The 1990’s witnessed an impressive growth of Enterprise Resource Planning (ERP) systems in the market of corporate IT solutions, and now they are an important component of IT architecture in many companies. The ERP systems are introduced in companies following well-defined stages, namely the stages of decision, selection, implementation, stabilization and utilization. This last stage (utilization) is also characterized by the development of an organized effort to continuously ensure that the ERP system meets business needs regarding functionality, performance, availability, and to control operation costs, at the ERP management stage. This chapter presents aspects involved in each stage of this life cycle, based on the referenced bibliography.
Enterprise Resource Planning (ERP) systems are integrated information systems acquired as commercial software packages that aim supporting most of the operations of a company. Markus and Tanis (2000) define them as commercial packages that enable the integration of data coming from transactions-oriented information systems and from the various business processes throughout the entire organization. Examples of ERP systems found on the market are the SAP ERP of the German company SAP and Oracle Applications of the American Oracle. Some authors present and describe characteristics that allow differentiating ERP systems from systems developed within the companies and from other types of commercial packages (Markus & Tanis, 2000; Souza & Zwicker, 2001). These characteristics may be summarized as:
ERP systems are commercial software packages;
They include standard models of business processes;
They are integrated information systems and use a corporate data base;
They have a large functional scope;
They require adjustment procedures to be used in a given company.
When deciding to use ERP systems, companies hope to achieve manifold benefits, like business processes integration, increased of control of operations, technological updating, IT cost reduction and access to information in real time for decision making. However, there are also problems to be considered, with implementation failures being reported (Barker & Frolick, 2003). Table 1 synthesizes benefits and difficulties of ERP systems mentioned by many authors (Bancroft, Seip & Sprengel, 1998; Davenport, 1998), and relates them to ERP systems’ characteristics.
Key Terms in this Chapter
ERP Systems: Integrated information systems purchased as commercial software packages with the aim of supporting most operations of a company.
ERP Systems’ Life Cycle: The various stages through which a project of introducing an ERP system in a company passes through.
System Development Life Cycle: The various stages through which a project of development and utilization of information systems passes.
ERP Management: The group of actions carried out to ensure the fulfillment of business requirements, the performance, the availability and the control of maintenance and operation activities of ERP systems.