Can You Add New Life To an Old ERP System?
Featured Author - *William
October 31, 2003
Recently, TEC featured an article by Olin Thompson titled, "The
'Old ERP' Dilemma: Replace or Add-on" which discussed options available
to companies who want to add business functionality to their "Old ERP"
systems. Certainly, there are many options now available in new business
functionality that run the gamut from Supply Chain Planning (SCP) to Customer
Relationship Management (CRM). The pros and cons of replacing or adding
on to your existing ERP system were set forward in Thompson's article.
But before you look to new ERP functionality, you should see if you are
getting the full benefit out of your existing system. If not, are there
ways to add new life to your current ERP system without going into an
extensive development project.
you have an old or new ERP system you have probably learned that to maximize
its value, you have to work hard at getting information from the ERP system
to key users. According to Thompson, " the data checks in, but the information
can't check out of many ERP systems". You also may be finding that as e-business
strategies are emerging in your supply chains, you could need access to more
externally generated information than your ERP system, in its current configuration,
can handle. For an Information Technology manager, both situations are problematic.
Many companies should take another look at data warehousing before deciding
that what to do with the "old ERP" system.
Data Warehousing Really Work?
Bob Cramer, Director of IT for Appleton WI based Anchor Food Products
has found that, " lots of the pain we have with our old ERP system is
based on users not having access to information. We see data warehousing
addressing most of the problems our users have with the old ERP system".
Today, most reporting from older ERP systems is directly from the ERP
transaction processing (OLTP) system. Typically, users take ERP transactional
data and input it to an Access database or a spreadsheet to generate the
reports they need to make business decisions. From a user perspective,
the extraction and re-inputting of information is both time consuming
and potentially error prone. From an IT perspective there are no opportunities
to build in validation checks to ensure that the information is either
reliable or the most current available.
warehousing provides another way of getting information from legacy systems.
Many companies have found it necessary to "build around" their ERP system
to some extent. For example, Advanced Planning and Scheduling (APS) systems
have often been added after the ERP installation. Companies find that
they can report from either their ERP or their APS systems, but have difficulty
combining data from both systems without having to create new databases
or spreadsheets. Once the data is extracted from the systems, it is very
difficult to ensure its integrity. James F. Dowling pointed out in the
TEC article, "Business
Basics: Unscrubbed Data is Poisonous Data" data should be managed
as a corporate asset that appreciates in value over time. Historical data
must be addressed with as much care as current database content".
Data Warehousing alternative uses a better approach. It "packages" the
information in data cubes that are customized for each group of users.
Once the information is packaged in a data cube, users can extract the
information using an On Line Analytical Processing (OLAP) tool. Today,
OLAP tools are available as client-server applications or can be operated
from a Web browser.
data warehouse also can include information that is not in your ERP system.
By adding information from outside the ERP system, IT can provide users
access to ALL the transaction information that the company collects as
well as whatever information they might want to collect from OUTSIDE the
company. This is a significant difference and a potentially powerful advantage.
Pat Clifford, Director of Business Consulting at the Boise ID agri-business
giant the J. R. Simplot Company, found after installing a data
warehouse comprised of company information from their ERP and several
legacy systems, " it not only gave more information to our employees,
but allowed them to move from just reading reports to performing managerial
is the Best Way to Integrate Your Old ERP with Data Warehousing?
There are two basic strategies that can be used to start a data warehousing
project. For certain ERP systems third party providers have developed
'off the shelf" data warehousing solutions that are pre-built to the fit
the features of your ERP system. If you have an old ERP system that is
supported by a data warehousing "solution", you should seriously consider
this option. Data warehouse solution products are usually based on the
ERP modules you have installed. You can roll out the data warehouse to
one module at a time making it easier for IT to manage. One major advantage
of using a data warehousing solution is that it can be done in a significantly
shorter timeframe than if you have to buy an entire data warehousing tool
your old ERP system is not supported by a data warehousing solution product,
you will need to "build your own" using a tool set provided by a data
warehousing vendor. At Simplot, Clifford found there were advantages in
defining the project by functional areas instead of trying to create one
big project: "Different functional areas look at information in different
ways, so it's important to work with each group as you build the data
warehouse". The advantage of a data warehousing tool set is that it gives
you total control over what kind of information you want to present to
your users. The disadvantage is that it will take more time and internal
resources to implement.
IT managers are under increasing pressure to deliver information that
can be used to perform managerial analysis. Decision makers in companies
are no longer content to read the simple reports that are generated by
old ERP systems. They need to have access to multi-dimensional information
based on transactions generated both inside and outside your company.
A well thought out data warehousing project can address many of the user
issues behind their perceived need for a new ERP system.
About The Author
was a consultant, writer and speaker who specialized in the application of IT
to business problems in the process industries. He was a principal of WR Friend
& Associates (www.wrfriend.com)
and had over 25 years executive experience in food and chemical manufacturing.
Bill co-wrote a monthly column "Managing Software"
for Food Engineering (www.foodengineeringmag.com)
and was a co-founder of the Food, Chemical and Life Science CIO Forums found
a colleague and valued contributor to the TEC site. He will be missed.