I. Importance of selecting the correct ERP software
a. Strategic fit
b. Cost vs. benefit to actual (clearly defined) business needs
c. Severe long term impacts on company operations
II. What this paper covers
d. General ERP system overview
f. Best practices
OVERVIEW OF ERP
The term ERP (Enterprise Resource Planning) was first used in 1990 to refer to a type of business software that integrated information from numerous departments within a company (Garača, 1). ERP systems are among the most important business information technologies that emerged during the last decade (Ghosh, 1). Because ERP software can ...view middle of the document...
The amount and type of hardware necessary for a proper ERP system varies depending upon the size of the organization. In smaller organizations with a small Local Area Networks (LAN), one computer may be all that is needed to store and process all the data for the company. It acts as a server which handles data inputs, processes the inputs and outputs them to other applications.
Large companies typically use multiple servers to store and process a large majority of their information. The information stored on the servers are accessed through entities such as individual desktops that are connected by a Local Area Network (LAN). The relationship or way that these components are connected dictated the layout for the entire organizations system. For large companies with existing systems it can often be hard to interface older equipment with newer hardware.
Hardware is the skeletal system of an ERP system. It Is the platform for which the software package operates ("Fundamentals Of Enterprise Resource Planning ERP.").
The software of an ERP system is the lifeblood of an organization, and is arguably the most important component of the ERP system. Software represents the business process of an organization. This means that when thinking about the software of an ERP system, a company must consider whether or not a business process will conform to ERP software. Because software modifications can cause a bevy of problems, if a business process does not conform, the process may need to be analyzed and changed in order to align with the ERP system. Because the software is most visible to the end users, it is often thought of as what ERP is.
There is a vast market for ERP software vendors, many of them targeting companies of a specific size, and with certain needs. In some instances they target specific industries such as Made2Manage by Consona whose website states its product meets the “needs of small- and medium-sized companies” and “is used extensively by companies in industrial and commercial machinery, electronics, fabricated metal.” On the other end of the spectrum there are very large ERP software providers such as Oracle, SAP and Microsoft. Even within a specific product, the software of an ERP system can be, to some extent, customized to the needs of the organization. This is why it is important that a company clearly defines its business needs from an ERP system, when selecting an appropriate product.
Although the functionality of an ERP system can vary greatly, Marnewick and Lessing, say that the majority of ERP products have some, if not all, of these common modules:
1. Finance: The finance module, interchangeable with accounting module, is often a very important component of an ERP system that manages things such as accounts receivable, accounts payable and inventory controls.
2. Human Resources: Human Resources can benefit greatly from an ERP system because it allows the employees to greater manage themselves. By...