ERP in the e-commerce era

E-commerce developments and requirements will force ERP vendors to continuously innovate their products. Classical ERP system characteristics are inappropriate for a future in which e-commerce is common practice. This paper reviews five of these characteristics, explains why they hamper ecommerce, and discusses solutions. Some of these are indeed already recognised and dealt with by ERP vendors; others aren’t. Finally, the paper introduces the research efforts of the Telematics Institute that should help effective and rapid application of ERP in e-commerce contexts. Introduction ERP systems are at the electronic heart of day-to-day business operations and planning inside companies. As such, they have been in use for many years. Currently, we witness a new trend that significantly impacts the ERP world: e-commerce. Due to e-commerce developments and requirements, ERP systems face a number of challenges in order to remain suitable candidates for use in an e-commerce environment. In order to sharpen discussion, we deliberately take an overly critical perspective on classical ERP systems. In our definition, classical ERP systems are solely aimed at planning and managing a single company’s internal processes. In the following section, we will elaborate on this by presenting five classical ERP characteristics. In subsequent sections, we will show that these characteristics make classical ERP in appropriate for e-commerce and networked business and discuss how these issues may be dealt with. Indeed, some of these have already been recognised and addressed by the ERP world. Some other points however, have hardly been made so far. Finally, we will translate our findings into two major research lines, currently pursued by the Telematics Institute. Five classical ERP characteristics First, the basic function of classical ERP systems involves company-internal planning and management of business functions. In other words, a company’s customers and other partners have no direct interaction with the system. Classical ERP systems do not encompass front-office functions for interaction with the business environment. Also, they lack, for instance, functions for negotiating with clients and suppliers. In short, classical ERP is incomplete (Figure 1).