be enough of a challenge when working across organisational boundaries internally. When a project crosses a company boundary too, things can get especially ‘interesting’ from a coordination, management and authority perspective.

Turning to advice on more technical matters, quite a few readers stressed the importance of making sure IT teams are aligned on interfaces and standards, and actually doing some basic testing of assumptions before diving into full development:

Share SDK like 'hello world' samples with your partners early

Open standards, open standards, open standards, keep it simple, open standards, open standards, open standards.

With the best will in the world, however, anticipating what you are going to be dealing with in terms of exceptional situations - whether process or data related - before you start running actual transactions through the system is almost impossible. You might be very confident in the data cleansing and mapping you have done your end, but has the other party understood the end result? And how good and consistent a job have they done on cleaning things up their end? All of this makes testing particularly important for projects such as this, and paying due consideration to the residual exception conditions that will need to be dealt with manually:

Make sure it all works perfectly before it goes live!

Test thoroughly

Don't forget the processes that follow. Someone has to pick up the failed invoices and work out why they failed.

Consider disaster recovery after the annihilation of some parties

So, while there is a lot of potential business benefit to be gained from B2B integration of ERP systems, there is a lot to consider, and we hope some of the warnings and tips listed above will help those exploring this route.

In the meantime, we would like to leave you with a last thought from one Reg reader. While we glibly use terms like 'trading partner' when discussing activity in the supply/demand chain, at the end of the day businesses put their own interests first, and a joint project isn't going to suddenly make them your best friend:

The larger the 'partner', the less flexible and more unreasonable they will be.

For those who missed our poll, feel free to add your own thoughts in the discussion area below. ®