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ERP

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 Development of hardware and software technology needed to support the system Computers have gotten smaller and faster

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ERP

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  1. ERP The Development of Enterprise Resource Planning Systems

  2. The Evolution of Information Systems • ERP system was not feasible until the 1990’s • Evolved as a result of • Development of hardware and software technology needed to support the system • 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 • Proliferation of personal productivity software

  3. The Evolution of Information Systems • Development of a vision of integrated information systems • 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)

  4. 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

  5. The Significance and Benefits of ERP Software and Systems • Allows easier global integration • 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 • Makes the organization more responsive when change is required

  6. 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 • ERP software • New Hardware • Consultants’ and analysts’ fees • Time for implementaiton • Training

  7. 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

  8. 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

  9. The Continuing Evolution of ERP • The Internet has forced ERP companies to rethink how users get and use their ERP software

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