Enterprise Resource Planning – ERP is a software solution that provides centralised management and coordination of functions, processes and information in a company. The basic concept of ERP is based on sharing of information among various departments within an organisation. Entity Resource planning software is based on several modules relevant to each department or function in an organisation (Esteves and Pastor 2001). Mostly these modules consist of functions such as sales, accounting and finance, human resource, marketing and production.
The ERP system integrates these modules to achieve effectiveness in the overall management of the organisation. The increased efficiency of organisational functions and popularity of ERP systems paved the way for increased use of these systems in especially in large and multinational organisations (Parr and Shanks 2000). The implementation of ERP systems was initially quite costly for organisations but it eliminated the reliance of these organisations on individual software and systems in various areas and increased the efficiency in operations. The long run effectiveness of ERP systems on organisational performance was taken as an added advantage of these systems. ERP systems became more cost effective with the passage of time and scenarios of implementing ERP systems to small and medium sizes organisations started being analysed. Davenport (1998 p.122) stated that “the business world’s embrace of enterprise systems may in fact be the most important development in the corporate use of information technology in the 1990s”. This also indicates the phenomenal growth of ERP systems and the reliance of organisations on information technology. ERP is largely implemented in organisations due to the system’s ability to adapt with business environment and customisation of individual modules regarding organisational requirements.
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