Future of ERP systems and Microsoft Dynamics
Learn about XML and Web services
Updated: September 6, 2006
If you want to make your next enterprise resource planning (ERP) investment a long-lasting one, you better know something about the future. Stewart McKie, a 20-year veteran of IT consulting, gives his opinion on two major emerging technologies and advises on how to implement them.
You can't keep information secret. It wants to get out. It dies if it doesn't circulate. For proof, look at the evolution of business applications. From departmental systems to enterprise systems to business partner integration, the trend is to spread information further and further.
It's hardly surprising. The better informed you are, the better positioned you are to act. So it's important to know which new technologies are currently helping to spread the word. According to McKie, there are two emerging technologies that you can't ignore. The first is Web services and the second is XML (extensible markup language).
"Until XML came along," McKie says, "there was no technology that could unleash the full potential of business collaboration. Now everyone has pretty much decided that XML will be the standard for exchanging documents between systems." With the emergence of the Internet and XML, EDI (electronic data interchange linking systems with different data formats) has become cost-effective and accessible to all.
Everyone is welcome
Previously, EDI was an exclusive club, open only to corporations with the cash to build a private network and the clout to force suppliers and customers to use it. But, the Internet has done away with the need to build private networks and XML has provided a standard way of talking about data, something traditional EDI lacked.
McKie explains what sort of requirements this puts on business applications. "ERP systems need to be able to create XML schemas [data specifications], and they need to be able to import and export data in XML documents."
"The more data you need to share with business partners," he adds, "the more important it is to have these capabilities."
At your service
In addition to XML, McKie identifies Web services—smaller software applications that are accessed from within business applications—as the other key technology for the future. In the ERP world, there are lots of data-centric Web services, which typically provide information that changes fairly frequently, such as exchange rates and tax codes.
"Instead of manually updating that data every time you need it, it makes sense to connect to a service from within your business application and get the data refreshed automatically," McKie says. "The services sound fairly trivial but each one saves considerable time and expense."
A second type of Web service that offers functionality rather than data is expected to emerge. And according to McKie, this type of Web service has great potential in business partner integration, analytics, and alerts.
Software for hire
"Much of the software that will allow business partners to collaborate together will probably exist on the Internet as a Web service. For example, you could send an invoice to a Web service, which passes it to your customer, the customer pays the invoice, and the Web service manages the whole process."
"Then, there's analytics. A significant amount of data needs to get passed around to companies so they can produce things like consolidated reports. It would be very useful to have a service that accepts reports from various subsidiaries, then performs a consolidation and pushes back the results of that consolidation to the parent company."
"Thirdly, there's sending alerts to mobile phones and other handheld devices. When your inventory hits a reorder level or goes out of stock, most ERP systems will produce a report of those items or generate a small alert that can be e-mailed to somebody. It would be much more useful to communicate that event immediately to the inventory manager and present options for resolving the event."
Before you buy, you need a strategy
How can your company take advantage of XML and Web Services? McKie's advice is to decide on a strategy, then choose a system that integrates all the technology the strategy requires.
"If you want an e-commerce storefront, a portal for your employees, and a closer working relationship with your partners, then you have to consider how slickly the ERP system can collaborate with these Web resources. It should be as easy as possible to push data in and out of your ERP system, to and from your storefront, portal, and Web services."
