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STAMFORD, CO., January 8, 2001 - BUSINESS WIRE - Some utility companies are shutting down to do maintenance work when customers need them the most, but new research from Gartner Group, Inc. (NYSE: IT and ITB) said these problems can be avoided.

Gartner analysts said the lack of collaborative enterprise resource planning (ERP) systems translates into energy shortages and skyrocketing fees borne by the consumer.

"The collaborative systems we see emerging will help the utilities and, thus, their customers avoid these maintenance-driven shutdowns at crucial times," said Kristian Steenstrup, research director for Gartner. "These ERP II systems can collaborate with each other so that utility plants can alternate energy coverage in areas where maintenance work is done."

Extrapolation of the incremental costs of the energy crisis suggests that consumers will have to pay for increased costs of more than $1 billion above what the colder weather alone would indicate is appropriate. During the first two weeks of December, significant electricity shortages occurred in California as a result of multiple plants voluntarily shutting down for scheduled maintenance, emissions concerns and breakdowns without alerting other utility plants. Gartner is advising the energy industry to take immediate steps to update their ERP applications in order to work in a collaborative environment.

Gartner estimates that by 2005, the next generation of ERP, which Gartner calls ERP II, will take the place of current ERP systems as the primary enabler of internal and interenterprise process efficiency, making current ERP systems obsolete. Investing and improving ERP strategies to include outward-facing elements such as collaborative-commerce (c-commerce) will become crucial to an enterprise's success in all industries.

"The operational challenges of business today are no longer centered upon maximizing internal processes," said Daniel Miklovic, vice president and research director at Gartner. "The challenge today is to know -- at any point in time -- exactly what is happening across the entire supply chain. Businesses and the technologies that drive their operations must be compatible and collaborative. The assembly line is no longer linear, it has many dimensions as collaborative-commerce emerges. This is an intricate dance as suppliers, manufacturers and distribution centers come alive with the new ERP II technologies."

to address the rise of ERP II and maximize the efficiency of current ERP systems, Gartner recommends businesses take immediate steps to implement a continuous improvement program. Gartner suggests the following steps:

1. Identify key areas of pain -- Identify areas that require immediate attention, such as where the system fails to meet the needs of the business or which customer-facing areas of the business are struggling with ERP and generating the most help desk calls. These types of indicators will expose the areas that must be addressed immediately.
   
2. Identify alternatives to address the pain -- When exploring potential solutions, Gartner recommends that the following alternatives be considered in this order:
   - Retraining requirements
   - Process improvement/change
   - More-standard functionality
   - Version upgrades
   - Bolt-on applications
   - Customizations
   
3. Prioritize based on cost and benefits -- Optimize high-impact areas that affect volumes of transactions or users, which allow for a fast multiplication of benefits. Optimization planning is crucial as return on investment becomes a larger concern.
   
4. Keep the time frame short and focus on results -- to maintain user and management commitment, it is necessary to take small but successful steps that truly resolve user concerns.
   
5. Involve the affected users -- Day-to-day users have the most insight into their issues. Work with experienced IS to develop systems that reduce identified areas of pain.

About Gartner
Gartner provides unrivaled thought leadership for more than 10,000 organizations, helping clients achieve their business objectives through the intelligent and efficient use of technology. Additionally, Gartner helps technology companies identify and maximize technology market opportunities. Gartner's technology content and strong brand reach IT professionals globally through Gartner Research, its research and advisory unit, Gartner Services, its custom consulting unit; Gartner Events, including Gartner's renowned Symposia; and, at www.gartner.com. Gartner subsidiary TechRepublic, Inc. (www.techrepublic.com) is the leading online destination developed exclusively for IT professionals by IT professionals. Gartner, founded in 1979 and headquartered in Stamford, Connecticut, achieved fiscal 2000 revenue of $859 million. Gartner's 4,300 associates, including 1,400 research analysts and consultants, are in more than 80 locations worldwide. For more information about Gartner's industry-leading products and services, please visit us on the Web at www.gartner.com.

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