Managing Automation - November 2007 - (Page 35)

just finished a two-year rationalization effort that saved the software giant millions annually. “We originally had some 40 data centers and dozens of versions and databases worldwide,” says Jon Chorley, vice president of supply chain management and e-business strategy for Oracle. “We merged them into a single 6.5-terabyte database, and we were able to reduce our overall IT cost by 46%.” Coming on the tail of a strong acquisition streak — most notably Oracle’s 2004 purchase of PeopleSoft — the consolidation effort was “a lot of work,” Chorley acknowledges. But, like most ERP vendors, Oracle is finding single-instance ERP to be a hot topic among its customers, with cost savings being the top driver. DRIVING FORCES There are compelling reasons to do this beyond cost, however. Having one database for customer and transactional data provides the elusive “single version of the truth” that enables consistent customer service, as well as cross-selling and upselling opportunities. In addition, single-instance ERP greatly eases regulatory compliance. “The cost of auditing and signing off on your SOX [Sarbanes-Oxley] compliance sheet is dramatically lower,” Vajpayee says. Perhaps the purest luxury of single-instance ERP is the visibility it gives into enterprise business processes. This lends itself to a corporate performance management (CPM) effort, in which executives can easily compare regional, plant, or even employee performance. “Having one instance of the application and the database where the group information resides enables you to get very good understanding of how different divisions are doing,” says Vikram Amaranath, vice president and head of manufacturing at MindTree Consulting. Perry Cozzone, CIO of Colorcon Inc., agrees with this assessment. Privately held Colorcon, a supplier of specialty chemicals to the pharmaceutical industry, began a migration of its eight worldwide manufacturing sites to Oracle at the end of the last century. The primary reason for consolidating the mix of mostly homegrown, legacy applications that ran in the plants was simple: to provide the best service to customers, which are mostly large pharmaceutical companies. “We wanted to give our customers a high level of confidence that no matter where they developed or manufactured their product, they would get consistent product from us, no matter what,” Cozzone says. To do that, the company needed to standardize the platform on which it ran its business. Cozzone and his team decided the Oracle database and e-business suite was the way to go. Shifting to a standard platform is not easy technically (a host of translation issues can trip you up), but Cozzone will be the first to tell you that technology is by far the easier issue compared with human factors. He advises anyone looking to do this to think hard about change management and TRANSITION TIME preparing the organization for the harYou can’t consolidate ERP instances monization of business practices that overnight. Getting down to a single must precede the new platform. instance is a multi-phase process and To get all 25 locations running off one requires constant care to guard against backsliding. database and one application took a lot of work, but it was worth it, Cozzone says. PHASE 1: Move all the ERP server “The key point of the single global inhardware to the location where the single instance will reside. stance was the ability to share information better. As a result, you are able to PHASE 2: Begin consolidating hardware. Run multiple applicameasure your processes based on a comtion instances on one box via plete and consistent set of metrics, and partitioning. you can watch the information flow and PHASE 3: Migrate the data from business process and figure out what the soon-to-be-unsupported verareas you should focus on,” he adds. sions over to the vendor/version of choice. Of course, no matter the benefits, single-instance ERP is not always a realistic You’re done, for the moment, but be ever vigilant or rogue versions goal. Fortune 500 companies may find may creep in. it impossible to rationalize all their Source: MindTree Consulting disparate systems down to one. And a number of variables might point to distributed ERP as the best choice for some manufacturers. For example, local requirements in certain regions may mandate running dif ferent versions. In addition, “some applications may have a threshold where it is best to split up the instances regionally,” says Jeff McKee, director of product management for Microsoft Dynamics AX. About 10% to 20% of Microsoft Dynamics customers run different versions of Dynamics in parallel, he says. Even when using a distributed ERP approach, however, companies should craft an IT infrastructure based on standards allowing for flexibility if the business case warrants. “There may still be business reasons to have a distributed ERP strategy,” McKee says. “But we now give customers better choices. They didn’t have the choice to do sinmanagingautomation.com gle-instance 10 or 20 years ago.” RELATED ARTICLES: As a general rule, the experts Coping with Integration Complexity say, manufacturers should aim www.managingautomation.com/integrate2 for single-instance ERP wherCreating the One Enterprise ever possible. “You have to keep www.managingautomation.com/integrate that as your vision, even if you The Great Enterprise Applications Race can’t achieve it perfectly,” Amawww.managingautomation.com/enterpriserace ranath says. “You have to keep that as an objective or there will COMPANIES MENTIONED: be no end to the divergence. 3i Infotech That costs you money, not just in www.managingautomation.com/3i terms of support and IT infraMicrosoft Corp. www.managingautomation.com/Microsoft structure, but, from a business perspective, the harmonization Oracle Corp. www.managingautomation.com/Oracle3 of data and business processes will not happen.” ■ action plan maonline 35 November 2007 http://managingautomation.com http://www.managingautomation.com/integrate2 http://www.managingautomation.com/integrate http://www.managingautomation.com/enterpriserace http://www.managingautomation.com/3i http://www.managingautomation.com/Microsoft http://www.managingautomation.com/Oracle3

Table of Contents Feed for the Digital Edition of Managing Automation - November 2007

Managing Automation - November 2007 Contents Take 1 Mailbox SAP's Business ByDesign to Validate On-Demand Model for Enterprise SW Portfolio Management Specialist Losing Ground to Rivals At Incor, It's Time for Some Deep Breathing Can HART, ISA Get Together on a Wireless Spec? Mesa Tries to Help Improve Plant Metrics Notes Cover Story: The Digital Factory Special Report: Breaking Down Walls Integration: Dreaming of One ERP Industries: Locking onto Cyber-Security Transformation: Not Your Father's Time & Attendance Program Product Scan Advertiser Index Next

Managing Automation - November 2007

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.