"ERP II"--being promoted by Gartner--and "ECM"--the term favored by AMR Research--are both freshly minted abbreviations that basically describe the way that Internet technology is driving enterprise software beyond the confines of the enterprise. While ECM (enterprise commerce management) may be the superior concept at the moment for more accurately depicting what's going on now, both terms are merely transitional and provide an incomplete picture of where e-business will be going in the future.
ERP II amounts to building a new addition on an old house. Gartner coined the term ERP (enterprise resource planning) more than a decade ago to describe a new class of software that integrates a variety of centralised tasks, such as finance, human resources, and ordering, and runs them off a shared database. ERP vendors, such as Oracle, PeopleSoft, and SAP, did extremely well until sales levelled off a few years ago. That's when supply-chain management (SCM), CRM, e-procurement, e-marketplace, and other B2B applications stole ERP's thunder.
The ERP II concept does have its merits. It acknowledges that companies are not abandoning legacy ERP systems for newer applications. The traditional ERP vendors also managed to rejuvenate their sales by integrating their legacy ERP systems with these new B2B applications and offering their own B2B products. For example, Oracle, PeopleSoft, and SAP-all of which Gartner counts at ERP II companies-- now offer their own CRM products
However, ERP II is flawed in ways that are ironic. Gartner doesn't identify a company as an ERP II vendor unless it provides traditional ERP capabilities. That leaves out vendors such as Ariba, i2, and Siebel Systems. The irony is that these companies pioneered the B2B applications that ultimately reinvigorated traditional ERP vendors by forcing them to provide better integration with the new B2B apps; partner with vendors offering those apps; and, in many cases, building like products themselves. At the same time, the old-guard ERP vendors have all but abandoned the ERP label as they recast themselves in the role of hip, new e-business providers.
The ECM concept takes all this into account. AMR Research's vision for ECM is superior to Gartner's ERP II vision because it recognises the importance of the B2B software vendors. As a July AMR report states, "One of the precepts of ECM is that the multi-vendor corporate system is a reality." ECM also offers a more expansive and pragmatic approach to application integration. ERP II expects companies to thoroughly integrate outward-facing applications, such as CRM and SCM, into back-office ERP systems. ECM promotes an integration architecture that provides a layer of abstraction between individual ERP modules and B2B applications. Instead of aspiring to complete integration, the ECM vision embraces private trading exchanges as a way for companies to integrate with customers and suppliers while reducing costs and complexity. AMR identifies Eastman Chemical and Textron as examples of companies embracing ECM.
Although the ECM concept is preferable, neither it nor ERP II is particularly farsighted. Both concepts provide only an intermediate model for IT as it responds to the demands of e-business. It's a step in the right direction--away from the pure self-involvement of IT behind the corporate firewall--but neither concept goes far enough.
Both ERP II and ECM assume that the individual enterprise will still form the core of e-business. It should send up a flag that both ERP II and ECM begin with the word "enterprise" when the core of e-business is actually moving to the Internet as companies learn that they must employ software and processes that serve the needs of multiple companies. Companies will have to give up some of the independence with which they've historically pursued IT solutions in order to achieve the benefits of collaboration. They'll have to be more open so they can share information and business processes with customers and suppliers.
As long as I'm criticising other people's terms I suppose I should offer something that I think is an improvement. How about "multi-enterprise collaboration"? If you don't like that, don't get too upset. I'm just trying to put my mark on my new territory.
What About :
"Universal Enterprise Management"
Stuart Meyers
eGlobal Technology