Move over ERP, here comes ERP II

Enterprise resource planning (ERP) has been given a new lease of life and will become as critical to implement as ebusiness strategies, says researcher Gartner.

But it will not be traditional ERP systems that will become corporate must-haves. Instead, businesses will gain competitive edge by deploying so-called ERP II platforms.

The major difference being that ERP II involves collaborative commerce, explained Gartner research group director Bruce Bond at the company's Symposium/ITxpo conference in Florida this week.

Collaborative commerce enables business partners from multiple companies to exchange information posted on ecommerce exchanges. For example, companies can develop new products with their suppliers by sharing each other's data across online marketplaces. Collaborative commerce also enables organisations to find new partners to solve one-off design problems, said Bond.

"Your competitive edge will be your ability to take good information and put it on the internet, and enable people to collaborate on it," he added.

Unlike old-style ERP, ERP II will cut across and all business processes, such as customer relationship management, as well traditional functions including finance, and human resource management. ERP II will also be applicable to all industries, not just the finance, manufacturing and distribution sectors that were the focus of ERP, said Bond.

"Buying and selling over the web is old hat. This is business interaction - who are you working with and who is your focus. Collaborative commerce is about intellectual capital."

Because of this, the work of ensuring data integrity has become important again. "The quality of your product and service is not enough. You will be doing this [implementing ERP II], otherwise you won't be seen as a reliable partner," warned Bond.

He believes traditional ERP vendors are revamping their products to include collaborative commerce features and are beginning to specialise in certain areas rather then try to be broad players. For example, vendors are beginning to choose whether to operate in the manufacturing or services sector, and are including technologies that support deeper applications integration.

Bond singled out SAP and PeopleSoft as the most likely suppliers that will succeed in this area. SAP, because its enormous installed base will make it move into the ERP II space, and PeopleSoft, because it particularly understands the issue of collaborative commerce, he claimed. Oracle follows closely behind.

Bond suggests that organisations should find out whether their current ERP suppliers have ERP II strategies, and to move with them through upgrades. But most importantly companies have to prepare for being in a constant state of change to their infrastructure and applications environments, and they should ensure they are using the most up-to-date versions of software as possible.

But Bond also advised companies to not forget their ebusiness plans. ERP could be seen as a sub-set of ebusiness because corporate and customer information is just as important as selling products and services over the web, he said.