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Evolution of Enterprise Resource Planning Systems: Trends and Future Outlook

Explore the evolution of ERP systems post-Y2K, benefits, management expectation, importance of training, recent moves, future outlook, and conclusions.

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Evolution of Enterprise Resource Planning Systems: Trends and Future Outlook

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  1. Chapter 11 • Trends in ERP Pg 167-171 By Jason Russo

  2. Background Information • There was a great deal of concern with Y2K problems • After the Y2K boom, vendors concentrated on making products faster and easier to install • Target markets included non-profit organizations and smaller businesses

  3. Studied Benefits • Two studies by Mabert et al and Olhager & Selldin based on a 1-5 scale • ERP systems had support above 3 for providing information faster, increasing interaction within organizations and providing better performance in respect to required cycles • ERP systems received less than 3 for interaction with customers and in getting work done more efficiently • While there was low support found for decreasing IT costs, ERP systems were found to make higher quality information more available

  4. ERP Expectations • Management of organizations that adopt ERP expect many benefits which are often difficult to meet • There are 3 types of ways managers deal with the massive change in the working environment: • 1. Those who really cooperate with the new system will develop key skills that contribute to the organization • 2. Those who passively go on with work must attend intensive training programs and in time they will contribute by utilizing the new system • 3. The last group will leave the organization – i.e. Dell canceled its ERP project after significant investment

  5. Importance of training • Probably the most important factor that is overlooked is user training • Most ERP vendors have been successful in reducing installation time but they under-budget for user training • Employees need adequate time to learn the new system and adapt new work methods – the system is only as good as the people who use it

  6. Recent moves to ERP systems • PepsiCo selected mySAP Business Suite to streamline all its business processes in June 2004 • PepsiCo will also eliminate outdated legacy applications through the mySAP implementation • Earlier this year Coca-Cola Enterprises Inc. also selected SAP R/3 Enterprise software • Coca-Cola wanted to organize information gathered by delivery drivers • Tyson Foods Inc. also recently chose mySAP to move its multiple legacy back-end systems and standardize its software

  7. Future of Enterprise software • Sales of Enterprise resource software grew 7% this year to $26.7 billion • The market is expected to grow to $37 billion by 2008 • “Health care is one area to see some growth, because many organizations are running on legacy systems that they want to move to integrated solutions,” -- Albert Pang, enterprise applications research director at IDC • Merrill Lynch & Co. surveyed 50 corporations • 80% said that their IT budgets will increase by 5% or more from last year and 46% will look to add security products to their systems

  8. Conclusions • ERP has had a mostly positive impact on information systems • ERP is not for every organization but it has evolved to provide flexible products to most firms • The desire for supply chain support had led to more open systems and outside vendor packages that are more organized and have more features

  9. Questions/Comments? References Dubie, Denise. (2004 January). IT spending on security, CRM to rise in 2004. ComputerWorld. Retrieved from http://www.computerworld.com/news/special/pages/story/0,5364,2325-89225,00.html?f=x2325 Kawamoto, Dawn. (2004 May). Rebound seen for resource management software. ZDNet. Retrieved from http://news.zdnet.com/2100-3513_22-5214414.html News and trends about Enterprise Resource Planning software. Retrieved November 26 from http://www.olcsoft.com/enterprise_information_technology_news_and_trends.htm Olson, L David. Managerial Issues of Enterprise Resource Planning Systems. Mcgraw-Hill Company. New York. 2004. The best run business run SAP. Retrieved November 26 from http://www.sap.co.il/ppts/1_06_cic_SAPPHIL_2002.ppt Westervelt, Robert. (2004 June). SAP: Pepsi's software for a new generation. SearchSAP.com. Retrieved from http://www.olcsoft.com/enterprise_information_technology_news_and_trends.htm

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