The New Enterprise thus needs to be both electronic and extended: electronic, because it has to move information in the fastest possible manner among its employees, suppliers, partners and customers; and extended, because it has to work with the other enterprises as though they were one, single enterprise. Says Peter Graf of SAPMarkets, “People now understand that you have to help business processes cross the boundaries between organizations to unleash their true value potential.”
For every large company, there are a thousand small and medium enterprises (SMEs), which are integral parts of the supply chains of the large companies. The big opportunity in the next few years will be to convert existing organizations which are individual, isolated enterprises into Intelligent, Real-Time Enterprises. The opportunity is greatest with the “Corporate Poor” of the world: the SMEs in the emerging markets, who are today the weakest link in supply chains. A new Technology infrastructure needs to be built to target these enterprises.
An Asia-specific view from business research firm Strategic Intelligence:
The supply chain — the organised flow of goods and information between supplier and customer — can account for up to 70 percent of a product cost.
As the world’s largest manufacturing base, Asian companies need to adopt an Internet-based supply chain management (SCM) system that enables firms to cut costs through better planning and monitoring of inventories and delivering goods faster.
The task of modernising and wiring their SCM systems has become even more pressing as Asian manufacturers struggle with the consequences of a global high-tech slowdown.
However, the high cost of telecommunications in Asia and the lack of infrastructure are preventing especially small and medium enterprises (SMEs) from taking advantage of the Internet’s potentials.
There is also a need to harmonise and integrate Asia’s heterogeneous software systems which use different languages and document formats, and ranging from state-of-the-art modules to homegrown solutions and manual systems.
Currently, SMEs in Asia are not yet full aware of all the benefits supply chain management systems offer. They also believe SCM solutions to be unaffordable or too generically designed to meet their specific needs.
The lack of technological sophistication in Asian manufacturing means that even Internet access can be a luxury.
Clearly, a lot needs to change. What Asian and other SMEs (estimated to be 25 million worldwide) need is a new infrastructure which can take advantage of technology and yet work around its limitations. One of the starting points is to look at how the Internet is going to change the way we buy and use software.