Stove-piped systems allow data to flow slowly and in batches requiring repackaging and at times reentry to facilitate its flow across different functional departments of an organisation. The zeal to integrate all business functions and ensure compliance across multi-functional departments has posed a challenge to business-IT/IS managers. The result was to set up a data warehouse available to the organisation. This serves the purpose of meeting all departmental needs and also securing both the customer and supplier. ERP package software integrates the business and IT service functions of the organisation beyond the firm’s boundaries. Certain organizations have software systems that perform some or most of the functional duties of an ERP package software, but the ability of ERP to automate all business functions in a unique fashion makes ‘its appeal clear’ to business (Hitt, Wu and Zhou, 2001).
The most widely used ERP systems is the SAP R/3 which was introduced in 1992 by SAP AG. It will interest you to know that two of the best world software companies IBM and Microsoft run their business on SAP R/3. ERP standardized and integrated environment provides a level of interoperability that no standalone system can meet. To achieve it will be very expensive to justify. The integrated nature of ERP allows data entered at one part of the process cycle to be carried forward to the next part of the cycle for further or future processing. ERP systems have made legacy systems outdated. The case of Owens Corning confirms this assertion. The business went from having more than 200 legacy systems to fewer than 10 (Bae and Ashcroft, 2004).
The selection and acquisition of an ERP package could be a difficult process requiring expertise in both business and IT. The process should be dictated by the business needs and financial capability of the organisation. By finance, I mean the total understanding of the cost and risk factors involved in an ERP implementation project. The ERP market has grown and is still growing. It has been forecasted that about 70%-80% of multinational firms will use the package software by 2010 (PricewaterhouseCoopers, 2004). This growth and popularity is attributed to a number of factors which will be stated later in this chapter of the study. In 1993 for example, ERP revenue in North America was $319 million, and then it experienced a 55 fold increase reaching at a peak of $17.7 billion by the close of 1999, a further 30% increase took the total revenue to $23 billion in 2000 (Pang, 2001)………….
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