This article mis6 bidgoli pdf download contains original research. ERP is usually referred to as a category of business-management software — typically a suite of integrated applications—that an organization can use to collect, store, manage and interpret data from these many business activities. ERP provides an integrated and continuously updated view of core business processes using common databases maintained by a database management system. Enterprise system software is a multibillion-dollar industry that produces components supporting a variety of business functions.
IT investments have become the largest category of capital expenditure in United States-based businesses over the past decade. Though early ERP systems focused on large enterprises, smaller enterprises increasingly use ERP systems. The ERP system integrates varied organizational systems and facilitates error-free transactions and production, thereby enhancing the organization’s efficiency. However, developing an ERP system differs from traditional system development.
By the mid-1990s ERP systems addressed all core enterprise functions. ERP systems experienced rapid growth in the 1990s. Because of the year 2000 problem and the introduction of the euro that disrupted legacy systems, many companies took the opportunity to replace their old systems with ERP. ERP systems initially focused on automating back office functions that did not directly affect customers and the public. ERP II” was coined in 2000 in an article by Gartner Publications entitled ERP Is Dead—Long Live ERP II. Developers now make more effort to integrate mobile devices with the ERP system.
ERP vendors are extending ERP to these devices, along with other business applications. Technical stakes of modern ERP concern integration—hardware, applications, networking, supply chains. An ERP system covers the following common functional areas. Order Processing: Order to cash, order entry, credit checking, pricing, available to promise, inventory, shipping, sales analysis and reporting, sales commissioning. ERP for public sector, and an integrated office automation system for government bodies. The software structure, modularization, core algorithms and main interfaces do not differ from other ERPs, and ERP software suppliers manage to adapt its systems to government agencies. ERP implementation success in the public sector are cultural.
Most ERP systems incorporate best practices. This means the software reflects the vendor’s interpretation of the most effective way to perform each business process. Systems vary in how conveniently the customer can modify these practices. Use of best practices eases compliance with requirements such as IFRS, Sarbanes-Oxley, or Basel II.
They can also help comply with de facto industry standards, such as electronic funds transfer. These systems are typically configured by systems integrators, who bring unique knowledge on process, equipment, and vendor solutions. This requires that the vendors offer specific support for the plant floor equipment their customers operate. ERP vendors must be experts in their own products and connectivity to other vendor products, including those of their competitors. Database integration—ERP systems connect to plant floor data sources through staging tables in a database.
Plant floor systems deposit the necessary information into the database. The ERP system reads the information in the table. The benefit of staging is that ERP vendors do not need to master the complexities of equipment integration. Connectivity becomes the responsibility of the systems integrator. These devices communicate directly with plant floor equipment and with the ERP system via methods supported by the ERP system. Many system integrators offer custom solutions.
These systems tend to have the highest level of initial integration cost, and can have a higher long term maintenance and reliability costs. Long term costs can be minimized through careful system testing and thorough documentation. ERP’s scope usually implies significant changes to staff work processes and practices. Generally, three types of services are available to help implement such changes—consulting, customization, and support. Besides that, information processing influences various business functions e. Wal-Mart use a just in time inventory system. This reduces inventory storage and increases delivery efficiency, and requires up-to-date data.
Implementing ERP typically requires changes in existing business processes. Poor understanding of needed process changes prior to starting implementation is a main reason for project failure. The difficulties could be related to the system, business process, infrastructure, training, or lack of motivation. It is therefore crucial that organizations thoroughly analyze business processes before they implement ERP software. Analysis can identify opportunities for process modernization. It also enables an assessment of the alignment of current processes with those provided by the ERP system. A potential disadvantage is that adopting “standard” processes can lead to a loss of competitive advantage.