Enterprise Resource Planning Systems: Effects and Strategic Perspectives in Organizations

Enterprise Resource Planning Systems: Effects and Strategic Perspectives in Organizations

Alok Mishra (Atilim University, Turkey)
Copyright: © 2009 |Pages: 10
DOI: 10.4018/978-1-59904-859-8.ch005
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In the age of globalization, organizations all over the world are giving more significance to strategy and planning to get an edge in the competition. This chapter discusses the Enterprise Resurce Planning (ERP) systems effects and strategic perspectives in organizations. These are significant how information technology and ERP together facilitate in aligning the business in such a way so that it should lead to excellent productivity. It further explores in what ways effects of ERP system in organizations can provide sustained competitive advantage.
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Enterprise Resource Planning (ERP) software is one of the fastest growing segments of business computing today (Luo and Strong, 2004) and ERPs are one of the most significant business software investments being made in this new era (Beard and Sumner, 2004). Davenport (1998) has declared that ‘the business worlds’s embrace of enterprise systems may in fact be the most important development in the corporate use of information technology in the 1990’s. Mabert et al. (2001) noted that industry reports suggests as many as 30,000 companies worldwide have implemented ERP systems. According to a report by Advanced Manufacturing Research, the ERP software market is expected to grow from $ 21 billion in 2002 to $ 31 billion in 2006 and the entire enterprise applications market which includes Customer Relationship Management and Supply Chain Management software will top $ 70 billion (AM Research, 2002). Further, AMR Research has projected as much as $ 10 billion in global investments in ERP (as cited in Kalling, 2003). The ERP market is projected to grow from a current $15 billion to $ 50 billion in the next five years and to reach $ 1 trillion by 2010 (Bingi et al., 1999). ERP systems offer the advantage of providing organizations with a single, integrated software system linking the core business activities such as oprations, manufacturing, sales, accounting, human resources, and inventory control (Lee and Lee, 2000; Newell et al., 2003; Shanks and Seddon, 2000). According to Brown and Vessey (2003) this integrated perspective may be the first true organization-wide view available to management. According to Lee and Myers (2004) much of the literature on ERP implementation suggests that ERP systems should support the strategic objectives of the organization. They observed that some ERP vendors tend to assume that implementing their products is a straightforward translation from strategy to IT-enabled business processes.

ERP helps organizations to meet the challenges of globalization with a comprehensive, integrated application suite that includes next-generation analytics, human capital management, financials, operations, and corporate services. With support for industry-specific best practices, ERP helps organizations improve productivity, sense and respond to market changes, and implement new business strategies to develop and maintain a competitive edge. ERP is designed to help businesses succeed in the global marketplace by supporting international legal and financial compliance issues and enabling organizations to adapt internal operations and business processes to meet country-specific needs. As a result, organizations can focus on improving productivity and serving their customers instead of struggling to ensure they are in compliance with business and legal requirements around the world. Companies that automate and streamline workflows across multiple sites (including suppliers, partners, and manufacturing sites) produced 66% more improvement in reducing total time from order to delivery, according to Aberdeen’s 2007 study of the role of ERP in globalization. Those companies that coordinate and collaborate between multiple sites, operating as a vertically integrated organization, have achieved more than a 10% gain in global market share. The majority of companies studied (79%) view global markets as a growth opportunity, but of those companies, half are also feeling pressures to reduce costs (Jutras, 2007). Those companies that coordinate and collaborate between multiple sites, operating as a vertically integrated organization, have achieved more than a 10% gain in global market share (Marketwire, 2007).

Key Terms in this Chapter

Integrated: Also known as combining different functional aspects of the organization similar to integrated application suite associated in the manuscript with: integrated software system linking the core business activities such as operations, manufacturing, sales, accounting, human resources, and inventory control.

Competitive advantage: Also known as organization’s sustains profits that exceed the average said to possess competitive advantage. Similar to a competitive advantage is an advantage over competitiors by offering consumers greater value either by means of lower prices or by providing greater benefits associated in the manuscript with: competitive advantage through ERP

Business Processes: Also known as IT-enabled business processes. Similar to integration of business processes, associated in the manuscript with business processes to better align with the ERP software.

ERP: Also known as Enterprise Resource Planning, similar to systems attempt to integrate all data and processes of an organization into a unified system associated in the manuscript with Effects and Strategic Perspectives in Organizations

Global: Also known as globalization, similar to Multinational Organizations, Organizations distributed at international level associated in the manuscript with global market for ERP software, global marketplace.

Business Benefits: Also known as: business benefits of ERP. Similar to: Combined tangible and intangible benefits to organizations due to ERP implementation. Associated in the manuscript with: Effects and benefits of ERP implementation

Complete Chapter List

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Editorial Advisory Board
Table of Contents
Jatinder N. D. Gupta, Sushil Sharma, Mohammad A. Rashid
Jatinder N. D. Gupta, Sushil Sharma, Mohammad A. Rashid
Chapter 1
Nancy Alexopoulou, Panagiotis Kanellis, Mara Nikolaidou, Drakoulis Martakos
Efficient response to change, both upon expected and unpredicted contingencies, is a critical characteristic for modern enterprises. This chapter... Sample PDF
A Holistic Approach for Enterprise Agility
Chapter 2
Hossana H. Aberra
SAP Business Blueprint is a vital part of SAP implementation exercise. A well-defined business blueprint may set the foundation for successful... Sample PDF
What is SAP Business Blueprint?
Chapter 3
Rogerio Atem de Carvalho
This chapter introduces the key aspects of Free/Open Source Enterprise Resources Planning systems (FOS-ERP). Starting by related work carried out by... Sample PDF
Free and Open Source Enterprise Resources Planning
Chapter 4
Brian H. Cameron
Business process modeling (BPM) is a topic that is generating much interest in the information technology (IT) industry today. Business analysts... Sample PDF
The Changing Nature of Business Process Modeling: Implications for Enterprise Systems Integration
Chapter 5
Alok Mishra
In the age of globalization, organizations all over the world are giving more significance to strategy and planning to get an edge in the... Sample PDF
Enterprise Resource Planning Systems: Effects and Strategic Perspectives in Organizations
Chapter 6
Gary P. Moynihan
An executive information system (EIS) is a software system designed to support the informational needs of senior management. The EIS is... Sample PDF
An Overview of Executive Information Systems
Chapter 7
Joseph Bradley
Enterprise Resource Planning systems have proven difficult and costly to implement. Organizations must consider the risks and rewards of embarking... Sample PDF
Enterprise Resource Planning System Risks and Rewards
Chapter 8
Andrea Masini
After observing that the pervasiveness of IT may soon render it strategically irrelevant, management scholars have recently questioned the value of... Sample PDF
ERP-Driven Performance Changes and Process Isomorphism
Chapter 9
Ronda R. Henning
The application software life cycle considers the functionality of a given collection of components within the context of a consumer’s requirements... Sample PDF
Application Integration within the Enterprise Context
Chapter 10
Sanjay Mathrani, Mohammad A. Rashid, Dennis Viehland
A significant investment in resources is required for implementation of integrated enterprise systems as technology solutions while the... Sample PDF
The Impact of Enterprise Systems on Business Value
Chapter 11
Charlotte H. Mason, Aleda V. Roth
Growing competitive pressures and escalating customer demands have led businesses to sophisticated information technology to manage costs and... Sample PDF
The Right Path to SCM-CRM Integration
Chapter 12
Euripidis Loukis, Ioakim Sapounas, Konstantinos Aivalis
This chapter is dealing with the alignment of enterprise systems with business strategy and its impact on the business value that enterprise systems... Sample PDF
Enterprise Systems Strategic Alignment and Business Value
Chapter 13
Sanjay Mathrani, Mohammad A. Rashid, Dennis Viehland
The market for enterprise systems (ES), continues to grow in the post millennium era as businesses become increasingly global, highly competitive... Sample PDF
Enterprise Systems in Small and Medium-Sized Enterprises
Chapter 14
Kerstin Fink, Christian Ploder
Small and medium-sized enterprises (SMEs) are a vital and growing part of any national economy. Like most large businesses, SMEs have recognized the... Sample PDF
Integration Concept for Knowledge Processes, Methods, and Software for SMEs
Chapter 15
Tobias Schoenherr, Ditmar Hilpert, Ashok K. Soni, M.A. Venkataramanan, Vincent A. Mabert
Although the research on integrated enterprise systems (ES) is proliferating, the knowledge base about ES implementations, usage and experiences... Sample PDF
Enterprise System in the German Manufacturing Mittelstand
Chapter 16
Darshana Sedera
Organizations invest substantial resources in acquiring Enterprise Systems, presumably expecting positive impacts to the organization and its... Sample PDF
Size Matters! Enterprise System Success in Medium and Large Organizations
Chapter 17
Joseph Bradley
ERP implementation projects normally involve a single vendor providing the packaged software for the entire system. Although most companies follow... Sample PDF
Implementing Best of Breed ERP Systems
Chapter 18
Ganesh Vaidyanathan
Enterprise resource planning systems are complex yet single, integrated software programs that runs off a single database so that the various... Sample PDF
Enterprise Resource Systems Software Implementation
Chapter 19
Calin Gurau
This chapter considers the importance of business modelling for implementing e-CRM systems. The introduction of e-business models requires the... Sample PDF
Restructuring the Marketing Information System for eCRM: An Application of the Eriksson-Penker Method
Chapter 20
Albert Boonstra
At the present moment, many hospitals are going through a process of change directed at the integrated delivery of health care. Enterprise Systems... Sample PDF
Analyzing an ES Implementation in a Health Care Environment
Chapter 21
S. Padmanaban
ERP systems have become key enablers of businesses today. While many organizations wish to adopt ERP for competitive advantage, they find choosing... Sample PDF
Designing to Deploying Customisable ERP Cost Effectively
Chapter 22
Mateja Podlogar, Katalin Ternai
This chapter introduces the ERP systems, their complexity, and especially their integration in higher education as a significant challenge for many... Sample PDF
ERP Systems in Higher Education from Regional Perspective
Chapter 23
Valentin Nicolescu, Holger Wittges, Helmut Krcmar
This chapter provides an overview of past and present development in technical platforms of ERP systems and its use in enterprises. Taking into... Sample PDF
From ERP to Enterprise Service-Oriented Architecture
Chapter 24
ERP and Beyond  (pages 329-345)
Suresh Subramoniam, Mohamed Tounsi, Shehzad Khalid Ghani, K. V. Krishnankutty
Enterprise-wide automation has already transformed the relations among suppliers, purchasers, producers, and customers. Conventional ERP helps only... Sample PDF
ERP and Beyond
Chapter 25
Gita A. Kumta
The chapter introduces the essence of ERP in government as a tool for integration of government functions which provides the basis for citizen... Sample PDF
E-Government and ERP: Challenges and Strategies
Chapter 26
Manish Gupta, Raj Sharman
A paradigm shift is occurring in identity management philosophy. User-focused identity management is one the emerging and most promising paradigms.... Sample PDF
Emerging Frameworks in User-Focused Identity Management
Chapter 27
Ramón Brena, Gabriel Valerio, Jose-Luis Aguirre
From the Knowledge Management perspective, Knowledge distribution is a critical process in organizations. As many of the other Knowledge-related... Sample PDF
Next-Generation IT for Knowledge Distribution in Enterprises
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