Enterprise Resource Systems
In business, it is important for companies to be able to communicate effectively. Each department of a company relies on the other departments as they add to the value chain. One way for a company to integrate its different departments is enterprise resource planning. ERPs are software programs that allow companies to join together data across operations on a company wide basis (Jessup and Valacich 248). ERPs store company information in a common database and allow all departments to access it from one central location (Koch). Companies without ERPS may contain many legacy systems, each operating with different equipment. Without an ERP and a common system used by each department, when information changes, it has to be changed in each legacy system. ERPs connect different departments so that company actions can be streamlined and data can be sent from one department to another easily. This makes it easier for information to be up to date. When data is changed in one department, it is updated company wide, avoiding conflicting data. There are many reasons why it is advantageous for a company to use enterprise resource planning systems. ERPs improve information access, and increase the accuracy and consistency of data. ERPs also improve employee productivity and cut down on the amount of paper companies use (Jessup and Valacich 250). The systems allow business partners and suppliers to communicate quickly, thus cutting down on the time it takes to process orders and get products to customers. Companies can either choose packaged or custom enterprise resource planning applications. Packaged applications come from major companies and are more general. Since they are made by large ERP companies, they less expensive to buy and maintain because the ERP companies will constantly update. Packaged applications are not as unique as custom ERPs, however. Custom applications can be designed to fit the specific applications of the company. In order to get a custom application, you have to hire someone to develop the system and have to pay to constantly update, which can be expensive (Jessup and Valacich 255). Recently there have been trends in enterprise resource planning companies especially in the merging of companies, and an increase in the amount of services each company offers. The number of ERP companies is decreasing as larger corporations have bought out competitors. Recently enterprise resource planning company People Soft was bought out by Oracle. Another trend is for enterprise resource planning companies to be all encompassing and able to provide all information system services for a company. Oracle showed this trend in expanding services when it bought customer relationship management company Siebel. Information systems company SAP also demonstrated this by integrating supply chain management into part of their ERP systems (Jessup and Valacich 272). The number of ERP companies is also decreasing because smaller companies can not compete with the prices of the large ERP suppliers. Software from smaller companies can offer more capabilities than larger more integrated companies, but it is hard to link the software of different smaller companies. Therefore, it is easier and cheaper for companies to choose an all encompassing larger company as an ERP provider (Koch). The future of ERPs and one of the only ways for small companies to survive is open-source software. Open-source software is when ERP providers give software codes to companies who improve code and send it back to the ERP provider to integrate it into updated versions. This would allow smaller companies to compete with ERP giants by providing service and selling add-ons (Koch). Enterprise resource planning systems are headed in the direction of becoming large completely integrated systems that expand to all aspects of a business and the number of...
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