Do it Yourself

The burgeoning market for packaged software appeals to many companies, but not all. At DaimlerChrysler AG a significant number of key applications continue to be built by in-house staff, and there are few indications that that will change any time soon. "One reason is that we simply aren't in the 'sweet spot' of the market," says Auburn Hills, Mich,-based William DeRosa, director of administrative and research-and-technology systems. "As a global company in a complex industry, we don't have lots of software vendors who can supply the types of applications we need." In the first quarter of this year, for example, DaimlerChrysler began rolling out two new applications designed to improve decision-making and help lower costs. The first, dubbed Balanced Scorecard, required about 18 months to develop and involved a team of from five to 10 people. The second, an ambitious costing system, also took about 18 months, but involved as many as 60 people. "Balanced Scorecard is important to us for two reasons," DeRosa says. "First, it's designed to let us take information we have on a number of different databases -- more than two dozen, in fact -- and deliver it to managers in a way that's easy to view, that lets them get answers to questions and thus make better decisions." The information in question involves everything from details about the market for scrap metal to human-resources issues such as employee attendance. "It is a matter of integrating the information that we've had for a long time and doing more with it," DeRosa says. "We can now create metrics, for example, that can show what's typical, what's superior, etc. It's a classic case of empowering people by providing them with better information." DaimlerChrysler built the system using Java, a Web-oriented software-development language. "One reason the project took 18 months is that we were simultaneously building the infrastructure we need to roll out additional Java applications," DeRosa explains. "Going forward we believe we can develop these applications very quickly, in some cases in a few months or even weeks." The costing system takes a holistic view of manufacturing processes in order to gain greater efficiencies. "This system is primarily designed to look at multiple dimensions of production and see if things can be done differently," DeRosa says. "For example, it can compare one production line to another, one period of time to another, look at trends in output, and find ways to help us operate with the greatest economy. It can help us decide which lines to use at a given time to maximize productivity and address other aspects of process-based costing." In both cases there simply weren't products available from outside vendors that could meet the company's needs. "We tend to be a big buyer of software tools," he says, "and we do buy some packaged applications. In fact, I would say that a greater percentage of our IT people are now involved in working with packaged applications than in the past. But we still build more than we buy." DeRosa is optimistic that creating customized software will be easier as a result of products such as Java. "The two applications we're rolling out . . . will really lay the groundwork for us," he says. "Going forward I think that almost all the software we write in-house will be Web-enabled. And as soon as we can extend the Internet plumbing, the TCP/IP lines, to the factory floors we can extend the use of such applications out to just about everyone."