29 Apr ERP
ERP systems became popular with large organizations in the 1990s. In 2000, Gartner group published an article titled “ERP is dead, long live ERP” in which they argued that in near future, ERP systems will overcome the need for other specialized systems (e.g. CRM). While there have been major advances in ERP systems since then, and the fact that most current ERP systems include CRM modules and applications, however, separate CRM systems are still widely adopted by organizations (Haddara et al, 2017). In the 21st Century, these products were expanded by addition of supply chain management (SCM) and customer relationship management (CRM), as well as access through the Web, creating the ERP II concept. Efforts to increase the market led vendors to serve not only large organizations, but also focus more on small-to-medium sized enterprises (SMEs) (Olson et al, 2015).
ERP systems have provided a great deal of benefit to business operations by integrating legacy systems, providing greater accuracy through combining databases, efficiencies through business process reengineering, and providing platforms to which added functionality can be linked (Watts et al, 2008). The goal of ERP is to integrate and consolidate all the systems across an organization into a one system that can meet and serve each department’s unique needs and tasks. While we recognize that rarely are all systems integrated, ERP installation moves toward more centralization of organizational computer support. Therefore, every aspect of an organization’s business process need to have a unified application inter- face, which provides high competitiveness in the market – or at least makes the organization compete in equal terms to their competitors that also uses such a system. Enterprises have invested heavily in ERP acquisition while small businesses or entrepreneurs often could not see how they could afford such systems mainly due to its high up front prices and resources required to deploy and maintain the system. To attack this niche market of ERP in the SME sector, vendors have transformed ERPs by adopting the information technologies that can reduce adoption costs, such as Web-based modules, as well as created simplified versions of their systems. Cereola et al. (Cereola et al, 2012) reported that while large enterprises primarily utilize proprietary ERP systems that are unlikely to migrate to open-source solutions, SMEs are suitable candidates for open- source ERP due to their agility and flexibility. Commercial open source ERP allows modifications to source code enabling firms to exploit their unique business processes and retain competitive advantages. Johansson and Sudzina (Johansson et al, 2008) noted that open-source ERP system interest has exploded, appearing to target SMEs. Poba- Nzaou and Raymond (Poba-Nzaou et al, 2011) gave two cases of open-source ERP lowering risk for SMEs (Olson et al, 2015).
- Cereola, S.J., Wier, B., Strand Norman, C. (2012). “Impact of top management team on firm performance in small and medium-sized enterprises adopting commercial”. Open-source enterprise resource planning, Behav. Inf. Technol. 31(9) 889–907.
- Haddara, M., Costantini, A. (2017). “ERP II is Dead- Long Live CRM”. Procedia Computer Science, Volume 121, Pages 950-959.
- Johansson, B., Sudzina, F. (2008). “ERP systems and open-source: an initial review and some implications for SMEs”. J. Enterp. Inf. Manag. 21(6) 649–658.
- Olson, D. L., Johansson, B., Carvalho, R .A. (2015). “Open source ERP business model framework”. Robotics and Computer-Integrated Manufacturing.
- Poba-Nzaou, P., Raymond, L. (2011). “Managing ERP system risk in SMEs: a multiple case study”. J. Inf. Technol. 26(3) 170–192.
- Watts, C.A., Mabert, V.A., Hartman, N. (2008). “Supply chain boltons: investment and usage by manufacturers”. Int. J. Oper. Prod. Manag. 28(12) 1219–1243.