ERP On The Web

The arrival of
ERP two decades ago was the start of the enterprise computing wave. With
global majors SAP, QAD, Baan and Oracle now furiously reworking their
glagship products to browser-based and web-enabled applications, the
second wave has burst out. As spin-offs from the second wave of web-based
enterprise computing, we are witnessing the emergence of ASP business
models and information appliances. Not all players will move fast enough.
Only the best will survive.

In January last year, without excessive media fanfare, Lotus released version 5 of its Notes and Domino flagship. A product launch, which set the note for a number of other vendor releases leading to a completely radical approach to the enterprise computing application space. Lotus released version 5, with browser based web collaboration across the enterprise, as its singular differentiator. Later in June, Microsoft released Office 2000, which enabled the office desktop to be extended across the web using its browser. It was almost as if the browser was being set up to become everything. And then in November, we had A product, which has set the pace and benchmark for ERP and other enterprise application vendors.

In one stroke, the Walldorf giant rewrote the complete enterprise business application space and repositioned itself as a leading e-commerce and internet solutions company. By migrating its ERP flagship, R/3 to the realm of the Microsoft browser front end, SAP has been able to irrevocably change what ERP stands for the global enterprise today. SAP has also been able to provide its global customer base with the means to become powerful e-commerce entities through its Marketplace module. And to bring the real power of ERP to the desktop, through its WorkPlace module of With this product SAP also distances itself from its closest ERP competitors like QAD and Baan, which are still rewriting their flagship products and takes on Oracle head-on in the e-commerce suite business.

The enablers
What has enabled enterprise application vendors to move towards web enabling their applications? There have been two primary technological enablers, which have taken years to mature and bear visible fruit in this millenium. In the mid-nineties, the world was told about the network computer.

Looking back at this brainchild of Larry Ellison, CEO of Oracle, built around the Java virtual machine, one can see early evidence of a bulky browser embedded in a not so bulky PC. The network computer was too early and its demands on the computer network too high to succeed at that time. But enterprise application vendors realized that rewriting their flagship products in Java would need to be done sooner than later. 

The concept of the network computer now more generically referred to as a thin client, has continued to exist in a more effective manner, through the Citrix application shell. Citrix products like Metaframe, Winframe and the ICA client, enable an enterprise application to run completely off the server, downloading mouse clicks, screen scrolls and keyboard strokes to an intelligent PC like a 286, 386 or 486. Vendor applications may or may not have been written for a PC Windows environment, but Citrix products enables them to be deployed from an enterprise server onto assorted clients, with only a very lean ICA (Independent Computing Architecture) shell being downloaded across the network. 

When Ellison eulogized the network computer many years back as the device of tomorrow, more than one vendor took this technological approach more than seriously. At almost the same time as Ellison’s network computer, SAP migrated its flagship product R/3 from host based or mainframe computing to client server computing and adopted a three-tier client server application model. This implied that the application would function almost as a server based product, with its main footprints distributed across the database and application server and only a small footprint downloaded to the client. This meant that the device necessary for a R/3 front end did not need to be the most sophisticated PC in the enterprise and could be a device lower down the PC life cycle. As Henning Kagermann, CEO SAP AG describes it, “The good news was because we prepared ourselves over the last three years, most of the ingredients were already there.”

But in both these cases, whether it was the Citrix shell or the SAP thin client, the application was still vendor specific and therefore access was limited to the enterprise network. But the fire had been lit and the ingredients mixed except for the most important one.

The arrival of the browser
The browser as the access device for the enterprise became real with the ‘Superhuman’ from Lotus when they released version 5 in January 1999. That made many vendors sit up. The Office suite from Microsoft was fully browser enabled with the release of Office 2000 in June 1999 and was not far behind. Another vendor, which has also rewritten its applications for the web is Oracle and as Derek Williams, Senior Vice President, Oracle Asia Pacific, describes it, “We are no more an RDBMS company. We are an e-commerce company with over ninety applications on the web.”

For SAP, moving its flagship 
R/3 to the web was relatively less of a technological challenge. R/3 already had a thin client access protocol, which essentially had to be rewritten around XML to allow the Microsoft browser to be used as its front end. As Peter Zencke, Executive Board Member, SAP AG, describes it, “We have always been supporting a lean protocol between the front-end and the application server and without that we would never have been able to go that fast into the internet.” SAP was able to bring out in less than twelve months from the day they decided to go ahead, because they had already adopted a three tier client architecture–perfect for the browser front end. As Kagermann describes it, “We have a thin client–otherwise it takes years to rewrite the code.” And the importance of Ellison’s network computer approach and adopting a three-tier client server model, so many years back, is also expressed by Zencke, “Without that we would never have been able to go that fast into the internet, which is actually a four tier client server model.”

Reengineering and redeploying
From what both Kagermann and Zencke have to say about the R/3 product application structure, the process of web enabling R/3 was not as much a challenge as conceptualizing the complete span of This product was visualized as the business workplace for a web enterprise, the e-commerce portal for an enterprise and the virtual extended supply chain. All this as part of the Marketplace module of Browser access would allow the actual end user to plug and play at the front-end with various components of, thereby leading to a fully customizable user interface. And this would be part of the Workplace module of

While SAP was able to leverage its three-tier client server structure to move rapidly into the internet, other vendors have not been so technologically blessed. While the web enabled version of QADs Mfg/Pro, called Net UI or version 9.0 has been rewritten in Java, the actual product is yet to be made available to end users. According to Alon Li, Managing Director, QAD Asia, “The graphical user interface used to account for a lot of the traffic on the communications network. We have basically rewritten the user interface in Java”. Rewritten, but yet to be deployed and the situation may be the same for other vendors. In comparison to, most vendors have yet to downsize the footprint of their client front-end, a veritable requisite for the entry of a thin client. As Kagermann puts it, “Oracle has a fat client, PeopleSoft has a fat client and a two-tier client architecture. Have you seen a better user interface? I saw Oracle’s–compare it with ours.”

The Indian context
Amongst the ERP installed base in the country, which primarily includes SAP, Baan, Oracle, QAD and Ramco end users, there appears to be a high degree of awareness that ERP applications can be deployed and accessed across the web. However the readiness to test and deploy web based ERP is 
much lower. The Ramco ERP sites, Carborundum Universal, Numaligar Refineries and Madura Coats, have plans to implement web based ERP from the second half of this year; QAD site, Tata Johnson also plans to deploy within the next six months; and SAP site Arvind Mills claims to have already tested the product. But most other ERP users have no immediate plans to explore this new technological crossroad.

Similar to awareness, most ERP users were quite unanimous about the possible benefits and drawbacks of web based ERP. Pradeep Kapoor, General Manager, IT at Godrej and Boyce sums up the situation quite well. The advantages of web based ERP according to him include, “Low investments, lower cost of maintenance, easy accessibility across the globe”. The disadvantages according to Kapoor include, “Low feature flexibility, lack of control on bug fixing and data security.” Adds Krishnaswamy Arvind of Numaligar Refineries, “The dramatic improvement in the learning curve is another advantage.” However, the lukewarm
reception to web based ERP is based on the weak datacom infrastructure across the country and the absence of payment gateways to facilitate e-commerce transactions. 

Down the ‘thin’ road
An integral part of web based ERP is the ability to use a browser through almost any access device. While the term ‘thin client’ was found to be well received in the ERP installed base, the exact connotation of what is a thin client appears to be different for different users. As Vijay Chhabra, Head ERP at Arvind Mills states, “The price advantage of a thin client is not significant at this moment.” JA Jeyaseelan, GM, Information Management at Madura Coats describes the dual role of a thin client as, “The ERP client acts as an office automation PC. If we have a thin client it will not serve both the purposes. If we have a separate desktop for office automation and a separate one for the ERP client, then the total cost of ownership would go too high.”

Another crossroad facing the users of thin client devices is whether to go the browser or the Citrix way. In the first case, the end user accesses the application from the LAN server or a web server using a browser. If the application has been set up on the web server then the application can also be accessed across the web from a remote location.

In the Citrix way, the application is set up on a LAN server or a web server using Citrix Metaframe or Winframe. These products essentially manage the applications completely from the server and download the ICA client to any accessing user interface and device including a browser. So where is the difference?

According to Michael McGrath, Director of Marketing, Citrix Systems, the Citrix ICA shell has a number of advantages over a browser-HTML download shell or a Java applet shell. “The HTML run application is bursty and not very feature rich. The Java applets can be demanding on bandwidth and
programmers need to restrict their size, limiting their features. The ICA shell is accurate in terms of bandwidth and scales well across a WAN.” The choice for an end user of a thin client therefore depends on the available bandwidth. As Zencke of SAP sums up, “The customer has a choice. He can use Citrix or he can use a browser. Citrix is the preferable solution if the bandwidth is limited.”

The future
Web based ERP brings with it tremendous business possibilities for both the industry and the enterprise. For the ERP vendor industry, the thin client approach unleashes ‘applications on tap’–a business model, which is rewriting the business plans of almost all software majors, the world over. For the enterprise, it scales down the costs, the time and the learning curve for deployment of ERP and simultaneously scales up its reach. With the improving communication infrastructure across the country, it is only a matter of time before India Inc realizes this.

Arun Shankar 
in Singapore, Goa and New Delhi. 
Additional reporting from 
Manisha Singh in New Delhi and 
Akila Subramaniam in Chennai. 

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