Enterprise Resource Planning (ERP) comprises an important part of the modern business development, while many organizations attempt to integrate the ERP system in their business development. In this regard, they need to understand the essence and efficient ways to implement the ERP system in their specific organizational environment because the ERP system may differ depending on the organizational background, size and basic characteristics. At the same time, organizations need to have the clear and accurate plan of the development and implementation of the ERP system in their business environment. At this point, companies should be aware of the importance of the integration of the ERP system in their organizational structure to facilitate internal business processes and improve organizational performance.
ERP system components
In fact, in order to develop an effective ERP system, organizations should understand the essence of this system. In actuality, the ERP system is usually based on a database and includes all business processes of a company, for example, ordering, production, and logistics processes (Vilpola, 2008). The ERP system aims at close integration of all databases and information flows within the organization to manage the information effective and to plan the communication and movement of resources within the organization.
As a rule, the ERP system attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different departments’ particular needs (Wailgum, 2011). In such a way, organizations can reach positive effects in their marketing performance and maximize the effectiveness of their internal business operations. At the same time, the ERP combines all departments together into a single, integrated software program that runs off a single database so that the various departments can more easily share information and communicate with each other (Wailgum, 2011).
At this point, it is important to dwell major components of the ERP system. In actuality, the major components of the ERP system may depend on the specificities of the organization and the industry it operates in but, as a rule, it is possible to distinguish such components as transactional databases, management portal, web services, which provide external access to the databases, for instance, for customers, customizable reporting, messaging and chats, and others (Behzad, 2003). All these components should be closely integrated and interact with each other effectively.
In actuality, the ERP architecture may have a complex structure but organizations always attempt to maximize the effectiveness of the ERP architecture to gain positive effects after the implementation of the system. Obviously, organizations need that benefits of the implementation of the ERP system covered costs. In this regard, it is important to place emphasis on the fact that the ERP system should include the integrated system that operates in real times without relying on periodic updates (Andrew, 2003). In such a way, the ERP system can function steadily and reliably. Furthermore, the ERP system should include a reliable database, which supports all applications (Behzad, 2003). In such a way, organizations can operate effectively and maintain all internal business process and effective information flow within the organization. At the same time, specialists (Behzad, 2003) argue that the ERP system should be installed without elaboration of application and data integration by the IT department of the organization (Behzad, 2003). In such a way, the ERP becomes easy to use and install and, therefore, effective.