B2B Integration : A Practical Guide to Collaborative E-commerce

Enterprise Application Integration (EAI) 107
The efficiency, and ultimately, the success of an enterprise today
depends on the immediate flow of information across the complete
supply chain. To this end, ERP promises to replace multiple, disparate
silo systems with one enterprise environment. Today's modern ERP
systems enable companies to standardize business processes across the
enterprise including sales, accounts receivable, engineering, planning,
inventory management, accounts payable, quality management,
production, distribution planning and external transportation.
History of ERP
ERP initially grew from the needs of the manufacturing industry. The
focus of manufacturing systems in the 1960s was on inventory control.
Most of the software packages were 'homegrown' and designed to
handle inventory based on the traditional inventory models of the time.
In the 1970s the focus shifted to MRP (Material Requirement Planning)
systems that translated the master schedule built for the end items into
time-phased net requirements for the sub-assemblies, components and
raw materials planning and procurement.
In the 1980s, with the advent of the just-in-time inventory model,
MRP evolved to MRP-II which extended material planning to the
shop floor and distribution management activities. In the early 1990s,
MRP-II was further extended to cover areas such as engineering, finance,
human resources and project management — essentially any process
across the enterprise. Hence, the birth of enterprise resource planning.
ERP implementation
The implications to existing business processes must be assessed before
implementing an ERP solution. The traditional approach has been to
conduct a comprehensive business process reengineering (BPR) analysis
prior to taking up ERP. The BPR process should identify areas for
process improvement in addition to high-level integration and
customization requirements.
The leaders in the ERP marketplace include SAP AG (SAP R/3),
PeopleSoft, JD Edwards, Oracle, BaaN Infosystems (BaaN IV), Ramco
Systems (Marshal) and QAD (MFG/PRO). SAP is, by far, the dominant