W H I T E PA P E R

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Application Life-Cycle Management for ERP: Overcoming

the Barriers to Automation
Sponsored by: Newmerix, www.newmerix.com

Melissa Webster
December 2003

Introduction

Packaged enterprise applications, such as enterprise resource planning (ERP) systems,

are among the largest IT investments that most companies make. Although expensive
and resource-intensive to implement, they are critical to the business when deployed.
Disruption due to application failures, performance problems, or unavailability comes at
a high price for the enterprise.

At the same time, ERP systems are highly change-oriented. Human resources and
financial systems must constantly respond to changes in the business, in the regulatory
environment, and in laws and tax code. ERP support teams must implement a steady
stream of vendor bug fixes and service packs, not to mention major new software
releases, which usher in significant architectural changes. ERP teams are struggling to
keep up with this rapid pace of change, while responding to the demands of the business.

This white paper focuses on the issues surrounding automation of the application life
cycle for ERP systems, such as those from PeopleSoft. IDC conducted in-depth
interviews with 15 large PeopleSoft customers to better understand the challenges they
face managing change in their packaged application environments.

This study was commissioned by Newmerix. IDC's parent company, International Data
Group, is a limited partner in IDG Ventures, which is a minority investor in Newmerix.

Automation Challenges for ERP Life-Cycle

Management

The software “complexity crisis” is readily apparent in the packaged application “The number of failure
environments of large organizations that must support multiple geographies, multiple points with a PeopleSoft
business entities, and diverse user populations. Large ERP implementations involve application — or any
ERP application — is
enormous numbers of interrelated application and data objects. ERP systems are
extremely high.”
highly configured and often significantly customized to meet business requirements;
enterprises add on functionality through homegrown modules and interfaces to other
systems, including legacy applications and other ERPs. As one interviewee put it, “The
number of failure points with a PeopleSoft application — or any ERP application — is
extremely high.”

The PeopleSoft customers we interviewed report that coping with the pace of change in
the face of this complexity is their single biggest challenge. Most find it difficult to keep
up with the steady stream of software updates from the vendor — “patches every 6
weeks, new tax tables every 2 months, a major upgrade every 12–18 months” — let
alone changes driven by internal business requirements, recent changes in legislation,
and initiatives in security and privacy. As one customer described the challenge, “Just “Just keeping all the
keeping all the development, staging, and production environments in sync as we development, staging,
and production
migrate projects is an issue ... invariably we end up with something out of sync.”
environments in synch
as we migrate
To cope in the face of tightened IT budgets, customers try to minimize change —
projects is an issue ...
avoiding customization, selectively applying patches, deferring upgrades — but still wind invariably we end up
up spending considerable resources on change and configuration management and with something out of
testing. Many customers report that all forward development comes to a halt when a new sync.”
configuration has to be tested.

Automation Gap
Given the cost, complexity, and business criticality of these applications, we might
expect to find application life-cycle management (ALM) tools — for software quality,
configuration management, change management, process management, requirements
management, etc. — in widespread use within ERP support groups. In fact, planning,
testing, and change management appear to be manual processes in many ERP support
groups. According to the PeopleSoft customers we interviewed:

! Change management is largely a manual process, sometimes aided by in-house “It takes a
or vendor-supplied tools. Where general-purpose software configuration man- considerable amount
agement products are used, they are often relegated to managing the custom of effort to make sure
that our customized
code for homegrown applications “bolted on” to PeopleSoft. As one interviewee
build can be safely
put it, “It takes a considerable amount of effort to make sure that our customized
upgraded to new
build can be safely upgraded to new versions of PeopleSoft.” versions of
PeopleSoft.”
! There is very little use of automated software quality (ASQ) tools for functional or
“It’s a multimillion-
load testing. Some of the PeopleSoft customers we interviewed have tried, but dollar project, and
abandoned automated testing tools. Several delegate functional testing to their we’re testing
business users. Others make periodic use of stress-testing tools, more as part of manually.”
a capacity planning effort for a major upgrade rather than as an ongoing part of
quality assurance. In the words of one project director, “It’s a multimillion dollar
project, and we’re testing manually.”

Although ERP support groups aren’t using ALM tools, their corporate IT groups are using
them. What are the barriers to adoption of these same tools by ERP support groups?
Most of the customers we spoke with had explored “point products” for testing and
configuration management, but they had difficulty applying them to the ERP
environment.

! Functional testing is often performed by nontechnical business users, and tradi-

tional ASQ tools are considered too difficult for them to use.

! Keeping test scripts current to reflect the latest application changes is a major
effort. In an environment with such a high rate of change, scripts are quickly out-
dated, so the cost exceeds the benefit.

! Implementing general-purpose software configuration management tools for

applications of this complexity is too daunting a task because all of the interrela-
tionships between these objects must be understood.

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In addition to the need for help with configuration management and testing, customers
identified additional areas for improvement in their ALM process:

! Better impact analysis in the planning stage would help teams prioritize projects
for maximum business impact, least risk, etc.

! Version management is a key issue. Many large enterprises manage several

PeopleSoft implementations to handle different geographies, the needs of sub-
sidiaries, or support acquisitions. For each of these implementations, ERP sup-
port teams must manage change across development, test, staging, and produc-
tion environments. The ability to reliably rollback all changes to a prior version is
highly desirable.

! Knowledge transfer between external consultants and in-house staff is inefficient.

It’s also hard to find time to keep documentation up to date.

Customers want practical solutions that are easy to use, easy to learn, and easy to
implement, and they need to see a return on their investment in a relatively short time
frame (6–12 months).

An Integrated, Automated Solution to

Life-Cycle Management for Packaged
Enterprise Applications

Our interviews highlight two key capabilities that ALM vendors seeking to address
packaged ERP systems should make as part of their product set. First, solutions must
be tailored to the specific ERP environment. This means they should access and
analyze metadata information directly through the ERP vendor’s published interfaces so
that configuration information is readily available for impact analysis, change
management, and version control.

Second, vendors should leverage this intelligence about the application to integrate
change and test management capabilities with the planning process (Program
Management Office).

Newmerix’s Approach
Experts from the enterprise application management space founded Newmerix in 2002
to respond to the need for an integrated, end-to-end solution for managing changes to
packaged enterprise applications. Their Automate! solution will provide workflow-based
automation of many of the activities of the ERP management team, including Program
Management, Task Automation, Change and and Release Management, and Workflow
and Methodology (see Figure 1). Their integrated approach to enterprise application life-
cycle management gives stakeholders role-based visibility into every step of the change
management process.

Automate! will be delivered as an integrated suite of modules with a common user

interface built on top of a shared repository and change management engine. The
repository and change management engine interact with the ERP’s database/application
framework and automatically capture intelligence about the application. Automate!
product modules leverage and manage this intelligence to keep track of (and provide

©2003 IDC #03-309C3920 3

version control for) the application — including processes and workflows, requirements,
service requests and projects, application objects and configurations, and test scripts.

FIGURE 1

A u t o m a t e ! A d d r e s s e s t h e Ke y A p p l i c a t i o n L i fe - C y c l e
Management Processes

Source: Newmerix, 2003

Program Management

Automate! Program Manager provides Web-based, role-oriented access for project

team members who collaborate to capture, organize, prioritize, and track requirements,
enhancements, specifications, bugs, upgrades, and service requests across multiple
projects. Automate! Program Manager versions documents of any type and makes
finding information easy.

Automate! Program Manager workflows help ERP support teams plan more effectively
for change, allocate resources, and gain control over complex, multistage changes and
revisions. Automate! Program Manager provides a dashboard view of all projects/status,
and also integrates with Microsoft Project.

Task Automation

Automate! supports the test management process with functional and load tools and
tracks status/completion/results. Nontechnical users can record/playback scripts to
quickly automate functional testing. Technical users can inspect/modify the scripts that
are generated “under the covers” or code new scripts using JavaScript.Net or any .Net
supported language. Users can interact with the test tool through an iconographic view

4 #03-309C3920 ©2003 IDC

of the workflow steps that have been predefined for testing. Automate! can also capture
and manage manual test scripts.

Automate! tracks all changes made to the ERP application database, and it integrates
testing with the other application life-cycle management functions. Thus, it identifies the
test scripts that will be impacted by a given set of changes and can recommend updates
to the scripts, reducing the overall test script maintenance burden.

Change and and Release Management

Automate! will help enterprise application teams create and manage workflows, approvals,
and migration paths and move database and file changes from one environment to
another. Through its change engine, Automate! will provide versioning and rollback
functionality across all application objects, whether file based or database based.

Automate! will help users assess the impact of changes before they are put into
production so they know what parts of the application need to be retested, what scripts
need to be run, and which need to be rerecorded. This gives ERP support groups tighter
control over the quality of a new release.

Workflow and and Methodology

Enterprise application management teams are a mix of technical and functional experts
with diverse roles. Some of these experts may be external resources and/or
geographically distributed. Automate! will let ERP teams flexibly configure their
workflows, processes, roles, and policies to support the way they do business.
Newmerix’s integrated solution will give these participants a shared view of the system,
and it will enable a systematic and repeatable workflow across all processes while
allowing organizations to establish and enforce policies.

Initially available for PeopleSoft, Newmerix plans support for additional leading
packaged enterprise applications in the future. The Automate! product line will include
(see Figure 2):

Automate!Program Manager

Automate!Test

Automate!Change

Automate!Program Manager was released in November 2003. Automate!Test

is due out in beta by year end. Automate! Load Manager and Automate!Change
Manager are expected to ship in 1Q04 and 2Q04.

For up-to-date information, go to www.newmerix.com

©2003 IDC #03-309C3920 5

FIGURE 2

A u t o m a te ! N e wm e r i x

Source: Newmerix, 2003

Vendor Challenges and Conclusion

There is ample opportunity for improvement in managing change in packaged enterprise

application environments. ALM vendors should tailor their solutions to specific ERP
systems and leverage the intelligence about the application that is captured in its
underlying databases.

The optimal solution will leverage this intelligence across all of the activities associated
with managing change to the packaged application to reduce the configuration
management and testing workload, improve planning and efficiency, and reduce risk in
this high-change environment. As solutions come to market that address the specific
challenges of packaged enterprise application life-cycle management, adoption of
automation should accelerate.

The PeopleSoft customers we interviewed see the need for a solution such as
Newmerix’s, but Newmerix will need to overcome several challenges to capture
customers and gain traction against incumbent ALM vendors moving into this space:

! ERP support groups will look to reference accounts and vendor track record for
comfort level in a purchase decision. ERP support groups may hesitate to push a
solution that appears to overlap or conflict with corporate IT standards. How will
Newmerix gain mindshare and make customers comfortable buying a “Release
1.0” product?

! The PeopleSoft customers we interviewed expressed a desire for cross-application

support — to include the non-PeopleSoft packaged applications they run and,
ideally, the custom applications they have developed in-house. Newmerix plans to
address this in subsequent versions of Automate!

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IDC believes that Newmerix should partner aggressively with systems integrators, adopt
a channels sales model to build traction with PeopleSoft customers, and demonstrate
value as it completes its offering and builds out support for additional ERP systems. This
will help Newmerix establish credibility with large customers and extend the reach of its
solutions.

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©2003 IDC #03-309C3920 7

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