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For users of ERP (enterprise-resource planning), the challenges appear to be morphing from inside the enterprise to outside.
The Conference Board, a business membership and research network based in New York City, published in December 2000 a study called “ERP Post Implementation Issues and Best Practices.” The report described a survey of 117 firms in 17 countries that had implemented ERP (the goal of which is to integrate companies' functional areas onto a single computer system). As many as 87% had done so on an enterprisewide basis.
In the study, 34% of the organizations were very satisfied with ERP, 58% were somewhat satisfied, 7% were somewhat unsatisfied, and 1% were unsatisfied. The study also found that 78% of the organizations that were “very satisfied” had made a quantifiable business case for ERP when they looked into using it — compared with only 22% that had not. Satisfaction rose as ERP modules were interfaced more tightly with one another. Some companies experienced a productivity drop for up to a year after first implementing ERP, but the 25% that did not attributed their feat to three elements: successful user training and change management; effective handling of the risks and the fundamentals of project management; and continued executive commitment. The third item was the most crucial.
Conference Board respondents found that ERP, by improving time-to-market and data quality, generally has been an enabler for e-commerce. However, in a September 2000 Information Systems Frontiers article regarding ERP and e-commerce, three researchers questioned the system's role in providing a viable outward-focusing platform for working closely with business partners on e-commerce and e-business products and services.
In the article, M. Lynne Markus, David Petrie and Sheryl Axline suggest another answer to working with outside e-commerce partners. Because of the changeability of the e-marketplace, they say, companies might look to intermediaries to be the “hosters” of ERP functionality. Only the hosters would need an ERP system and the accompanying database, not the partners. That is a radical view of the future, admit the researchers, but consider two arguments. First, ERP packages, even with their extended enterprise capabilities, cannot support true multiparty collaborative commerce (a tenet of e-commerce). Second, it is costly (and redundant) for every party to maintain its own ERP capability.
The Information Systems Frontiers article presents an unexpected and plausible alternative in the mission-critical ERP area. All executives should now ask themselves: Where is our ERP implementation leading us in the world of e-business, and should we be considering alternative paths?