Page 170 - DCAP307_PLANNING_AND_MANAGING_IT_INFRASTRUCTURE

Planning and Managing IT Infrastructure

Notes It is software comprised of a set of applications that automate routine back-end operations, such
as ûnancial inventory management, and scheduling, to help enterprises handle jobs such as
order fulfilment.

Example: In an ERP system there is a module for cost control, for accounts payable and
receivable, for fixed assets and treasury management.
An ERP system supports most of the business system that maintains in a single database the data
needed for a variety of business functions such as Manufacturing, Supply Chain Management,
Financials, Projects, Human Resources and Customer Relationship Management.

An ERP system is based on a common database and a modular software design. The common
database can allow every department of a business to store and retrieve information in real-
time. The information should be reliable, accessible and easily shared. The modular software
design should mean a business can select the modules they need, mix and match modules from
different vendors, and add new modules of their own to improve business performance.
Ideally, the data for the various business functions are integrated. In practice the ERP system
may comprise a set of discrete applications, each maintaining a discrete data store within one
physical database.
The term ERP originally referred to how a large organization planned to use organizational
wide resources. In the past, ERP systems were used in larger more industrial types of companies.
However, the use of ERP has changed and is extremely comprehensive, today the term can refer
to any type of company, no matter what industry it falls in. In fact, ERP systems are used in
almost any type of organization – large or small.
In order for a software system to be considered ERP, it must provide an organization with
functionality for two or more systems. While some ERP packages exist that only cover two
functions for an organization, most ERP systems cover several functions.
Today’s ERP systems can cover a wide range of functions and integrate them into one unified
database.

Example: Functions such as Human Resources, Supply Chain Management, Customer
Relations Management, Financials, Manufacturing functions and Warehouse Management
functions were all once stand alone software applications, usually housed with their own database
and network, today, they can all fit under one umbrella – the ERP system.
The term enterprise resource planning is misleading because the software does not concentrate
on either planning or resources. ERP’s major objective is to integrate all departments and functions
across a company onto a single computer system that can serve all of the enterprise’s needs.

Example: Improved order entry allows immediate access to inventory, product data,
customer credit history, and prior order information. This availability of information raises
productivity and increases customer satisfaction. ERP, for example, helped Master Product
Company increase customers’ satisfaction and, consequently, sales by 20 percent and decrease
inventory by 30 percent, thus increasing productivity.

Notes ERP promises benefits ranging from increased efficiency to improved quality,
productivity and profitability.

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