i work digital, Monday, March 22nd, 1999.

Next to Knowledge Management, Enterprise Resource Planning (or ERP) is the most misrepresented and misunderstood segment of the Enterprise software arena. And from most stock analyst's point of view you can lump Descartes Systems group into that ERP soup. Just don't expect CEO Peter Schwartz to agree to it.

"Really we are in the supply chain business; building inter-Enterprise applications. That is we take a page from Dell's play book in that we use the Internet to increase the velocity of material acquisition."

Before your eyes glaze over, take a closer look at what that means for businesses like Coke, Emery Worldwide, General Electric and Sun Microsystems. By increasing the velocity of material acquisition you can reduce the money you need for inventory, because you don't have to guess when your parts and products can be acquired and assembled.

"Using Deliverynet.com companies like Coke, Emery and Sun can peer into the inventory of their suppliers." explains Schwartz, "That means they can acquire a customer, sell the product and charge for the product upon delivery. Like a loaf of bread. You bake it, sell it and start again. Don't bake it and hope you made too much or too little."

While Enterprise Resource Planning better describes Enterprise applications which automate human resource and payroll functions such as those from PeopleSoft and SAP, Supply Chain management is similar in its automation of processes.

"The difference is that with Deliverynet.com and our Energy line of software products, Descartes recognizes a specific problem of companies with products with low differentiation. Automotive parts, computers, food goods. These companies have problems not of manufacturing but of order-to-delivery. By replacing their need to invest in shelf or warehouse space for goods, Descartes clients can invest more in building their brands."

There are some major advantages to using Internet technologies to accomplish this, particularly over other alternatives such as EDI. While running data through EDI is secure and allows a delivery sensitive company to open its systems to suppliers and customers, it is also restrictive and expensive. Using secure Internet protocols on the other hand through Descartes' Deliverynet.com site enables companies with different systems to communicate using a publish and subscribe system. This enables a company like Ericsson to post its parts requirements for vendors who in turn can quickly respond to the request. Thus as Peter states Ericsson "invests in the supply chain, not the inventory. Basically with a 'publish and subscribe' system you have an anything to anything relationship. That is much quicker and more flexible than any EDI system."


Founded in 1989, Descartes was the collaboration of Peter Schwartz, fresh out of Western University in London, ON and an associate who was a senior partner in a Big 5 accounting firm. Through a lead that came out of Digital Equipment Corporation, Schwartz and company recognized an opportunity to help Pepsi Corporation with a supply chain management solution. A path that would lead to the doors of some of the largest delivery critical businesses in the world. So what was the magic formula for Descartes? How can a fresh-faced kid with some consulting experience lead the charge of one of Canada's hottest e-businesses? Focus? Leading edge solutions? Strong management? YES, YES and YES.

Part of the answer is risk capital from JLAlbright and Associates. John Albright is perhaps the least risk adverse of VCs in Canada, a rarity in the country. An important board member of Descartes Systems Group, it is the lack of this sort of financial backing that Peter Schwartz insists is keeping great ideas from unfurling within our borders. It is the availability of such capital which will continue to push the ever important Knowledge Assets of Canada, south to the U.S..

Peter asserts that it is essential to have a lot of money to become a big E-Commerce and E-Business player. "The Excites and Alta Vistas of the World don't just spring up. Someone has to take a big financial interest in them." And while Canadians are inherently conservative in nature, it is conservatism that puts us in jeopardy in the world of e-business.
"Things are changing and if you wait to see how they shake out you might not be around to capitalize in the new environment. Look at Kodak, they just missed their earnings by a mile. Why? People aren't developing film like they used to because, people are scanning images and taking digital photos, zipping them to each other over the Internet. Already the Internet and Digital technology is having an impact on big multinationals."

To take on a multinational however, you can't just do it with $50 and a PC. The new e-business titans were fronted by heavy hitting VC firms. VC's like 20th Century Venture Partners, Kleiner Perkins Byers and Hambrecht and Quist. In Canada the John Albrights are too few and far between. So is Canada destined for trouble, forever left out of the new world order of e-business?

"I hope not" comments Schwartz. "Canadians are really good at International business, largely because of our experiences as members of a multicultural society. Our education system is top notch. And there are a lot of very good entrepreneurs. Without the money and vision though, I hate to really say it, but it could be bad for the future. Yeah we might be in trouble."