Enterprise system also known as enterprise resource planning (ERP). This system is develop to solve the problem of the typical arrangement of information system. The typical arrangement of information systems is build with many different kind of information that supports different functions, organizational level, and business process. Most of the system builds in around different functions and it is lead to none integrated between the business units and business process. Managers will find difficulties in gathering data needed.
There are few benefits of enterprise systems. Firstly, the enterprise system has brings changes greatly in firm structure, management process, technology platform and business capability of an organization. An organization can use enterprise system to support the organization structure and to create more disciplined organization structure compared to the typical arrangement of information system. Secondly, information supply in the enterprise system is structured around cross-functional business process and it will improve the management reporting and decision making.
An enterprise system can help the organization to determine which products are most or least profitable. Apart from that, the enterprise system promise to provide organization with a single, unified, and all encompassing information technology platform that houses data on all the key business process. The data will have common, standardize definitions and forms that can be used by the entire organizations. Lastly, enterprise can create the foundations for customer or demand-driven organizations. By integrating and improve business process in sale, production, finance, and logistics.
The entire organization will integrated and can respond to the request on products information, forecast new products, deliver and demand requires in more efficient way to customer respectively . There are few challenges of enterprise system. Firstly, the enterprise system is very difficult and costly to build up. They require not only a large investment cost but also fundamental change in the way of the business operate. The organization has to change the business process to ensure the information flow smoothly between them.
Employees also have to undergo training and being exposed to new job functions and responsibility. Organization that cannot understand how much change will required or that unable to make this change will have problem in implementing the enterprise system as they may not able to achieve a higher level of functional and business process integration. Secondly, the enterprise systems required complex pieces of software and large investment of time, money and expertise. Enterprise software is deeply inter-twined with corporate business process.
It might take three years to five years for a company to fully implement the enterprise system to the whole organizations. The enterprise systems are integrated. Therefore it is difficult to make a change in only one part of the business without affecting other parts as well. Lastly, the organizations may fail in to achieve the strategic benefits of the enterprise system if integrating business process using the generic models provided by the standard ERP software. Enterprise system promotes centralized organization coordination and decision making, which not may be the best way for some firms to operate.