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Building Unique Processes
Another company that sought an ERP system that would provide flexibility as the business grew is ChemPoint.com, a Seattle-based electronic distributor of fine and specialty chemicals. The company, a subsidiary of Univar N.V., based in the Netherlands, also wanted to keep IT costs in line.
Even as ChemPoint and its services were being designed and developed during 1999 and 2000, executives weighed different options for enterprise applications, including ERP. They looked at several of the well-established offerings on the market, but didn't select any of them because the systems didn't meet the company's needs for agility.
"The ERP products we saw in 1999 and 2000 had a specification that if you bought into their system, you pretty much had their architecture," recalls Edward Lux,ChemPoint's vice president of technology. "It reminded me of Henry Ford's comment, 'Any customer can have a car painted any color that he wants as long as it's black.' Not to disparage the fine work that ERP vendors have done, but ChemPoint realized early on that it needed the flexibility to build processes unique to the chemical-distribution business."
ChemPoint's executives wanted a system that could be customized to meet the needs of an online business with fast-changing requirements. They found the solution in the pending launch of Microsoft Biz- Talk Server. "Because BizTalk is a message broker, it facilitates the communication of applications like the e-commerce engine to the transaction or finance engines," Lux explains. "This facilitation is the glue that sticks the applications together."
Using BizTalk Server, ChemPoint was able to flexibly configure an ERP system that fulfilled its requirements, connecting the applications via XML. Central to the solution was Microsoft's Great Plains (later called Microsoft Dynamics GP) software platform for transactions and finance.
"The flexibility in the system comes from the ability to connect applications together with user-defined rules, as well as the type of applications that can be connected together," Lux says. For example, at the time ChemPoint was launched, Great Plains had limited ability to manage warehouse information. However, the increased flexibility of the application allowed the company to install Yantra, a warehouse management system, and "glue" it to Great Plains, "so the two acted as one complete package," he says.
Today, the ERP system is the foundation for all ChemPoint's processes. It collects information on customers, including who they are, what they do, which products they produce and which products they use.
One of the biggest issues involved in the decision not to go with a formalized ERP system, says Lux, concerned version control and upgradability. "As it turns out, we actually have better control today over what we will upgrade and when," he says. "For most companies, an upgrade of an ERP system represents everything, but we have the ability to upgrade just our CRM [customer relationship management] system, or just our transaction and financial systems, depending on our timing." The company periodically reviews the status of the ERP industry and compares it with the track ChemPoint is on with its more customized ERP. "The extreme flexibility built into our system," Lux says, differentiates it from "the more mature but rigid ERP systems."