CIOs struggle with the vast array of new business-to-business (B2B) applications, Internet-based services and exchanges that promise a huge payback and promise to address the shortcomings of the last must-do investment: enterprise resource planning (ERP). However, even corporations that have already embarked on projects to install e-procurement or build a private trading exchange (PTX) are at a loss to give a name to their grand plan. Unlike ERP, this new assembly of applications is not a single vendor package decision. It starts with ERP, perhaps includes e-procurement, with customer relationship management (CRM), supply chain management (SCM) and a PTX with a consortium trading exchange (CTX) thrown in for good measure.
Enterprise commerce management, (ECM) is the blueprint for the next generation of corporate systems and captures what many corporations have been building over the past several years. Organizations have supplemented ERP with other applications, such as advanced planning and scheduling (APS) and CRM.
ECM describes the processes on which many of the new B2B commerce applications and services are based. ECM is not just another name for ERP; it's a more accurate model for the next generation of business systems, comprising process-oriented applications and services tied together by the Internet to support inter-company commerce.
At the heart of ECM is the concept that the applications must be active and based on processes rather than data collection. Active means that the key ECM components have the ability to predict, monitor and manage internal and external business processes. The PTX is a good example of this active commerce concept, as its main purpose is to conduct inter-company commerce by extending internal processes across the Internet and provide services to manage and monitor these processes. The key enabler for ECM is the Internet. It has allowed software developers and corporate visionaries to completely rethink the way applications are designed, deployed and integrated. Visionary CIOs are building their enterprise systems around integration architectures that allow process-focused applications to be added or subtracted as required. The Internet has provided a network and application topology, saving the cost and time formerly required by one-of-a-kind corporate and vendor architectures.
The concept of ERP lives on and grows under ECM; however, the ERP software application - the large, monolithic, single vendor product - will transform into a more loosely coupled group of ECM applications. ERP now provides the foundation for many of the ECM systems that corporations are assembling. This trend is already under way. Supply chain planning (SCP) applications are replacing the materials requirements planning (MRP) function. E-procurement and strategic sourcing applications are gnawing away at the purchasing functions. CRM has obliterated ERP's rudimentary customer service functionality. Web-based order management applications are moving from simple self-service capability to full-fledged order fulfillment systems, replacing ERP order entry. The ECM systems of the future will comprise a mixture of in- house applications, outsourced business services and trading exchanges.
Software vendors have already begun to embrace ECM concepts as they react to market signals. If there is one lament that characterizes most corporations' ERP experience, it's that after spending all that time and money, they are not sure what they got. Although, in retrospect, many corporations have received tremendous payback from their ERP investments, they often don't feel that way. Contrast this situation to the ECM model, which puts the business process at the center of each application so that the benefits are clear. Many ECM applications also target core business processes neglected by ERP, including marketing, customer service and sourcing. AMR Research will continue to develop the ECM concept with input from visionary information technology organizations and leading software providers. Our goal is to provide the definitive model for the next generation of enterprise applications.
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