Executives at Whirlpool Corp. know a thing or two about spin cycles. After all, the company has been selling washing machines, along with a whole host of home appliances, for decades.
So when it came time for the white-goods specialist to start conducting E-commerce in an enterprise resource planning (ERP) environment, Whirlpool management wasn’t necessarily buying into vendor hype coming from ERP makers. The fact is, when the Internet frenzy hit in late 1999 and early 2000, many ERP vendors, including heavyweights SAP, PeopleSoft, and Oracle, began repositioning some of their ERP products as E-commerce products. But in reality, a number of the E-commerce applications being touted by ERP makers were merely Web-enabled versions of the vendors’ back-office applications — hardly true E-commerce platforms.
Whirlpool rolled out its ERP system — SAP’s popular R/3 platform — back in 1996 and 1997. But in recent years, the Benton Harbor, Michigan-based manufacture has moved a fair amount of its business — both with customers and partners — onto the Internet. With this increasing reliance on virtual commerce, Whirlpool IT executives are now eager to boost the E-commerce capabilities of the company’s existing ERP system. And they’re looking beyond SAP to get it.
“When we went in 1996 and 1997, ERP was basically the answer to everything, from finance to logistics to manufacturing,” explains Dave Cosgrove, director of E-business at Whirlpool. “Now there are strengths in those systems — and areas where they don’t have strengths.”
Whirlpool, which has manufacturing operations in 13 countries, has implemented its SAP platform globally. Cosgrove says the ERP rollout has solved the big problem of having duplicate back-office systems running at different locations. But he says management believes peripheral systems are needed to augment R/3, particularly in the area of customer relationship management (CRM). “One of the big things we’ve learned,” says Cosgrove, “is that an ERP system in and of itself doesn’t deliver everything you need to run a company that has multitiered distribution and deals with consumers.”
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Generally speaking, the leading ERP vendors have chosen to respond to the rising tide of E-commerce by expanding “significantly beyond their ERP roots,” notes Dave Boulanger, research director in the enterprise management strategies group at AMR Research. Entering uncharted waters presents challenges, he says.
“SAP has gone from being the major player in one arena, ERP, to areas that are relatively new to them and where they have significant competition,” says Boulanger. “As they broaden their suite, they have to have multiple balls up in the air in multiple arenas, and when they’re juggling six or seven competitors, you can’t use the strategy of ‘build internally.’ You need partners.”
You also need to make it easy on existing customers. Toward that, Boulanger says ERP vendors “need to provide an ERP backbone to customers and make the integration easy, so companies can plug in best-of-breed solutions.”
That’s exactly the route Whirlpool is taking. Cosgrove says company management has selected I2 Technology’s software suite to help with demand planning, forecasting, and manufacturing. Whirlpool executives are also considering deploying CRM software from Siebel Systems to help improve interaction with customers and to schedule technicians for service calls. Whirlpool, which reported revenues of $10.3 billion last year, is already using human-resources software from PeopleSoft rather than SAP’s HR module.