ERP Will Die and Give Place for C-Commerce

FLORENCE, ITALY (04/03/2000) - The traditional ERP (enterprise resource planning) model is dead, and a new model, c-commerce (collaborative commerce), is emerging, Nigel Rayner, research director at the Gartner Group Inc., said in a speech at the market research company's Spring Symposium here in Florence, Italy, today.

So far, ERP has been the center of the universe with CRM (customer relationship management) and SCM (supply chain management) revolving around it, Rayner said.

However, by the end of 2004, SCM and CRM will be equally important as ERP in the new online marketplace.

"By 2004, no more than 40 percent of the companies' applications will be provided by ERP," Rayner said, meaning that pure ERP is only becoming part of a much larger and more complex inter-enterprise system.

In the traditional business model, where ERP is key, the focus is on user productivity. This has been the case since 1995, according to the GartnerGroup analyst. However, from now until 2004, a more dynamic online marketplace will emerge, where companies can collaborate with employees, customers, stockholders, sales channels and suppliers through a multi-enterprise framework.

This development creates new challenges for the ERP vendors, who will have to go in one of two different directions, Rayner said.

A number of vendors will be offering software to help companies deal with different aspects of this new online marketplace, either offering different ERP, SCM and CRM pieces that companies will tie together into a c-commerce system, or offering some kind of over-arching software architecture, according to Rayner.

"ERP vendors will either focus on components or on the c-commerce framework," Rayner said. The key to success for those focusing on components will be to achieve positions as functional leaders, whereas the vendors concentrating on the c-commerce frameworks will need to achieve positions as technology-standard leaders.

Rayner went on to describe the Internet marketplace going through four different phases. First, in 1996 to 1999, there was the "presence phase," when all a company needed was to be seen on the Internet. Then, between 1997 and 2000, came the "interaction phase", which meant a company needed to supply basic search applications on its Web site. In the third phase, between 1998 and 2003, the "transaction phase" is starting to take place. Companies are now doing complete business transactions over the Internet. Lastly, from 2000 to 2005, there will be a "transformation phase", which will be the creation of c-commerce.

The GartnerGroup Spring Symposium continues through Wednesday here in Florence, Italy.

GartnerGroup, based in London, U.K., can be reached at +44-1784 431 611 or on the Web at www.gartner.com/.

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