Beyond ERP, Enterprise Resource Planning

Before the arrival of ERP systems, retail businesses relied on multiple mainframe applications, most of which were custom built to meet specific needs. These were highly specific, complex and expensive to maintain and often difficult to make work effectively together.

ERP systems met an important need when they were first introduced, providing best in class process engines that provided an integrated view of the total enterprise. ERP systems have served a powerful purpose, but business has now moved on yet again and ERP systems are increasingly struggling to meet the needs of the ever more networked business environment. Technology has also progressed, so that the technical limitations of ERP systems can now be overcome.

There are a number of ways in which ERP systems are increasingly limited in today’s business environment.

ERP systems:

• Start from the assumption that all processes take place inside the enterprise, but most business processes today cross the boundaries of organisations in a networked way
• Are complex and expensive to maintain and enhance, whereas businesses today need nimbleness and low cost
• They depend on old technology that forces the use of batch processing, resulting in information delays, whereas today’s need is for real-time views of the business

We are beginning to see the arrival of systems that overcome these problems. They place the process engines outside the boundaries of the business or network (typically as a hosted service), with the assumption that processes are multienterprise. They are adaptive to process variations because of new technology. They are able to deliver real-time visibility to the members of the network. These new systems combine the best of the private and public exchanges of the early internet era, providing a secure, customised environment. Best of all, they don’t have to replace existing systems, so much as link them together and add the network effect.

A great example of these new systems is the One Network from Fujitsu, (provided in partnership with One Network Enterprises), a supply visibility service that provides the retailer with a real-time, demand-driven supply chain service that halves out-of-stocks at the shelf and optimises the entire supply chain network. This service is quick and low cost to install, as it requires minimal integration to existing systems, using the philosophy of “embrace, not replace”. It quickly adds value to both the retailer and its suppliers, from supply planning, through logistics, warehousing and store replenishment. Early adopters are generating impressive benefits.

This is just the beginning of a new era in retail systems, where on-demand services will connect retailers, their suppliers and their customers in real-time networks, taking us into the post-ERP era.

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