However, Web services is promising to make the process of connecting best-of-breed applications simpler and less costly than it has been in the past, when complicated interfaces were required to integrate solutions from different vendors. In fact, some say Web services may lead to the Holy Grail, allowing companies to link best-of-breed apps for a seamless and much more flexible enterprisewide system. Even enterprise application suite vendors such as Oracle, SAP and Siebel are making their modules compatible with a Web services infrastructure.

"There’s a strong backlash emerging against these large enterprise application suites, particularly in these tough economic times," says John Hagel, a Burlingame, Calif.-based management consultant and author of the recently published book Out of the Box: Strategies for Achieving Profits Today and Growth Tomorrow Through Web Services. "Today, CIOs are looking for low costs, short lead times and near-term business impact, which is the polar opposite of the enterprise application suite proposition."

The Case Against Enterprise Suites

Neil A. Hastie, CIO of TruServ, the Chicago-based parent company of the True Value hardware chain, was never a big believer in enterprise application packages. "I was the anti-one-size-fits-all ERP guy before it was in vogue," boasts Hastie. "I still don’t know of any ERP system that’s totally integrated. There’s no one suite that will solve everything for everyone."

Hastie got religion after spending $10 million on a 1998 Oracle ERP implementation at Fel-Pro, the gasket manufacturing company acquired by Southfield, Mich.-based Federal Mogul. Hastie found that Oracle’s order management system couldn’t efficiently handle the heavy transaction volume at Fel-Pro. "It wasn’t vast or flexible enough," says Hastie. Then he found that Oracle’s warehouse management system wasn’t specialized enough to handle Fel-Pro’s distribution function; it didn’t integrate well with Fel-Pro’s materials handling equipment or scanners. Hastie used several different distribution packages, one of which he built in-house and another that was a bolt-on to Oracle.

"What Oracle was really good at was the manufacturing shop floor and financials," Hastie says. "They were just OK at order management. So we had to find another application to bolt on." (Oracle says that since that time it has introduced a completely new order fulfillment solution, 11i, that includes configuration, advanced pricing, order management, transportation and warehouse management capabilities.)

When Hastie took over as CIO at TruServ in 1999, he applied the lessons he learned at Fel-Pro. No ERP system exists at the $2.4 billion member-owned hardware cooperative. The enterprise is running on a suite of applications. They include The D&B Corp. for accounting; a "simple down-and-dirty" general ledger to record financials; a distribution system from EXE Technologies; a homegrown order management system; and what he calls a "data warehouse on steroids" from Business Objects that offers CRM-like analytics, which he assembled himself. This mix-and-match approach may be a little more work in terms of maintenance and integration (TruServ uses Microsoft BizTalk Server and the Oracle Integration toolset to connect everything), but Hastie prefers it to the alternative. "You either have to write some of your own applications in-house or get a package and modify it," Hastie explains. "And like all modifications of enterprise application software, that prevents you from being able to upgrade easily."