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14 Chapter 1 • Introduction to Enterprise Systems for Management

e-Business and ERP
Both e-Business and ERP technologies have pretty much evolved simultaneously, since the 1990s.
Hence, during the early days, many people thought only one would survive for the long term. With
the initial enthusiasm and support for e-Business, many analysts predicted the doom of ERP. Instead,
both have flourished beyond everyone’s expectation from those early days. One reason for their
success is this simultaneous growth. The early predictions were based on the assumptions that these
two technologies were competing for the same market. Yes there are some similarities between the
two, namely, both provide platform for systems integration or data sharing. While e-Business
systems are better for sharing unstructured data and collaboration, ERP are better for sharing
structured or transaction data; also, e-Business focus was on external integration (interorganizational),
while ERP systems’ initial focus was on internal data integration. Therefore, e-Business and ERP are
more of complementary technologies (see Figure 1-8) rather than competing technologies as
4
predicted earlier. Norris et al. provide the following major reasons for this.
1. e-Business technology focus has been on linking a company with its external partners and
stakeholders, whereas ERP focus has been on integrating the functional silos of an organiza-
tion into an enterprise application. e-Business technologies that have emerged as successful
over the decade (e.g., business-to-consumer and business-to-business) have generally focused
on market growth by selling products and services to new consumers and markets. On the
other hand, ERP technology has been successful in integrating business processes across
the functional spectrum of the organization and in providing a central repository of all
corporate data, information, and knowledge, thereby increasing organizational efficiency and
worker productivity.
2. e-Business is a disruptive technology, whereas ERP is adaptive technology. e-Business
practically transformed the way business operates in terms of buying and selling, customer
service, and its relationships with suppliers. This caused a lot of disruptions in organiza-
tional strategy, structure, power, and the like. ERP has emerged as an adapter by merging
the early data processing and integration efforts within a large corporation. It has been very

ERP e-Business
Internal Process ALIGNMENT STRATEGY BUSINESS External Process
(Goal: integration and (Goal: integration and
efficiency) effectiveness)

FIGURE 1-8 e-Business and ERP

4 Norris, G., Hurley, J. R., Hartley, K. M., Dunleavy, J. R., and Balls, J. D. (2000). E-Business and ERP Transforming the
Enterprise. New York, NY: PriceWaterhouseCoopers and Wiley Publishers.