Page 645 - Introduction to Business

CHAPTER 18 The Digital Enterprise 619

outdated and partial information. If a company’s information is fragmented, its
business is fragmented. 3
Enterprise resource planning (ERP) systems, sometimes simply called enterprise
systems, offer a solution to the problem of information fragmentation. The idea
behind ERP systems is simple.
• Store all information in a single database.
• Represent each business function by a module.
• Design and build the ERP system as a collection of business processes, not
business functions.
The anatomy of an ERP system is presented in Exhibit 18.1.
Notice that because there is a single database, the information used for decision EXHIBIT 18.1
making is always up-to-date and because there is only one system, the modules Anatomy of an ERP System
for each business function
are guaranteed by design to
“talk” to each other. ERP Accounting Finance
module module
systems are then software
packages designed to inte-
grate the majority of a firm’s
business processes, execute Customers Marketing Single Operations Suppliers
all transactions related to the module Database module
firm’s business processes that
are being integrated, store
Human
each piece of data only once resources
in an enterprise-wide data- module
base, allow access to data and
information in real time, and
operate in a client/server environment, whether traditional or Web-based. Notice ERP systems Software packages
that ERP systems digitalize the business processes of the firm. Any or all informa- designed to integrate the majority of a
firm’s business processes, execute all
tion systems that the ERP system replaces are called legacy systems.
transactions related to the firm’s
Examples of business processes for different business functions that are sup- business processes being integrated,
ported by ERP systems are store each piece of data only once in an
enterprise-wide database, allow access
Marketing. Order processing, pricing, shipping, billing, sales management, to data and information in real time, and
sales planning operate in a client/server environment,
traditional or Web-based
Operations. Inventory management, purchasing, shipping, production plan-
legacy systems Any and all information
ning, materials requirements planning, plant and equipment mainte-
systems that an ERP system replaces
nance
Accounting and finance. Accounts payable, accounts receivable, cash
management, product-cost accounting, cost-center accounting, asset
management, general ledger, financial reporting
Human resources. Personnel administration, time accounting, payroll,
personnel planning and development, benefits accounting, applicant
tracking, travel and expense reporting
To address the globalization trends of businesses, some ERP systems are multi-
language, multicurrency, and multinational. Multilanguage refers to the ability of multilanguage A property of ERP
ERP software to be in multiple languages. For example, one company sells an ERP systems to simultaneously operate in
multiple languages
system that can simultaneously operate in more than 30 different languages. When
the user launches the ERP system, he or she has the option of selecting the language
in which he or she will interact with the system. Multicurrency refers to the ability multicurrency A property of ERP
of ERP software to handle multiple currencies. For example, a Japanese user of systems to handle multiple currencies
Sony’s ERP system is able to view Sony’s profit and loss statement in yens, while a

Copyright 2010 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.