In the late 1990s, demand for ERP applications began to flatten as the market became saturated and customers became disillusioned with the time and cost of ERP implementations. At the same time, a variety of new software vendors sprang up to offer e-business applications that automated such business processes as procurement, supply chain operation, and customer relationship management.
Companies greeted these and other new e-business applications with enthusiasm, and as a result, many of the new e-business software vendors experienced exponential growth. At one point, many observers were so impressed by the contrast of the moribund ERP market with the dynamic e-business market that they were beginning to talk prematurely about the "death of ERP."
As it turns out, ERP vendors have thrived by embracing the newer e-business applications--most of which were missing in ERP systems. Most enterprise customers don't want to implement new e-business software in isolation. Instead, they expect to tie the new applications into their existing IT infrastructure, which makes ERP systems essential. Bigger ERP vendors have met the challenge by integrating with third-party applications and by developing their own e-business extensions that expand the functionality of their suites.
Here are several categories of e-business applications and modules that ERP vendors are adding to their traditional product suites:
Sales force automation (SFA) augments the performance of sales representatives by automating the process of collecting, qualifying, and organizing sales prospects. SFA software helps handle regular sales tasks such as contact management and appointment scheduling. SFA capabilities are available from most major ERP vendors and are sometimes bundled as part of the CRM application.
Customer relationship management (CRM) collects and organizes customer data gathered from a variety of sources, such as call centers, e-mail, point-of-sale operations, and direct contact with the sales force. CRM software provides a comprehensive view of customer data and behavior so companies can apply resources more effectively and derive more revenue from customer relationships. Most of the major ERP vendors, such as Baan, Oracle, PeopleSoft, and SAP, are on the second or third generation of their CRM applications. Most other ERP vendors have added or are adding CRM capabilities through development, acquisition, or partnership, thus making CRM a nearly ubiquitous application offering among ERP vendors.
E-procurement improves the efficiency of corporate purchasing operations by handling the specification, authorization, competitive bidding, and acquisition of products and services. It helps corporate purchasing agents manage and interact with suppliers by using features such as catalogs, auctions, request for proposals, and request for quotes.
Supply chain management automates the planning, coordination, and refinement of a company's supply chain from the gathering and tracking of unfinished materials and subcomponents, through manufacturing, inventory, shipment, and receipt of completed products at the customer's loading docks. Like CRM, all the major vendors, as well as many other vendors, offer supply chain management capabilities.
Business intelligence organizes ordinarily disparate data so that it can be analyzed in a way that provides new insights into existing operations and shines light on new business opportunities. The ultimate goal is to assist managers in making more thoughtful, creative, and better-informed decisions.
Enterprise customers must weigh the trade-offs between the "best-of-breed" approach and the single-vendor approach. If you choose the best-of-breed approach, make sure that the extra capability you are choosing provides your enterprise with a clear competitive advantage. If you choose to stick with a single vendor to provide as many different applications as possible, be sure you know what you're giving up and try to evaluate how soon the vendor will provide these desired features.
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