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Software As a Service For ERP

On-line, on-demand ERP eliminates the huge challenge of building IT infrastructure.

It's not like Inteva Products, LLC (Troy, MI; www.intevaproducts.com), started with nothing when it spun off from Delphi Interiors and Closures last March.

It's not like Inteva Products, LLC (Troy, MI; www.intevaproducts.com), started with nothing when it spun off from Delphi Interiors and Closures last March. The Tier 1 supplier of instrument panels and consoles, cockpits, door module and window-lift systems, and other interior systems has customers worldwide, more than 3,800 engineers, and technical centers and manufacturing sites across 17 facilities on three continents.

But it does not have an enterprise resource planning (ERP) system. Well, almost. Inteva could stay on Delphi's SAP ERP system through late spring 2009. For the long term, explains Dennis Hodges, Inteva's chief information officer, Inteva wanted an ERP system that better fit the new company's business model and size.

Inteva decided on Plexus Online from Plexus Systems, Inc. (Auburn Hills, MI; www.plex.com). This is an on-demand software system, technically known as "software as a service" (SaaS). The over 350 software modules in the Plexus system are accessible via the Internet from anywhere in the world. The software modules include ERP (e.g., accounting and finance); customer relationship management (e.g., order entry and tracking); manufacturing execution systems (e.g., production scheduling and machine integration); and supply chain management (e.g., supplier quality and traceability).

Choosing Plexus was not a simple decision, admits Hodges. "Any time you go from a large system to a smaller one, you have some reticence from management. And any time you go from an internally hosted system to SaaS, you've got the typical IT concerns." These concerns include data privacy, software upgrades, and backup management. So what convinced management to choose SaaS? "Cost," replies Hodges. He also points out, "The strength of SaaS is that I don't have to put together a large staff just to keep some large, internally hosted system running. Instead, I can put in more of a ‘virtual IT organization' so that the IT team can stay small and focused on supporting the business. In a way, the Plexus system is kind of the best of both worlds: It's a homegrown system you don't support."

Details about pricing are confidential, but generally user companies can choose between two programs: monthly subscription or the conventional perpetual license. In either case, explains Hodges, head count is not a factor. Conventional software contracts typically involve "named users." This often limits the number of people using the software system because a user company might try to keep costs down by restricting the number of people with access to the software system. With Plexus, says Hodges, "we can add any customer, supplier, and anybody in the company at no additional charge."

Even Inteva's suppliers benefit. Suppliers can use Plexus Online to see orders, enter ship dates, and perform other SCM tasks. This is particularly good for small providers because, points out Hodges, they typically don't have electronic data interchange capabilities anyway.

To date, Inteva has gone live with 50 or so users on some of the Plexus ERP modules. A few Inteva sites in Europe have gone live in 30 to 45 days, "which you certainly would not see with large ERP systems," adds Hodges. He expects the full implementation of Inteva's operations on Plexus Online will be completed by June 2009.