LEB702Short Paper Two
Recently, a client who running online fashion shop (where based in North Sydney) asked the following questions about ERP: What is the ERP? How does it work? Why should I undertake ERP? Therefore, I prepare this short report for her.
What is the ERP?
In 1990, research firm Gartner Group coined the term Enterprise Resource Planning, or ERP. It quickly became a catchall for back office enterprise functions that includedfinancials, human resources, accounting, purchasing, ordering and costing. Through the90s, companies like SAP, Baan, PeopleSoft, Oracle and J.D. Edwards became identifiedas large ERP vendors.ERP is a commercial software package that supports the integration of transactions-oriented data and business processes throughout an organisation. Traditionally, ERPsystems acted as an interface quite similar to modern-day enterprise information portals;they automated business processes and aided in better information flow.In the past, ERP systems were designed to integrate various departments within theenterprise. Typically, when manufacturing businesses by offering different components.These components such as distribution, accounting, human resources, and factory floor automation modules could all be linked in a configuration customised to individualcompanies, with data flowing among the various modules. However, the integrationremained within the four walls of the enterprise, according to Nigel Raynor, a researchdirector at Gartner Group Inc.Today's ERP market is essentially witnessing two major trends:1.One is a demand for highly customised and verticalised solutions basedessentially on the business of the deploying enterprise and its domain.2.The other is greater enterprise demand for ERP vendors to include e-procurement,SCM (supply chain management), and CRM (customer relationship management)footprints.
How does ERP work?
For example, Rebel Sports wants to order 5,000 pair of sports shoes from Nike Australialogs onto a CRM system over the Internet. Rebel Sports places an order, which is then processed by the CRM system. The system checks the Rebel Sports against an existingdatabase to see if the Rebel Sports has any specific requirements or outstanding debts for example. If the systems say okay, then the order can be fulfilled.The order goes automatically on to the SCM system which checks whether there areenough raw materials in the factory to make all these shoes. If there is not the SCMsystem, or possibly the ERP system should, in theory, be able to order more supplies sothat the shoes can be made.Galen HsiehID: 4074343