A Bit of History

Enterprise resource planning (ERP) and business intelligence (BI) grew up as two separate segments of the IT industry. Although early on it was obvious that ERP data could make important contributions to many BI applications, that data was hard to get at; and the ERP system vendors didn't seem to be too anxious to help the folks on the BI side of the aisle.

Then something happened to engender a significant change in the thinking of the ERP vendors. A little more than two years ago, the growth of the ERP segment dropped from double to single digits. Suddenly, ERP vendors had to find new avenues to sustain traditional growth rates. Enter BI ­ the only high-growth IT segment offering the ERP vendors a sufficiently large market size and a good theoretical fit with ERP, namely reliance on lots and lots of data. Further, the BI market looked fragmented, and the big kahuna ERP companies thought it would be easy to leverage their existing customer bases. In short, the ERP vendors fell victim to the low-hanging fruit syndrome; and, as we shall see, they haven't done a whole lot of picking yet.

The first attempt at the anschluss of BI by an ERP vendor was announced in late 1998 by SAP. With great fanfare, its new BI solution, dubbed Business Warehouse, purported to be able to build a data warehouse of SAP ERP data and combine that data with data from other sources in a warehouse designed to support BI-style analytical applications. Not to be outdone, over the past year the other ERP vendors formulated a response to the SAP initiative and are now claiming to be in the race for BI dollars.

Survey.com undertook a hard look at the status of the ERP/BI marriage via an in-depth survey of hundreds of IT professionals. The survey data shows that SAP's Business Warehouse program is, thus far, a dismal failure, despite the fact that SAP was able to get some major marketing initiatives from heavy lifting partners (e.g., Hewlett- Packard). Other efforts by ERP competitors such as Oracle and PeopleSoft also appear to have come to naught. Not a single aspect of these products was singled out for excellence. Most surprising was the finding that only a relatively small percentage of the ERP system customers know about their own ERP vendors' BI products! The few that were familiar with them don't think much of those products in any event. Methinks this state of affairs smacks of smoke and mirrors.

E-Commerce will Drive both BI and ERP

The survey found that 70 percent of users believe it is important that e-commerce applications be integrated with ERP. Nonetheless, the user community is not adopting a common methodology for achieving this integration. Nearly one-third of the respondents had no clue as to how they would make this happen, and there was certainly no unanimity of opinion among the rest of the survey population. Yet users rated the importance of ERP information to e- commerce applications very high.

The issue of scalability is a particularly challenging problem for traditional ERP systems. Even very large enterprises usually have relatively few people accessing the ERP system output. We found that more than one-half of the survey respondents anticipate having to serve the needs of more than 1,000 e-commerce application users, and about a quarter of the population need to serve more than 10,000. However, a typical ERP user base, even in large enterprises, usually numbers in the low hundreds.

Response time is another key issue. Approximately two-thirds of the respondents wanted response times less than five seconds and nearly 90 percent want better than 10 seconds. We think that the only rational way to achieve these goals is to adopt the technologies and methodologies prevalent in the BI environment that have the many tools and processes needed to address these performance issues.

The Scorecard

Given that the ERP folks began jumping on the BI bandwagon more than a year ago, it is fair to ask how they are doing. Survey.com's research strongly suggests that if the ERP companies are going to have an impact in the BI environment and, ultimately, in the hot class of applications we call e- commerce, they had better get on the stick PDQ or face being trampled by the competition.

These companies have done a lousy job, both with the technologies they have brought to market and with their market/product positioning. A case in point is mySAP.com touted by SAP as "the open, collaborative Internet solution." If one looks at SAP's home Web page, mySAP.com is splashed all over it in a variety of guises and colors. Yet, our survey found that 58 percent of SAP's customers never heard of mySAP.com! In fact, only one percent of SAP user respondents have installed it, and only 15 percent are looking at it.

If these vendors were my clients, I'd tell them to immediately increase the management and financial resources they are devoting to BI and e-commerce or face being crushed by the stampede of well- funded, hot technology companies that are carving out chunks of the e-commerce market. For companies not currently in the ERP business, huge opportunities for incorporating ERP data in BI applications are out there waiting to be plucked. The demand is there. The only question is who will satisfy it.

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