5 Questions on “Make or buy” ERP Software 2019

Standard vs. Individual Software – and the Conversion Problem

Planning is Everything

Interview with Dirk Bingler – Spokesman of the Management Board of GUS ERP GmbH ERP systems have long been standard in medium-sized companies. Where do you see the reasons why the interaction of different ERP systems, for example those of customers and suppliers or those of subsidiaries and company’s headquarters, is still difficult and complex today?

A key point is that many medium-sized companies operate their ERP systems on-premise in their source company network. Establishing a connection to other business partners is therefore costly and always involves security risks.
Another complicating factor is that – even with ERP systems from the same manufacturer – different release and customizing levels as well as individual customization developments are in use. For communication between companies, the data or messages must first be “translated” using the standard interfaces.

Dirk Bingler

The ERP connection of external systems (CRM, WMS, PIM, online shop) if often just as difficult. Does this have the same causes or do other aspects have to be added?

All in all, the causes are similar. However, the variety of CRM, WMS, und PIM systems or even online shops is much greater than with ERP applications. Moreover, message types between these systems are even less standardized. The basic requirement is that an ERP system supports all common and modern communication protocols, such as REST. In general, companies that use other IT applications in addition to ERP should clearly define which system is the leading one for which data. Is an item description more likely to be stored in the ERP or in the PIM? Or do I record my contact persons at a prospective customer leading in the CRM or in the ERP system?

Dirk Bingler

To what extent would common data models, such as those of Adobe, Microsoft and SAP with their Open Data initiative launched in September 2018, improve the interaction of ERP systems with each other and with third-party systems?

In principle, the idea is very good. However, such an approach requires that the in-house ERP system also supports the common data model and that the information is synchronized centrally, for example in the Azure Cloud. If the data is available centrally for all applications, the necessary business rules remain decentralized in the respective applications.
In my view, the Open Data initiative therefore primarily provides a common evaluation and analysis platform, for example in connection with AI applications. In my opinion, it is currently not relevant for the execution of cross-application transactions.

Dirk Bingler

One problem with integration nowadays is the “interface”. What do you recommend to IT managers to avoid or at least master the notorious interface problem?

Thorough planning is everything. IT managers should create a map of all data objects and data flows across all applications used in the company. For each business object, the leading system should be defined. Based on this, the optimal distribution strategy (central integration platform, Hub and Spoke etc.) and thus also the interfaces can be defined.
Applications such as the Digital Hub Service of the GUS Group can provide support here. The service can be used to easily configure REST interfaces. This enables companies to open only individual parts and functions of an ERP system securely to the outside for communication with customers, suppliers or mobile employees. No master data migrates to the cloud. If no modern technologies are available in the IT systems, “Robotic Process Automation” (RPA) offers an alternative. Here, robots simulate a human user in handling the user interface.

Dirk Bingler

EDI systems have long been a proven interface between ERP systems, especially across company borders. What else is missing from proven standards like EDIFACT? After all, there are already over 200 clearly defined “EDIFACT messages” that ERP systems could use to exchange orders, invoices, shipping notifications, consignment notes or customs declarations in an unmistakable way.

That’s right, EDIFACT is a standard that has been tried and tested for years. Nevertheless, the implementation and use of EDI systems is still relatively complex and expensive nowadays. In addition, standards such as EDIFACT are mainly geared towards business transactions between companies, but they are less suitable for PIM or CRM systems. Despite all standardization: Without individual agreements between business partners, especially regarding data content (e.g. what are mandatory fields and what aren’t), it is usually not possible.

Dirk Bingler

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