Enterprise resource planning Literature review Example | Topics and Well Written Essays - 3000 words

Enterprise resource planning - Literature review Example Taking into account all the necessary precautions described in this review, readers can develop an accurate and effective ability to choose the correct ERP to fulfil their company’s needs. Enterprise Resource Planning The development of Enterprise Resource Planning (ERP) packages has evolved the software market in the most valuable segments of modern organizations. They have transformed over the past decade, every aspect of organisational process including sales, marketing, manufacturing and staffing. The first ERP systems that emerged were very expensive for small and medium companies and also required complex processes and maintenance to incorporate them. The detrimental effect that ERPs possess over the entire organization is deemed important for the development and prosperity of a business (Livermore & Ragowsky, 2002). As, such a combination of human and technical expertise is required in order to make a correct selection of vendor, implement the system accordingly and p rovide adequate support and maintenance. The instances of companies going bankrupt due to implement failure of an ERP system include prestigious firms, such as Mobil Europe, Nike, Reebok and Hershey. The continuous failures of the ERP system have raised the question of their viability and the risks involved with incorporating such practices (Chen, 2001). Based on available literature and real-life examples, this review will analyse the tasks needed in order to choose the correct ERP system, the implications that need to be considered, important procedures needed for implementation and future directions for research are proposed. History of ERP The predecessors of modern ERPs were made in the 1960’s with the manufacturing of early Material Requirements Planning (MRP) software by the partnership of J.I. Case with IBM.. However these solutions were big and expensive because they required a large technical staff to support the mainframe computers. In 1970’s the developme nt of faster and higher capacity storage enabled the development of a more integrated business information system. The introduction of COPICS concepts for IBM computers and subsequent birth of software companies such as SAP (Systemanalyse und Programmentwicklung) and Oracle among others, lead to increased technological advancements in MRPs. Its functions included scheduling and releasing manufacturing work orders and purchase orders (Chen, 2001). The MRP II system was created in the early 1980’s by J.D Edwards was later named manufacturing resource planning rather than its original acronym and adopted the MRP-II term to conjoin with the newer capabilities, such as integrating primary functions (production, marketing and finance) and personnel and engineering to improve the efficacy of the enterprise. During the late 80’s the update of CIM (Computer Integrated Manufacturing) framework offered a strategy to help integrate information in a consistent manner across the e nterprise, which was the key to the migrating path between MRP and ERP systems (Chung & Snyder, 2000). The term enterprise resource planning (ERP) was named in the early 1990s by the Gartner Group and included certain criteria to asses the extent of integration across many functional areas such as production from raw materials to work-in-process (WIP) to finished goods inventory (FGI), shipping and receiving