Why Does My ERP Implementation Keep Getting Delayed? Apptricity Corporation

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1 Why Does My ERP Implementation Keep Getting Delayed? Apptricity Corporation "The results were quite surprising no ERP company stands out as a brand of choice. - Jon Derome, program manager, TheYankee Group A recent Yankee Group study revealed that a surprisingly low percentage of customers are satisfied with their Enterprise Resource Planning (ERP) software providers. This is especially alarming in light of the huge investments that many firms typically make in such ERP systems. Given that ERP is arguably the most stable of Enterprise Software segments versus segments like SCM, CRM, and other newer enterprise initiatives how did this dissatisfaction develop? Apptricity, an enterprise software firm specializing in applications that drive down operating costs while delivering a rapid return on investment (ROI), believes the problem and the solution are basically the same: o Break down large, monolithic application projects into simpler and easier-to-manage application components o Deliver application components around a framework that allows for easy integration to other application components, legacy systems, and future version migrations and upgrades o Build composite applications such as procure to pay from a component code base, providing a rapid implementation and quicker ROI Continuous process simplification of inherently complex enterprise applications should be the primary goal. Apptricity believes that the primary focus for business-technology managers should be on achieving a rapid application integration and deployment to guarantee measurable ROI. Business-technology and business managers should not have to constantly recalibrate solution delivery objectives or re-scope project deliverables with reduced functionality because of finger pointing or other rationalized justifications. How can ROI be assured and achieved more rapidly? What are the major decisions faced by organizations relative to their Information Technology (IT) strategy, and how does this impact ROI? And why would a company choose an application suite versus extending in-house legacy systems? The case for application suites (One of the major issues with IT organizations today is) gaining economic ROI recovery from their ROI-challenged enterprise application suite deployment. - Meta Group report (December 2003) Traditional enterprise application vendors such as SAP, Oracle and Peoplesoft, amongst others, market an integrated application suite strategy to address the issues of integration with applications and legacy infrastructure. The notion here is that, as long as you keep buying our software modules, you can reduce or even eliminate integration issues. Sounds good on the surface, but several challenges with application suites have surfaced over the past few years:

2 o Suites at some point must integrate with other systems and applications o As extensive as they are, application suites still have gaps in functionality that are often times critical to business operations o Extending or customizing application modules within suites can create serious integration problems, especially with newer releases of software o The expanded size and scope of application suites frequently results in longer and more expensive implementation cycles, and thus target ROI becomes even more elusive As traditional enterprise software companies extended their product modules into vast application suites, integration became the vendors highest priority. This integration effort, however, often involves hundreds of application interfaces from disparate engineering teams and different architectures. Customization and industry best practices have taken a back seat to integration. Business-technology managers, though, require solutions that provide rapid return on investment, quick implementation, and excellent service and support. It appears that traditional ERP software vendors do not share the same priorities. What is the alternative? Apptricity offers solutions for companies that have implemented commercial enterprise applications, or application suites, that extend the functionality of those suites for specific industry or business requirements. Apptricity allows businesses to address unique business processes with exact-fit applications. Additionally, Apptricity s Advanced Information Framework virtually eliminates the cost and pain associated with future version migrations and upgrades. Exact-fit applications, rapid implementation, and easy version migration result in the lowest possible Total Cost of Ownership (TCO) and real ROI. The case for extending legacy systems Does it make sense to build a new Payroll system on Unix when you could buy one from a company like Oracle? Would anyone build an HRMS application for Windows that could be bought off-the-shelf from Peoplesoft, JD Edwards or Lawson as a discrete application if they could? Sometimes this happens, but it is the exception rather than the rule. The case for building new applications from scratch is most often justified with an in-house development staff whose primary mission is maintaining legacy systems. The basic premise of an incremental effort to build on top of or extend such legacy systems is the core of the value proposition that often convinces organizations to undertake such projects. The business reasons for extending legacy systems are analogous to the case for extending the life of physical plant or equipment capital investments: o Legacy systems have provided the backbone of IT automation for most established organizations, and in many cases they continue to function quite well o Legacy systems are already installed, so the disruptions experienced with many new application technologies, especially application suites, are avoided o Legacy systems have already proven their worth, and their operational characteristics are understood, so operational and deployment risks are minimized

3 o Companies with legacy systems have invested in both the technologies and the organizational resources to support these systems so extending the legacy infrastructure and environment often means extending the overall ROI for IT departments While there are good reasons for additional development on legacy systems, there are of course issues around continuing to invest in older technology and platforms. The negative issues around legacy systems usually involve compromising the introduction of new technology and the costs associated with maintaining older systems. o Cul de sac technology: The future technology fauna for certain legacy systems is diminishing, or may simply no longer exist. This makes essential components and ancillary technologies everything from drivers, to application adapters, to newer hardware and software technologies difficult to acquire, and sometimes impossible to integrate o When technologies are sunsetted the costs to support such systems, and the applications built on them, typically increases year-over-year o Software developers and designers are attracted to newer technologies. Why would a talented software designer invest their time and energy in a technology that has limited prospects for growth? This inevitable exodus of software talent leads to the snowball effect of an ever-increasing distance between state of the art technology and legacy systems Legacy technology that garners a decreasing customer base results in lower vendor investment in that technology. When vendors reduce investment in a technology, the developer base diminishes. Eventually the costs to support such technology become prohibitive, and new development is simply not feasible. Does this mean legacy systems are a dead end solution? Not necessarily. Apptricity s Integration Engine allows for simple and inexpensive integration to both existing legacy systems, and newer enterprise application suites. This is done with the use of industry standards such as SOAP, WSDL, UDDI, XML, and other web services protocols and interfaces. For any system that supports at least some level of web services standards, Apptricity can integrate new functions with relative ease and in a short period of time due to its service-oriented architecture ( SOA ).. The Dilemma: Buy (a new application suite) or Build (on top of legacy systems)? Or is there a middle ground? (There is a structural change in the way companies purchase enterprise applications) While the previous technology boom was driven by spending allocated to IT departments, the next wave of must-have applications will need to deliver demonstrable value to and thus be driven by business executives. - Tony Friscia, President & CEO, AMR Businesses today face several issues when deciding on a strategy for IT solutions. First and most obvious, the question of buy versus build: a) Buy implies a software package(s), which almost always means buying most of what one needs with off-the-shelf products, and building whatever else is non-existent or needs customizing; b) Build involves building a solution from the ground up, with little or no packaged or commercial software involved.

4 Building solutions from scratch today usually involves either extending the life of legacy systems, or developing next generation applications that require brand new technology or new functionality that heretofore has not existed. It is rare that a new application or re-development of an existing application occurs where solid, well established packaged applications exist. Clearly, the most common trend over the past decade has been to buy a commercially available application that already runs on a legacy platform (mainframe, AS/400, etc.) or that already runs on a more modern platform (Unix, Linux, Windows), and then extend the application to fit the business need. The immediate challenge here is to integrate into existing systems and applications infrastructure. The second issue is dealing with the disruption that such a new implementation creates. The cumulative effect of both these issues is drawn out implementations, delayed deployments and evaporating ROI. Apptricity offers the best of both by providing a risk mitigation alternative when considering extending legacy systems. The basic premise for using Apptricity to extend legacy systems is that the Apptricity Information Framework and Integration Engine allows customers to both incorporate new technology like Java/J2EE and Web Services, while providing a non-disruptive extension to installed systems and infrastructure. The proposition here is that if given sets of functions or applications are successfully serving a organization, regardless of the platform they happen to be running on, then leave them alone let them continue to service the needs of the organization in the future as they have in the past. For those under served needs new application areas, or additional functionality for existing systems apply newer technology that can seamlessly and rapidly integrate with the existing infrastructure, so ROI objectives dependent upon rapid implementation and deployment are achieved. This accomplishes the dual need of both introducing new technology to the current infrastructure and addressing immediate application functionality, while minimizing the risk and reducing the disruption to the legacy environment. Furthermore, this simple approach will provide quicker, more measurable ROI than either building new applications using older technology, or making wholesale changes to IT infrastructure by scrapping legacy systems and introducing large-scale enterprise application suites. ABOUT APPTRICITY Founded in 1999, Apptricity provides highly adaptable enterprise software solutions that deliver permanent operating cost reductions at 1/8th the total cost of ownership of established vendors. Adapted to the way an enterprise operates its business, Apptricity s applications drive transactions in supply chain, spend and workforce management. Apptricity s supply chain management suite focuses on optimizing capital resources and value chain relationships. Apptricity s spend management suite focuses on reducing corporate procurement and reimbursement costs. And, Apptricity s workforce management suite focuses on labor utilization. Due to its framework technology, Apptricity dramatically reduces implementation time, complexity and costs caused by customization and integration. Apptricity complements and extends legacy mainframe infrastructure as well as more contemporary ERP suites. Apptricity leverages object oriented technology in an advanced framework to facilitate fast, low cost, non-resource intensive implementations. Notably, Apptricity has proven solutions

5 deployed at leading enterprises in a broad spectrum of industries, including retail, energy, manufacturing and transportation services. Apptricity s customers include Wal-Mart Stores, TXU Corporation, Cooper Cameron Corporation, H.E. Butt Grocery (Forbes Private 10), Higher Power Aviation, DAK Americas, amongst others. Apptricity s applications are fast to implement and easy to adapt, enabling enterprises to achieve rapid return on investment and risk mitigation. On October 5, 2004, Apptricity formed Apptricity Government Services Corporation, a wholly owned subsidiary, to provide its highly adaptable solutions to the federal and state sectors. In the federal sector, the Department of Defense has purchased the full Supply Chain suite and certain integrated Spend applications to provide deep visibility to the United States Armed Forces. For more information on Apptricity solutions, please visit or call (214)