Thursday, August 20, 2009

Core Systems - EDI or SAP?

The title of this article might seem strange as things I write often are, but the question this time is valid. Many traditional third party EDI vendors are now competing with the large ERP vendors like SAP, Oracle, Lawson, SAGE, MS Dynamics and others. These EDI vendors are extending their offerings to include Supply Chain management, Transportation management, Supplier Portals, Customer Portals, Catalog management, e-Invoicing etc.

The question for the CIO is - What is the company's IT strategy? Is it to use their traditional EDI solution as the center of their IT universe and to extend applications off of it, or is SAP ERP the core? If the answer is SAP is the center of the universe, then extending SAP ERP with additional new SAP components makes sense.

Today it is common for SAP users to seek ways of reducing or eliminating non-core software applications and to standardize on their ERP when possible. This simplifies the IT infrastructure and reduces maintenance and support costs as well as hopefully providing better business solutions. Traditional EDI vendors are being impacted by this trend. They are not part of the SAP ecosystem. They are third party plug-ins that provided a valuable function for a limited time. Once SAP announced their own SAP-centric approach to EDI called Business Network Transformation through their co-owned EDI exchange called Crossgate the value of third party EDI solutions to SAP users significantly diminished.

SAP now has their own EDI/B2B strategy and solution that provides powerful advantages for SAP users. Third party EDI vendors are not capable of providing SAP-centric solutions as they must be generic in order to provide any-to-any data movements for all brands of ERP. Crossgate utilizes SAP NetWeaver PI and many other SAP technologies to provide a deep SAP integration at the business process and data levels. The costs are significantly lower than traditional EDI solutions as Crossgate utilitizes NetWeaver PI and other technologies in a cloud computing environment.

If you would like more details on this subject please email me.


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