ERP Application in China
1. Introduction
Enterprise resource planning is a cross-functional enterprise system driven by an integrated suite of software modules that supports the basic internal business process of a company (Brien, J.A., & Marakas, G.M. 2007). It tracks business resources—cash, raw materials, production capacity—and the status of business commitments: orders, purchase orders, and payroll. The applications that make up the system share data across the various departments (manufacturing, purchasing, sales, accounting, etc.) that entered the data. ERP facilitates information flow between all business functions, and manages connections to outside stakeholders (Bidgoli, H. 2004).
In 1990, Gartner Group first used acronym ERP as an extension of material requirements planning (Group G. 1990). Then, ERP systems experienced a rapid growth and have been widely used all over the world. Many business companies found major benefits ERP systems can bring to them. By implementing ERP systems, it significantly improves the quality and efficiency of work performance and production. Compare to other nonintegrated legacy systems, using ERP systems decreases the costs of hardware, software and other IT supports. Also, ERP systems help managers to improve their abilities to make better decisions by providing cross-functional information.
However, it’s sad to say, a lot of managers and IT specialists underestimated the fact that it’s never be easy to prepare the planning and training for a new ERP system, which would probably change the entire information systems in their companies. Thus, most companies fail when it comes to implement or upgrade the ERP systems. According to one recent report, more than 29% of ERP implementations fail to achieve even half the planned business benefits. Some well known examples include Waste Management suing SAP for $500 million for a failed ERP implementation, Hershey Foods’ 19% drop in profits from a failed SAP implementation at Halloween time a few
Enterprise resource planning is a cross-functional enterprise system driven by an integrated suite of software modules that supports the basic internal business process of a company (Brien, J.A., & Marakas, G.M. 2007). It tracks business resources—cash, raw materials, production capacity—and the status of business commitments: orders, purchase orders, and payroll. The applications that make up the system share data across the various departments (manufacturing, purchasing, sales, accounting, etc.) that entered the data. ERP facilitates information flow between all business functions, and manages connections to outside stakeholders (Bidgoli, H. 2004).
In 1990, Gartner Group first used acronym ERP as an extension of material requirements planning (Group G. 1990). Then, ERP systems experienced a rapid growth and have been widely used all over the world. Many business companies found major benefits ERP systems can bring to them. By implementing ERP systems, it significantly improves the quality and efficiency of work performance and production. Compare to other nonintegrated legacy systems, using ERP systems decreases the costs of hardware, software and other IT supports. Also, ERP systems help managers to improve their abilities to make better decisions by providing cross-functional information.
However, it’s sad to say, a lot of managers and IT specialists underestimated the fact that it’s never be easy to prepare the planning and training for a new ERP system, which would probably change the entire information systems in their companies. Thus, most companies fail when it comes to implement or upgrade the ERP systems. According to one recent report, more than 29% of ERP implementations fail to achieve even half the planned business benefits. Some well known examples include Waste Management suing SAP for $500 million for a failed ERP implementation, Hershey Foods’ 19% drop in profits from a failed SAP implementation at Halloween time a few