ERP/ EAI implementation strategy for Indian companies

Abstract

Companies are trying to derive more and more business utility from the ERP systems and as a result ERP strategies are evolving. Instead of using EAI to integrate with Supplier / Customers’ systems, companies are using other add on ERP modules and are increasing the scope of core ERP. It means utilizing more functionality, extending the footprint beyond the core ERP functionality and making decisions between ERP suites and using EAI to integrate pure play or “Best of Breed” solutions. The trade-off between Best of Breed functionality and ease of integration is no longer as simple as it once was. Over the last decade, ERP has expanded, beyond the limits of core ERP functionality. At the same time, the consolidation within the software industry is having a broader effect than just on ERP itself. ERP companies have also been acquiring pure play or Best of Breed vendors that offer extensions to core ERP functionality. This is affecting the enterprise application vendor landscape and also on how ERP versus EAI decisions are made. Companies are considering these options to balance EAI integration efforts and the ability to upgrade to new releases against extended features, functions and advanced technology that ERPs are now offering. The three most important factors to consider in ERP versus EAI decisions are Functionality, Integration and Ability to upgrade to new releases. Depending on the existing systems of the client and the value the client wants to derive from the new system, a framework has been developed to make a choice between the ERP and EAI solutions available. We found the main factors are Vertical Specialization, Horizontal Specialization, Optimization of Business Models, Extending ERP Functionality, Effect of Influencers, and Acceptability of Success Scope of Technical Effort Involved. ERP is Push Oriented Bottom Up Approach with Standard Business Processes and focuses on Internalization. EAI is Pull Oriented Top-Down Approach with Organization’s Business Processes and focuses on Externalization. We also recommend companies to go for ERP only when they are ready for it. We have suggested a framework to assess the organization’s ERP capabilities based on four parameters namely, Process, Organization, Knowledge and Technology.