'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
R. Garland - September 13, 2001

Introduction 

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.

Now 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?

This, 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.

ERP 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 solutions.

ERP

Enterprise Resource Planning, which came into its own in the early 90's, is typically comprised of the following key high-level components:

  • Manufacturing and Logistics

  • Finances and Accounting

  • Human 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).

CRM

Customer 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:

  • Sales Force Management (SFA)

  • Enterprise Marketing Automation (EMA)

  • Customer Interaction Center (CIC) - formerly called Customer Service; now with a broadened scope.

  • e-CRM

  • Field Force Automation (FFA)

  • Professional Services Automation (PSA)

  • Partner Relationship Management (PRM)

  • Analytics

The Big Kahuna 

Picture this process, if you will:

Kate 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.

Kate 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.

A 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.

Meanwhile, 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 for re-stock.

A Pipe Dream? 

Oh, to have a fully automated solution as depicted in the scenario above.

ERP 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.

The 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.

Defining 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").

The 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.

The 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.

Components of C-Commerce include internal and external pieces:

Internal

  1. Integration of internal applications

  2. Process and workflow automation

  3. Customer-centric business processes, data collection, and analysis

  4. Automated back-end fulfillment processes

External

  1. Transaction automation

  2. Movement of both goods and data

  3. Inter-Enterprise Application Integration (IEAI)

  4. Appropriate security of company-critical information

Today's Reality 

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?

We 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.

There are some XML standards that are being promulgated by the likes of RosettaNet (www.rosettanet.org) 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.

User Recommendations 

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.

Editor's Note:
This article has been modified from its original form since the original publication date.

 
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