Enterprise Resource Planning (EPR) refers to “a way to integrate the data of an organization in to one single system, using sub-systems that include hardware, software and unified database in order to achieve integration and to store the data for various functions found throughout the organization” (Article Alley, 2010, para.1). In the past, ERP used to refer to the way organizations of the “industrial type”, which were large in size, set up plans to utilize “organizational wide resources” (Article Alley, 2010). In the current day, this term is used in nearly all types of organizations regardless of their size or the industry to which they belong. The question comes in as to how one can get to know the kind of software system that can be regarded as ERP. In answering this question; it can be pointed out that the software system has to offer a company with functionality for a minimum of two systems in order for it to be regarded as an ERP system (Openbravo, 2010).
However, a large number of the present day ERP systems can serve more than two functions and they bring these functions together in to a single Data Base (Openbravo, 2010). It has been observed by experts that “Human Resources Management, Supply Chain Management, Customer Relations Management, financial, manufacturing and warehouse management functions can be found in modern companies under one umbrella – ERP system” (Article Alley, 2010, para.3).
ERP systems offer the capabilities which are much-needed and these include; “management of finances, product/inventory, human capital, purchasing, and other transactional data within one environment” (Hatch & Jutras, 2009, p.5). The “value proposition” for investing in Enterprise Resource Planning has usually been, as pointed out by Hatch and Jutras (2009), “tied to the standardization of business processes and centralization of information that makes it easier and faster to collect and manage data across many areas of the business” (Hatch.& Jutras, 2009, p.5). The clients of ERP have come to find out, on a rising level, that there can be remarkable increase of the value that is derived from “investing in ERP through analyzing the consolidated data which is captured around the ERP system as well as within the system (Hatch & Jutras, 2009, p.5).
Currently, business organizations are, regardless of their size and shape, as indicated by Hatch and Jutras (2009), “sitting on mountains of data resident in their transaction processing systems of record” (Hatch & Jutras, 2009, p.5). Whereas ERP solutions are at the heart of this data, on the other hand, the amount and complexity of the data increases as ERP is encircled by applications which expand “its reach into areas such as customer relationship management, supplier and supply chain management, product lifecycle management and others” (Hatch.& Jutras, 2009, p.5). Having a large amount of data from ERP and possibly from other different sources can bring in a big challenge. But attaining transparency as well as visibility is not any longer just a lofty objective but instead, it is now a basic need of any business organization (Hatch & Jutras, 2009).
In a situation where transparency has to be brought to the business as well as order to the possible chaos, it may be conceivable that “the most important of the extensions to ERP is Business Intelligence (BI)” (Hatch & Jutras, 2009, p.6). It can be thought of as being a layer placed on top of or entrenched within ERP and also in other applications that “wind-up being giant repositories of data” (Hatch & Jutras, 2009 p.6). As on one hand the implementation of Business Intelligence and ERP can be carried out together; on the other hand, just as it is always the case, the two are perceived as being separate initiatives (Hatch & Jutras, 2009). There must be consideration of the needs that are supposed to be met within the context of the “business drivers” behind the business intelligence projects (Hatch & Jutras, 2009, p.6).
It has been observed that “the top requirement of a Business Intelligence deployment indeed coincides with the need to extract additional value from the relevant business data which is inherent in an ERP implementation” (Hatch & Jutras, 2009, p.6). Enhancing the access speed to this data is an avenue that leads to the realization of “transparency and visibility as well as informed decision making” (Hatch & Jutras, 2009, p.6). The other two requirements are associated with having a direct connection between the decision makers and the data that is required to sustain the decisions which are made. This may call for widening the scope in order to get to the business’s new areas or it may mean “providing access to data and tools to more knowledge workers within the organization” (Hatch & Jutras, 2009, p.6). The two avenues lead to “a clearer view of the data which in turn offers direction towards a clearer view of the business” (Hatch & Jutras, 2009).
References
Article Alley, (2010). ERP – A business intelligence application. Web.
Hatch, D. & Jutras, C. (2009). The ERP/BI connection: adding value through actionable intelligence. Web.
Openbravo, (2010). Business Intelligence (BI). Web.