Mastering ERP Systems

Efficient and integrated information systems are crucial for companies to remain competitive. An Enterprise Resource Planning (ERP) system can aid in integrating a company's operations by acting as a company-wide computing environment, including a shared database for all functional areas, and delivering consistent real-time data across all business functions. ERP systems evolved from unintegrated information systems supporting only individual business functional areas, to a vision of integrated information systems, and the reengineering of companies to shift from a functional focus to a business process focus. The development of computer hardware and software, such as relational database and spreadsheet software, and telecommunications advancements allowed for the sharing of data and peripherals on local networks. Manufacturing software, such as material requirements planning (MRP) software, evolved to handle production scheduling methodology. The need for ERP systems was further highlighted by the inefficiencies caused by the functional model of business organization, which limited the exchange of information between lower operating levels and required top management involvement. The process business model allowed for information to flow between operating levels without top management's involvement. The adoption of ERP systems has also been driven by the need for compliance with the Sarbanes-Oxley Act of 2002, which requires companies to substantiate internal controls on all information.