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Business software opens up

Companies that make enterprise resource planning software are slowly making it easier for other firms to attach products to the systems.

Enterprise resource planning companies such as SAP and J.D. Edwards may be spreading their wings to every nook and cranny of corporate computing, but that doesn't mean they aren't willing to share some of the spotlight.

The makers of software that automates business processes are slowly making it easier for other software companies to attach their products to the systems, a trend that solidifies ERP systems' place as the new corporate computing backbones.

"Broad, one-size-fits-all suites are rapidly becoming ineffective," said Tom Gromley, analyst at Forrester Research in Cambridge, Massachusetts, in a recent study on the changing role of enterprise resource planning, or "ERP." "An increasingly Internet-based economy is forcing companies to shift from automating basic, internal functions to enabling complex connections with customers and business partners.

"ERP suites which were originally designed for internal processes and trained employees are being asked to deliver self-service customer interactions, supply-chain management, and Internet commerce," he added.

And while many of the players are building those types of functions themselves, they also are being forced by customers to build interfaces and partner with other vendors to make it easier to attach systems already on the market.

"Best-of-breed players like Manugistics and [demand chain management software maker] Industri-Matematik [IMI] are threatening to replace the basic materials resource planning and order-handling capabilities in ERP suites, and leading-edge players like Siebel Systems and Aurum dominate the customer management market," Gromley added.

Companies such as Baan and J.D. Edwards "are stuck between a commodity rock and a best-of-breed hard place," he noted. "Each vendor must balance between preserving its share of the corporate applications market and pursuing high-growth, outward-facing opportunities against swifter specialty players."

So they are turning to those competitors for help and becoming the source of system integration--or, at the very least, making it easier for their customers to attach other products.

J.D. Edwards today announced a new architecture for its OneWorld product. The new component-based architecture allows users to attach other products to J.D. Edwards's flagship system using Microsoft's Component Object Model (COM) and the Object Management Group's Common Object Request Broker Architecture (CORBA) frameworks.

"What is driving the trend is customers want best-of-breed software without the cost," said Travis White, vice president of product strategy at J.D. Edwards. "There are lots of packages out there. Customers are fairly experienced at integration, but they know it is costly and difficult. And once they get it done, there is a lot of inertia. You get seven or ten different systems integrated and then one vendor sends you a new release. You are hesitant to implement it. But new component architecture and messaging technology is making it easier."

White said the new technology is also making it easier for companies like his to take responsibility for that integration by certifying third-party products on OneWorld or partnering with lots of players.

"It is easier for us to incorporate third-party applications while maintaining visibility," White said. "We can integrate a lot of functionality for you. Now we are finding it much easier to bring in a Manugistics or Synquest and preintegrate the products, allowing customers to have a broader suite of functionality."

Industry titan SAP is pushing its extended supply-chain initiative and business application programming interfaces at its European user group conference in Madrid. SAP is also in the midst of reengineering components of its popular R/3 application. The move is designed to make it easier to mix and match different software systems while keeping R/3 as the backbone of the computing environment. Baan has a similar initiative under way with its BaanSeries product.

The ERP vendors are also calling on integration system vendors such as Oberon and Crossworlds, which sell software systems that act as a bridge between different software products to translate data and keep transactions flowing from one system to the other.