Enterprise Resource Planning
Sowmyanarayanan Sadagopan
Indian Institute of Information Technology, Bangalore
I. INTRODUCTION
II. ERP—DIFFERENT PERSPECTIVES
III. ERP—AN INFORMATION SYSTEM PERSPECTIVE
IV. COMPONENTS OF ERP
V. ERP IMPLEMENTATION ISSUES
GLOSSARY
business process reengineering (BPR) Refers to the
critical analysis of the existing ways of carrying out
key activities within an enterprise, often referred to
as business processes, and optimizes them. In to-
day’s IT-intensive business environment, BPR gen-
erally accompanies most ERP implementations.
change management Refers to the management of
changes in internal policies, revised roles of key
positions, and the accompanying resistance to
changes that results because of the introduction of
ERP software that impacts most employees.
customization The process of making the generic
ERP software taking into account firm-specific de-
tails and processes.
enterprise computing Refers to the key issues involved
in the applications of IT for large-scale, organization-
wide, high-performance and mission-critical appli-
cations.
“going live” Refers to the process of commissioning
the ERP software—with “live” data getting entered
into the system.
materials resource planning (MRP) Refers to the de-
tailed calculations that accompany the planning of
time-phased availability and ordering of materials,
taking into account the complex relationships be-
tween assemblies and subassemblies that constitute
the final product.
manufacturing resource planning (MRP II) Refers to
the planning of manufacturing schedules taking
Encyclopedia of Information Systems, Volume 2
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VI. ERP BENEFITS
VII. ERP AND OTHER ENTERPRISE FUNCTIONS
VIII. ERP PRODUCTS
IX. FUTURE OF ERP
X. CONCLUSIONS
into account the time-phased material availabilities,
ordering, and the capacities of production facilities.
“packaged” software Refers to the general-purpose
software, such as ERP, that packages business
processes that are common to most firms across in-
dustries; this permits a firm-level implementation
by customizing a generic solution than building it
ab initio for every firm-level deployment.
process modeling Refers to the abstraction of a set of
activities like order processing, as a process that
can be analyzed and optimized for efficiency and
effectiveness; this is often done through a set of
tools built into standard process-modeling software.
ERP is an acronym that stands for enterprise re-
source planning. ERP software saw phenomenal in-
terest from the corporate sector during the period
1995–2000. It used to be the fastest growing segment
among business software. ERP programs offer the ca-
pability of integrating all functions of an enterprise—
finance and accounts, human resources, sales, logistics,
production, materials management, and project man-
agement. Naturally, it was appealing enough that most
Fortune 500 corporations embraced ERP; this was fol-
lowed by many small and medium enterprises as well.
Substantial investments were made in hardware, soft-
ware, consulting, and training to support ERP imple-
mentations, that a recent McKinsey article estimates ERP
market to be in excess of $80 billion in the year 2000.
Significant benefits are associated with successful
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