Extreme ERP Makeover

Competitive advantage. Up until last year, Ensco International, a $700 million offshore oil drilling company with 56 rigs and offices around the globe, had separate best-of-breed applications for each functional area, like finance and purchasing. And each rig had its own customized parts and maintenance databases.

"If we were notified by a vendor that there was a problem with a particular type of valve," says Tom Chapman, Ensco's director of IT, "we would have to e-mail each rig and ask, 'Do you have this valve? And, oh, by the way, have you had a problem with it?" The information was out there, but it was trapped in each rig's system, and in each rig's proprietary data format.

Ensco's single instance of PeopleSoft went live in the first quarter of 2003 for all its offices and rigs, and now all its inventory information is in one place. If a rig off of Venezuela needs a particular piece of equipment, instead of buying it from a supplier, Ensco can check to see if another rig has it sitting in inventory. The single instance allows Ensco to visualize its purchasing habits and hence maximize its purchasing power. In fact, the company can now run reports on anything it likes.

One area that is particularly useful, says Chapman, is analyzing maintenance trends. Each rig is essentially just millions of pieces of equipment thrown together. "The amount our customers pay us on a daily basis doesn't allow for too many failures," says Chapman. By doing a detailed analysis of all of its equipment, Ensco can figure out the optimal time for preventative maintenance, reducing both downtime and equipment failures. Chapman believes that this translates into a competitive advantage.

Why They're Waiting for Web Services

Proponents of the single-instance approach, everyone from CIOs to vendors, recognize that what they're gaining in integration they are sacrificing in functionality. An inventory module from an ERP vendor simply won't have all the features that one from a vendor of inventory software will. For Chapman, it was an easy sacrifice to make; he says that Ensco's point applications weren't that good to begin with. But for other CIOs, that may not be the case. For them, cost, functionality and the ability to collaborate with partners dictate that either they integrate their existing systems using today's XML-based integration tools or they wait until Web services matures.