What is an ERP System/ERP Systems/Historical system architectures/ERP Key Characteristics

Simplistic Definition

ERP — Enterprise Resource Planning

Detailed Definition

“a business strategy and set of industry-domain-specific applications that build customer and shareholder communities value network system by enabling and optimizing enterprise and inter-enterprise collaborative operational and financial processes

Historical system architectures

Historically, companies created “islands of automation”. A hodge-podge of various systems that operated or managed various divergent business processes. Sometimes these systems were integrated with each other and sometimes they weren’t. Sometimes they were loosely interfaced and sometimes they were more tightly interfaced.

Key Characteristics of ERP

Integration

seamless integration of all the information flowing through a company — financial and accounting, human resource information, supply chain information, and customer information.

Packages

Enterprise systems are not developed in-house

—IS life cycle is different

1.Mapping organizational requirements to the System processes

2.Making informed choices about the parameter setting of system functionality.

—Organizations that purchase enterprise systems enter into long-term relationships with vendors. Organizations no longer control their own destiny.

Best Practices

ERP vendors talk to many different businesses within a given industry as well as academics to determine the best and most efficient way of accounting for various transactions and managing different processes. The result is claimed to be “industry best practices”.

—The general consensus is that business process change adds considerably to the expense and risk of an enterprise systems implementation. Some organizations rebel against the inflexibility of these imposed business practice changes by ERPs.

Some Assembly Required

Only the software is integrated, not the computing platform on which it runs. Most companies have great difficulty integrating their enterprise software with a package of hardware, operating systems, database management systems software, and telecommunications suited to their specific needs.

— Interfaces to legacy systems

— Third-party bolt-on applications

Evolving

Enterprise Systems are changing rapidly

—Architecturally: Mainframe, Client/Server, Web-enabled, Object-oriented, Componentization

—Functionally: front-office (i.e. sales management), supply chain (advanced planning and scheduling), data warehousing, specialized vertical industry solutions, etc.