The technical system: information technology and information systems
Enterprise Resource Planning (ERP) is a type of business which has its origins in the manufacturing business but is now widely adapted to other non manufacturing entities. The ERP system allows for the coordination of business activities and when used properly the system reduces costs by improving business management processes.
This essay discusses Enterprise Resource Planning (ERP) software which is a type of business software that assists businesses in keeping track of their work processes to increase productivity.
What business activities and/or business functions does this type business application support?
ERP software enables the integration of records that would normally be scattered across applications (Rosemann and Wiese, 1999). Data is entered once into the system for use across different departments creating a single database ensuring that a lot of processing time is saved. The ERP software supports and coordinates business activities in sales, marketing, finance, operations, distribution and customer information collection among other departments. Solutions to core business processes like warehouse management, production, planning and control are also provided in addition to administrative solutions like accounting and human resources.The ERP software is not for a single purpose, rather it supports multiple purposes.
What information do the applications provide?
The ERP system is designed in such a way that it allows the user to purchase and install only the modules they need. The different types of software that exist are M1, Epicor and SAR R/3 among others provided by different vendors. According to Rajapakse and Seddon (2005) ERP software provides enterprise wide business process support. Information is centralized allowing communication between different business activities. Since the ERP system is a consolidation of various other applications, information like accounting, order and invoice tracking is available to any department that may require it in real time.
What kind of analyses do the applications allow?
Depending on what modules of the ERP system have been implemented, finance, sales, market changes, business cycle and human resource changes analyses can be performed. The application is able to serve across a divide of departments which includes analysts, managers and accountants amongst others. Management and financial reporting, supply chain management, improving cash flow by analyzing cash and credit processes, calculating financial risk are analyses which are all possible depending on the needs. Estimating, quoting, accounts payable and receivable, supply chain and customer relationship management with partners in business can be done enabling identification of bottlenecks in the business processes. The human resources department can also track employee time through the business processes.
What kind of knowledge does it assume that users will have?
Several authors suggest that ERP software users need to have overall business knowledge including document handling and data mining abilities. Rajapakse and Seddon (2005) and Sudzina et al, 2008 comment that modern management concepts, high IT literacy, configuration of ERP work processes and knowledge of ERP concepts are all critical for users of ERP software. Software selection and configuration ability for the required modules and the ability to share information online, with clear definition of tasks and deliverables are all essential for the users.
What kind of computer hardware and software are needed to support this type of business application?
According to the ERP Study Centre (2006), ERP software due to the nature of the amount of functions it can support, it is the most demanding software in terms of hardware requirements. The ERP Study Centre notes that the RAM size of 1GB would be needed and several more GB would be needed for larger installations. In terms of hardware, 100GB of disk space which is high speed is needed for ERP software. It is further noted that ERP software would be best with high end Unix operating systems like IBM AIX and Sun Solaris. Finally for database requirements, Oracle, MS SQL Server among others can support ERP (ERP Study Centre, 2006).
ERP Study Centre (February 9, 2006). Technology Issues. Retrieved April 8, 2009 from:
Rajapakse, J. and Seddon, P. B. (2005). Why ERP May Not be Suitable for
Organisations in Developing Countries in Asia. Department of Information Systems,
University of Melbourne, Australia Retrieved April, 12 from: http://www.pacis-net.org/file/2005/121.pdf
Rosemann, M. and Wiese, J. (1999). Measuring the Performance of ERP software – A
Balance Scorecard Approach. In Proceedings of the 10th Australasian Conference on Information Systems. Retrieved April, 13 from: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.4.9176&rep=rep1&type=pdf.
Sudzina, F,; Pucihar, A. and Lenart, G. (2008). ERP System Selection: Criteria
Sensitivity. Retrieved April, 12 from: http://apachepersonal.miun.se/~vivasp/IRIS31/IRIS31-067.pdf