Service-oriented architectures are supposed to spell doom for the enterprise resource planning (ERP) market dominated by SAP and Oracle — at least that’s what AMR Research predicted a year ago.
The analyst firm predicted that customers might stop buying applications from ERP vendors and instead pay low-cost integrators to “build custom composite apps that sit on top of their ERP backbone”. This was supposed to happen by 2010. AMR called the potential scenario “death by SOA.”
But at least one SAP customer says the vendor’s ERP tool is what lets his firm embrace SOA and get the benefits of web services and application integration. Steve Strout, CIO of publisher Morris Communications, is one of many SAP customers who recently upgraded to mySAP ERP 2005.
“This application ... is so different in the respect that you have services architecture built into the basic system,” Strout says. “That allows you to do so much more with this application than you have been in the past.”
Available since May 2006, the new ERP application is being adopted by customers faster than any previous program released by SAP, partly because SAP has said it will be the”go-to-release” through to 2010, according to SAP and the Americas’ SAP Users’ Group (ASUG).
SOA features let Morris quickly launch web services and integrate ERP tools with CRM and websites.
Morris can pick and choose where to use SOA without doing a full overhaul of the company’s IT infrastructure, Strout says.
“We’ve selected and targeted our SOA components for the things that are compelling to us, things that are going to change relatively rapidly over the next few years,” he says.
Morris Communications owns 27 daily newspapers in 14 US states, radio stations in the western half of the country and has its hands in advertising and the book and magazine publishing industries.
The SAP system has let Morris build a customer self-service program for newspaper subscribers, letting them, for example, request redelivery of newspapers on days they don’t receive them.
The company’s 6,500 employees use mySAP ERP to manage pay cheques, and about 1,000 employees use the program every day, according to Strout. The heavy users are primarily department managers or people in accounting and finance.
The ERP upgrade went live in May after five months of preparation. Strout says he can’t discuss how much Morris paid for the software due to company policy, but he says mySAP ERP 2005 may let them get rid of redundant software over time as the IT department turns on new features. Future uses of the package might include travel and expense reports, and sales and distribution for book publishers, he says.
Software charges for the whole suite were paid up front, so it won’t cost extra to expand use of the system.
“Turning things on and off, you get to do that at your leisure,” he says.
Upgrading to mySAP ERP 2005 was “relatively simple” but did require some time and planning, according to Strout. Morris hired consultants who are familiar with the system’s inner workings, and did lots of testing to make sure the 15 or 20 applications it’s using from within the suite would actually work. After all, employees would have been angry if they didn’t receive their paychecks the first week the system went live.
“When going through implementations of a large package like an SAP, historically it takes a significant amount of effort and a significant amount of time,” Strout says. “The things that allowed us to be very successful [were] dry runs. We tested and tested dry runs of taking our systems and upgrading them in a sandbox environment or in a development environment... When it came time to turning the thing on and doing the upgrade, it was pretty much a non-event.”