Page 649 - Introduction to Business

CHAPTER 18 The Digital Enterprise 623

ners. Alliance partners like Accenture and Deloitte & Touche provide professional
services. Platform partners like IBM and Hewlett-Packard provide hardware. Tech-
nology partners like Microsoft and Oracle provide operating systems and database
systems. And complementary partners like FedEx and UPS provide tools that run
with R/3. The approach used by SAP, and soon copied by other ERP software ven-
dors, was to share a major portion of the implementation revenues with its part-
ners. In Europe, its plan was to share 80 percent of the revenues with implementa-
tion partners, while in the United States, its plan was to share 90 percent, in order
to generate market share.
Because the modules of some ERP software vendors are better than the mod-
ules of other ERP software vendors, some companies have decided to buy different
modules from different ERP software vendors. For example, a company may decide
to buy the accounting module from SAP, the operations module from Baan, the
human resources module from PeopleSoft, and the finance module from Oracle. In
ERP systems jargon, such a company is said to follow a best-of-breed approach. best-of-breed approach An approach
When a company adopts all the required modules from a single ERP software ven- for implementing an ERP system where
the modules of the system are from
dor, such a company is said, again in ERP systems jargon, to follow a monolithic
different ERP software vendors
approach. The advantage of a best-in-breed approach is that the company is get-
monolithic approach An approach for
ting the best modules in the market; the disadvantage is that developing interfaces implementing an ERP system where all
among the modules from different ERP software vendors can turn into a nightmare. the modules of the system are from a
The advantage of the monolithic approach is that the ERP software vendor single ERP software vendor
designed all the modules to seamlessly interface with each other, and if there are
problems with the ERP software, then there is only one vendor to deal with. The dis-
advantage is that not all modules from one vendor are necessarily the best in the
market. An example of a company that adopted the best-in-breed approach is Dell;
an example of a company that adopted the monolithic approach is CITGO Petro-
leum Corporation. 7

reality If your school has ERP software, do you know which vendor
CH ECK supplied it?

SAP is the largest vendor of ERP
systems in the world.
Copyright SAP AG. All rights reserved.
Used with permission.

Copyright 2010 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.