Increasing Functional Specificity over Increasingly Commoditized Hardware - Guide to Cloud Computing for Business and Technology Managers - page 23

many migrated to client/server systems where networks were central and
distributed databases more common. The growth of ERP and the migration
to client/server systems really got a boost from the Y2K scare. Many compa-
nies were convinced of the need to replace older mainframe-based systems,
some ERP and some not, with the newer client/server architecture.
An analysis of the performance of ES shows that a key indicator
is the level of enterprise integration. First-generation MRP
systems only provided limited integration for sales, engineer-
ing, operations, and storage. Second-generation MRP II solu-
tions enhanced that integration and included financial capabilities.
ERP systems enabled the jump to full enterprise integration. Finally,
CRM and SCM systems are expanding that integration to include
customers and suppliers. In this history, there is a clear positive trend
of performance improvement, coinciding with the diffusion of ES
functional innovations. If we assume that ERP, CRM, and SCM systems
achieve real integration, the next stage is likely to be an ES that allows
for the integration of a group of businesses.
1.5.2 Extended Enterprise Systems (EES)
The most salient trend in the continuing evolution of ES is the focus on front-
office applications and interorganizational business processes, particularly
in support of supply chain management (SCM). At present, greater organi-
zational effectiveness in managing the entire supply chain all the way to the
end customer is a priority in business. The greater emphasis on front-office
functions and cross-enterprise communications and collaboration via the
Internet simply reflects changing business needs and priorities. The demand
for specific modules/capabilities in particular shows that businesses are
looking beyond the enterprise. This external focus is encouraging vendors to
seize the moment by responding with the modules/systems that meet evolv-
ing business needs. In this renewed context, ESs enable organizations to inte-
grate and coordinate their business processes. They provide a single system
that is central to the organization and ensure that information can be shared
across all functional levels and management hierarchies.
ES is creeping out of the back-office into the front and beyond the enter-
prise to customers, suppliers, and more, in order to meet changing business
needs. Key players like Baal, Oracle, PeopleSoft, and SAP have incorporated
Advanced Planning and Scheduling (APS), Sales Force Automation (SFA),
Customer Relationship Management (CRM), SCM, Business Intelligence,
and E-commerce modules/capabilities into their systems or repositioned
their ESs as part of broader Enterprise Systems suites incorporating these
and other modules/capabilities. ES products reflect the evolving business