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Chapter 1 • Introduction to Enterprise Systems for Management 29

organizations is necessary. Today, even mid-market companies are increasing their international
presence, often driven by major customers who have entered global markets. Every part of the
organization is involved or affected by an ERP system, whether a technical staff person, functional
analyst, or an end user. Small to midsize organizations are realizing the need for a single integrated
system to adapt to the changing environments and needs around the globe. The proliferation
of ERP system implementations continues and will continue at a rapid pace. New generations of
systems will only capitalize on what has been accomplished already. Organizations successfully
implementing an ERP system will not retreat to nonintegrated systems.

Summary

•This chapter provided an overview of infor- of architecture: physical and logical. The
mation systems, ERP systems, and the history logical architecture works to assist in imple-
of how they started, where they came from, menting the organization’s vision and busi-
and why they exist. The components of an ness processes. The physical architecture
ERP system and the complexities involved in highlights how the data, application logic,
implementing and supporting the system and presentations are integrated and installed
were also discussed. Whereas the risks for in the IT environment.
implementing an ERP are greater, the payoff •The ERP system benefits and limitations
is very high for organizations. are discussed in Table 1-3.
•The integration of data helps an organiza- •The business benefits and limitations of
tion to better meet the demands of a fast and ERP systems are discussed in Table 1-4.
dynamic business world. As discussed in the •There are several ERP vendors competing for
examples, success or failure hinges on both an organization’s business today. The current
the software and the implementation, orga- vendors include SAP, Oracle, Infor, SSA
nization, and planning. Management must Global, Microsoft Dynamics, and Epicor.
be involved and support an ERP implemen- •Before purchasing a vendor-developed ERP
tation, whereas project management and system an organization must identify and
change management are the keys to success- document its needs and its vision of the
ful implementations. future. The selection of a system must be
•Information systems have changed as infor- based on these needs and how well a vendor
mation technology has changed. System meets those needs now or in the future.
models have moved from centralized to •There are many ERP system implementa-
decentralized, and finally to the current state. tion success stories, but the ones that reach
As the models have changed, so also have the news are often the ones that fail. It is
the needs of organizations. The availability essential to learn from both. A success or
of ERP systems provides for integrated data failure is sometimes based on something
and business processes, thereby creating very small.
opportunities for organizations to expand •To be successful in implementing an ERP
and change as their business changes. system, an organization and its management
•ERP components consist of hardware, soft- must clearly understand the implementation
ware, information, process, and people to process. The key to this is the application of
perform the fundamental phases of an infor- an ERP life cycle and methodology through-
mation system: input, process, and output. out an implementation. A methodology brings
•ERP system architecture is a blueprint of about a process to arrive at well-thought-out
the actual ERP system. There are two types decisions.