ERP has become the cornerstone of many companies’ mission-critical business tools. In the late nineties, ERP software were upgraded to meet Y2K conformity. During the same period, the GUI (Graphic User Interface) emerged. The revolution from a single-site, single-enterprise ERP to one that is multisite, multi-enterprise, and web-enabled ERP is only beginning. During 2002–03 many renowned ERP software developers added new features to their software, like e-commerce, B2B, B2C, CRM (Customer Relation Management) and SCM (Supply Chain Management). Combining ERP systems and e-commerce is absolutely critical to most businesses future success, but if badly executed, it could be worse than doing nothing.
First generation ERP systems integrate business processes through consolidation of different systems and databases into an integrated whole. The second generation views ERP systems as a global information and transaction backbone for a company. What are the characteristics of third generation ERP systems?
The methodologies to support third generation ERP systems implementation need to address the following: 1.Component-based Architecture: The third generation ERP will address the integration of heterogeneous components by establishing a component-based architecture. Currently, there is an ongoing initiative to break ERP systems into separate components (componentization).
Componentization refers to the act of breaking up large, monolithic ERP systems into components that would work together. With componentization, ERP vendors can easily upgrade their solutions and the customers can easily upgrade their software.
In addition, a customer could selectively upgrade some components without having to upgrade the entire ERP software. The component-based architecture will expedite testing by providing consistent modularization and interfaces definitions. Each component will be incrementally integrated and tested until it can be certified by the framework and becomes part of the repository. 2.E-commerce: E-commerce starts for all business transactions carried out electronically in an online environment. ERP vendors are also embracing e-commerce. By extending the existing ERP system to support e-commerce, companies not only leverage their investment in ERP solutions but are also able to speed up the development of their e-commerce capabilities. Internet commerce application like internship, interworld and broad vision can build on existing ERP systems to offer customers high-quality service through the net. SAP introduced mySAP.com, a suite of e-commerce components for SAP. Oracle has numerous initiatives, including one that will allow its ERP and e-commerce solutions to share the same database. 3.Mobile Commerce: In the coming mobile commerce era, users will want to be able to have access to the right resources and work as efficiently as possible – whether they are travelling, seeing a customer or working at other remote locations – with their ERP systems. Many ERP vendors are currently researching for means to provide mobility to ERP users.
They attempt to connect employees to their work more effectively than ever before by enabling mobile phones and other wireless devices to become a new kind of tool to seamlessly exchange information, automate data entry and perform a range of transactions anytime, anywhere.
The aim is to provide seamless integration between back and front offices to ensure that whenever something important happens that affects the enterprise, the right people are informed and appropriate action will take place immediately. 4.Customer Relationship Management: The bottom line for e-commerce is customer service. Customer satisfaction and loyalty are vital to success in cyberspace. The third generation ERP software will be integrated with powerful Customer Relationship Management (CRM) software. CRM includes front office applications that assist in customer interaction, addition of customer and product information, and has the ability to hook to back-end systems, including financials, inventory, and ERP systems. The pre-requisites for CRM are Enterprise Application Interface (EAI) or ERP environment, web-enabled architecture, RDBMS, historical database, data warehousing, BI (Business Intelligence) Applications and communication channels. 5.Supply Chain Management: More and more companies are granting external suppliers and customers access to their internal billing, inventory, manufacturing, and scheduling systems. Successful supply chain management allows enterprises to anticipate demand and deliver the right product to the right place at the right time with the lowest possible cost. Other benefits include customer responsiveness, just-in-time inventory, transportation costs reduction, and compressed product delivery cycle times. 6.Scalability: A high-performance third generation ERP system must be able to gracefully handle continuous increase in sites and traffic, and allow companies to easily align business processes with corporate imperatives without custom programming.
The ability to adopt changing business rules without extensive programming or outside consultation will allow the ERP systems to integrate seamlessly with other ERP systems and organisational structures created by mergers and acquisitions, reengineering, or ad hoc teams or alliances. 7.Availability: Availability is a measure of uptime. Enterprises require their ERP systems to be operational 24 hours a day, 7 days a week, and 365 days a year for e-commerce. These systems are no longer backroom systems but are now strategic business systems. Such rigorous demands on high-availability require a foolproof mechanism for detecting and recovering from failures, while continuously providing service. 8.The quality of Service:In the context of information access, quality of service refers to an assured value of the data access time or the transaction rate. It dramatically reduces the human error part also while entering the data more frequently. Currently, these vary widely with the level of network congestion, the existence of other clients, overall load on the server, and other unpredictable parameters. For third generation ERP systems, quality of service is critical and should be guaranteed. 9.Maintainability:Maintenance of large scale multi-enterprise and multi-vendor systems requires skilled expertise in a wide range of software platforms and hardware devices. Third generation ERP solutions that require minimal maintenance and very limited additional training in specialised platforms are necessary.
10.Security: For e-commerce ERP systems, companies worldwide can have direct access to their suppliers’ and business partners’ ERP systems. This “openness” expands the universe of users tremendously. 11.Data Sharing and Integration: A flexible architecture that facilitates the exchange of information among business units and trading partners is at the heart of third generation ERP systems. Data sharing is important for third generation systems that link legacy systems to ERP systems, and connect ERP systems from different organisations. This data sharing takes place on an instant basis. Information entered remotely on the web can be transmitted on instant basis across organisational, lines and locations. Further, the new ERP system assists in integrating the information.