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CH A P TE R2

THE DEVELOPMENT OF

ENTERPRISE RESOURCE

PLANNING SYSTEMS

L E ARNING O BJ ECTIVE S

After completing this chapter, you will be able to:
• Identify the factors that led to the development of Enterprise Resource
Planning (ERP) systems
• Describe the distinguishing modular characteristics of ERP software
• Discuss the pros and cons of implementing an ERP system
• Summarize ongoing developments in ERP

I N TRODUCTION

In today’s competitive business environment, companies try to provide customers with goods and

services faster and less expensively than their competition. How do they do that? Often, the key is
an efficient, integrated information system. Increasing the efficiency of information systems results in

more efficient management of business processes. When companies have efficient business
processes, they can be more competitive in the marketplace.

An Enterprise Resource Planning (ERP) system can help a company integrate its operations by

serving as a company-wide computing environment that includes a shared database—delivering

consistent data across all business functions in real time. (The term real time refers to data and

processes that are always current).

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