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Enterprise Resource Planning

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Computer Standards & Interfaces 24 (2002) 337 – 346 www. elsevier. com/locate/csi A synergic analysis for Web-based enterprise resources planning systems David C. Yen a,1, David C. Chou b,*, Jane Chang a,1 b a Department of Decision Sciences and MIS, Miami University, Oxford, OH 45056, USA Department of Computer Information Systems, Eastern Michigan University, 412 Owen Building, Ypsilanti, MI 48197, USA Received 8 October 2001; received in revised form 3 December 2001; accepted 12 December 2001

Abstract As the central nervous system for managing an organization’s mission and critical business data, Enterprise Resource Planning (ERP) system has evolved to become the backbone of e-business implementation.

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Since an ERP system is multimodule application software that helps a company manage its important business functions, it should be versatile enough to automate every aspect of business processes, including e-business. D 2002 Elsevier Science B. V. All rights reserved. Keywords: Enterprise resource planning (ERP); E-business; Customer relationship management (CRM) 1.

Introduction Enterprise resources planning (ERP) has been used in major business applications, such as finance, human resources and manufacturing.

ERP’s financial applications furnish corporate financial management. Its human resources applications handle employee benefit programs, payroll management, and other human resource management. Finally, its manufacturing applications cover areas such as inventory control and production management. ERP systems are software that can be used to integrate information across all functions of an organization to automate corporate business processes. In other word, an ERP system is a

Corresponding author. Tel. : +1-734-487-0054. E-mail addresses: [email protected] edu (D. C. Yen), david. [email protected] edu (D. C. Chou). 1 Tel. : + 1-513-529-4826. * business management system that integrates all facets of the business, including planning, marketing and manufacturing. More than 20,000 firms in the world spent 10 billion US$ to install the ERP systems in 1997 [12]. Now, around 39% of large companies and 60% of smaller companies are deploying ERP systems, and 70% of Fortune 1000 companies have implemented core ERP applications for manufacturing, finance, human resources, and other main areas.

A recent study of IDC’s (International Data) European Software Expertise Center reports that ERP software accounts for more than half of the software licenses and maintenance revenues in Western Europe, growing twice the rate of the overall application software market. The expected annual growth rate for the ERP market over the next 5 years is 37%. With this growth rate, total ERP corporate revenue is expected to reach 52 billion US$ by 2002 [1]. ERP continues to be one of the largest, fastest-growing, and most influential 920-5489/02/$ – see front matter D 2002 Elsevier Science B. V. All rights reserved. PII: S 0 9 2 0 – 5 4 8 9 ( 0 1 ) 0 0 1 0 5 – 2 338 D. C. Yen et al. / Computer Standards & Interfaces 24 (2002) 337–346 players in the application software industry in the next decade. It is interesting to know why companies, especially larger companies, continue to invest heavily in ERP application software. A primary reason is that ERP can help companies reengineer their business processes and compete in the market.

Indeed, ERP software can help companies integrate business processes in a way that traditional applications cannot achieve. Business owners also expect ERP applications to improve decision-making capabilities for functions such as strategic procurement, so that supplier and parts rationalization can be streamlined. Also, ERP applications deliver additional revenues by allowing companies to mass customize their product and service offerings so they can adapt to the rapidly changing world. This article provides a synergic analysis for ERP and e-business.

Section 2 discusses the implications of ERP, includes the concept of ERP, its functions, its components and architecture, its characteristics and its evolution. Section 3 analyzes the current and future status of ERP, includes the pros and cons of ERP, successful and unsuccessful experiences on ERP, its relationship with supply chain management (SCM) and CRM, and market analysis of ERP. Section 4 discusses the synergy of ERP and e-business, includes technological impacts on the Internet, groupware, data warehousing, XML (Extensible Markup Language), system platform, network technology, and standard and security.

Whatis. com [19] defines ERP as follows: An industry term for the broad set of activities supported by multi-module application software that help a manufacturer or other business manage the important parts of its business, including product planning, parts purchasing, maintaining inventories, interacting with suppliers, providing customer service, and tracking orders. ERP can also include application modules for the finance and human resources aspects of a business. Internet. om’s Webopedia [10] defines ERP as follows: A business management system that integrates all facets of the business, including planning, manufacturing, sales, and marketing. As the ERP methodology has become more popular, software applications have emerged to help business managers implement ERP. All of these three definitions identify ERP as a tool of business processes integration. They mention that ERP can integrate several business functions, such as sales, manufacturing, human resources, logistics, accounting, and other enterprise functions.

The main difference among them is the role that ERP plays in corporate management. Some believe that ERP is used to manage the whole business process. However, other practitioners feel that ERP works for only the important parts of the business. For example, Gartner Group and Webopedia support the concept that ERP integrates all facets of the business, but Whatis. com indicates that ERP is related to important parts of a business. Moreover, Gartner Group specifically points out that ERP allows all business functions to share a common database and business analysis tools.

After comparing these perspectives, it is clear to show that ERP is a set of highly integrated applications, which can be used to manage all the business functions within the organization. ERP is comprised of a commercial software package that promises the seamless integration of all the information flowing throughout the company, including financial, accounting, human resources, supply chain, and customer information. 2. Implications of ERP 2. 1. Definition of ERP There are several ERP definitions. We like to compare current ERP definitions and to identify their similarities and differences.

First, Gartner Group [8] defines ERP as follows: A collection of applications that can be used to manage the whole business. ERP Systems integrate sales, manufacturing, human resources, logistics, accounting, and other enterprise functions. ERP allows all functions to share a common database and business analysis tools. D. C. Yen et al. / Computer Standards & Interfaces 24 (2002) 337–346 339 2. 2. Functions of ERP ERP systems can be used to manage business information for corporate resources planning.

Generally speaking, ERP can be applied to such fields as finance, human resources, manufacturing and logistics, supply chain management, and data analysis. Functions that ERP can provide to specific fields are listed below. First, ERP can facilitate the following finance functions:           General ledger: ERP can keep track of the centralized accounts and corporate financial balances. Accounts receivable: ERP can keep track of payment dues from customers. Accounts payable: ERP can schedule bill payments to suppliers and distributors.

Fixed assets: ERP can manage depreciation and other costs associated with tangible assets such as buildings, property and equipment. Treasury management: ERP can monitor and analyze cash holdings, financial deals and investment risks. Cost control: ERP can analyze corporate costs that are related to overhead, products, and manufacturing order.   Order entering: ERP can automate data entry, process customer ordering, and keep track of order status. Warehouse management: ERP can keep track of goods and process movements in corporate warehouses.

Transportation management: ERP can schedule and monitor the delivery of products to customers. Project management: ERP can monitor costs and work schedule on a project-by-project basis. Plant maintenance: ERP can set the plan and oversee upkeep of internal facilities. Customer service management: ERP can administer service agreements and check contracts and warranties when customers needed. In the field of supply chain management, ERP can advance planning applications, monitor production constraints and demand forecasting, and keep order delivery promises.

At last, in the field of data analysis, ERP’s decision support software can allow managers to analyze transaction data and business performance [7]. 2. 3. Components and architectures of ERP Usually, ERP systems have the following key components. . Client/Server system: An ERP system employs client/server technology, its applications are most commonly deployed in distributed and often widely dispersed manner. While the servers may be centralized, the clients are usually spread to multiple locations throughout the enterprise. . Enterprise-wide database: An ERP ystem is always implemented via a core database of the system. The database interacts with all the applications in the system, thus, there are no redundancies in the data and its integrity is ensured. . Applications modules: ERP vendors provide different kinds of ERP application modules that are integrated software packages for individual business units such as finance, human resources and order processing. Most ERP systems start with a set of core modules, and offer additional modules from which a company can choose. ERP systems require users to

The human resources (HR) department can gain the following advantages through ERP process:  HR administration: ERP can automate personnel management processes such as recruitment, business travel and vacation time.  Payroll: ERP can handle accounting process and preparation for checks related to employee salaries, wages and bonuses.  Self-service HR: ERP can allow workers to change their personal information and beneficial allocations online. The manufacturing and logistics department may use ERP for:  Production planning: ERP can perform capacity planning and create a daily production schedule for manufacturing plants. 40 D. C. Yen et al. / Computer Standards & Interfaces 24 (2002) 337–346 comply with the processes and procedures as described by the applications. Vendors also offer specialized applications to account for unique processes and procedures within a given industry. The relationship of these three components can be shown in two commonly implemented ERP architectures: two-tier and three-tier client/server implementations. A typical two-tier client/server architecture has the server to handle both application and database processes.

The clients are responsible for presenting the data and passing user inputs back to the server. While there may be multiple servers and the clients may be distributed across several types of local and wide area links, the distribution of processing responsibilities remains the same. A three-tier client/server architecture can handle a complete corporate ERP deployment with separate database and application servers. In this scenario, processing requests from client computers require two or more network communications. Initially, the clients establish communications with the application server.

The application server then creates a second communication to the database server. 2. 4. Characteristics of ERP ERP possesses a few key characteristics. . Standardized data definitions: ERP business processes share the same data definition across all ERP application modules. Before using ERP, a company may implement multiple application systems using non-standardized data across business processes. . Common access to a single set of data: A basic design objective of ERP is to have a single set of data maintained across all business processes within an organization.

Before using ERP, multiple versions of data were maintained and processed across an organization. Under such circumstance, vital business decisions were based on inaccurate and non-normalized data. . System flexibility: An ERP system should be flexible to the changing needs of an enterprise. The client/server technology enables ERP to run across various database back-ends through Open Data Base Connectivity (ODBC). . Open system architecture: This implies that any module in the ERP system can be interfaced or detached whenever required without affecting the other modules.

ERP systems should support multiple hardware platforms for companies that use heterogeneous systems, including some third-party add-ons. . Beyond the company scope: The ERP system should not be confined to an organization’s boundary. Instead, it should support an organization’s online services to external entities. 2. 5. Evolution and major vendors of ERP Before creating ERP, inventory control system was the software designed to handle traditional inventory processes. It was one of the early business applications, which did not belong to the finance and accounting area.

The early stage of ERP was carried out through Materials Requirements Planning (MRP), a software which focused on time requirements for subassemblies, components, materials planning, and procurement. Manufacturing Resource Planning (MRP-II) was developed in 1970– 1980, that was the software package focused on extending MRP to the shop floor and distribution management activities. Like MRP, MRP-II still focused on manufacturing process. The next stage of ERP evolution was Just-in-time (JIT) methodology that combined with the plummeting price of computing to create the islands of automation in late 1980.

The maturity stage of ERP occurred in mid-1990. ERP was the software package focused on extending MRP-II to cover additional areas such as finance, engineering, human resources, project management, etc. [13]. The current ERP development intends to utilize ERP to realize and sustain a competitive advantage. Now, complementary technologies begin to extend the functionality of enterprise applications, including the Internet and telecommunications technologies, to fulfill the e-commerce era. It is interesting to know the major vendors in the ERP market.

Currently, SAP, PeopleSoft, Baan, Oracle, and J. D. Edwards are the major competitors in the ERP market. SAP provides two main products in the ERP market: R/2 and R/3. R/2 and R/3 software are designed to help organize manufacturing and accounting processes. SAP offers modules for logistics and human resources and also expands its product line to supply chain management, sale force automation, and data warehousing. D. C. Yen et al. / Computer Standards & Interfaces 24 (2002) 337–346 341 PeopleSoft dedicates its products to human resource and client/server technology.

They continue to prove its value in enterprise-wide applications and financial and supply chain applications. Currently, it targets the service sector with products designed to help companies handle their intangible costs. Baan sells manufacturing software to companies that wary of SAP product. It stocks up on small software suppliers, which results in a wider variety of product offerings. They continue to develop enterprise applications in areas that SAP and Oracle are less competitive. Oracle offers ERP applications designated to work with their database software.

Oracle is a leading database software provider that sells most of its applications to manufacturers and consumer goods companies. Oracle intends to dominate their database software by levering over the ERP market. J. D. Edwards provides ERP applications for managing the enterprise and supply chain. Their integrated applications give customers control over their front office, manufacturing, logistics and distribution, human resources, and finance processes. J. D. Edwards continues to allow its ERP solutions to operate in the computing environment and also to be XML enabled.   

Data integration: ERP performs real time filing and data analysis from a variety of sources. It then allows a more comprehensive and unified management of data. Utilization of the latest information technology: ERP utilizes the latest information technology such as the Internet and e-commerce. It allows businesses to quickly adapt to the latest information technology and fit in the future business environment. Enabling process improvement: ERP system needs to enter data only once. Therefore, operation efficiency can be increased and its operational cost will be decreased. 3. Current and future analyses of ERP 3. . Pros and cons of ERP ERP provides the enterprise-wide solution to deliver many benefits such as low operating costs and improved customer service, thus enhances their business operations in many areas [16]. The pros for ERP include:  Promotion of integration: ERP automatically update data among different business components and functions. Therefore, communication and integration among different business processes are improved, and the scope of improvement is business-wide.  Adaptation to globalization: ERP allows flexible use of language, currency, and accounting standards.

It thus improves adaptation to multinational business environments. Although ERP system possesses certain advantages, it also holds some disadvantages. ERP has the following disadvantages: its high cost prevents small businesses from setting up an ERP system, the privacy concern within an ERP system and lack of trained people may affect ERP’s efficiency, implementation of an ERP project is painful, and customization is costly and time-consuming [16]. These disadvantages are discussed below. . High cost: The high cost makes ERP system out of reach for many small businesses. Moreover, implementing costs are much higher than setting up cost.

Therefore, a company plans to invest into ERP needs to have a good strategy and a clear idea about the cost of ERP system. . Privacy concern within an ERP system: Many companies have no clear answer to questions such as who owns the access right to the system and who can change the information within the system. The best way to solve this problem is to clearly define the access scope and responsibility of ERP system, and also keep updating the rules accordingly. . ERP implementation is a long and painful process: Implementing a new ERP system may slow down the routine works within an organization.

Therefore, providing a good training and appropriate preparation to corporate employees can prevent such drawback. . ERP system customization is costly and timeconsuming: Customizing an ERP system for a particular organization is costly and time-consuming. Thus, ample preparation can make adaptation quickly and smoothly. 342 D. C. Yen et al. / Computer Standards & Interfaces 24 (2002) 337–346 3. 2. Successful and unsuccessful stories of adopting ERP Several companies made successful stories of adopting ERP [16]. They have reaped great rewards from successful implementation of ERP systems.

Boeing installed a number of ‘‘PeopleSoft HRMS’’ software to standardize and streamline its human resources, payroll, and benefits administration processes. Boeing’s ERP system improves its human resource (HR) processes through timely access to information and provides common processes and services to all of its 235,000 employees. Fujitsu Microelectronics has successfully implemented its ERP programs, which help reduce cycle time of filing orders from 18 days down to 1 day. Green Financial has successfully deployed its SAP R/3 solution to benefit Y2K compliance, enterprise-wide integration, and reporting efficiency.

IBM also installed ERP systems that significantly improved the efficiency of its storage systems division. For example, all products can be reprised in 5 min now, while in the past, it needed 5 days to be finished. Also, its credit check can be completed in 3 s now compared to 20 min in the past. Now, about 80% of IBM’s core business activities may eventually run on ERP systems. Motorola is another example. It has successfully implemented the SAP software to replace its legacy payroll and human resources systems, which have improved and streamlined its business processes.

Finally, SunAmerica has also successfully deployed the SAP R/3 solution and reported that its business process is more effective now. At the same time, due to different reasons, some companies have failed in implementing their ERP programs. A study conducted by an ERP consultant has identified the main causes of failure [14]. They are: 1. 2. 3. 4. 5. Lacking of proper education and unrealistic expectations to ERP users. Lacking of top management support. Lacking of formal project status, sufficient personnel, time, and communication.

Lacking of technical expertise and information system support to solve problems. Personnel’s resistance to change. failing to meet the ERP implementation schedule. Dell computer adopted an ERP system but did not fit its decentralized management style. ForMeyer Drug experienced a bankruptcy after implementing its ERP programs. Hershey Foods encountered major order processing problems after implementing ERP systems that resulted in shipment delays and deliveries of incomplete orders, because it squeezed what was originally planned as a 4-year ERP project into just 30 months.

Finally, W. W. Grainger launched its new SAP R/3 system in the spring of 1999. Since then, their problems with the ERP system have resulted in millions of dollar loss in sales and earnings. 3. 3. ERP’s relationship with SCM and CRM Supply chain management (SCM) covers every aspect of corporate supply chain processes, starting from the production of raw materials to establishing relationships with the customers. Being able to automate these processes will greatly help any company gain a competitive advantage.

Having seen SCM’s obvious benefits and its potential revenues, now, every major ERP vendor integrates SCM strategy into their ERP offerings. ERP vendors tying their supply chain initiatives to their own ERP platforms may limit customers’ ability to pursue a bestof-breed strategy. PeopleSoft, for example, purchased demand-forecasting experts, Red Pepper in 1997 and Distinction Software in 1999, to integrate these two companies’ key capabilities into its ERP framework [6]. Customer Relationship Management (CRM) is another subject area that links to ERP.

CRM provides solutions that will help companies improve customer relationships; in the mean time, ERP will perform internal operations for customer relationships to make CRM more efficient and effective. The integration of the front-end CRM and the back-end ERP will create new business architecture for an enterprise, which places the customer at the center. CRM can help businesses enhance customer relationships by getting more profitable customers, and establishing longer and stronger customer relationships, so now the ERP vendors have positioned themselves to enter the CRM market.

This situation will allow one vendor to offer fully integrated enterprise application architecture to business community. For example, City of Oakland experienced cost overruns and a rollout delay of up to 7 months due to D. C. Yen et al. / Computer Standards & Interfaces 24 (2002) 337–346 343 3. 4. Market forecast of ERP In the last 3– 4 years, the ERP market has experienced a considerable growth that was driven mainly by the Y2K crisis and the European Monetary Union (EMU) compliance. Now, 70% of Fortune 1000 companies have implemented core ERP applications.

Also, many smaller companies whose revenues are less than $250 million have also installed ERP systems. This sector is a key market for ERP vendors. According to AMR Research, ERP software vendors’ revenues will grow from $14. 8 billion in 1998 to $52. 2 billion in 2002. However, recent trends indicate a slow down in the traditional ERP market. Growth rates that were as high as 40% per annum are expected to slow down considerably to around 15 –20%. The top ERP vendors such as SAP, Oracle, PeopleSoft, Baan, and J. D. Edwards, account for 4% of the ERP market according to AMR Research [2]. Originally, SAP started the development for ERP manufacturing software while PeopleSoft pioneered the software for human resource applications. All the leading vendors now provide a complete suite of applications dealing with the broadest range of business processes and targeting to specific industries, such as oil and gas, utilities, healthcare, and so on. These leading ERP vendors are now extending their focuses from the traditional back-office applications to supply chain, customer management, and industry specific applications. . 5. Future trends of ERP A robust ERP system has the capability of integrating information across an organization. As a company expanding its business and operational capability, more functionality needs to be added to such ERP system. For example, global financial capability, advanced planning and scheduling, product configurations via the Web, supply chain management, customer relationship management, e-Commerce, business intelligence, and component or object-oriented architecture are the main targets of development for the ERP software industry [11].

It is especially important for ERP software to support the e-business capability and to make it easier to deploy enterprise software applications across the Internet. In the next few years, ERP will be redefined as a platform for enabling global e-business. Originally focused on automating the internal processes of an enterprise, ERP systems will begin to include customer and supplier-centric processes as well. ERP software suites will become universal business applications that will encompass front-end office, business intelligence, e-commerce, and supply chain management.

ERP will no longer be an acronym sufficient enough to cover it, so a new acronym iERP (internetenterprise resource planning) will appear. Another trend in ERP software is to target specific industries and to provide solutions that are tailored for that industry rather than adapting to a general purpose ERP system. ERP vendors are increasingly setting up partnerships with software companies that have already encountered in specific industries. 4. Synergy for ERP and e-business 4. 1. The Internet for ERP The Internet offers an opportunity for companies to implement new business models and to make them more competitive in the market.

According to Nortel Networks, the value of the global Internet marketplace will reach $2800 billion in 2003. The spending on the Internet infrastructure will reach $1500 billion a year in 2003. The study estimates that e-business is set to grow at 86% to reach $1300 billion per year by 2003 [3]. Also, this study indicates that revenues from businessto-business (B2B) e-commerce will be six times greater than that of business-to-consumer (B2C) ecommerce. The ERP vendors combine the efficiencies of the Internet, ERP systems, and existing enterprise management systems to benefit today’s customers.

Moreover, network computers provide those ERPdriven businesses a way to leverage the emerging Web technologies, such as Java, Intranets, and Extranets applications. The heavy adoption of network computers by ERP-based business reflects the recent trend of growing client/server architecture. Today, Internet-enabled applications determine the platform to build the next-generation networks. ERP experts agree that the Internet has a profound impact on the ERP environment. The Internet will dominate the next generation’s ERP applications.

Application integration of ERP is critical to the operation of larger companies since they use different 344 D. C. Yen et al. / Computer Standards & Interfaces 24 (2002) 337–346 ERP software or mixed ERP applications. These companies also need to integrate their internal applications into Intranet and Extranet applications, particularly supply-side applications, to link with their customers. Java-based network computers, with their browser interfaces and cross-platform support, make it easier to integrate ERP into Intranet and Extranet environments. . 2. Groupware and ERP Groupware can help corporate employees work collaboratively; even when they are located remotely from the headquarters. Groupware provides services such as calendar sharing, collective writing, e-mail handling, shared database accessing, electronic conferencing, etc. A major contribution of groupware is its capability of information sharing across a distributed system so that all networked users can process the same information. Using groupware technology allows companies to extend their ERP implementation to the Internet.

Groupware can support and energize a Web site, which enables companies to communicate online with their customers and partners. For example, a company’s sales force can process customer data online, and their customers can also process their invoices online. Moreover, companies can implement groupware through their Intranet to help networked teams collaborate effectively [15]. Since groupware can turn document flows into electronic channels, every document that has entered the system can be retrieved instantly, which provides an easy-to-use connectivity through the Intranet. . 3. Data warehouse and ERP Company that deploys ERP applications gains the benefit of integrated processes. In the mean time, data warehousing provides employees a solution for timely access to critical information. The next logical step is to generate an integrated system, that is, creating bridges between packaged ERP applications and data warehouses. Creating a bi-directional flow for data stored in both operational and analytical systems enables companies to react swiftly and intelligently to new opportunities.

The first step, however, is for companies to pull data out of ERP systems and keep them in an application that enables users to analyze the information and take action. Many companies deploy data warehouses for facilitating the data analysis in ERP. They will buy packaged analytic applications that include a data warehouse, analytical tools, and predefined data models to accelerate the data analysis in ERP. To succeed in the new information economy, companies need to set a new strategic vision on how they can serve their customers and suppliers more effectively and efficiently.

They then need to work with visionary vendors and consultants to build bridges between ERP applications and data warehouses for ebusiness applications. 4. 4. XML for ERP ERP applications are becoming the hub for business transactions; they advance the capability of integrating data, content, and applications in order to support the e-business. New standards and technology are appearing to allow ERP systems to support ebusiness solutions. Increasingly, the Internet is acting as a communication tool between business partners, which needs a common language of communication inside and across enterprises.

XML (Extensible Markup Language) shows promise as this communication medium. XML provides a vendor, platform, and language neutral technology for distributing data across both public and private networks, and so it has gained wide support from ERP vendors including SAP, PeopleSoft, and others [18]. ERP vendors embrace XML as a way to lighten system workloads and to simplify data sharing between enterprise applications. Also, the third-party software vendors such as Baan and Oracle, they push XML to enable data exchange over the Web.

With XML, ERP users do not need to create proprietary interfaces for their e-business systems. 4. 5. System platforms for ERP Companies should assess their system platforms before adopting ERP systems. The AS/400 is still popular because of its overall robustness. Windows NT tends to appeal to smaller companies because of its ease of use. Unix-based systems, meanwhile, remain the top choice among large companies because of their scalability. Approximately, 50% of ERP users choose Unix-based systems, while 25% select NT and 25% D. C. Yen et al. / Computer Standards & Interfaces 24 (2002) 337–346 45 use AS/400, according to AMR’s survey [5]. Now, Unix has been identified as the operating system of the choice for Fortune 1000 companies that running multisites and having global ERP networks with hundreds or even thousands of users. Meanwhile, NT has been labeled as an option only for single-site manufacturers with less than 50 users or as a departmental server handling a few specific functions such as file or message management within a larger enterprise network. This idea became conventional industry wisdom after the less-than-spectacular launch of the first version of NT in 1993 [9].

Companies in the middle-tier of the market are skipping Unix because they are looking for vertical integration from top to bottom. They want their databases, operating systems, and applications all on the same platform, which Unix is hard to achieve. Also, some businesses are delaying their buying decisions because they are looking to skip Unix and go straight to NT. 4. 6. Network technology for ERP The success of a business depends on its capability of handling a seamless and timely delivery of information across the enterprise.

Companies are now implementing mission-critical solutions such as ERP, data warehousing, e-commerce and other Internetbased solutions, as well as corporate messaging and collaboration systems. These applications and platforms require high levels of interoperability, availability and reliability. Applications that run on the local area networks (LANs) are now just as critical as those found on mainframe systems. Unfortunately, most LANs were not originally designed to carry critical and time-sensitive information. We need to have an industrial-strength network to deliver the robust and reliable operation to the distributed systems.

For example, Honeywell’s Network Consulting delivers an information infrastructure that optimized to meet business requirements. Their design is based on companies’ information needs, technological requirements, traffic flows, current resources use, and the estimated growth of present and future applications. This industrial-strength network that possesses the reliability, robustness, and security is necessary to deliver mission-critical, time-sensitive information to the enterprise. 4. 7. Standards and securities for ERP ERP vendors do not look into the product standards that share analytical information among applications.

Business users such as IBM, Informatica, and Microsoft sought standards of using their analytical applications and asked for a common standard for sharing analytical information from ERP vendors [4]. However, since ERP vendors focus mainly on business solutions and analytical applications, which can be their profitable add-ons, ERP vendors are reluctant to move to the direction of ERP standardization. However, ERP vendors should recognize the fact that the main concern for the ERP users is to integrate data from different systems. As ERP systems evolve, ERP vendors must offer support for viable standards.

For example, XML is a standard to make the process of inter-operation much easier for developers and customers. ERP vendors will face the problem that most ERP systems are monolithic and therefore cannot adjust themselves quickly to take advantage of new standards. As companies become more and more reliant on electronic transactions and processes, the security of ERP applications has become an emerging issue. Ebusiness transactions now take place directly between internal business units, customers, suppliers, and partners, making the need to preserve critical information a paramount concern.

Digital certificate has been used to secure telecommunications and e-transactions. For example, ValiCert provides validation for users’ certificates prior to each transaction. ValiCert’s SecureTransport software provides secure, reliable and fast data transfer over Intranet, Extranet, or the Internet. Implementing secure ERP applications before, during, and after e-transactions means avoiding the risk of lost revenue and sensitive intelligence while expanding efficiency, decreasing costs, and increasing revenue through secured transactions [17]. 5.

Conclusion The expansion of ERP software has occurred within the last 5 years. Nowadays, ERP becomes the foundation of business process and is used as a management tool to give organizations a great com- 346 D. C. Yen et al. / Computer Standards & Interfaces 24 (2002) 337–346 [13] S. Shankarnarayanan, at http://www. expressindia. com/newads/ bsl/advant. htm. [14] Strategicnewspapers. com, at http://www. strategicnewspapers. com/da/042900/erp. htm. [15] D. Strom, at http://mappa. mundi. net/inform/archive/ informA0178. html. [16] R. Usman, at http://shrike. depaul. edu/~rusman/erp. tml. [17] ValiCert, at http://www. valicert. com/html/erp. html. [18] J. Wade, at http://www. erpsupersite. com/newsletter/ EBIZ-Evolution. htm. [19] Whatis. com, at http://www. whatis. techtarget. com/ whatisAdefinitionApage/0,4152,213946,00. htm. petitive advantage. ERP has taken off so successfully because companies are using ERP to handle the Y2K compliance and to foster a more productive and efficient work environment. Organizations that implement ERP software can gain competitive advantage over their competitors since ERP helps companies increase quality and reduce the cost.

Major firms all over the world are using ERP solutions to streamline their business processes. ERP customers will soon start requiring the integration of ERP systems for business-to-business transactions. This trend will become real because companies are under extreme pressure to keep healthy financial status. The core component of ERP today is an integrated set of applications that link back-office operations together, such as manufacturing, finance, and distribution. ERP will extend into transportation, warehousing, sales-force automation, and computeraided design and data management systems.

The new ERP solutions are tailored into the Internet to reach beyond the traditional manufacturing industry. We can expect the ERP industry to grow in the next 5 years. References [1] AMR Research, Enterprise Resource Planning Software Report: 1997 – 2002, at http://www. lionhrtpub. com/orms/orms-6-99/ erp. html. [2] AMR Research, at http://www. amr. com. [3] J. Bridges, at http://www. sunservermagazine. com/sun0600/ erpAinet. htm. [4] M. Brown, at http://students. depaul. edu/~mbrown4/erptrends. htm. [5] E. Callaway, at http://www. managingautomation. com/ BuyersGuide/bgAeAspec-complexity-grows. tm. [6] CIO. com, at http://www. cio. com/analyst/070199Ayankee. html. [7] City University (London), at http://www. city. ac. uk/~ds626/ enterpriseAresourceAplanning. html. [8] Garner Group, at http://www. garnergroup. com. [9] S. Hill, at http://www. manufacturingsystems. com/archives/ 1996/ms960602. asp. [10] Internet. com, at http://webopedia. internet. com/TERM/E/ ERP. html. [11] P. J. Jakovljevic, R. Cundiff, at http://www. xonitek. com/news/ IndustryANews/essentialAerp. htm. [12] M. Martin, An ERP strategy, Fortune 137 (1998) 149 – 151, Feb. 2. David C.

Yen is a professor of MIS and chair of the Department of Decision Sciences and Management Information Systems at Miami University. He received a PhD in MIS and Master of Sciences in Computer Science from the University of Nebraska. Professor Yen is active in research, he has published two books and over 70 articles, which have appeared in Communications of the ACM, Information & Management, International Journal of Information Management, Journal of Computer Information Systems, Interface, Telematics and Informatics, Computer Standards and Interface, Internet Research, among others.

He was also one of the corecipients for a number of grants such as Cleveland Foundation (1987 – 1988), GE Foundation (1989), and Microsoft Foundation (1996 – 1997). David C. Chou is a professor of Computer Information Systems at Eastern Michigan University. He received his MS and PhD degrees from Georgia State University. Professor Chou has published more than 140 articles and papers in the fields of software engineering, systems design, telecommunications, the Internet, and electronic commerce.

His articles appeared in journals such as Technology in Society, Computer Standards and Interfaces, Information Systems Management, Total Quality Management, Internet Research, Industrial Management and Data Systems, International Journal of Technology Management, Interfaces, Information Management and Computer Security, Journal of Education for Business, and Information Executive, The Executive Journal, and others.

Jane Chang received her Master degree in Accountancy on May 2000 from Miami University at Oxford, Ohio and is currently working as an information consultant in the Eli Lily Company. Her research interests include ERP, Internet, CRM, and electronic commerce.

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Enterprise Resource Planning. (2018, Jan 31). Retrieved from https://graduateway.com/enterprise-resource-planning/

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