The difference between ERP and ERP II

The difference between ERP and ERP II "In 1990 when we coined the term, ERP was enterprise centric with very little awareness of anything going on around it," says Zrimsek. "Today, we’re moving towards collaborative commerce, or c-commerce. To do that you have to share information outside the enterprise."

ERP II systems are not just the backbone of the enterprise. They are also the information link for an enterprise in the supply chain. That’s because the business of tomorrow is going to play multiple roles in multiple supply chains, from traditional sources to electronic marketplaces.

The challenge for ERP II is two-fold. First, it’s to aggregate and manage the data surrounding all the transactions of an enterprise as accurately as possible in real time. Then, it’s to open up the system to make that information available to trading partners.

Zrimsek has identified six key differences between ERP and ERP II systems (Figure 1), but he doesn’t expect to see a fully realized ERP II system deployed before 2005.

Role	Traditional ERP was concerned with optimizing an enterprise. Internal optimization, however, will only take you so far. ERP II systems are about optimizing the supply chain through collaboration with trading partners.
Domain	ERP systems focused on manufacturing and distribution. ERP II systems will cross all sectors and segments of business, including service industries, government, and asset-based industries like mining.
Function	As ERP systems cross sectors and segments, they will no longer be able to present all things to all people. Zrimsek expects ERP II vendors to pick the industries in which they’re going to play, and focus on providing deep functionality for those users.
Process	In ERP systems, the processes were focused on the four walls of the enterprise. ERP II systems will connect with trading partners, wherever they might be, to take those processes beyond the boundaries of the enterprise.
Architecture	Old ERP systems were monolithic and closed. ERP II systems will be Web-based, open to integrate and interoperate with other systems, and built around modules or components that allow users to choose just the functionality they need.
Data	Information in ERP systems is generated and consumed within the enterprise. In an ERP II system, that same information will be available across the supply chain to authorized participants.

Figure 1: Six key differences between ERP and ERP II systems (Zrimsek)