Page 192 - DCAP302_ENTERPRISE_RESOURCE_PLANNING

Enterprise Resource Planning

notes Research, however, do not respond to new business practices too hastily. This lag is an issue in
inertia of information systems (IS) research delayed the emergence of ERP research until the late
1990s. The ERP research interest was fuelled by the unsuccessful ERP implementation projects
and has only recently been consolidated into a strategic and managerial perspective on enterprise
systems (ES) management.
For quite some time supply chain management (SCM) has been the driving force in challenging
the industry to integrate and to collaborate with other businesses, and ES are instrumental in this
transformation. New information technology (IT) has had a significant impact on SCM practices,
and interest is now growing towards loose-coupled and network oriented perspectives.
11.1 exploring erp-ii

ERP II is an important concept to industry and until now the research on this concept has neither
been consistent nor conclusive as regards the content and status of this phenomenon.

In this unit the ERP II concept will be approached by evaluating the development of the ERP
packages and the emerging business requirements. This will lead to an outline of a conceptual
framework for ERP II. This study builds on existing ERP theory, analysis of the vendors’ systems
and current business practices. This suggests that the framework will be useful in the analysis
and design of the complex enterprise systems in practice.

The ERP II concept is decomposed, expanded and the conceptual framework is outlined. Finally
the paper discusses the research and business implications of next-generation enterprise systems
and sum up further research into enterprise systems.

11.1.1 enterprise systems in retrospect

The concept of ES has often been explained through the evolution of ERP. The concept of ES has
evolved over almost 50 years driven by the changing business requirements, new technologies
and software vendors’ development capabilities.
The fundamental structure of ERP has its origin in the 1950s and 1960s with the introduction of
computers into business. The first applications automated manual tasks such as bookkeeping,
invoicing and reordering. The early inventory control systems (ICS) and bill of material (BOM)
processors gradually turned into standardized material requirements planning (MRP). The
legacy of the IBM’s early COPICS specifications can be traced in the structure of the systems even
today.
The development continued in the 1970s and 1980s with the MRP II and CIM concept. Even
though the CIM ideas failed in many aspects, the research, e.g. on IS development (ISD) and
enterprise models, provided the background for gradually integrating more areas into the scope
and of the information systems. This development peaked in the early 1990s with the advent of
the ERP systems – often embodied in SAP R/3 along with the other major vendors: JD Edwards,
Baan Oracle, Peoplesoft, and SAP the so-called JBOPS. Although the ERP systems have other
legacies like accounting, planning and control philosophy is rooted in manufacturing.
ERP is a standardized software packaged designed to integrate the internal value chain of an
enterprise. An ERP system is based on an integrated database and consists of several modules
aimed at specific business functions.
According to the American Production and Inventory Control Society (APICS) defines ERP as:

[…] a method for the effective planning and controlling of all the resources needed to take, make,
ship and account for customer orders in a manufacturing, distribution or service company.
This definition emphasizes the business purpose of the system.

186 LoveLy professionaL university