Why your ERP Integration Efforts End up Looking Like This . . .

Why your ERP Integration Efforts End up Looking Like This . . .

CIOs are often left with the daunting task of trying to cobble together different vendors' software packages themselves. And it's a job they are increasingly unprepared to do as cost-conscious IT departments shed their in-house software developers.

Reader ROI

- Learn why software cannot be truly integrated across multiple vendors.

- See the difference between integration and interface.

- Discover how multivendor packages can work.

Getting different vendors to truly integrate complex software is impossible.

But that doesn't mean a more limited form of interfacing can't be achieved.

To sell a multimillion-dollar software system to a big company, a vendor needs a showcase customer. Jay Shreiner, former CIO of the cereal giant Kellogg, played that role for Oracle, which sells, among other things, ERP software. As showcase customers go, Shreiner was ideal: well known and good with customers and the press.

He needed to be good. Shreiner was helping Oracle sell a radically ambitious software product. Launched in 1996, Oracle CPG (consumer packaged goods), promised to integrate four complex software packages from four different vendors - Oracle's ERP software, Indus's enterprise asset management, Manugistics' supply chain management and IMI's order management - into a seamless whole. The combination of software would let CPG companies, which manufacture just about anything sold in a supermarket, run all aspects of their business, from estimating product demand to manufacturing to delivery. Oracle pledged to take responsibility for the integration and support of all of the separate software within CPG.

From a marketing perspective, CPG sounded great. Business executives in the consumer packaged goods industry saw Oracle's grand vision as a way to take a particularly angry monkey off their backs: the need for their own IT departments to do the work of integrating software from different software vendors.

Shreiner also saw it that way. He met with sceptical techies from potential CPG customers and did many interviews with the press affirming his faith in Oracle's ability to pull off this integration miracle. Why did Shreiner put himself on the line for Oracle? Because he was deeply invested as CPG's first customer. According to one source close to the project, Kellogg spent at least $US10 million and devoted as many as 30 programmers over the course of more than three years to helping Oracle piece together the CPG software package. In return, the company was able to influence the features and functions of CPG to meet the cereal company's particular needs. Kellogg was the "poster child" for the Oracle CPG product, says the source.

But after three years of trying, CPG never worked at Kellogg - or anywhere else for that matter, at least not the way Oracle had promised it would. "No one ever got CPG up and running [in its full form]," says Dave Boulanger, research director for enterprise management at AMR Research in Boston. "It was never completed." Some customers got pieces of CPG running, he says, but not the full product.

Donald Klaiss, Oracle's senior vice president of applications development, disagrees. He says that CPG was completed and that Oracle supports the software today. "We had an aggressive plan with our software partners to build integrations between the different pieces of CPG, and those were all built,'' Klaiss says. But former customers claim that Oracle did fail to finish CPG, and that failure cost them millions. "Millions thrown down a rat hole," says one former CIO and CPG customer from the food industry who declined to be identified. Of the three CPG customers interviewed for this story, two abandoned CPG altogether and replaced it with ERP systems from competing vendors. Another customer, Paragon Brands, a nappy manufacturer, is pursuing litigation against Oracle, and still another, Tri Valley Growers, a farm co-op in California, ended up in bankruptcy after spending millions trying to get CPG up and running.

What the CPG debacle demonstrates with frightening clarity is that the task of getting a host of different vendors to integrate CPG complex software programs to the level that Oracle aspired to with CPG is more than difficult; it's impossible. "If you had to point a finger at the root of the problem, it was the integration," says Boulanger. "They could never get the different systems to talk to each other adequately. It was like trying to tie them together with bailing wire."

"It's impossible to try to integrate four pieces like that from different vendors into a single product," agrees Barry Wilderman, a vice president at Meta Group (US).

Yet in the years since CPG was first introduced, the trend toward multivendor software packages has only increased. More and more vendors are banding together to try to increase the breadth of their product coverage to span such realms as e-commerce, Web-based procurement, CRM, ERP and supply chain management. And they are doing this at their customers' requests.

It's a fact of IT life that no single vendor can provide all the software necessary to run a business. CIOs are often left with the daunting task of trying to cobble together different vendors' software packages themselves. And it's a job they are increasingly unprepared to do as cost-conscious IT departments shed their in-house software developers. By buying more software packages from vendors, companies are increasingly beholden to those vendors to do this integration work for them. And the work itself is crucial. If the links between a company's warehouse software system and its finance system break down, its ability to ship goods and close its books grinds to a halt. As companies from Nike to Whirlpool to Hershey have discovered recently, CIOs who can't master the links between big software packages are putting the very survival of their company at risk.

So how do CIOs find their way out of this mess? By finding out what vendors really mean when they say their product is "preintegrated" with a software package from another vendor.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about ACTAlphaAMR ResearchAribaBillionForestExpressGilletteGreat PlainsGreen Mountain CoffeeHISi2IBM AustraliaIMIIndusManugisticsMeta GroupMicrosoftNikeOraclePeopleSoftPromiseRightWorksSAP AustraliaSoftware TodaySpeedTri Valley GrowersVertexWal-Mart

Show Comments