Move aside, enterprise resource planning. It's the age of eco-system resource planning (ERP) 4.0. Rich Sherman, senior fellow at the Supply Chain Centre of Excellence with Tata Consultancy Services, explains.
SCB: You talk about ERP, but the “E” is different. It stands for Ecosystem, not Enterprise, and you’ve added a “4.0” to it. What does that mean?
Sherman: We've got Industry 4.0, Business 4.0, and digitalization. And supply chains that have evolved into Multi-Enterprise Supply Chain Business Platforms. They’re adding applications to their data-exchange and transaction-management capabilities. Because if I'm optimizing my enterprise network, which includes suppliers and customers, that doesn't really address the entire ecosystem.
SCB: So you’re getting away from the enterprise-centric approach — in favor of what?
Sherman: There’s a lot of talk about the convergence of physical and digital, about autonomous supply chains. As the universe for data management and digitalization expands, there's going to be a need for neutral third parties to help consolidate data across enterprise-centric networks, to create a total ecosystem model. You need to be able to optimize all of the resources that are required to move goods and information within that ecosystem.
SCB: So we should be thinking about this as a single entity?
Sherman: Yes. We talk about control towers, which are an enterprise-centric view of all transactional information and product moving within the network. But if you think about actual control towers at every airport, they all plug into a traffic control system. So we have to look at how these enterprise platforms evolve into Ecosystem Resource Planning, in order to take advantage of the movement not only of my goods, but of my competitor's as well.
SCB: Who then owns the data that resides within this larger ecosystem that you're describing?
Sherman: I think you’ve hit the nail on the head. Ecosystem providers aren’t intending to monetize the data as much as they’re trying are to monetize the insights that are gathered from their analytics of the data. The data is community-owned, but value is created by the kind of insights you can generate. For example, transportation-management providers aren’t really monetizing all of that load, route and tender information. What they’re doing is federating the data, and using it for the community to get benchmarks on rates, routes and capacity.
Timely, incisive articles delivered directly to your inbox.