II.

1 Enterprise Resource Planning

An enterprise resource planning system is an off-the-shelf software package that

enables a company to handle the processing of information (materials, human
resources, finance, customer information, etc.) effectively and seamlessly by
implementing a total, integrated solution (Davenport, 1998).

Monk & Wagner (2013) state that Enterprise Resource Planning ( ERP) systems
are software applications used to integrate and coordinate information, connecting
every area of the business. By using a shared database and management reporting
resources, ERP helps an organization handle enterprise-wide business processes.

The terminology of ERP was first introduced in 1990 by The Gartner Group. It is
used to describe the whole system and its evolution of material requirements
planning (MRP), manufacturing resource planning (MRP II), and computer
integrated manufacturing. According to Jacobs and Weston (2007), The Gartner
Group then began to produce reports frequently about ERP technology in a broader
sense, as long as a system applies integration across multiple modular components.

Since the ERP connecting the business functions of the organization, the modules
in the ERP were built according to the organization’s area of operation. There are
at least four areas of operation (Monk & Wagner, 2013) as seen in Figure 1. The
area of operation nowadays is usually more than four.
Figure 1: Examples of functional areas of operation and their business functions
(Monk & Wagner, 2013)

In the earlier stage, only big businesses adopted ERP. Yet smaller companies are
increasingly using ERP systems. From 24.4B USD in 2012, the ERP market
consistently grew by 3.8% to 25.4B USD in 2013 (Columbus, 2014). ERP is
expected still to be one of the essentials for an organization, with SAP as the
dominating vendors, followed by Oracle, Sage, Infor, and Microsoft.
Figure 2: ERP Market Share, 2013 (Forbes, 2014)