Technical System: Information, Information Technology, And Information Systems
The Technical System:
Information, Information Technology, and Information Systems
The use of Enterprise Resource Planning (ERP) systems to manage the manufacturing and services processes with companies is one of the most critical areas of enterprise software there is. Google, Yahoo and other search engines, in their search taxonomies also classify ERP systems as manufacturing systems, and this is because of the highly coordinated approach these applications bring to running an enterprise. The business activities and functions support, information the applications of an ERP systems provide and the knowledge that users need to successfully manage based on its analysis and reporting are provided.
Fundamentals of ERP Systems
At the center of ERP systems are the accounting and finance modules that include Accounts Payable and Accounts Receivable, General Ledger and Financial Reporting (Edwards, Coutts, 2005). These form the coordination point of the ERP system so that inbound supplies for production can be accounted for, assigned costs, and then priced as they are produced and sent to distribution channels and customers for sale. In effect ERP systems create an economic ecosystem of a company (Ng, Gable, 2010). Additionally ERP systems have Supply Chain Management (SCM), Customer Relationship Management (CRM), and Pricing Management applications included as part of their configuration. These modules streamline supply chain transactions and make it possible for suppliers to stay more in touch with what is going on in manufacturing centers of the companies they sell to (Law, Chen, Wu, 2010). CRM systems make it possible...
In addition, CRM systems can also manage product ordering and checking order status for sales teams and for customers themselves. By being integrated to the company's ERP systems this can be accomplished relatively easily. These two examples of supply chain and CRM integration to ERP systems illustrate how companies are synchronizing their most important functional areas to production and finance (Malhotra, Temponi, 2010). ERP systems act as a catalyst of coordination throughout companies, ensuring that demand for products gets reflected back to suppliers in time for them to respond, and also taking customer expectations into account. ERP systems also coordinate the fulfillment of orders and shipping, coordination and synchronizing all the efforts of a company in a single enterprise-wide system (Law, Chen, Wu, 2010).
Analysis and Information Provided by ERP Systems
Beyond business intelligence, ERP systems can track the individual production runs in a factory, assign costs to them and even determine the level of profitability they generated with customers. When the CRM systems' data is included into this analysis it's possible to understand what features customers prefer the most are also the most profitable, how easy or difficult it is to produce products that reflect those preferences, and how effective the products perform once sold. All of this information can be captured in ERP systems, giving companies an overview of how their supply chain, marketing, pricing, manufacturing and service organizations are all working with teach other or not. ERP systems can also drill down into…
