Market Trends -- ERP

Enterprise software vendor JD Edwards & Co. recently announced a strategic alliance with electronic commerce newcomer Ariba Inc. that is designed to stretch JD Edwards' strengths from back-room enterprise resource planning (ERP) to the end-user world of Internet e-commerce transactions.

The marriage likely is a sign of the ERP times. With widely scattered reports that the once-heady ERP market is slowing, players like JD Edwards, SAP America Inc. and PeopleSoft Inc. are looking to branch out, and the red-hot e-commerce market has a lot of appeal.

But the trend is more than a matter of ERP vendors following Internet money. The shift to e-commerce is natural, ERP vendors argue, because their systems are built largely around enterprisewide financial and logistics systems. Those systems are being pitched as the perfect cornerstones for state and local government e-commerce platforms.

"The whole Internet market is a good extension from the ERP market," said George Gulliford, JD Edwards' product marketing manager for logistics. "Also, for many state and local governments, there has been a heavy investment in their ERP infrastructure. With this being added to the ERP suite, it will be a benefit to them in the long run."

Here's how the Edwards/Ariba alliance envisions growing an ERP infrastructure into an e-commerce platform:

An agency would work with an ERP vendor-in this case, JD Edwards-to lay an automated procurement foundation. That would involve integrating a base of established suppliers into the ERP system. Then a business-to-business e-commerce solution from Ariba-its Operating Resource Management System or its ORMS with the Ariba.com network-would be layered on top of the procurement system to produce online catalogs. After that, a purchaser would receive an automatic e-mail or other type of notification that would walk the purchaser through levels of approval. The system also would incorporate accounts payable and note other details such as delivery location.