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Erp's and Enterprise Systems

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Submitted By scalderonb
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Putting the Enterprise into the Enterprise System
By: Thomas H. Davenport

1. Explain the hypothesis it tries to prove, and its results.

The hypothesis Davenport tries to prove in his article is that ERP’s are great systems that enable companies to integrate the data used throughout the entire organization, however when companies install these systems without thinking through its complete business implications, it can lead to disaster and can have very negative effects on the company.

Davenport tries to prove this hypothesis by stating several companies that didn’t integrate the system correctly and didn’t end up well. Fox Meyer Drug was riven into bankruptcy, Mobile Europe didn’t think about the company as a whole and spent billions of dollars implementing an ERP to later abandon it, Dell Computer implemented an ERP and the realized it did not fit its new, decentralized management model, Applied materials gave its ERP up when it could deal with the organizational changes inside the company, and Dow Chemical spent seven years and a lot of money implementing an ERP, to later start over on a client-server version.

If companies rush to install an ERP, because they feel fragmented, without understanding the full business implications this implementation will have on the company, they will probably fail, after wasting a big amount of money and probably causing disruption and weakness inside the companies units.

2. Explain your opinion when an ERP should fit the company 
procedures or the company processes should change to fit the ERP. In the past, company’s first decided how they wanted to develop their business and then searched for a software package that would support their processes. However, now days, with ERP’s, it is completely backwards. In most cases, the business is often modified to fit the chosen system. ERP’S are customizable to

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