ERP Getting a New Breath of Fresh Air in Europe
Written By: Predrag Jakovljevic
Published On: December 25 2000
ERP Getting a New Breath of Fresh Air in Europe
According to silicon.com, a leading European IT TV News Service, European
companies began to realize the importance of customer oriented ERP applications
and are set to dramatically increase their investment in related projects
over the next two years. A report commissioned by Oracle and enterprise
systems provider Bull claims European companies will increase ERP projects
by 50 per cent, double the volume of business intelligence (BI) and data
warehousing (DW) projects and treble the use of CRM applications in the
next two years. Two out of three companies surveyed regarded integration
of established ERP systems with new CRM solutions as a crucial business
strategy. The survey, conducted by IDC, was based on the IT strategies
of 1,000 enterprises throughout Europe.
to Peter Reed, marketing manager for enterprise solutions at Bull, the
drive towards customer focused applications is accelerating now as e-commerce
takes off and as company resources are freed from developing Y2K solutions.
He said while the results of the report were positive, it highlighted
a worrying trend of European companies embracing CRM applications as a
cost reduction exercise rather than copying the US trend of using it as
a method of customer acquisition.
is a confirmation of a trend we have long noticed in the global market
rather than any kind of a surprise. All major business applications players
realized the need to shift from an internal to an external focus some
time ago, particularly after feeling the Y2K-induced pinch. Over the last
few years, the main players have been actively developing internally or
partnering in order to provide solutions that allow businesses to collaborate
more effectively. Also, while the vast majority of vendors have distanced
themselves from using the unpopular, outdated term ERP in their marketing
campaigns, at the same time, they have tacitly been enhancing their traditional
back office functionality and/or providing hooks to external 'killer'
real reason for this lies in the fact that the boundaries between ERP,
CRM, e-commerce, BI and Supply Chain Management (SCM) have been blurred.
If the ultimate objective is to win and retain customers, one must consider
the entire chain, which includes traditional ERP and SCM functions as
well as the more remarkable CRM and e-commerce activity, with the inevitable
need for extrapolating useful information for all management levels by
ERP system remains the backbone of the supply chain. It sets the structure
a company needs to do business and to communicate with other businesses.
The combination of ERP, supply chains, and the Internet, or collaborative
commerce, is an integration designed to offer faster and easier access
to business transactions as well as customer and supplier data. This combination
does not mean ERP systems become obsolete over night. While the traditional
introverted mind-set of ERP becomes history, its functionality remains
critical. The 'new economy' will not cause the obsolescence of general
ledger and accounts payable & receivable for example. On the contrary,
it may only emphasize the importance of their efficient use. Integration
and interconnectivity are therefore the name of the game in the future.
also concur with the above-mentioned opinion that implementing CRM and
e-commerce only for cost cutting and process streamlining is a rather
myopic strategic move. The much stronger demand for extended-ERP components
than for a core ERP system are also not unexpected, mainly due to a large
ERP market penetration and saturation compared to other much more recent
Users should be aware of the fact that they need a reliable back-office
system in place in order to conduct their e-commerce business or client
relationship management. While in a minority of cases a legacy system
can perform these functions satisfactorily, we encourage businesses to
aggressively inform themselves about vendors' latest product offerings,
perform cost-benefits exercise and vigorously negotiate contract terms.
is not merely electronic retailing via a Web site. The ability to coordinate
the entire supply chain, fulfill orders, and service customers quickly
and efficiently is what matters. Therefore, pay close attention to vendors'
extended ERP offerings and discern hype from reality. The 64,000-dollar
question is how functionality rich those new modules are, and how seamlessly
they have been integrated with the back-office. Alternatively, how feasible
would the integration with third-party products be? Vendors' corporate
viability and service & support capabilities remain crucial factors in
any selection process.
currently initiating an e-business software component(s) selection are
advised to research the major players in respective niches, seek assistance
in the selection process from unbiased service providers, and base their
decisions only on existing functionality that the vendors are able to
demonstrate during scripted scenario sessions. 'Bolt-ons' should be selected
only from official business partners of the primary contractor, after
making sure that partnership is not a mere marketing pitch.