Extreme ERP Makeover

Costs. Many companies have made substantial investments in best-of-breed software that they don't want to write off. When, for example, big oil companies were first moving to ERP packages in the late '80s, Holly, a $1 billion oil refiner, looked at the big vendors before deciding to build its own ERP-like system for financials, called Trafx. Over the years, Trafx grew to include crude-oil purchasing, joint-interest and product billing, and project accounting, evolving to the point where it had one data store. But Trafx doesn't do everything the company needs - for example, asset management and enterprise reporting. "We looked at several ERP solutions, and they could perform all of the new functions we needed," says Holly CIO and Vice President of IT Tommy Guercio. "But the problem was that if we wanted the full benefit, we would have had to buy their financials, purchasing and billing as well. We couldn't have gone in and just done the areas that we needed."

To Guercio, replacing Trafx didn't make sense. It would have cost a bundle, and it would have been a tough sell internally - people don't want to go through the trauma of change when the current system is working, he says. Instead, he decided to augment his existing system with best-of-breed solutions, which, he asserts, have more functionality than systems from ERP vendors. Guercio integrated the solutions using a variety of methods ranging from point-to-point to XML. This strategy has allowed him to preserve his company's core investment in its homegrown system.

Guercio says that Holly has had more success with the point integration than the XML, both because the company lacks familiarity with the newer technology and because XML tags generate a tremendous amount of data, which slows down overall performance.

Eventually, he believes, Web services could solve that problem.

Functionality. For some companies, a single ERP system is simply too generic to fit diverse or highly specialized business needs. For example, one Rock-Tenn division makes cardboard supermarket display boxes for products such as batteries and toothpaste. This unit needs to track the location, inventory level, lot number and expiration date of the products that will ultimately fill the displays, as well as the customer location and shipping date of finished displays - all in case of a product recall. Another division makes 2-ton cardboard rolls. Rock-Tenn needs to track each roll's weight, width and dimensions in linear feet and square feet. "There is no ERP system that does that," says CIO Shutzberg.