Transcript ERP - High Point University

ERP
The Development of Enterprise Resource
Planning Systems
The Evolution of Information Systems
 ERP system was not feasible until the 1990’s
 Evolved as a result of
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Development of hardware and software
technology needed to support the system
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Computers have gotten smaller and faster
Moore’s Law
 Performance doubled with each new generation of
computers
 Every 18-24 months the # of transistors on a
computer chip doubled
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Proliferation of personal productivity software
The Evolution of Information Systems
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Development of a vision of integrated
information systems
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As PC’s gained popularity, managers became
aware that important business information was
being stored on individual PC/s, but there was no
easy way to share the information electronically.
Servers became more powerful and less
expensive and provided scalability
Possible to view ERP systems as an
extension of MRP II (Manufacturing Resource
Planning)
ERP Software Emerges
 SAP
 Formed in 1972 by five former IBM systems analysts
 Systemanalyse und Programmentwicklung
 Systems Analysis and Program Development
 R/3
 Released in 1992
 Designed using an open-architecture
 Allows all business areas to access the same
database, eliminating redundant data and
communication s lags
The Significance and Benefits of ERP
Software and Systems
 Allows easier global integration
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Barriers of currency exchange rates, language
and culture can be bridged automatically
 Eliminates updating and repairing many
separate computer systems
 Allows management to manage operations,
not just monitor them
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Makes the organization more responsive when
change is required
Questions About ERP
 How Much Does an ERP Package Cost?
 Large company might spend from $50 million
to $500 million
 Midsize company might spend $10 million to
$20 million
 Cost includes several factors
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ERP software
New Hardware
Consultants’ and analysts’ fees
Time for implementaiton
Training
What return can be expected from an
ERP investment?
 Savings in operations expense
 One study indicated that 33% of companies
say costs savings in sales order management,
and 34% of companies said their ERP
systems significantly reduced their personnel
needs
 More sales can be generated every month
 Competitive advantage
 Save personnel, suppliers, distributors, and
customers much frustration
Why do some companies have more
success with ERP than do other?
 Some executives hope that new software will
cure fundamental business problems that
aren’t curable by any software
 Some executives and IT managers don’t take
enough time for a proper analysis during the
planning and implementation phase
 Some executives and IT managers skimp on
employee education and training
The Continuing Evolution of ERP
 The Internet has forced ERP companies to
rethink how users get and use their ERP
software