ERP Ties All Systems Together

By Outsourcing Center, Beth Ellyn Rosenthal, Senior Writer

ERP Ties All Systems Together

Tired of the gray drabness of London, Simon Bahad, an IT consultant, headed for Miami, Florida, to join his business partner. The two Brits were lured by the siren call of the constant sunshine. Bahad and his partner started Dataforce Corporation in 1993 as a marketing vehicle for their Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) consultancy.

The sun kept shining on the two consultants. Two years later they had a team of consultants working for them. In 1999 Inc. magazine labeled the company the 49th fastest growing corporation in America, thanks to its growth rate of 3,263 percent from 1994 to 1998. The South Florida Business Journal recently listed it as the 17th largest technology company in south Florida.

The company has assembled a suite of application programs that encompass every aspect of a corporation’s operation. Like most ERP suppliers, Dataforce offers its clients the ability to outsource all core functions with one software package.

It is known for its fast track guarantee. Dataforce promises it will implement its solution in 90 days or less. “That’s pretty aggressive,” Bahad says. It can deploy technology quickly because many of the functions, like financial and accounting, are fairly vanilla and need no customization.

Dataforce specialized in ERP solutions exclusively until 1999 when it began to focus on e-business as well. Bahad says the company added this new dimension at the behest of its clients. Since ERP solutions today are all Web-enabled, it made sense for customers to add e-business processes to the overall program. Dataforce helps its clients strategize so they can craft the best solution together.

Linking E-Commerce With The Applications

Tying the front end — e-commerce — with the back end — the applications — can be tricky. But the software solution has to be what’s in the middle. Dataforce is building a specialty in Enterprise Application Integration (EAI), which creates a technical bridge between the front and back ends. “Integrating the two sides is the only way to gain efficiencies,” says the supplier.

DataForce also helps its clients with the tricky issue of application licensing. How the client uses the software can determine the cost of the license. DataForce, knowing its client’s processes intimately, can structure the licensing fee so it is as economical as possible. “We determine the most cost effective way for our clients to legally use the applications,” Bahad explains.

DataForce then passes 100 percent of the savings on to the client. It’s the company’s way of thanking its clients for doing business with DataForce. “To us it’s their reward for an on-going perpetual relationship,” says the CEO.

Bahad says the arrival of Web-based ERP solutions is introducing many middle tier companies to the advantages of ERP. Before the Internet, ERP software used client-server technology, which requires an extensive capital investment. “The costs were prohibitive for a small organization,” says Bahad. But the Web makes ERP affordable “for almost everyone” because they don’t need WANs, LANs or expensive computers.

Seeking A Competitive Solution

Even large companies with a capital budget like the new Web-based applications. Some of Dataforce’s biggest clients had difficulty getting their servers to work properly in offices located great distances from company headquarters. The Web has eliminated this problem.

Employing an ERP solution allows a company to operate more efficiently. Typically, an employee only has to enter data once. Thereafter, the system adds it wherever it belongs. If the system doesn’t share data, many of the business processes have to be done more than once. The problem becomes magnified if the company uses two disparate computer systems that can’t communicate with each other. Doing the same job twice increases overhead, decreases profitability and cuts into competitiveness.

“At the end of the day, you have to have a competitive edge,” says Bahad. “One of those edges is technology,” he explains.

A good example is Carnival Cruise Lines, a Dataforce client. Carnival hired Dataforce to help it migrate its Oracle applications from release 9 to release 10. Dataforce performed an in-depth analysis of Carnival’s existing systems, then determined it needed to reengineer Carnival’s Pay-On-Receipt program to expedite its invoicing system.

For example, Carnival purchases produce for its cruise ships. Before Carnival completed the reengineering, an employee in procurement would issue a purchase order for the produce. Someone in shipping had to check the order. Once the produce was distributed to the ships, another Carnival employee in the accounting department approved payment. Thirty days later the cruise line cut a check.

Saving Money For Carnival Cruise Lines

The Pay-On-Receipt program automated this system. Once the good are received, the computer system automatically authorizes the invoice because it met the criteria agreed upon between the two principals. Then the system pays the invoice. The reengineering reduced the number of invoices the system handled. It also eliminated discrepancies due to price or quantity received.

Carnival doesn’t need any staff members to do anything to complete the process. In fact, Carnival was able to reassign 40 percent of its payables staff to other tasks. Ali Duprix, manager of accounts payable for Carnival, says the cruise line added seven new ships to its fleet and did not have to add another staffer to the accounting department. If Dataforce had not implemented the Pay-on-Receipt program, Duprix estimates Carnival would have had to add another five people to handle the volume of the new liners.

The reeingeering made Carnival a good business partner. Its vendors now receive payment earlier because they don’t have to wait for a 30 day billing cycle.

Originally, Dataforce concentrated only on south Florida companies when it was seeking clients. Today, 80 percent of clients are out-of-state companies; its client roster totals 75. The Floridians also work abroad with the European subsidiaries of their American clients.

Lessons from the Outsourcing Primer:

  • Building an e-commerce platform is necessary in today’s environment. But this program must interface with the back end software to be efficient.
  • Integrating software into an ERP solution removes redundancies and makes a company more competitive.
  • Reengineering can shave personnel costs and make your vendors happier.

About the Author: Ben Trowbridge is an accomplished Outsourcing Consultant with extensive experience in outsourcing and managed services. As a former EY Partner and CEO of Alsbridge, he built successful practices in Transformational Outsourcing, Managed services provider, strategic sourcing, BPO, Cybersecurity Managed Services, and IT Outsourcing. Throughout his career, Ben has advised a broad range of clients on outsourcing and global business services strategy and transactions. As the current CEO of the Outsourcing Center, he provides invaluable insights and guidance to buyers and managed services executives. Contact him at [email protected].

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