Information Systems for Business and Beyond (2019)

An ERP System (click to enlarge)

• Centralized database . All data in an ERP system is stored in a

single, central database. Centralization is key to the success of an ERP. Data entered in one part of the company can be immediately available to other parts of the company.

• Used to run an entire company . An ERP can be used to manage an entire organization’s operations. Companies can purchase modules for an ERP that represent different functions within the organization such as finance, manufacturing, and sales. Some companies choose to purchase many modules, others choose a subset of the modules.

An ERP system not only centralizes an organization’s data, but the processes it enforces are the processes the organization has adopted. When an ERP vendor designs a module, it has to implement the rules for the associated business processes. Best practices can be built into the ERP – a major selling point for ERP. In other words, when an organization implements an ERP, it also gets improved best practices as part of the deal. For many organizations the implementation of an ERP system is an excellent opportunity to improve their business practices and upgrade their software at the same time. But for others an ERP brings a challenge. Is the process embedded in the ERP really better than the process they are currently utilizing? And if they implement this ERP and it happens to be the same one that all of their competitors have, will they simply become more like them, making it much more difficult to differentiate themselves? A large organization may have one version of the ERP, then acquire a Information Systems for Business and Beyond (2019) pg. 167

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