Since the early 1990s, ERP vendors have insisted that companies will cut costs and improve productivity by investing in tightly integrated end-to-end ERP. These systems promise to automate business processes into an all-embracing architecture that dictates integration by means of an all-encompassing data warehouse. Accordingly, the goals of ERP could be achieved best by using software from one supplier.

The alternative -- integrating a multiplicity of applications offered by admittedly superior yet specialized suppliers -- was scoffed at as requiring middleware tools and time-consuming integration efforts. Extensive testing would be required as changes occurred. Undesirable translation logic would delay transactions, and performance would suffer.

Preintegrated software packages were the choice of many organizations seeking simplification in information processing and escape from the chaos of software proliferation.

Billions of dollars have been invested in launching organizations on a march toward synchronization through centralization. In just about every case I have examined, the driver has always been the finance establishment. They welcomed the opportunity to consolidate financial systems. The real agenda was to reassert control over the mess left by the rapid succession of failed CIOs.

The reality of ERP turned out to be different than claimed. Just about every ERP system would be, in due course, either aborted or truncated when bumped up against the realities of enterprisewide systems integration. Contrary to claims that ERP provides easy-to-use, off-the-shelf solutions, the truth is that forced conversions from "legacy" systems are horrendously expensive and traumatic for the people who work with them. Many of these legacy applications could have been modernized at a fraction of the conversion cost by updating their data formats and standardizing on communications.

And few ERP systems have ever been completed as originally proposed. Smart operators never let go of systems that gave them answers they needed. Slipping schedules, budget overruns and user revolts forced firms to purchase supplementary solutions from a variety of small suppliers. Increasingly, users had to divert efforts from their vendor-provided standard applications to fixes and overlays that thwarted hoped-for systems integration.

Why do I now pronounce the ERP era as coming to an end? The answer is Web-based services that can deliver integration of dissimilar systems. Web services make it possible for corporations to plug into best-of-breed suppliers for rapid acquisition of innovative applications. Web services enable pilot tests that can verify performance before the company commits to implementation. They offer a superior architecture for enterprisewide integration of diverse, distributed and refurbished "legacy" applications that can remain in place until gracefully upgraded or retired. Web services promise a way to reduce huge development budgets. Web services avoid the shock of forced insertions commonly associated with all ERP ventures because they can be trickled into the workplace as the workforce is ready to absorb changes. Web services smooth the migration from hard-to-manage (and insecure) client/server environments to outsourced network service providers that offer the protection of experienced security staffs.

Web services accept diversity in applications instead of a single application architecture dominated by one supplier. They allow integration through network message sharing (in vendor-independent universal standard formats such as XML) instead of forcing every data element into a monolithic data repository.

Rapid replacement of failed applications is a benefit of Web services as is tactical outsourcing as an alternative to emigrating most of a company's IT to a contractor from where it can hardly ever be repatriated and never reconstituted. Web services make it possible to unburden the CIO of an organization from housekeeping and allow him to make IT a source of competitive advantage. Through loose coupling of services, the Web environment is more suited to the prevailing conditions where mergers, acquisitions and supplier and customer collaboration call for interapplication interoperability in a matter of days instead of years, as currently dictated by ERP initiatives.

Why then is the adoption of Web services so slow? Organizations can shift to Web service-based integration only after they restructure the way IT is managed and shift attention from computing to communications. They must also accept a move away from ownership of the means of computing and be willing to purchase most of their transactions as a service. I will write more about such transformations next month.

Paul A. Strassmann has served as a CIO since 1961 and has experience implementing two ERP projects. Contact him at paul@strassmann.com.