Sign in Subscribe
Computer peripherals industry

ERP and Electronic Commerce: Integration and Limitations

Strategic Insights

— 1 min read

As corporate computing and enterprise resource planning (ERP) increasingly incorporate electronic commerce, the emphasis is on integration. ERP vendors like PeopleSoft and SAP are shifting their focus to developing internet and extranet interfaces, enabling businesses to connect with customers directly. However, this deep integration demands not only technical expertise but also a profound understanding of the business. Some commentators are warning that ERP vendors risk overextending themselves by suggesting their technology can address sectors such as core banking and risk management.

Key Takeaways:

  • ERP vendors are emphasizing the importance of integration with electronic commerce systems, recognizing that this is crucial for future success.
  • According to a report by Cambridge Information Network, chief information officers made a significant mental leap in 1998, adopting electronic commerce systems and ERP processes as the backbone of their companies' information systems.
  • Companies like N.V. Edon Groep are utilizing internet front-ends to enhance collaboration and reduce costs, with contractors bidding on work and customers accessing their energy data and rates.
  • The concept of "extended resource planning" (XRP) has been introduced to describe the integration of ERP and electronic commerce systems.
  • The shift to electronic commerce requires a deep understanding of the business and adapting to its specific needs.
  • The use of non-ERP software environments like Lotus Notes has facilitated web-enablement for smaller businesses, reducing investment costs and improving data exchange links.
  • Rentals of SAP R/3 financials hosted on BT servers and accessed via secure ISDN provide an alternative route for smaller businesses to sidestep high software costs.
  • The integration of ERP and electronic commerce demands careful consideration and a well-planned approach to achieve success.

Statistics:

  • In 1998, chief information officers hesitated to integrate electronic commerce systems and ERP processes due to change management issues.
  • Twelve months later, they recognized electronic commerce and ERP as crucial components of their companies' information systems.
  • The web environment is still relatively immature, with standards and best practices in formation.
  • 65% of companies have already implemented electronic commerce systems, while 21% are in the planning stages.

Sources:

  • Cambridge Information Network, "The Transformation of ERP: from money pit to money pot"
  • PeopleSoft, "Industry Strategy Director, Financial Services, Martin Mackay"
  • Giga Information Group, Andrew Bartels, Vice-President
  • Cambridge Technology Partners, "eXtended Resource Planning" (XRP) concept
  • Total Computer Systems (TCS), Tony Westray, Marketing Director
  • British Telecommunications, SAP announcement on rented applications service
  • Financial Times Limited, 1999, Copyright

Read more