Enterprise resource planning

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Enterprise resource planning (ERP) is a method of using computer technology to link various functions—such as accounting, inventory control, and human resources—across an entire company. ERP is intended to facilitate information sharing, business planning, and decision making on an enterprise-wide basis. ERP enjoyed a great deal of popularity among large manufacturers in the mid-to late-1990s. Most early ERP systems consisted of mainframe computers and software programs that integrated the various smaller systems used in different parts of a company. Since the early ERP systems could cost up to $2 million and take as long as four years to implement, the main market for the systems was Fortune 1000 companies.

"Throughout the 1990s, most large industrial companies installed enterprise resource planning systems—that is, massive computer applications allowing a business to manage all of its operations (finance, requirements planning, human resources, and order fulfillment) on the basis of a single, integrated set of corporate data," Dorien James and Malcolm L. Wolf wrote in The McKinsey Quarterly. "ERP promised huge improvements in efficiency—for example, shorter intervals between orders and payments, lower back-office staff requirements, reduced inventory, and improved customer service. Encouraged by these possibilities, businesses around the world invested some $300 billion in ERP during the decade."

By the late 1990s, however, sales of ERP systems began to slow. Some large manufacturers encountered problems implementing the systems, and others felt that ERP did not live up to its billing as a planning tool. Larger economic factors also influenced sales of ERP systems. For example, many companies developed close relationships with customers and suppliers and began conducting business over the World Wide Web. In addition, a growing number of companies came to value the speed and flexibility of smaller, interconnected computer systems and no longer wanted to rely on a mainframe to run ERP software. In response to these issues, the vendors of ERP systems have evolved to focus on smaller companies, develop Web-enabled systems, and expand their offerings up and down the supply chain.

Benefits and Drawbacks of Erp

When the idea was first introduced, ERP was an attractive solution for many large companies because it offered so many potential uses. For example, the same system could be used to forecast demand for a product, order the necessary raw materials, establish production schedules, track inventory, allocate costs, and project key financial measures. ERP "acts as a planning backbone for a company's core business processes," Gary Forger wrote in Modern Materials Handling. "In addition to directing many of them, the system also ties together these varied processes using data from across the company. For instance, a typical ERP system manages functions and activities as different as the bills of materials, order entry, purchasing, accounts payable, human resources, and inventory control, to name just a few of the 60 modules available. As needed, ERP is also able to share the data from these processes with other corporate software systems." Another important benefit of ERP systems was that they allowed companies to replace a tangle of complex computer applications with a single, integrated system.

Despite these potential benefits, however, traditional ERP systems also had a number of drawbacks. For instance, the early systems tended to be large, complicated, and expensive. Implementation required an enormous time commitment from a company's information technology department or outside professionals. In addition, because ERP systems affected most major departments in a company, they tended to create changes in many business processes. Putting ERP in place thus required new procedures, employee training, and both managerial and technical support. As a result, many companies found the changeover to ERP a slow and painful process. Once the implementation phase was complete, some businesses had trouble quantifying the benefits they gained from ERP.

Finally, as technology began shifting toward speedy Internet connections, Web-based business-to-business (B2B) relationships, and electronic commerce, some companies worried that their mainframe-based ERP systems were too slow and outdated. As it turned out, though, many companies found that their ERP systems provided a solid technological foundation for future growth by standardizing business procedures, facilitating information sharing across the company, and creating an organization accustomed to change. "ERP systems may feel like an albatross to companies that have expensively and painfully installed them," James and Wolf stated. "Nonetheless, they constitute a valuable foundation for a wide range of new value-enhancing applications. …In hindsightit appears that much of the value of these large systems lay in the infrastructure foundation they created for future growth based on information technology."

Erp Solutions for Small Businesses

As sales of ERP systems to large manufacturing companies began to slow, some vendors changed their focus to smaller companies. According to a survey by AMR research reported in Modern Materials Handling, the overall market for ERP systems grew 21 percent in 1998, despite the fact that sales to companies with greater than $1 billion in revenues declined 14 percent during the same period. "ERP applications are no longer just the stuff of huge corporations," Constance Loizos noted in Industry Week. "While billion-dollar manufacturing companies are now completing their ERP implementations, mid-size customers—witness to the improved business processes of manufacturing market leaders—are beginning to refine their own operations…. Invariably the mostsubstantial reason for companies to implement ERP is that without it, staying competitive is a practical impossibility. The business world is moving ever closer toward a completely collaborative model, and that means companies must increasingly share with their suppliers, distributors, and customers the in-house information that they once so vigorously protected."

Of course, small and medium-sized companies—as well as those involved in service rather than manufacturing industries—have different resources, infrastructure, and needs than the large industrial corporations who provided the original market for ERP systems. Vendors had to create a new generation of ERP software that was easier to install, more manageable, required less implementation time, and entailed lower startup costs. Many of these new systems were more modular, which allowed installation to proceed in smaller increments with less support from information technology professionals. Other small businesses elected to outsource their ERP needs to vendors. For a fixed amount of money, the vendor would supply the technology and the support staff needed to implement and maintain it. This option often proved easier and cheaper than buying and implementing a whole system, particularly when the software and technology seemed likely to become outdated within a few years.

Erp and the Internet

Another trend in ERP development and use involves vendors making the software available to client companies on the Internet. Known as hosted ERP or Web-deployed ERP, this trend has also contributed to making ERP systems available to smaller businesses. When a company chooses to run its ERP systems through a Web-based host, the software is not purchased by or installed at the client company. Instead, it resides on the vendor's host computer, where clients access it through an Internet connection. "Rather than dispersing ERP to multiple corporate sites and incurring the costs of many servers needed to run the software, Web-deployed ERP centralizes the system," Forger noted. "Using the Web to access a single ERP system at a central location, companies can reduce their IT investment on two fronts—hardware and personnel."

Running ERP systems on a host computer relieves small businesses from the need to purchase a mainframe computer or hire information technology specialists to support the system. In addition, this arrangement allows client companies to save money by paying only for the ERP applications they use rather than having to buy a certain number of modules. In effect, ERP vendors act as application service providers (ASPs) for several client firms. "Systems supplied by ASPs are particularly attractive to start-up companies that can't reliably predict their future business volumes, can't afford to pay for first-tier ERP systems, and don't want to be continually replacing cheaper, less capable systems as their businesses grow," James and Wolf explained.

Erp Expands Along the Supply Chain

Traditional ERP systems were concerned with automating processes and connecting disparate information systems within a business enterprise. But during the late 1990s, an increasing number of businesses turned their focus outward, toward collaboration and forging technological links to other companies in the supply chain. "Increasingly, manufacturers in developed countries are becoming part of the design and production line of their customers," Richard Adhikari wrote in Industry Week. "Tight scheduling requires automating the supply chain and enterprise resource planning functions and implementing electronic communications links." ERP vendors have responded to this trend by integrating ERP systems with other types of applications, such as e-commerce, and even with the computer networks of suppliers and customers. These interconnected ERP systems are known as extended enterprise solutions.

Sales of extensions to traditional ERP systems increased by 92 percent in 1999, and were expected to continue growing by over 50 percent annually through 2004, according to a survey by AMR Research reported in Manufacturing Systems. In the meantime, sales of core ERP systems were expected to stagnate. These core systems, which accounted for 90 percent of ERP vendors' revenues in 1999, were expected to make up only 57 percent of the market by 2004. "In today's business climate, manufacturers realize that true value comes from collaboration rather than trying to further streamline business processes," analyst Simon Bragg told Jim Fulcher in Manufacturing Systems. "For example, to get MRP [material requirements planning] to really work, a manufacturer needs decent forecast information. The best way to improve forecast accuracy is to work closely with customers and suppliers."

ERP systems have expanded to include several new functions. For example, application integration functions link ERP to other software systems that affect the supply chain. Visibility functions give companies an overview of inventory and its status as it moves through the supply chain. Supply chain planning software helps create optimal plans for producing and delivering goods. Similarly, customer relationship management software customizes the way that a supplier deals with each customer individually. ERP has also been adapted to support e-commerce by facilitating order fulfillment and distribution, simplifying the process of electronic procurement, and tracking information about customers and their orders.

Choosing an Erp Vendor

As of 1998, according to Loizos, there were five leading ERP vendors that accounted for 62 percent of the market: SAP of Germany; Oracle; J.D. Edwards; People Soft; and Baan of the Netherlands. For the most part, these vendors focused on large business clients and concentrated on automating manufacturing, distribution, human resources, and financial systems. The remaining 38 percent of the ERP applications market was comprised of numerous smaller vendors which served smaller business clients and focused on niche applications.

Loizos outlined a series of factors for small businesses to consider in choosing an ERP vendor. For example, she emphasized that implementing an ERP system is a major information technology decision which requires time and resources, so companies should avoid choosing a vendor too quickly. Instead, she recommended that small businesses evaluate their needs carefully and come up with a list of business issues they expect the ERP system to help them address. Loizos also suggested that companies research potential ERP vendors thoroughly, looking at their reputations in the industry but also checking references and interviewing previous clients. She recommended avoiding multiple vendors if possible, and ensuring that the vendor chosen is appropriate for the small business's future growth and expansion plans. Finally, she noted that companies should ensure that project funding is in place before a contract is signed.

Factors in a Successful Erp Implementation

Once a small business has decided to install an ERP system and selected a vendor, there are a number of steps the company can take to ensure a successful implementation. In his article, Forger noted that the ERP implementation is more likely to succeed if the company positions it as a strategic business issue and integrates it with a process redesign effort. Of course, the ERP system should fit the company's overall strategy and help it serve its customers. It may also be helpful to find a passionate leader for the project and select a dedicated, cross-functional project team. The small business owner should make certain that these individuals have the power to make decisions about the ERP implementation process.

Forger recommends that companies attack the implementation project in short, focused stages, working backward from targeted deadlines to create a sense of urgency. It may be helpful to begin with the most basic systems and then expand to other functional areas. Forger also suggests using change management techniques to manage the human dimension of the project, since ERP requires a great deal of support from affected areas of the company. Finally, he emphasizes that once the ERP system is in place, companies need to interpret the data collected carefully and accurately if the system is to contribute to business planning.

Although ERP systems may seem complex and costly, even small businesses are increasingly finding it necessary to invest in such technology in order to remain competitive. "ERP systems are being implemented today to provide a stable foundation for a growing number of businesses across all segments, from dot-coms to major automotive manufacturers," Dave Morrison wrote in CMA Management. "The number of implementations down the supply chain and into small and medium-sized companies is steadily growing as the initial costs are reduced along with the overall cost of ownership. Pre-configured and pretested versions are now effectively slashing the implementation costs while reducing the project complexity and risks. These new systems are providing a clean head start in development and delivering a stable and fully tested product to production. The methodology is continually evolving and the results are very positive."

Further Reading:

Adhikari, Richard. "ERP Meets the Middle Market." Industry Week. March 1, 1999.

Forger, Gary. "ERP Goes Mid-Market." Modern Materials Handling. January 31, 2000.

Fulcher, Jim. "Extended Enterprise Systems." Manufacturing Systems. December 2000.

James, Dorien, and Malcolm L. Wolf. "A Second Wind for ERP." McKinsey Quarterly. Spring 2000.

Johnson, Dexter. "Enterprise Resource Planning." Advanced Manufacturing Technology. December 15, 2000.

Krumwiede, Kip R., and Win G. Jordan. "Reaping the Promise of Enterprise Resource Systems." Strategic Finance. October 2000.

Loizos, Constance. "ERP: Is It the Ultimate Software Solution?" Industry Week. September 7, 1998.

Morrison, Dave. "Full Speed Ahead." CMA Management. November 2000.

Pender, Lee. "The Missing Link." CIO. June 15, 2000.

Peterson, Scot. "What's Behind the ERP Blues?" eWeek. June 12, 2000.

Wah, Louisa. "Give ERP a Chance: Many Businesses Have Declared ERP a Waste or a Burden, but Experts Urge Companies Not to Dismiss This Technology." Management Review. March 2000.

See also: Inventory Control Systems; Material Requirements Planning

A process by which a company (often a manufacturer) manages and integrates the important parts of its business. An ERP management information system integrates areas such as planning, purchasing, inventory, sales, marketing, finance, human resources, etc.

Investopedia Says:
ERP is most frequently used in the context of software. As the methodology has become more popular, large software applications have been developed to help companies implement ERP in their organization.

Think of ERP as the glue that binds the different computer systems for a large organization. Typically each department would have their own system optimized for that division's particular tasks. With ERP, each department still has their own system, but they can communicate and share information easier with the rest of the company.

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Enterprise resource planning (ERP) systems integrate internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application. Their purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders.^[1]

ERP systems can run on a variety of computer hardware and network configurations, typically employing a database as a repository for information.^[2]

Contents 1 History 1.1 Origin of "ERP" 1.2 Expansion 2 Characteristics 3 Components 4 Best practices 5 Modularity 6 Connectivity to plant floor information 7 Implementation 7.1 Process preparation 7.2 Configuration 7.3 Customization 7.4 Extensions 7.5 Data migration 8 Comparison to special–purpose applications 8.1 Advantages 8.2 Benefits 8.3 Disadvantages 9 See also 10 References 11 Further reading

History

Origin of "ERP"

In 1990 Gartner Group first employed the acronym ERP^[3] as an extension of material requirements planning (MRP), later manufacturing resource planning^[4][5] and computer-integrated manufacturing. Without supplanting these terms, ERP came to represent a larger whole, reflecting the evolution of application integration beyond manufacturing.^[6] Not all ERP packages were developed from a manufacturing core. Vendors variously began with accounting, maintenance and human resources. By the mid–1990s ERP systems addressed all core functions of an enterprise. Beyond corporations, governments and non–profit organizations also began to employ ERP systems.^[7]

Expansion

ERP systems experienced rapid growth in the 1990s because the year 2000 problem and introduction of the Euro disrupted legacy systems. Many companies took this opportunity to replace such systems with ERP. This rapid growth in sales was followed by a slump in 1999 after these issues had been addressed.^[8]

ERP systems initially focused on automating back office functions that did not directly affect customers and the general public. Front office functions such as customer relationship management (CRM) dealt directly with customers, or e–business systems such as e–commerce, e–government, e–telecom, and e–finance, or supplier relationship management (SRM) became integrated later, when the Internet simplified communicating with external parties.^{[citation needed]}

"ERP II" was coined in the early 2000s. It describes web–based software that allows both employees and partners (such as suppliers and customers) real–time access to the systems. The role of ERP II expands from the resource optimization and transaction processing of traditional ERP to leveraging the information involving those resources in the enterprise’s efforts to collaborate with other enterprises, not just to conduct e-commerce buying and selling.^[9] Compared to the first generation ERP, ERP II is said to be more flexible rather than confining the capabilities of the ERP system within the organization, it is designed to go beyond the corporate walls and interact with other systems. "Enterprise application suite" is an alternate name for such systems.

Characteristics

ERP (Enterprise Resource Planning) systems typically include the following characteristics:

• An integrated system that operates in real time (or next to real time), without relying on periodic updates.^{[citation needed]}
• A common database, which supports all applications.
• A consistent look and feel throughout each module.
• Installation of the system without elaborate application/data integration by the Information Technology (IT) department.^[10]

Finance/Accounting

General ledger, payables, cash management, fixed assets, receivables, budgeting, consolidation

Human resources

Payroll, training, benefits, 401K, recruiting, diversity management

Manufacturing

Engineering, bill of materials, work orders, scheduling, capacity, workflow management, quality control, cost management, manufacturing process, manufacturing projects, manufacturing flow, activity based costing, product life cycle management

Supply chain management

Order to cash, inventory, order entry, purchasing, product configurator, supply chain planning, supplier scheduling, inspection of goods, claim processing, commissions

Project management

Costing, billing, time and expense, performance units, activity management

Customer relationship management

Sales and marketing, commissions, service, customer contact, call center support

Data services 

Various "self–service" interfaces for customers, suppliers and/or employees

Access control

Management of user privileges for various processes

Components

• Transactional database
• Management portal/dashboard
• Business intelligence system
• Customizable reporting
• External access via technology such as web services
• Search
• Document management
• Messaging/chat/wiki
• Workflow management

Best practices

Best practices are incorporated into most ERP systems. This means that the software reflects the vendor's interpretation of the most effective way to perform each business process. Systems vary in the convenience with which the customer can modify these practices.^[11] Companies that implemented industry best practices reduced time–consuming project tasks such as configuration, documentation, testing and training. In addition, best practices reduced risk by 71% when compared to other software implementations.^[12]

The 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. This is because the procedure can be readily codified within the ERP software and replicated with confidence across multiple businesses who share that business requirement.^{[citation needed]}

Modularity

Most systems are modular to permit automating some functions but not others. Some common modules, such as finance and accounting, are adopted by nearly all users; others such as human resource management are not. For example, a service company probably has no need for a manufacturing module. Other companies already have a system that they believe to be adequate. Generally speaking, the greater the number of modules selected, the greater the integration benefits, but also the greater the costs, risks and changes involved.^{[citation needed]}

Connectivity to plant floor information

ERP systems connect to real–time data and transaction data in a variety of ways. These systems are typically configured by systems integrators, who bring unique knowledge on process, equipment, and vendor solutions.

Direct integration—ERP systems have connectivity (communications to plant floor equipment) as part of their product offering. This requires the vendors to offer specific support for the plant floor equipment that their customers operate. ERP vendors must be expert in their own products, and connectivity to other vendor products, including 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.

Enterprise appliance transaction modules (EATM)—These devices communicate directly with plant floor equipment and with the ERP system via methods supported by the ERP system. EATM can employ a staging table, Web Services, or system–specific program interfaces (APIs). The benefit of an EATM is that it offers an off–the–shelf solution.

Custom–integration solutions—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. Custom–integrated solutions typically run on workstation or server class computers.

Implementation

ERP's scope usually implies significant changes to staff work processes and practices.^[13] Generally, three types of services are available to help implement such changes—consulting, customization, and support.^[13] Implementation time depends on business size, number of modules, customization, the scope of process changes, and the readiness of the customer to take ownership for the project. Modular ERP systems can be implemented in stages. The typical project for a large enterprise consumes about 14 months and requires around 150 consultants.^[14] Small projects can require months; multinational and other large implementations can take years.^{[citation needed]} Customization can substantially increase implementation times.^[14]

Process preparation

Implementing ERP typically requires changes in existing business processes.^[15] Poor understanding of needed process changes prior to starting implementation is a main reason for project failure.^[16] It is therefore crucial that organizations thoroughly analyze business processes before implementation. This 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. Research indicates that the risk of business process mismatch is decreased by:

• linking current processes to the organization's strategy;
• analyzing the effectiveness of each process;
• understanding existing automated solutions.^[17][18]

ERP implementation is considerably more difficult (and politically charged) in decentralized organizations, because they often have different processes, business rules, data semantics, authorization hierarchies and decision centers.^[19] This may require migrating some business units before others, delaying implementation to work through the necessary changes for each unit, possibly reducing integration (e.g. linking via Master data management) or customizing the system to meet specific needs.^[20]

A potential disadvantage is that adopting "standard" processes can lead to a loss of competitive advantage. While this has happened, losses in one area are often offset by gains in other areas, increasing overall competitive advantage.^[21][22]

Configuration

Configuring an ERP system is largely a matter of balancing the way the customer wants the system to work with the way it was designed to work. ERP systems typically build many changeable parameters that modify system operation. For example, an organization can select the type of inventory accounting—FIFO or LIFO—to employ, whether to recognize revenue by geographical unit, product line, or distribution channel and whether to pay for shipping costs when a customer returns a purchase.^[20]

Customization

ERP systems are theoretically based on industry best practices and are intended to be deployed "as is".^[23][24] ERP vendors do offer customers configuration options that allow organizations to incorporate their own business rules but there are often functionality gaps remaining even after the configuration is complete. ERP customers have several options to reconcile functionality gaps, each with their own pros/cons. Technical solutions include rewriting part of the delivered functionality, writing a homegrown bolt-on/add-on module within the ERP system, or interfacing to an external system. All three of these options are varying degrees of system customization, with the first being the most invasive and costly to maintain.^[25] Alternatively, there are non-technical options such as changing business practices and/or organizational policies to better match the delivered ERP functionality.

Key differences between customization and configuration include:

• Customization is always optional, whereas the software must always be configured before use (e.g., setting up cost/profit center structures, organisational trees, purchase approval rules, etc.)
• The software was designed to handle various configurations, and behaves predictably in any allowed configuration.
• The effect of configuration changes on system behavior and performance is predictable and is the responsibility of the ERP vendor. The effect of customization is less predictable, is the customer's responsibility and increases testing activities.
• Configuration changes survive upgrades to new software versions. Some customizations (e.g. code that uses pre–defined "hooks" that are called before/after displaying data screens) survive upgrades, though they require retesting. Other customizations (e.g. those involving changes to fundamental data structures) are overwritten during upgrades and must be reimplemented.^[26]

Customization Advantages:

• Improves user acceptance^[27]
• Offers the potential to obtain competitive advantage vis-à-vis companies using only standard features.

Customization Disadvantages:

• Increases time and resources required to both implement and maintain.^[25]
• Inhibits seamless communication between suppliers and customers who use the same ERP system uncustomized.^{[citation needed]}
• Over reliance on customization undermines the principles of ERP as a standardizing software platform

Extensions

ERP systems can be extended with third–party software. ERP vendors typically provide access to data and functionality through published interfaces. Extensions offer features such as:^{[citation needed]}

• archiving, reporting and republishing;
• capturing transactional data, e.g. using scanners, tills or RFID
• access to specialized data/capabilities, such as syndicated marketing data and associated trend analytics.
• advanced planning and scheduling (APS)

Data migration

Data migration is the process of moving/copying and restructuring data from an existing system to the ERP system. Migration is critical to implementation success and requires significant planning. Unfortunately, since migration is one of the final activities before the production phase, it often receives insufficient attention. The following steps can structure migration planning:^[28]

• Identify the data to be migrated
• Determine migration timing
• Generate the data templates
• Freeze the toolset
• Decide on migration-related setups
• Define data archiving policies and procedures.

Comparison to special–purpose applications

Advantages

The fundamental advantage of ERP is that integrating the myriad processes by which businesses operate saves time and expense. Decisions can be made more quickly and with fewer errors. Data becomes visible across the organization. Tasks that benefit from this integration include:^{[citation needed]}

• Sales forecasting, which allows inventory optimization
• Chronological history of every transaction through relevant data compilation in every area of operation.
• Order tracking, from acceptance through fulfillment
• Revenue tracking, from invoice through cash receipt
• Matching purchase orders (what was ordered), inventory receipts (what arrived), and costing (what the vendor invoiced)

ERP systems centralize business data, bringing the following benefits:

• They eliminate the need to synchronize changes between multiple systems—consolidation of finance, marketing and sales, human resource, and manufacturing applications
• They bring legitimacy and transparency in each bit of statistical data.
• They enable standard product naming/coding.
• They provide a comprehensive enterprise view (no "islands of information"). They make real–time information available to management anywhere, any time to make proper decisions.
• They protect sensitive data by consolidating multiple security systems into a single structure.^[29]

Benefits

• ERP can greatly improve the quality and efficiency of a business. By keeping a company's internal business process running smoothly, ERP can lead to better outputs that will benefit the company such as customer service, and manufacturing.
• ERP provides support to upper level management to provide them with critical decision making information. This decision support will allow the upper level management to make managerial choices that will enhance the business down the road.
• ERP also creates a more agile company that can better adapt to situations and changes. ERP makes the company more flexible and less rigidly structured in an effort to allow the different parts of an organization to become more cohesive, in turn, enhancing the business both internally and externally.^[30]

Disadvantages

• Customization is problematic.
• Re–engineering business processes to fit the ERP system may damage competitiveness and/or divert focus from other critical activities
• ERP can cost more than less integrated and/or less comprehensive solutions.
• High switching costs associated with ERP can increase the ERP vendor's negotiating power which can result in higher support, maintenance, and upgrade expenses.
• Overcoming resistance to sharing sensitive information between departments can divert management attention.
• Integration of truly independent businesses can create unnecessary dependencies.
• Extensive training requirements take resources from daily operations.
• Due to ERP's architecture (OLTP, On-Line Transaction Processing) ERP systems are not well suited for production planning and supply chain management (SCM)

The limitations of ERP have been recognized sparking new trends in ERP application development, the four significant developments being made in ERP are, creating a more flexible ERP, Web-Enable ERP, Interenterprise ERP and e-Business Suites, each of which will potentially address the failings of the current ERP.

See also

• List of ERP software packages
• Accounting software
• Business process management
• Document automation
• Data migration
• Enterprise feedback management (EFM)
• Enterprise planning systems
• Enterprise system
• ERP modeling
• ERP for IT
• ERP system selection methodology
• Information technology management
• List of project management software
• Management information system
• Manufacturing operations management
• Service management
• Software as a service
• Supply chain management

References

1. ^ Bidgoli, Hossein, (2004). The Internet Encyclopedia, Volume 1, John Wiley & Sons, Inc. p. 707.
2. ^ Khosrow–Puor, Mehdi. (2006). Emerging Trends and Challenges in Information Technology Management. Idea Group, Inc. p. 865.
3. ^ L. Wylie, "A Vision of Next Generation MRP II", Scenario S-300-339, Gartner Group, April 12, 1990
4. ^ Anderegg, Travis. "MRP/MRPII/ERP/ERM — Confusting Terms and Definitions for a Murkey Alphabet Soup". http://www.wlug.org.nz/EnterpriseSpeak. Retrieved 2007-10-25 
5. ^ "ERP". http://www.erp.com/component/content/article/324-erp-archive/4407-erp.html. Retrieved 2009-10-07. 
6. ^ Sheilds, Mureell G., E–Business and ERP: Rapid Implementation and Project Planning. (2001) John Wiley and Sons, Inc. p. 9.
7. ^ Chang, SI; Guy Gable; Errol Smythe; Greg Timbrell (2000). "A Delphi examination of public sector ERP implementation issues". International Conference on Information Systems. Atlanta: Association for Information Systems. pp. 494–500. ISBN ICIS2000-X. http://portal.acm.org/citation.cfm?id=359640.359793. Retrieved September 9, 2009. 
8. ^ Monk, Ellen; Wagner, Bret (2006). Concepts in Enterprise Resource Planning (Second ed.). Boston: Thomson Course Technology. ISBN 0-619-21663-8 
9. ^ http://www.uncg.edu/bae/people/holderness/readings/ERP_is_Dead--Long_Live_ERP_II.pdf
10. ^ Sheilds, Mureell G., E-Business and ERP: Rapid Implementation and Project Planning. (2001) John Wiley and Sons, Inc. p. 9-10.
11. ^ Monk, Ellen and Wagner, Brett."Concepts in Enterprise Resource Planning" 3rd.ed.Course Technology Cengage Learning.Boston, Massachusetts.2009
12. ^ "Enhanced Project Success Through SAP Best Practices – International Benchmarking Study". ISBN 1-59229-031-0.
13. ^ ^{a b} What is ERP?, http://www.tech-faq.com/erp.shtml
14. ^ ^{a b} http://carl.sandiego.edu/gba573/critical_issues_affecting_an_erp.htm CRITICAL ISSUES AFFECTING AN ERP IMPLEMENTATION
15. ^ Turban et al. (2008). Information Technology for Management, Transforming Organizations in the Digital Economy. Massachusetts: John Wiley & Sons, Inc., pp. 300–343. ISBN 978-0-471-78712-9
16. ^ Brown, C., and I. Vessey, "Managing the Next Wave of Enterprise Systems: Leveraging Lessons from ERP," MIS Quarterly Executive, 2(1), 2003.
17. ^ King. W., "Ensuring ERP implementation success," Information Systems Management, Summer 2005.
18. ^ Yusuf, Y., A. Gunasekaran, and M. Abthorpe, "Enterprise Information Systems Project Implementation: A Case Study of ERP in Rolls-Royce," International Journal of Production Economics, 87(3), February 2004.
19. ^ "Requirements Engineering for Cross-organizational ERP Implementation: Undocumented Assumptions and Potential Mismatches" (PDF). University of Twente. http://www.vital-project.org/papers/Daneva-Wieringa-Camera-Ready-RE-Paper.pdf. Retrieved 2008-07-12. 
20. ^ ^{a b} Thomas H. Davenport, "Putting the Enterprise into the Enterprise System", 'Harvard Business Review', July–August 1998.
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Further reading

This article's further reading may not follow Wikipedia's content policies or guidelines. Please improve this article by removing excessive, less relevant or many publications with the same point of view; or by incorporating the relevant publications into the body of the article through appropriate citations. (August 2010)

• Grant, David; Richard Hall, Nick Wailes, Christopher Wright (March 2006). "The false promise of technological determinism: the case of enterprise resource planning systems". New Technology, Work & Employment 21 (1): 2–15. doi:10.1111/j.1468-005X.2006.00159.x. 
• Loh, Tee Chiat; Lenny Koh Siau Ching (September 2004). "Critical elements for a successful ERP implementation in SMEs". International Journal of Production Research 42 (17): 3433–3455. doi:10.1080/00207540410001671679. 
• Shaul, Levi; Tauber Doron (September 2010). "Hierarchical examination of success factors across ERP life cycle". MCIS 2010 Proceedings.: 79. http://aisel.aisnet.org/mcis2010/79/. 
• Head, Simon (2005). The New Ruthless Economy. Work and Power in the Digital Age. Oxford UP. ISBN 0-19-517983-8. 
• Waldner, Jean-Baptiste (1992). Principles of Computer Integrated Manufacturing. Chichester: John Wiley & Sons Ltd. ISBN 0-471-93450-X. 
• Waldner, Jean-Baptiste (1990). Les nouvelles perspectives de la production. Paris: DUNOD BORDAS. ISBN 978-2-04-019820-6. 
• Lequeux, Jean-Louis (2008). Manager avec les ERP, Architecture Orientée Services (SOA). Paris: EDITIONS D'ORGANISATION. ISBN 978-2-212-54094-9. 
• CIO Magazine's ABCs of ERP
• History Of ERP
• Clemons, E.K.; Kimborough (1986). "IS for Sustainable Competitive Advantage". Information & Management 11 (3): 131–136. doi:10.1016/0378-7206(86)90010-8. 

• Henderson, Ian ERP From the Frontline MBE ISBN 978-1-898822-05-9 Making ERP Work
• Software Advice's 4-Part Series on the History of Enterprise Software
• MRP versus ERP
• ERP Customization

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