Academic journal article Communications of the IIMA

E-Business Enabled ERP II Architecture

Academic journal article Communications of the IIMA

E-Business Enabled ERP II Architecture

Article excerpt

INTRODUCTION

Business strategies have changed alongside the change of the economies, from the production focus of the industrial age, to the internal integration focus of the information age, and to the external integration focus of the relationship age (Galbreath, 2002). The value chain of a firm is extended to a value network to include the value chains of the customers, suppliers and channel partners. Knowledge and relationship assets have become key ingredients of value creation in the relationship age. Globalization that widens the market and increases collaboration has created new competitions and opportunities. E-business technologies, utilizing computer networks, including the Internet, and other information technologies, provide the platform for business transactions among business entities in the extended enterprise around the globe, transcending business operations beyond the time and space confined by geographical and national boundaries.

To succeed in this new economy, businesses need an enterprise strategy that exploits relationship and knowledge assets in real-time business operations across the extended enterprise. ERP II provides a competitive strategy that integrates ERP with knowledge management and relationship management in the entire value network. This paper describes a conceptual model for ERP II and discusses the role of e-business technologies in ERP II. It brings together the concepts of e-business, enterprise resource planning, value chain management, relationship management and knowledge management in an integrated architecture for ERP II. The structure of this paper is arranged as follows. Section 2 provides a review of the literature. In section 3, a conceptual model for ERP II is described. Section 4 describes the e-business enablement of ERP II. In section 5, an e-business enabled ERP II architecture is presented. The paper concludes in Section 6 with an outline of future research directions.

LITERATURE REVIEW

The enterprise architecture proposed in this paper provides an integrated framework for the e-business enabled ERP II processes in enterprise resource planning, value chain management, relationship management and knowledge management. A literature review of these topics is provided below.

Enterprise resource planning (ERP) systems focus on the integration of enterprise-wide resources and have evolved from manufacture resource planning (MRP II) systems, an extension of material requirements planning (MRP) systems (Mohamed, & Fadlalla, 2005; Xu, Wang, Luo, & Shi, 2006). ERP integrates various intra-enterprise functions that include marketing and sales, manufacturing and production, finance and accounting, and human resources (Laudon, & Laudon, 2007). ERP II was introduced as the next generation of ERP in the early 2000s. The Gartner Group (2000) defined ERP II as "a business strategy and a set of industry-domain-specific applications that build customer and shareholder value by enabling and optimizing enterprise and inter-enterprise, collaborative, operational and financial processes." Mohamed (2002) characterized ERP II as a competitive strategy that integrates a centralized, core ERP system with highly specialized solutions such as supply chain management (SCM), CRM and knowledge management (KM). It further described that in ERP II, "the company's supply chain process is integrated with the supplier's supply chain system". ERP II provides the platform for collaborative integration of the entire value network.

Porter (1985) described the value chain as a systematic way of examining all the activities of a firm and how they interact. Primary value chain activities include inbound logistics, operations, outbound logistics, marketing and sales, and service. Support value chain activities include procurement, technology development, human resource management and firm infrastructure. Porter (1985) further extended the value chain concept to a value system to include the value chains of the suppliers, channels and buyers. …

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