March 29, 2004

Bendoly: Info-sharing can help firms succeed

By Diana Drake

Elliot Bendoly has a vision for a brave new world of business that will broaden partnership horizons and help companies focused on internal efficiencies become externally efficient, as well.

The assistant professor of decision and information analysis at Goizueta Business School has looked beyond enterprise resource planning (ERP) to explore his own concept of "value chain resource planning," or VCRP.

"Since I've been at Emory, I've been involved with research into the implementation and use of ERP systems, [which are] management systems designed to integrate processes, enforce data integrity and better manage resources within the firm," Bendoly said. "Many firms are thinking about extending the systems or adding applications so they can communicate not only within firms but also with partners outside. This is not just a technological 'next step'--it's also an operational and organizational one."

With the help of co-authors Ashok Soni and M.A. Venkataramanan, Bendoly laid out a framework for improved competitive advantage and strategy in a paper, "Value Chain Resource Planning: Adding Value With Systems Beyond the Enterprise," published in the March/April issue of Business Horizons .

The study examines the importance of developing interfaces that allow for seamless availability and accessibility of real-time data. The new applications, addressing data warehousing and data mining, are literally "bolted on" to ERP systems so that data can move between various systems and facilitate outside partnerships. The end goal? To better coordinate with partners and understand their needs.

"Part of our message is that we aren't talking about making much larger ERP systems; we're talking about using [existing] ERP systems and adding on packages and extending the entire architecture," Bendoly said. "The idea is to create an interorganizational architecture [through] applications that allow people in real time to see designs for products at one firm as well as at their partners. They can communicate in real time rather than wait weeks for independent assessments.

"We're talking about creating environments so that you can talk to your customers and get a good feel for what they want in terms of service requirements," he continued. "You can go over service contracts in real time--not just using a phone, but also looking at things in detail through computers."

As an example, Bendoly pointed to Georgia-Pacific, which he says has been implementing novel VCRP-related applications to plan for sustainable growth for its suppliers in the timber industry. Georgia-Pacific also has taken a proactive stance with customers like Wal-Mart and Target by continuously monitoring the inventory at these retailers so it can be ready to provide the necessary types and amounts of goods. Other examples of VCRP-ready firms include Owens Corning and Cardinal Health.

Inherent in the VCRP concept is the notion of collaboration not only with suppliers and wholesalers but also other firms which companies may not previously have considered "partners."

"We're talking about collaborating with carriers and firms you wouldn't have considered working with before," Bendoly said. "This may be simply because you have common logistical needs that can be resolved by the sharing of resources, like warehouses and trucks, that you have underutilized in the past because you don't have enough volume to better use them."

Georgia-Pacific has been working with companies like Campbell Soup and General Mills, sharing freight and economizing, which allows for better weight disbursement on vehicles, fewer trucks on the roads--and, consequently, fewer emissions polluting the environment.

Bendoly urged managers to recognize that these new management frameworks and system extensions add value and, because of their inherent technological and interorganizational complexity, contribute to sustainable competitive advantage across multiple partners. The biggest barrier, he said, may be concerns about sharing information.

"Sharing information suggests they are going to be giving away secrets that jeopardize their situation," Bendoly said. "Managers need to come to terms with the idea that some information is worth sharing--and, in fact, only becomes useful upon sharing.

"Some information certainly represents a source of advantage that firms shouldn't give away freely," he acknowledged, "but I think managers tend to overestimate or not fully understand the distinction between those two. They tend to overestimate the kind of information that is strategic, versus the kind of information that creates value when shared."

This article first appeared in
Knowledge@Emory ( ) and is reprinted with permission.