Implementing Enterprise Resource Planning ( Erp ) Systems

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“In the mid-to-late 1990s, companies began implementing enterprise resource planning (ERP) systems to automate, standardize, and integrate their business processes for effective planning and control.” (Bradford, 2015) A major component of this ERP system is a single all-encompassing database that Bradford refers to as, “a single source of the truth.” (pg. 1) Essentially, what this means is that employees in various departments of an organization will input data essential to their core activities; and this data can be utilized to help other departments perform their activities faster and more efficiently. The idea is to have all aspects of an organization work from the same data. Organizations have abandoned the legacy systems of the past…show more content…
The system will collect the information from all these activities form various departments and makes this information available to other departments where it can be used effectively. It allows a corporation to be more aware of information relating to production, finance, distribution and human resources which, in turn, allows for more informed decision making. Basis Characteristics. An ERP system has a modular design, meaning it offers distinct business modules such as financial, accounting, manufacturing, distribution, etc. These modules can be individually purchased based on the organizations need, which can be cost effective. For example, a distribution company that doesn’t manufacture may only need to license the modules tailored to its needs such as financial, purchasing, sales and inventory. These modules are integrated using a centralized database management system providing a seamless data flow, increasing the operational transparency. (Rashid, Hossain & Patrick, 2002) They not only bridge the gap across departments, but also across companies under the same management. (Prime Vision) Vendors, on the other hand use these modules as pricing units, so in essence, the more modules a company wants to implement, the costlier the system will be. Bradford states that although costly, the more modules a company implements, the greater the integration, the greater the
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