3. ERP is defined as an integrated, multidimensional system for all functions, based on a business model for planning, control, and global (resource) optimization of the entire supply chain, using state-of-the art information system and IT, that supply value-added services to all internal and external parties . Definition:
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5. Enterprise-wide resource planning information systems seek to standardize , streamline , and integrate diverse operations and information flows in a company by synergizing its resources through information technology . Definition:
6. Enterprise Resource Planning systems comprise an integrated suit of application software modules, which provide operational, managerial, and strategic information, for an enterprise to improve productivity, quality, and competitiveness . Definition:
7. ERP is a fully integrated business management system covering logistics (materials, production, sales and distribution, plant maintenance, quality management, project management, production planning, etc.), accounting (finance and controlling), and human resources, while incorporating industry-specific solutions and best business practices worldwide . Definition:
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13. Looking more closely at ERP systems, a key factor is the integration of data from all aspects of an organization. To accomplish this, an ERP system typically runs on a single database instance with multiple software modules providing the various business functions of an organization.
14. Some organizations - typically those with sufficient in-house IT skills to integrate multiple software products - choose to only implement portions of an ERP system and develop an external interface to other ERP or stand-alone systems for their other application needs .
15. For instance, the PeopleSoft HRMS and Financials systems may be perceived to be better than SAP's HRMS solution. And likewise, some may perceive SAP 's manufacturing and CRM systems as better than PeopleSoft's equivalents. In this case these organizations may justify the purchase of an ERP system, but choose to purchase the PeopleSoft HRMS and Financials modules from Oracle , and their remaining applications from SAP .
16. This is very common in the retail sector, where even a mid-sized retailer will have a discrete Point-of-Sale (POS) product and financials application , then a series of specialised applications to handle business requirements such as warehouse management , staff rostering , merchandising and logistics .
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19. Typically, the delivery of best practice applies more usefully to large organizations and especially where there is a compliance requirement such as IFRS, Sarbanes-Oxley or Basel II, or where the process is a commodity such as electronic funds transfer . This is because the procedure of capturing and reporting legislative or commodity content can be readily codified within the ERP software, and then replicated with confidence across multiple businesses who have the same business requirement .
20. Where such a compliance or commodity requirement does not underpin the business process, it can be argued that determining and applying a best practice actually erodes competitive advantage by homogenizing the business compared to everyone else in their industry sector .
27. Disadvantages Many problems organizations have with ERP systems are due to inadequate investment in ongoing training for involved personnel, including those implementing and testing changes , as well as a lack of corporate policy protecting the integrity of the data in the ERP systems and how it is used .