Some years ago, ERP was hyped as the panacea to most corporate ills and ERPwas what everyone wanted to do. The fashion now is to treat it as theuniversal punching bag, a convenient scapegoat that everyone loves to nail.Having invested in a great deal of money, time and effort in implementingERP, it is vitally important - now, more than ever before - for companies toget a true perspective of it. They owe it to themselves.

ERP is complex!
There are plenty of good reasons for this issue to develop into acontroversy. A quick sample of companies who have `gone live' will throw upboth happy users and skeptics. At the heart of the problem is the ratherdifficult task of quantifying the benefits of implementing ERP.

This is true for almost every IT initiative that a company undertakes. Achunk of the benefits are qualitative, subjective and varies according tohow companies use the data that is generated and stored. A certain degree ofdisillusionment with ERP seems pre-ordained owing to huge expectationscoupled with unclear measurement.

The issue is far more complex as a typical ERP implementation is accompanied(rightly so) by varying degrees of process change/improvement, need fortraining and retraining users and also demands on the company to undertake amajor change management exercise to accomplish its goals. The elementsinvolved in this project include the software product, IT and implementationconsultants, implementation managers and users, who all need to worktogether as a cohesive team.

The success of the project hinges as much on the clarity and measures of theproject objectives and the initial planning work as the software selectedand the effectiveness of the implementation team. A large number ofcompanies around the world are testimony to the fact that ERP can be a verysatisfying experience.

ERP is the foundation for e-business!
To get a full perspective on the benefits of ERP, let us take a good look atthe world around us, particularly at the opportunities and challenges thrownup by this phenomenon called e-business.

This is the knowledge age. And often, the key differentiator betweencompanies and that succeed and those that don't, is how well each employeeis empowered by the cutting edge of superior knowledge.

Worldwide surveys have shown that most corporations use less than 10 percentof the data in their possession to help themselves. Either it is notorganised or not analysed in a manner that lets individual employees use thedata when they need it most to enhance client satisfaction or outwitcompetition.

No wonder that one of the hottest IT initiatives for companies around theworld is data warehousing and data mining (often termed BusinessIntelligence) that allows them to convert information into insight.

In the old days, IT processed data into information and now it istranslating it into knowledge and intelligence. It is obvious that betterthe quality of base data, superior would be the organisational insight.Where does this data come from? It comes from recording every transactionand every experience that a company has with its customers, suppliers,dealers, etc. In other words, a good ERP lays the foundation for a greatknowledge management system.

As companies are racing to take advantage of Web enabling their marketingprocesses over the Web (Oh yes, we are not talking of the Amazon.com's ofthe world, but the millions of traditional brick and mortar companies), theyare discovering the need for a well integrated system that lets them buildan efficient value chain from their suppliers to their customers.

Pundits agree that while many companies who were faster off the block doenjoy a certain first-mover advantage, they predict that the eventualwinners are those who will be able to have well integrated end-to-endsystems that leverage the Web.

Not only is it important to make it easy for a customer to place ordersover the web, but also to take care of the internal processes such asmanufacturing and logistics that ensure that the order is executedefficiently and that customers return for more. And ensure that they arelinked seamlessly.

ERP is the foundation to such an integrated system. A good ERP is like thebackbone to the limbs of web sales and procurement.

ERP - the killer advantage
Now comes the best news - a company which already has implemented an ERP isin a better position to develop an integrated architecture than one who hasmerely done the `easier' Web bit and now has to set his house in order. Theformer can potentially complete the e-business journey faster and transforminto a potent `click and mortar' company that combines the best of the twoworlds. And if it keeps knocking the stuffing out of its competition, well,just blame it on ERP!

The author is director, e-business, SAP India and can be reached one-mail at dv.jagadish@sap.com.