Summary of Enterprise Resource Planning Systems

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Because this is a dense read, you won’t be surprised to learn that the author, Daniel E. O’Leary, is a Ph.D. If you don’t have a conversational grasp of acronyms - including, but not limited to ERP, LAN, WAN, SMEs BOPSE, MAPs, SAP and BAAN - then you’ll have to decode as you read. If you’re actually interested in using the business resource known as "Enterprise Resource Planning," or ERP, your company should be grossing some $200 million a year, because ERP costs about $15 million to implement. While O’Leary makes a very compelling case in favor of ERP, citing integration of information infrastructure, real-time data, value creation and other wonderful attributes, this is a very expensive and risky resource to pursue. Companies such as Microsoft and Cisco had a hard time implementing it and even they have to worry about cost getAbstract warns that this is serious tech for Big Money companies. Mom and Pop operations need not apply.

About the Author

Daniel O’Leary received his Ph.D. from Case Western Reserve University and his MBA from the University of Michigan. He is a professor in the Marshall School of Business at the University of Southern California. He has published over 120 papers in a variety of computer science, information systems and management science journals.

 

Summary

Is ERP for Me?

Enterprise resource planning (ERP) systems are corporate marvels that are changing the business and information technology worlds in the following dimensions:

  • ERP affects most major corporations in the world - A single ERP system is used by 60% of multinational firms. SAP, its producer, is conquering the world. Almost every important company is more or less in SAP’s hands.
  • ERP affects many small and medium enterprises (SMEs) - The impact is not limited to giant firms. By 1997 SAP expected 50% of its revenues to come from SMEs.
  • ERP affects competitors’ behavior - One quarter after Quantum Corp., a maker of hard drives, began using Oracle’s Applications, its competitor, Western Digital, purchased the same apps.
  • ERP affects business partner requirements - ERP firms operate in real-time and they expect the same thing from their partners.
  • ERP has changed the nature of consulting firms - Services involving ERP packages generate one-third to one-half of the total consulting revenue at national professional services firms.
  • ERP provides one of the primary tools for reengineering.
  • ERP has diffused many "best...

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