DILEMMA FOR ERP: USE VENDOR OR DATA WAREHOUSE TOOLS?

Tony Baer has noted in ComputerWorld that a unique problem is now facing IT (information technology) managers seeking to utilize data warehouses for ERP (enterprise resource planning) ventures: Should they go with tools from their ERP vendor or from companies that are in the data warehousing field?

Baer cites as examples both Monsanto Co., a life sciences company in St. Louis, and Hercules Inc., a chemical manufacturer in Wilmington, Del., that had to decide whether to adopt SAP AG's data warehousing strategy for their R/3 ERP systems or travel the third-party route. Interestingly, they chose different paths.

Frank Gillette, an analyst at Forrester Research Inc. in Cambridge, Mass., told Baer he is skeptical that transaction-application vendors such as SAP are qualified to build data warehouses. "You don't want to have data extraction and transformation going on in the same database that you run your transactions in, " he said. Gillette specifically asserted that SAP's Business Warehouse, which is now entering general release, isn't yet ready for prime time. "You wouldn't want to bet your business on Version 1 of anything," Gillette said.

Indeed, that was Monsanto's rationale. "SAP does a lot of things, but we found that they couldn't yet satisfy all of our decision-support needs," Paul Eveld, information systems manager on the R/3 project, told Baer Monsanto's global business units had previously spent millions building their own stand-alone data marts, using tools from Business Objects Inc., Cognos Inc., Pilot Software Inc., Hyperion Solutions Corp. and others. Thanks to recent acquisitions, Monsanto also also had several other ERP systems, including J.D. Edwards & Co.'s World and System Software Associates Inc.'s BPCS, to contend with. An SAP-specific solution didn't make sense to them.

"We decided for the time being to protect our data warehouse investments," Eveld noted. The firm took the opportunity for enterprise systems migration to consolidate the back ends of its dozens of data marts with an Oracle Corp.-based R/3 decision-support repository containing current and historical transaction data. It will be populated by ActaTechnology Inc.'s R/3 data extraction and transformation tools.

Individual business units may still keep their favorite front-end tools, but at least they will be working from common enterprise data models for topics such as products or customers.

On the other hand at Hercules, the decision for an all-SAP approach appeared more definitive. Having become one of SAP's first North American R/3 customers in 1993, Hercules was well over half finished by last year and was committed to converting all its major enterprise systems to R/3. When SAP offered an opportunity to join its Business Warehouse beta program, Hercules officials decided the risk was justified.

"It was clear to us that [Business Warehouse] was a strategic piece of SAP's go-forward strategy and that they would bring the resources to bear to bring out a viable product," Pete Steiner, Hercules' SAP project director, told Baer. Major factors reinforcing the decision were Hercules' desire to leverage the company's existing SAP programming skills base and the fact that, as a beta customer, it stood a good chance of influencing SAP's Business Warehouse product-development direction.

As an example of Hercules' input, Steiner pointed to SAP's development of an extract program from R/3's Profit Center Analysis module, which was high on his list.

Despite its more cautious approach, even Monsanto is confident about Business Warehouse's long-term prospects. With the company's R/3 implementation barely 20% finished, Eveld conceded that it may not yet be time to force the issue. "I don't think we're ready for [Business Warehouse] yet, but I don't think that SAP is ready either." But he added, "We'll evaluate the production version next year."