Points of the TriangleERP II is a major advance in strategic business software technology. But don't expect to get there without big changes in how you do business
by Mirghani Mohamed Continued from Page 1 Organizational inertia is a serious impediment to ERP II implementation and may result in complete failure. Unfortunately, changing organizational culture is far more difficult than customizing software. The business process may need to institutionalize a different business model that compromises between the ERP businesses process — such as the vendor's best practices — and the inherited legacy business process that exist in the company. If inertia averts the company from taking the necessary steps to implement change, then there is no need for either an ERP II implementation or its integration. However, the change in business process must be accompanied by clear value creation and supported with prevailing communication, coordination, and understanding of the process itself. In order to achieve higher ROI and attain a future competitive advantage, continuous improvement and a process sharing strategy, even in "coopetitive" ecosystems, are considered necessary. ERP II's main thrust is to integrate cross-functional business processes such as sales automation, marketing, and customer services and focus on creating customer value by elevating the quality of knowledge. This goal can be achieved through systematic business intelligence that, via creative insight, turn into nonstructured knowledge, such as text, gained from other trading partners or from analysis and interpretation of discrete data collected through analytic CRM tools (data warehousing, data mining, and so on). PeopleThe essence of almost any KM initiative is to create an environment that promotes innovation and creativity by strategically organizing people in a way that helps them to think and work together. Technology such as ERP provides the information, but it is the responsibility of people to use their creative insight to transform that information into contextual knowledge. Knowledge is a people-embodied process, and only people-centered approaches such as networking, aspiration, and change of behavior to improve communication can effectively unlock, transfer, and exchange knowledge for future business benefit. ERP infrastructure was originally designed for better networking of virtual communities across the enterprise regardless of the geographical locations involved. ERP II extended that virtual space to focus on the customer and other business actors who may add value through their know-how and experiences. Although ERP II implementation requires fairly complex technology, the crux of the issue depends on the business community's cultural acceptance of the system and its ability to nurture a customer-centric culture across the entire business chain. In ERP II architecture, this objective is even more complicated because there is a need to create a knowledge-sharing culture not only inside the organization, but also at all stakeholder touchpoints and interfacing systems. Employees, customers, partners, retailers, suppliers, and other actors are the principal contributors and the pivotal decision makers; all of these actors have their own bona fide metrics, benchmarks, preferences, patterns, and rules through which they reach their decisions. As a result, empowering them by offering needed information is the most effective method for earning their loyalty. The flow of information between the company and these stakeholders will also create a valuable feedback cycle for tapping the knowledge of the entire business value chain. Pursuing this line of logic, ERP II can be considered a new way of managing the company's intellectual capital. Ultimately, ERP II culminates in the "extended manufacturing enterprise," in which product data management and product development processes are not limited to the walls of the factory, but rather function as a collaborative network with no boundaries to innovation. Bottom LineConventional ERP systems were originally designed to improve the internal efficiency of various business processes such as order fulfillment — such as taking orders and transforming them into invoices, shipping freight, and maintaining inventory records that are transparent across the organization. The business drivers were to speed up and standardize internal business process. However, information on just one side of the business equation is ineffective in achieving competitive advantage in the global economy. This new market demands a distributed knowledge network, which necessitates the participation of the entire value chain from customer to supplier, and in some cases, even from competitors. The evolution of ERP paralleled our progression toward a knowledge economy where collaboration between various stakeholders results in value greater than the individual parts. In general, ERP II philosophy deems the customer a focal point for all business activities. This ERP II customer-centric scheme satisfies the global enterprise's needs by unifying and synchronizing valued-customer touchpoints. In ERP II, information ripples across the entire value chain in a manner that may result in long-lasting relationships with customers. This goal is only possible by identifying customers and their unique needs through knowledge maps, sales automation systems, catalog management, and complex query capabilities that exist in new CRM, SCM, PRM, and KM tools. These tools assist in the immediacy and the transparency of actionable information that leads to real-time decisions. Implementation of ERP II can be considered both technological evolution and organizational revolution to elevate intellectual resources and achieve business results beyond the boundaries of the organization. Mirghani Mohamed, Ph.D. [mirghani@gwu.edu] is the assistant director of the data center of information systems and services at George Washington University in Washington, D.C.
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