Outsourcing Manages E-Business Effectively

While the promise of e-business has taken deep root in the information technology marketplace, the practicality of implementing an efficient e-business system can often be a whole other reality. As a result, the outsourcing of e-business initiatives to a responsible third party has become the means through which many companies keep pace with the market.

Effective Data, a Schaumburg, Ill.-based consulting firm, earns its keep in the IT world primarily by unburdening companies of their e-business concerns. The company specializes in handling all outsourced EDI functions from AS/400 shops. In fact, about 50 percent of the firm's business is AS/400-based, according to Effective Data Partner Tim Wightman.

In 1991 Effective Data began working solely with EDI on the AS/400 and has since expanded the organization to include a variety of services on the AS/400 and client/server environments, says Dan Duffy, a partner with Effective Data. "Our niche is to improve our clients' productivity and marketplace performance through the strategic use of IT," he says, adding, "E-business is the use of information technology to effectively and efficiently conduct business within and between organizations."

Effective Data works with companies to implement e-business initiatives on the AS/400, as well as a variety of other platforms. One company that has used Effective Data's services -- first on the AS/400 and now on Unix -- is Deluxe Video Services Inc., a Deerfield, Ill.-based company that duplicates movies for major film studios (including Universal Studio, Twentieth Century Fox, Paramount and Tri-Star Home Video).

Deluxe Video initially enlisted Effective Data to update the video duplication firm's systems to Sterling Commerce's Gentran/400, according to Wightman. "This was more of an object-oriented approach to implementation where, regardless of what data was going to be coming in or out, we had generic interfaces that could be used, whether they were EDI or applications that would eventually be integrated," he says.

Effective Data is currently helping Deluxe through the SAP reengineering phase of its conversion, according to Paul Janczewski, manager of programming services for Deluxe Video. "We've taken a lot of people who were a part of the legacy EDI systems and moved them into the reengineering for SAP," he says. "We then needed to have someone continue to work on the legacy systems. [Effective Data] provided the resources for us to do that."

The majority of Effective Data's work with Deluxe Video on the AS/400 platform has been managing Deluxe's overall e-commerce environment, according to Wightman. Effective Data now has the opportunity to work with Deluxe Video on a cross-platform implementation, as they migrate Deluxe's SSA BPCS infrastructure on the AS/400 to SAP on HP 9000 systems. Deluxe's EDI functions have also been migrated to a Unix-based version of Gentran Server.

Phase one of this project with Effective Data is the conversion of Deluxe Video's manufacturing and finance modules from AS/400 to Unix. The second phase will be conversion of the distribution side of the business, expected to occur within the next two years. "Effective Data personnel fills most of the roles of this conversion," Janczewski says. "When choosing to outsource, it was important for Deluxe to find a partner that could handle the legacy systems as it moved forward into the reengineering of SAP."

Despite migrating their manufacturing system to Unix, Deluxe will continue to have all their distribution running on the AS/400 for years to come. "They will need someone to support both sides, that is where our expertise comes into play" Wightman says.

"We also partnered with Deluxe to create strategic alliances for them," Wightman continues. "They're a video duplicator that does enormous volume with a select group of customers. One of the key things they were looking to do at the time was tie their customers into their system, and EDI was a natural avenue for that. In the partnership we have with Deluxe, we have provided services to a number of their clients as well [preparing their EDI systems]."

Deluxe plans to keep its AS/400s up and running for the next two years. After that time, Deluxe's core business systems will reside on SAP Unix, according to Janczewski, who adds that he is uncertain what Deluxe's AS/400s will be used for once reengineering is complete. Under the company's current configuration, AS/400s are used primarily for development and production, with an additional leased AS/400 to facilitate Year 2000 conversion.