Y2K is over, ERP (Enterprise Resource Planning) also came and went. What next? Software vendors have now reinvented themselves and are trying to pitch yet another high-tech buzzword to corporates, so that they can stay in business.

Y2K, the year that was, propelled ERP to centre stage. Eager to appear techno-savvy, numerous Indian corporate houses bought into ERP hype - which was projected as a seamless computerised system that integrates a company's internal departments.

ERP, companies were told, had the ability to effectively manage and integrate information, and turn even a mid-sized manufacturers into international powerhouses.

However, when Y2K fell flat on its face, ERP also died down.

"ERP vendors rode the Y2K wave effectively," claims Pradeep Erinjery, Director of Operations, Thirdware Solution Limited. "However, when user expectations changed, ERP was also transformed. Today, it has taken the form of CRM (Customer Relationship Management) and ORM (Online Resource Management), with e-commerce enablement."

In the laypersons language, what software companies are now saying i.e.: Earlier, you built up to the internal mechanics of your organisation. Now, you must present a face to the world-and we're here to help.

However, this time around, companies are not biting the bait as easily. Having invested vast resources in software in the last two years, many corporates are now feeling the pinch. At the beginning of 2000, for instance, 120 of the top 500 companies in India had established ERP systems. The rest were at various stages of implementation.

The high cost and long lead times for ERP deployment led to its downfall. Firms that bought and ERP package often spent more than five times the cost of the software just on implementation. Servicing the system also added up to far more what they were used to spending on the software licenses, for instances.

Lakshmi Narayan, CEO of Chennai-based Cognizant Technology Solutions is optimistic that ERP is still alive. "People continue to implement ERP products, though the hype has abated. Earlier, there was a need to do it immediately to counter the Y2K problem. Now, a new product line has emerged, whereby ERP applications are being integrated with web-based front-end solutions like CRM.

He added, "ERP only addressed the inside of an organisation. Now companies are moving beyond that to improve customer retention. The concept of business intelligence has come to force."

Clearly, some firms would agree. Steel company Isibars is currently installing ERP. As Managing Director Ashwin Gupta said "It is a prerequisite, the backbone of any firm. It will translate into goods savings." Added Chris George, CEO of Esaybuymusic.com, "ERP has been worthwhile investment. Since our firm is highly labour intensive, the economies of scale have been tremendous. I could do away with almost 50% of my manpower after ERP installation."

ERP was all about improving the supply chain and fostering greater collaboration across multiple enterprises. As Mr Erinjery pointed out, "The very transparency of the system killed it. It met with a lack of success in most firms, since it revealed that objectives were not aligned across all functions. Once you reduced the water level, the rocks surface. And no one likes to be told that your flaws are clearly spelt out."

ERP, in its new avatar, also has a new price tag. Corporates, who had spent a phenomenal amount of money putting the system into place are understandably averse to buying the new software. So, the next option? Rent it. According to Rufina Fernandes, associate VP, Global Tele-Systems, "We do not cater to ERP solutions per se. We are supplying it as an ASP (Application Service Provider). There is a huge upfront cost to installing the software, the hardware and then maintaining it. By hiring it, corporates can save close to 40-50% of their cost." Global has a tie-up with Oracle for their ERP systems.

She added, "Renting is a viable option. The services protects you from technological obsolesce. In an area where IT solutions are changing and moving fast, it makes sense to keep abreast of latest developments." However not all software companies have successfully reinvented themselves. Bangalore-based Cambridge Technology Partners were forced to cut down its ERP operations. S Vaidyanathan, Director, Operations, said, "We used to market ERP around two years ago, but had to close shop six months back. Now, we have moved on to the next stage, E-CRM, wherein we have retooled our personnel for a better understanding of the market."

Clearly, in an industry where trends and technologies change at the speed of thought-well, almost-the software industry has figured out how to collaborate and reinvent themselves to keep up. And ERP remains core.