3 - ERP Systems Background

Summary

The purpose of this chapter is to provide some basic background information about ERP systems. As a result, we will address a number of specific questions.

• What is an ERP system?

• Who are the ERP vendors?

• What are ERP “partners”?

• What are some sample ERP modules?

• What does it mean to talk of “best of breed”?

• What are “add-ons” to ERP?

• What are ERP MAPs?

• How do ERP systems work?

Since SAP is the dominant ERP system, I will use it to illustrate some of the general ERP concepts.

What Is an ERP System?

In this book, ERP systems are computer-based systems designed to process an organization's transactions and facilitate integrated and real-time planning, production, and customer response. In particular, ERP systems will be assumed to have the following characteristics.

• ERP systems are packaged software designed for a client server environment, whether traditional or web-based.

• ERP systems integrate the majority of a business's processes.

• ERP systems process a large majority of an organization's transactions.

• ERP systems use an enterprise-wide database that typically stores each piece of data once.

• ERP systems allow access to the data in real time.

• In some cases, ERP allows an integration of transaction processing and planning activities (e.g., production planning).