ERP Version 2.0

You won't hear many companies talk about enterprise resource planning anymore. That's not to say that companies will stop marketing applications used to manage human resources, financials and other core business operations that generally fall under the ERP rubric. But they would prefer not to talk about it.

Instead, vendors of ERP tools are focusing on how they can help their customers tailor their systems to provide services online, which will facilitate their plans to become e-governments and e-businesses.

In the past year, the top providers of ERP systems to federal agencies have acquired or partnered with companies that offer customer relationship management (CRM) tools and portals that provide a single point of entry to all business functions.

"There is a numbing down of the ERP buzz because that's not what sells in the government, and that's definitely not what sells in the commercial space," said Zip Brown, vice president of American Management Systems Inc.'s E-government Solutions Group.

Agencies are reluctant to adopt massive ERP solutions and are focusing more on the needs they have to solve specific business problems, such as tracking citizen requests, e-procurement, financial management and employee self-service for human resources and benefits information, Brown said.

Tools for Integration Partnership among vendors is the key to this new arena. ERP vendors have the applications for managing and processing information — which is just as critical to e-government applications as it is to traditional "back-office" applications such as human resources and financial management. But ERP vendors need to integrate those tools with the front-end services agencies want, Brown said.

AMS has responded by forming partnerships with Ariba Inc. for e-procurement, Siebel Systems Inc. for CRM and FreeMarkets Inc. for reverse auctions — all of which are tailored by AMS to meet federal requirements. This is something of a change because ERP vendors have traditionally offered customers "all-in-one" solutions so that they would not have to worry about trying to make different products work together. "ERP was successful years ago because the pain of integration was higher than adjusting business processes," said Michael Dow, vice president of acquisition business solutions in AMS' Public Sector Group.

But the availability of enterprise integration tools from companies such as webMethods has changed the business case, making it easier to choose the best-of-breed solution in each functional area and then integrate the different products, he said.

But not everyone takes that view. Managers at Oracle Corp. still believe that an integrated enterprise application from one vendor is better than a hodgepodge of best-of-breed products, said Steve Perkins, senior vice president and general manager for Oracle Federal.

Oracle has developed solutions for all areas of e-government, such as interactions with suppliers, customer (or citizen) relationship management, and the traditional internal operations and administration of financials and human resources that make up ERP.

Still, even Oracle realizes it cannot be all things to all people. Like other vendors in the federal space, Oracle has partnered with companies such as Compusearch Software Systems for contract management, Gelco Information Network for travel software and others for specific asset management tools Oracle does not already offer.

Customer Focus
AMS, Oracle and other vendors are angling for position in this new arena because they realize ERP applications, how-ever old-fashioned, can provide the underpinnings for many e-government services. In general, e-government involves giving citizens, suppliers or employees the ability to find relevant information on government systems. Government agencies, in the process, need the ability to track those interactions to ensure "customer satisfaction."

"Customer relationship management is probably the most promising growth area for 2001," said Jim McGlothlin, regional vice president for sales and business development at PeopleSoft Federal.

The shift in focus from back-office applications to front-end services is partially the result of agency chief information officers and external business consultants educating senior federal managers that e-government is not just about replacing computer systems but also about how information technology can be used to meet agencies' overall missions and objectives, McGlothlin said.

"Software companies like PeopleSoft have reacted by looking at their product lines and saying, "I've got the enabler toward e-government,' " he said.

PeopleSoft 8, released earlier this year, adapts the company's financial, human resources, e-procurement and CRM solutions for the World Wide Web. Another area the federal government is exploring for its government-to- government applications is electronic grants, McGlothlin said. The Centers for Disease Control, for example, is interested in automating the grants notification and disbursement systems for its customers in state and local governments, he said.

"In every case, the customer wants to have information that usually comes out of back- office applications, such as, "How much have I disbursed and what is my available balance?' " McGlothlin said.

PeopleSoft acquired Vantive Corp. in late 1999 and has integrated Vantive's CRM solution with PeopleSoft's products, creating PeopleSoft CRM and PeopleSoft Analytics for enterprise performance management.

PeopleSoft partnered with Commerce One Inc. in June 1999 for an e-procurement solution that could be integrated with the company's federal-approved financial package. In March 2000, PeopleSoft used Commerce One's electronic marketplace product in its PeopleSoft Marketplace, which it is now trying to market to federal agencies.

Portal Power
ERP vendors also see a significant role for themselves in developing information portals. Beyond generating information for eventual dissemination, their software can be used to create systems that draw people in and help them find the information they want.

SAP Public Sector and Education Inc.'s enterprise portal — mySAP Workplace — is the company's answer to the outside-in approach in government, said Thomas Shirk, president of SAP Public Sector and Education. "There is a shift in focus from the inside-out administrative business systems to the outside-in, where you pull in the customers, suppliers, citizens," Shirk said. The back-end business applications feeding portals are transparent to users, he said.

Federal agencies such as NASA and the Navy are eyeing mySAP Workplace, which brings together tools for financial management, logistics, human resources, CRM, advanced planning and data warehouses, along with non-SAP components, Shirk said. In May, SAP also partnered with Commerce One to offer a marketplace site that uses SAP's business processes software as the backbone. SAP has also created a development environment that enables users to expand mySAP.com to mobile devices so that they can fit into the "e-anywhere, e-anytime" mold, he said.

PeopleSoft plans to offer portals aimed at three audiences: employees, customers and suppliers — what the company calls "role-based" portals. Instead of inundating users with data they're not interested in, the portals aggregate data for individual users, which simplifies the process of information interaction, said Laura King, acting general manager for PeopleSoft's Education and Government marketing and strategy.

PeopleSoft also offers an enterprise portal product, which allows customers to integrate other PeopleSoft products or other companies' products, which they may already be using, McGlothlin said. "We want to have a complete product offering and service offering for e-business, but we are not sending a message that says you have to paint your ship 100 percent PeopleSoft color," McGlothlin said. "We want each application to be the best application in its niche."

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