What Is Enterprise Software in a Multicompany Environment

Enterprise software is the basis of our major business processes. If we consider procure to pay or order to cash, we might think of purchasing, order entry, inventory control. E-commerce, and a host of other application systems that make the process efficient, effective, and economic. We can marvel at the integration that ties these pieces of software together and we call the whole interwoven bundle our enterprise resource planning system, or ERP. 

But our ERP system is only interwoven within the boundaries of our company. While we might communicate electronically with our trading partners to automate the transfer of invoices, orders and other electronic documents, our software does not interoperate with our trading partners. 

That is, we do not really know what is happening in other parts of the supply chain until we are informed via some, hopefully automated, communication. We do not have access to their data from our own systems. We might be able to look up our supplier s inventory on the Internet and use that information as we place our order, but our system does not identify a supplier with inventory and place the appropriate orders because it does not have access to the data. 

For example, when an airline makes a change to the menu on its inflight service, the commissaries at airports throughout the nation need to order the ingredients in advance. In turn, a distributor needs to stock the items in warehouses throughout the country by placing orders with the manufacturer. The distributor will also need to reduce inventory of the items that are being replaced. 

Because the fundamental nature of business competition has shifted from company against company to supply chain against supply chain, we need our enterprise software to support this new model. Ultimately, our enterprise software will need to broach the boundaries between companies so that everyone in the chain can operate from a common set of data. 

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