Enterprise Resource Planning – Definition

Cite this article as:"Enterprise Resource Planning – Definition," in The Business Professor, updated November 30, 2018, last accessed October 21, 2020, https://thebusinessprofessor.com/lesson/enterprise-resource-planning/.


Enterprise Resource Planning (ERP) – Definition

Employer or Enterprise resource making plans (ERP) is a process wherein an organization or a company, a producer, or manager integrate the vital elements of its commercial enterprise. An ERP management system integrates functions, such as: planning, buying, income, advertising, finance and human assets. ERP has been revolutionized by new software systems designed for use by firms.

A Little More on What is an ERP System

The ERP systems connect various technologies used by every part of a business, removing any duplication, and filtering out technology that is highly-priced to the agency. The ERP enables a firm to integrate various departments with a single machine.

Further, the ERP software collects historical data and make the statistics available to managers to be used productively. Linking records about production, finance, distribution and human sources collectively allows the organization to be more self-aware.

The first ERP device was utilized through SAP, a software program company created in 1972 with the aid of 3 software engineers based in Mannheim, Germany. SAP’s purpose was to hyperlink different components of a commercial enterprise by using shared data accrued from those parts to help the agency operate more successfully.
ERP system effectiveness is generally limited by the company’s improper use or lack of willingness to adopt traditional methods to conform with the ERP system.

References for Enterprise Resource Planning

Academic Research on Enterprise Resource Planning

‚󏬆¬†¬†¬†¬† Enterprise resource planning: Implementation procedures and critical success factors, Umble, E. J., Haft, R. R., & Umble, M. M. (2003). European journal of operational research,¬†146(2), 241-257. Enterprise resource planning (ERP) systems are highly complex information systems. This article identifies success factors, software selection steps, and implementation procedures critical to a successful implementation of an ERP. A case study of a largely successful ERP implementation is presented and discussed in terms of these key factors.

‚󏬆¬†¬†¬†¬† Enterprise resource planning: A taxonomy of critical factors, Al-Mashari, M., Al-Mudimigh, A., & Zairi, M. (2003). European journal of operational research,¬†146(2), 352-364. This paper presents a novel taxonomy of the critical success factors in enterprise resource planning (ERP) implementation process. Results from various studies show that ERP benefits are realised when a tight link is established between implementation approach and business process performance measures.

‚󏬆¬†¬†¬†¬† The impact of critical success factors across the stages of¬†enterprise resource planning¬†implementations, Somers, T. M., & Nelson, K. (2001, January). In¬†System Sciences, 2001. Proceedings of the 34th Annual Hawaii International Conference on¬†(pp. 10-pp). IEEE. The paper describes the impact of critical success factors (CSFs) across the stages of enterprise resource planning (ERP) implementations using the responses from 86 organizations that completed or are in the process of completing an ERP implementation. Our results provide advice to management on how best to utilize their limited resources to choose those CSFs that are most likely to have an impact upon the implementation of the ERP system.

‚󏬆¬†¬†¬†¬† Examining the role of innovation diffusion factors on the implementation success of¬†enterprise resource planning¬†systems, Bradford, M., & Florin, J. (2003).¬†International journal of accounting information systems,¬†4(3), 205-225. This paper draws upon Diffusion of Innovation (DOI) theory and Information Systems Success (IS) theory to develop and test a model of ERP implementation success. Results reveal that top management support and training are positively related to user satisfaction, while perceived complexity of ERP and competitive pressure show a negative relationship. This leads to the proposal of a new model of ERP implementation for future research.

‚󏬆¬†¬†¬†¬† Investment in¬†enterprise resource planning: Business impact and productivity measures, Hitt, L. M., Wu, D. J., & Zhou, X. (2002).¬†Journal of management information systems,¬†19(1), 71-98. This paper analyses the benefits of ERPs, and compares it to the costs and risks of implementign this system. The main objective is to see if this system is relevant, and if the benefits of this system exceeds the risks and costs. To achieve this, the authors employ the Tobin q‚Äôs method.

‚󏬆¬†¬†¬†¬† Enterprise resource planning: common myths versus evolving reality, Mabert, V. A., Soni, A., & Venkataramanan, M. A. (2001). Business Horizons,¬†44(3), 69-69.

‚󏬆¬†¬†¬†¬† Enterprise resource planning¬†survey of US manufacturing firms, Mabert, V. A., Soni, A., & Venkataramanan, M. A. (2000). Production and Inventory Management Journal,¬†41(2), 52. This article contains the findings of a recently completed survey of randomly selected U.S. manufacturing firms. Objectives of the study were to determine the extent of use of packaged enterprise resource planning systems, important motivational factors, implementation experiences, and future directions. This study provides a view into the current experiences of small and large firms based on data collected from 479 respondents.

‚󏬆¬†¬†¬†¬† Enterprise resource planning: the emerging organizational value systems, Gupta, A. (2000). Industrial Management & Data Systems,¬†100(3), 114-118. This paper attempts to provide an overview of an ERP system along with the real experiences of its implementation. Reports results of a survey of several ERP companies and considers factors such as future trends in ERP including developments such as Web‚Äźbased procurement applications and outsourcing of ERP applications. The paper thus goes on to suggest some challenges for ERP, such as the need to ensure global compatibility and flexibility.

‚󏬆¬†¬†¬†¬† Enterprise resource planning: the role of the CIO and it function in ERP, Willcocks, L. P., & Sykes, R. (2000)..¬†Communications of the ACM,¬†43(4), 32-38.

‚󏬆¬†¬†¬†¬† Examining the critical success factors in the adoption of¬†enterprise resource planning, Ngai, E. W., Law, C. C., & Wat, F. K. (2008).¬†Computers in industry,¬†59(6), 548-564. This paper presents a literature review of the critical success factors (CSFs) in the implementation of enterprise resource planning (ERP) across 10 different countries/regions.

‚󏬆¬†¬†¬†¬† Enterprise resource planning: Managing the implementation process, Mabert, V. A., Soni, A., & Venkataramanan, M. A. (2003).¬†European journal of operational research,¬†146(2), 302-314. This paper explores the successes and failures of different companies in the implementation of ERPs. This paper empirically investigates and identifies key differences in the approaches used by companies that managed their implementations on-time and/or on/under-budget versus the ones that did not using data collected through a survey of US manufacturing companies that have implemented ERP systems.

‚󏬆¬†¬†¬†¬† Identifying critical issues in¬†enterprise resource planning¬†(ERP) implementation, Ehie, I. C., & Madsen, M. (2005). Computers in industry,¬†56(6), 545-557. This paper analyses the implementation of ERPs and aims to investigate the reasons why companies invest in ERPs despite numerous reports of failures. This study reports the results of an empirical research on the critical issues affecting successful ERP implementation. Through the study, eight factors were identified that attempts to explain 86% of the variances that impact ERP implementation.

‚󏬆¬†¬†¬†¬† Enterprise resource planning:¬†ERP¬†adoption by European midsize companies, Van Everdingen, Y., Van Hillegersberg, J., & Waarts, E. (2000). Communications of the ACM,¬†43(4), 27-31.

‚󏬆¬†¬†¬†¬† Enterprise resource planning¬†(ERP)‚ÄĒA brief history, Jacobs, F. R. (2007). Journal of Operations Management,¬†25(2), 357-363. This is a brief history of ERP‚ÄĒenterprise resource planning. Major ERP vendors are discussed as well as the major impact of developments in computer hardware and software on the industry. The industry consolidation that has recently occurred is also discussed. Different interviews were conducted, and conclusions were documented in this paper.

‚󏬆¬†¬†¬†¬† An innovation‚ÄĒdiffusion view of implementation of¬†enterprise resource planning¬†(ERP) systems and development of a research model, Rajagopal, P. (2002). Information & Management,¬†40(2), 87-114. This paper analyses the implementation of ERPs by different firms and the contextual factors which leads to the implementation of this resource by different firms. Six companies were taken into account as case studies, and three different ERPs were studied using the six-stage model proposed by Kwon and Zmud. Results from this research are documented and proposed for administration to other firms.

‚󏬆¬†¬†¬†¬† Implementing¬†enterprise resource planning¬†(ERP) systems in small and midsize manufacturing firms, Muscatello, J. R., Small, M. H., & Chen, I. J. (2003).¬†International Journal of Operations & Production Management,¬†23(8), 850-871. The paper analyses the potential benefits of implementing ERPs to adopting firms. This research adopts a multiple case study approach to investigate the implementation of enterprise resource planning systems in small and midsize manufacturing firms in the US. It focuses on implementation activities that foster successful installations and are developed using information gleaned from our field studies of four projects.

‚󏬆¬†¬†¬†¬† Enterprise Resource Planning¬†(ERP): a review of the literature, Moon, Y. B. (2007). International journal of management and enterprise development,¬†4(3), 235-264. This article is a review of work published in various journals on the topics of Enterprise Resource Planning (ERP) between January 2000 and May 2006. A total of 313 articles from 79 journals are reviewed. This paper aims to serve three diverse purposes, which are listed in the text. The literature is analysed under six major themes and nine sub-themes.

‚󏬆¬†¬†¬†¬† Enterprise resource planning¬†(ERP) systems: a research agenda, Al-Mashari, M. (2003). Enterprise resource planning (ERP) systems: a research agenda.¬†Industrial Management & Data Systems,¬†103(1), 22-27. This paper analyses the progress in the development of ERP technology. It also goes on to show the gap in the ERP literature and research area. The main objective of this paper is to fill this gap by proposing a novel taxonomy for ERP research. It also presents the current status with some major themes of ERP research relating to ERP adoption, technical aspects of ERP and ERP in IS curricula.

‚󏬆¬†¬†¬†¬† Evaluating¬†enterprise resource planning¬†(ERP) systems using an interpretive approach, Skok, W., & Legge, M. (2002). Knowledge and process management,¬†9(2), 72-82. This paper reports on an interpretive study that attempts to understand the reasons for the apparent lack of success in ERP systems by analyzing issues raised by representatives of key stakeholder groups.

‚󏬆¬†¬†¬†¬† Critical success factors for the implementation of¬†enterprise resource planning¬†(ERP): empirical validation, Bhatti, T. R. (2005, September). In¬†the second international conference on innovation in information technology¬†(Vol. 110). This paper analyses the difficulty and high cost of a successful ERP implementation, and proposes a model to lighten this task. It analyses different literatures and past successes by different firms in implementing this system.

‚󏬆¬†¬†¬†¬† Supply chain management (SCM) and organizational key factors for successful implementation of¬†enterprise resource planning¬†(ERP) systems, Stefanou, C. (1999). AMCIS 1999 Proceedings, 276. This paper reports some findings of an on-going research into ERP implementation issues. A part of the research, which this paper reports, consists of reviewing several cases of successful implementations of ERP systems. Results show that successful implementation of ERP is dependent on technological and organizational factors, with the organizational factors being more important.

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