Playing Well Together

There's no escaping it. You need bolt-ons so that your ERP software can share.

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- Strategies for connecting ERP and bolt-on applications - How to minimise integration risk for future upgrades - How others organise work teams to support bolt-on integration - The state of enterprise application integration tools Let's say you've chosen your enterprise resource planning (ERP) package with the utmost care. You've done the cross-functional requirement planning teams, the meticulous change management process, the whole shebang. Perhaps you've even navigated the initial integration shoals with something akin to grace, bolting on your demand forecasting software, the corporate human resources intranet and, of course, your specialised systems for tax planning, bar coding and shop floor control. Time for a breather? Ha! Now it's time for your ERP vendor to come out with a new version that "basically blows away all the interfaces" to your bolted-on applications, says Bruce Richardson, vice president of research strategy at AMR Research in Boston. "It's enough to make everybody go to the top of the nearest tall building and either shout or just jump."As ambitious and all-encompassing as ERP may be, the system won't run the company by itself. Inevitably, other software must be wired in to handle additional business functions, particularly industry-specific ones. And those other applications, often called bolt-ons, haven't always been trained to communicate with ERP packages. The process of connecting the ERP system to the bolt-ons into one harmonious whole can be quite complex. It can involve conversion of data formats, brokering of messages, writing of procedure calls and other tedious technical arcana. Fortunately, there are basic procedures and project management disciplines plus a growing number of software tools that can ease the initial burden of bolting on and also reduce the risk of living out Richardson's upgrade nightmare scenario a few months or years down the road.

ERP implementers have a lot of variables to consider as they embark on the bolt-on process. Four organisations offer glimpses into their integration experience, replete with the lessons they learned.

Relying on Partnerships

Jefferson Health System

Hal Augustine, CIO of Jefferson Health System in Radnor Pennsylvania, is in the throes of managing a gradual rollout of PeopleSoft's ERP software at Jefferson's five member networks, which comprise 14 hospitals plus primary-care and specialist practices, rehabilitation centres and other health-care institutions. Jefferson was created just a few years ago, so the various institutions have quite an array of platforms and programs that need to plug into PeopleSoft -- an IT version of "the backbone's connected to the head bone". To further complicate things, there is no top-down, mandated timetable for Jefferson's member organisations to move onto the core ERP platform.

(Jefferson's Main Line Health network, the first, is expected to be done implementing the system by July 1999.) However, with an eye toward running all of Jefferson on the PeopleSoft system, a team composed of representatives from administration, finance, HR, materials management and IS from the member organisations has agreed on definitions for a common health-care data model, such as what a patient's record must include. This will provide the basis for making implementation easier across the rest of the system and supporting integration efforts now and in the future.

Even so, Augustine says he doesn't have a standard solution for interfacing.

For example, Jefferson's bolt-on portfolio includes two applications from Per-S Technologies -- an operating room scheduling system and a resource scheduling system (for example, supply utilisation and time and attendance data) for nursing -- that both exchange data with PeopleSoft. In this case, the bolt-on vendor is doing the interface work: Per-S has an alliance with PeopleSoft.

According to AMR's Richardson, that's a common strategy for ensuring bolt-on success: Choose companies that are partnered with your ERP vendor. "If you polled very large companies choosing bolt-ons, a large chunk will say they took 'whatever has been endorsed by my ERP vendor'," Richardson says. Of course, the wise CIO will look beyond the press release to make sure there is some actual shared development between the vendors, not just a joint marketing effort.

Jefferson is also using bolt-ons where the vendor is not doing the integration work, such as the link between Jefferson's specialised patient accounting system and PeopleSoft's general ledger module. The Main Line implementation team is hand-writing the connections using integration tools supplied by PeopleSoft. That brings Augustine to another element of the integration process: testing. The Main Line team checks its own work by writing detailed test scripts. "We do unit testing and then test all the applications in concert," says Augustine. "We exchange test files with all our third parties," which includes banks and credit unions doing direct deposit, payment identifications and check reconciliation. Users within Jefferson take part in the testing process as well. Third parties are receptive to this type of exercise, says Augustine. "The banks and benefits folks are used to doing this in the course of normal software upgrades, and for other vendors as well it's a normal part of a business relationship," he says.

Doing It Yourself

Domino's Pizza

In Domino's US distribution division another PeopleSoft project supports heavy business process re engineering, particularly in the area of supply chain management. Domino's delivered 338 million pizzas in 1998. To keep the nation in pizzas, the company manufactures an average of 4.2 million pounds of dough per week in its 18 US distribution centres. A fleet of 160 trucks carries the dough along with other food and paper products to the 4500 US Domino's franchises. Many events create an uptake in pizza consumption, according to Jim Krasner, vice president of supply chain management. Some are obvious (the Super Bowl) and some curious (hurricanes -- apparently customers don't mind jeopardising the health of the delivery drivers). Domino's has no cut-off time for ordering supplies, so a store can call and adjust its order even after the truck has rolled away from the distribution centre. Forecasting software from Prescient Systems helps anticipate demand. Another application from Manugistics schedules and routes the delivery trucks, while on-board computer systems feed data into a time-and-attendance system from Kronos, which in turn connects to the PeopleSoft human resources module. Domino's also uses extensive data warehousing and performs some data mining with tools from Cognos and Hyperion Solutions in an effort to anticipate, rather than react to, its market. "We're trying to shift the way we manage our business, from an entrepreneurial, seat-of-the-pants way to a more information-based way," says Krasner.

Domino's was already using some of these and other applications before it started its ERP rollout. It found that existing applications frequently required data fields that PeopleSoft didn't have -- or vice versa. For instance, Domino's routing system for its trucks tells the drivers which stores to visit and in what order. The PeopleSoft ERP system didn't have a data field for the delivery stop sequence, but it needed to relay that information to the warehousing system so that it could tell the loaders what to put in the trucks and in what order. To make all the pieces work together, Domino's decided to take the relatively drastic step of modifying the core PeopleSoft software to include these fields. Domino's did not want to toss out its existing application portfolio and was confident in the collective integration experience of its staff, so the company's IS team in many cases is building one-to-one interfaces between its ERP system and its bolt-ons. Instead of partnering with its vendor, Domino's is banking on its own disciplined, well-documented development processes to avoid the jump-off-the-building scenario. "If you keep control over the developers and you know what's been done, when you need to upgrade it's not that tough," Krasner says.

Another important tip: "I would start the process of both integration and data conversion very early," he notes. Domino's built a separate team to address those specific chores from the get-go of its PeopleSoft implementation in late 1997. "There's a lot you can do in advance in terms of figuring out what you have and what you don't, what isn't in the right format," he says. The team still found bugs to fix and features to add once the project actually started rolling out, but because they were in the early stages of the implementation, Krasner says there was plenty of time to clean up.

Tooling Around with EAI Proteam.com

Enterprise application integration (EAI) tools are an emerging class of software that automate much of the data connection and conversion process for bolt-ons. (EAI vendors include Oberon Software, Extricity Software and CrossWorlds Software.) One enthusiastic EAI user is Dominic DiMascia, CIO of Proteam.com (formerly Genesis Direct), which produces direct marketing catalogues such as Competitive Edge Golf and Soccer Madness. By targeting consumer niches, the four-year-old Pro-team.com has grown into a $US400 million company (though it recently sold off a number of non-sports-related titles).

The central financial system for Proteam.com is Lawson Software running on an HP 9000 Unix server. A slew of systems from other vendors plug in, including a mail-ordering and cataloguing system from Smith Gardner & Associates, a warehouse management system from Manhattan Associates, a light manufacturing shop floor control system (Proteam.com makes neither golf clubs nor soccer equipment, but it does personalise various products through engraving or custom sewing), inventory forecasting software, a materials handling system for the company's distribution centre, and electronic commerce software from Interworld. The webbing between these products is what DiMascia dubs his Data Train (for transaction routing and integration network), which is built around DataGate, an EAI product from Software Technologies Corp (STC). Each application has an interface to the EAI software, which routes all data in appropriate format to other apps as necessary. In a sense, DiMascia regards the middleware -- not the business applications -- as being the core of his company's IT systems. DiMascia chose the EAI route for several reasons. For starters, EAI products are built specifically to integrate with other products, so linking to them is not terribly difficult. Second, DiMascia says, "If I have to replace a given application, I can do that with as little impact on the other applications as possible." Because Proteam.com is growing rapidly, flexibility in the application portfolio is important. Further, the EAI product can reformat and manipulate data as it passes the information from one system to another or distribute parts of a data string to different target applications. For example, when a shipping confirmation comes into the system, DataGate sends one record to the catalogue management system for billing and customer service purposes and another copy of the data to the financial management system.

While DiMascia is pleased with his company's experience with EAI, there are a few caveats. Most EAI products on the market represent a relatively new technology and as such they should be subjected to careful scrutiny to make sure they will handle integration with each business's application portfolio.

The software vendors themselves in many cases are also quite new and may not pass the "big installed base" or "financially stable" criteria that are important to many CIOs. This was initially a concern for DiMascia, and one reason he selected DataGate was that it was an older product that had evolved over time from STC's original electronic data interchange software offerings.

Getting Your People Organised

PC Connection

At PC Connection, a mail-order vendor of hardware and software in Merrimack, New Hampshire, the ERP system has a variety of interfaces that "touch on virtually every other program" down to the telephone switches, says John Bomba, CIO of the $US732 million corporation. The company rolled out J D Edwards' World ERP software as its core system in July 1998. PC Connection uses many of the ERP modules: accounts payable, accounts receivable, general ledger, inventory management, advanced warehouse management and sales order management. One system that is crucial for PC Connection is a mail-order specific front-end program that facilitates rapid order and customer data entry by customer service representatives in the phone centre. The company also uses a third-party bar-coding solution in the distribution warehouse, a data repository for corporate reporting, a telephony system and tight links to the company Web site for electronic commerce.

Connecting all these pieces is not just a technical issue. One of the keys to success lies in having the right people organised in the right way to make everything come together. To that end, PC Connection brought in a consultant to oversee the ERP implementation and integration project: Dennis Pyburn, who prior to Bomba's arrival had served as interim IS director at the company.

Pyburn's familiarity with the company's corporate business models and functions greased the project's wheels. In organising the rest of the department, PC Connection does not have a specific group focused on integration to maintain the links and keep up with upgrades. Instead, Bomba says, the department is organised along platform lines. Bomba's group selected the J D Edwards software in part because it runs on the IBM AS/400 platform with which PC Connection's staff had significant experience. In this way, the company believes it is minimising the project's technical risk. The bar-coding bolt-on also ran on the AS/400. This set-up makes it simple for the AS/400 platform group in IS to maintain responsibility for some interfaces, while other groups handle interfaces that connect to systems on the platforms they tend -- again curtailing the disruption of the ERP implementation process. A separate database group keeps an eye on data integrity across all platforms and all integration links.

PC Connection also strove to select "tried and true, financially stable" bolt-on vendors that already had big installed bases for their products, says Bomba. PC Connection chose a business partner of J D Edwards for a bar-code solution and upgraded its telephony application to popular products named CallPro and CallPath. Similar to Jefferson Health System, PC Connection tries to rely on the vendors to handle integration where possible. "The closer you stay to pre-packaged solutions, the better positioned you are to take advantage of changes," Bomba says. The exception is the mail-order front-end package, which is custom developed by PC Connection to match its most critical business functions more closely. "On average I would say we did a good job of selecting our vendors. They stepped up whenever there was an issue to address, and some continue to work with us today."Lessons Learned Veterans offer tips for keeping bolt-on integration simpler and more manageable- Go "vanilla" on your ERP implementation, that is, don't get tricky. Modifying the core software makes upgrades problematic. The trade-off: Vanilla may not match key business processes.

- Stay up to date on all applications. New releases or patches for one piece of the puzzle probably won't be engineered to work with your six-year-old database or inventory management program. The trade-off: Money (as always). Keeping up to date can be expensive. - Select bolt-ons from "official business partners" of your primary ERP vendor. Ask questions to make sure they are working together, not just marketing together. - Incessantly prod both the ERP vendors and the bolt-on vendors to build integration into their products. - Don't abandon the basic disciplines of implementing ERP. Keep those cross-functional teams together and test integration links like crazy. - Consider new EAI tools but be aware of the risks.

Most Common Bolt-On Areas

Other solutions implemented as part of ERP program Electronic Data Exchange 21% Distribution/Warehouse 18% Data Warehousing 17% Human Resources 16% Tax 16% Bar Coding 15% Sales Automation 13% Planning and Scheduling 11% Transportation 11%Source: Deloitte Consulting LLC.

Survey of 62 Fortune 500 companies.