'Collaborative Commerce': ERP, CRM, e-Procurement, and SCM Unite! A Series Study
Written By: Randy Garland
Published On: September 13 2001
'Collaborative Commerce': ERP, CRM, e-Procurement, and SCM Unite! A Series Study
In the early 90's, ERP came of age. Everyone had to have the functionality
ERP packages promised. Since then, as Web and Internet technologies have
matured, CRM on the front end, and e-Procurement and Supply Chain Management
on the back end, have come into their own.
in 2001, the catchphrase is "Collaborative Commerce," where we unite all
of the above elements into one coherent system within and between organizations.
This is the Big Kahuna, the zero latency, fully transparent, 360 degree
exposure that is the stuff systems integrators dream of. Is it here? Are
the technologies mature enough? Simple enough?
the first of a series of articles on Collaborative Commerce (C-Commerce),
examines what it is and can be. Additional articles in the series will
look at the initial efforts of the leaders in this game; namely, the big
ERP vendors, including SAP, J.D. Edwards, Baan, IFS,
Oracle, and PeopleSoft.
and CRM: Their trademark functionality
Let's review the very high level attributes of both ERP and CRM systems,
in order to set us up for evaluating the state of various vendor C-Commerce
Resource Planning, which came into its own in the early 90's, is typically
comprised of the following key high-level components:
Resources and Payroll
For a complete
definition of the scope of ERP, please refer to the article: Essential
ERP: It's Functional Scope.
ERP has extended
backward, outside the organization through e-Procurement (electronic Purchasing)
and Supply Chain Management (Distribution and Inventory Management).
Relationship Management, which has followed on the heels of ERP and is
just now coming into its own, can be thought of to comprise the following
key high-level components:
Force Management (SFA)
Marketing Automation (EMA)
Interaction Center (CIC) - formerly called Customer Service; now with
a broadened scope.
Force Automation (FFA)
Services Automation (PSA)
Relationship Management (PRM)
Picture this process, if you will:
visits www.skateboardingismyworld.com. She prowls the web site for her
favorite skateboard, which she busted up pretty good in a bad fall at
a recent X-Games event. She's been to this site many times to purchase
much skateboarding paraphernalia, and the site greets her by name. She
finds the skateboard that she needs, but realizes that it's the new version
of her old standard, and she's worried about the new, larger-size wheels
they have as the standard configuration for it. She clicks on the Talk
To Me Now button, and via Voice over IP, she connects immediately with
a knowledgeable customer service rep. She explains that she'd like the
skateboard with the original size wheels. The customer service rep, through
collaborative web browsing, shows Kate how she can custom order the skateboard
with her preferred wheel size on the web.
hangs up with the rep, and adds the customized skateboard to her online
shopping cart, and proceeds directly to checkout. Since she's a regular,
the site automatically discounts her purchase 20%, and presents a full
screen with her Billing and Shipping address and credit card information
pre-filled in. She selects same-day shipping, since she can't skip a beat
practicing for the next competition. She confirms the order and the price
on the next screen, her credit card transaction is processed, and she's
off to school in time for homeroom.
local vendor of skateboarding equipment gets an electronic order for Kate's
skateboard, and the request for same-day delivery. They put on the original
wheels, and deliver it to Kate's door by 2 pm, just when Kate returns
from school and is ready to once again hit the local boarding course.
skateboardingismyworld's logistics package is notified that they just
dipped beneath the pre-set threshold for stock on that skateboard. An
order is automatically sent to all component manufacturers of the board
Oh, to have a fully automated solution as depicted in the scenario above.
reaches beyond the four walls; beyond integration between internal finance,
manufacturing, logistics, by reaching forward to CRM functionality such
as web-enabled shopping and live customer support help, and reaching backward
to automated e-Procurement and Supply Chain Management.
reality is that this scenario isn't reality today. ERP vendors have had
a hard time simply linking internal resources, employing often difficult
and always expensive EAI (Enterprise Application Integration) tools for
linkages. CRM vendors have the same dilemma, though they tend to have
better integrated the various CRM components without the need for EAI.
But what about linking all the events in the Entire Customer
Experience (see the Tutorial, CRM
and Technological Solutions: Be the Customer), as depicted in the
scenario above? We're not there yet.
the Collaborative Commerce Ideal
In the ideal scenario, Collaborative Commerce (C-Commerce) is an all-embracing,
holistic philosophy. It recognizes that the competitive landscape in the
new digital economy is no longer company versus company, but groups of
organizations collectively competing against one another. It's a philosophy
that touches every part of the organization and every external touch point.
It stretches from Front Office (CRM), to Back Office internal product
movement and accountability (ERP), to supplier relationships via e-Procurement
and Supply Chain Management. It includes not just the flow of products,
but the flow of data, and the flow of data about data ("metadata").
ultimate goals include improved customer satisfaction, and reduced costs
via automated self-service, fulfillment, and replenishment. Databases,
both internal and external, talk to one another to move goods and data,
satisfy customer demand, and reduce corporate overhead.
concept of C-Commerce is indeed a complete paradigm shift. It's not that
it hasn't been the vision of many companies for a long time, it's just
that no one has been able to come close to the vision. C-Commerce is getting
closer, but we're not there yet.
of C-Commerce include internal and external pieces:
of internal applications
and workflow automation
business processes, data collection, and analysis
back-end fulfillment processes
of both goods and data
Application Integration (IEAI)
security of company-critical information
C-Commerce is a tall task, indeed. Given that we haven't perfected the
standalone CRM, ERP, e-Procurement, or Supply Chain Management functions,
how can we possibly link them all together?
have some new inter-communication tools, such as XML, but XML is not the
end-all, be-all solution. In its simple definition, XML gives users a
way to represent their data in an application-independent way. The problem
is, it is still a language in which a business vocabulary needs to be
defined between trading partners, much like EDI, except that XML runs
over the open Internet instead of through private, Value Added Network
(VAN) providers. We still have to define document formats, allowable information,
and process descriptions.
are some XML standards that are being promulgated by the likes of RosettaNet
for IT and electronic component industries, and Microsoft's Biztalk
Framework, as well as standards being formed through a joint project
of the United Nations body for Trade Facilitation and Electronic Business
and the Organization for the Advancement of Structured Information Systems
(OASIS; www.ebxml.org). Still,
XML is not the simple solution.
Don't expect pure C-Commerce anytime soon. There are too many vendors,
too many point solutions, too many protocols, and too much old-style thinking
that needs to change before this paradigm becomes reality. But that doesn't
mean that companies aren't getting started on the effort. Keep an eye
out for the follow-on series of articles exploring the state of the art
in C-Commerce from the leaders in the movement, the big ERP vendors, including
reviews of the efforts of SAP, J.D. Edwards, Baan, IFS, Oracle, and Peoplesoft.
This article has been modified from its original form since the original