It’s been 12 years since consulting firm Gartner came up with the description enterprise resource planning (ERP) to describe a suite of software that organised a company’s manufacturing process, sorted out the financials and dabbled with distribution.
It wasn’t until last year that Gartner’s definition guru struck again, this time with ERP II. But now the expression was not intended to be an acronym. In fact, it has a definition. I quote: ‘ERP II is an application and deployment strategy that expands out from ERP functions to achieve integration of an enterprise’s key domain-specific internal and external collaborative, operational and financial processes.’
Why does that sound like a mission statement from a dotcom company?
Joking aside, ERP II, as we all know, is resource planning with knobs on. It differs from ERP in three areas. It has more ‘vertical functionality’ so it is supposed to provide a better insight into specific application areas. It is based on an open architecture, which is component oriented, allowing easier integration with other software. And finally, by being web enabled and bristling with the latest open technologies, it can be extended into the systems running at suppliers and customers.
So why aren’t all manufacturers using it? With a tried and tested ERP core, the user adds on supply chain and distribution functions, on the fly, and can be up and running in three months – a refreshing change from companies who decided to implement enterprise software ten years ago and spent years and considerable sums getting nowhere.
With the countless examples of implementation success, it’s now fair to say that enterprise software works and can be as friendly and flexible as the advertisements suggest. By definition ERP II is component based so integration should not be a problem. Using XML to share data between existing ERP and additional modules, for example, should be a painless process.
A small to medium sized company embarking on the enterprise route would, however, be well advised to deal with a single vendor with the capability of supplying and supporting a full suite of component based applications – just in case help is needed in a hurry.