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Enterprise Resource Planning (Erp)

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An Enterprise Resource Planning (ERP) system is a multi-module transaction-based application software that helps organisations to manage the vital parts of the business. Today, ERP systems are often preferred over the legacy systems, despite the fact that the Legacy systems offered a great deal of value from their unique, customized features (Fosser, E, Leister, O H, Moe, C E & Newman, M., 2008). It’s important to note that the Legacy system has had many drawbacks, such as, rigid development & delivery methodologies; lengthy reaction time to address business changes; overly-complicated & difficult-to-manage programs; functionality gaps & user dissatisfaction; costly and/or painful version release upgrades; business applications written at different times with different tools, languages, to name a few (Simparel, 2010). Alternatively, the ERP system has asserted to create value through integrating activities across organization; implementation of best practices; standardization of processes; one-source data; and on-line access to information (Olson, 2007).

According to Fosser, Leister, Moe & Newman (2008) in their idealised form, Enterprise Resource Planning (ERP) systems integrate all business processes into one enterprise-wide solution; accomplished by having a centralised database that all business functional areas have access to. While it is possible to customise the ERP system to fit the original business processes, the current understanding is that customisation is not recommended because of the high cost and problems with system upgrades and maintenance difficulties. Most ERP systems are built to be configurable and it has been identified that this is the preferable method for most organisations.

Increased competition and business growth has lead the ERP system to gain popularity, as this system has the ability to provide cross-functional integration and

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