Chapter 5 • Enterprise Systems 199common processes. On the other hand, choosing a single
vendor could also reduce flexibility for the adopting
company. A “best of breed” or mix-and-match approach
with multiple vendors might enable the company to meet
more of its unique needs and reduce reliance on a single
vendor; conversely, such an approach typically makes
implementation more time-consuming and complicates
system maintenance. With either approach, it is usually
essential to employ the vendor or another consulting firm,
or both, to assist in the implementation process. For large,
multidivisional firms, implementing an ERP system is a
very complex, challenging task that needs the best minds
and careful attention of internal IS specialists, internal
business managers, and external consultants. The potential
payoff of an ERP system, in terms of better information for
strategic and operational decision making and planning,
and greater efficiency, profitability, and growth, makes the
efforts and the costs worthwhile.
An Example ERP System: SAP ERP
The most popular of the ERP systems is SAP ERP, devel-
oped by SAP AG, headquartered in Walldorf, Germany.
On the strength of SAP’s R/3 system and its newer variants
(the current version is SAP ERP 6.0), SAP is one of the top
software firms in the world. SAP boasts more than 95,000
customers in over 120 countries.
SAP R/2 was a mainframe-based ERP; R/3 is a
client/server system employing a common, integrated
database with shared application modules. SAP developed
R/3 using its own fourth generation language (4 GL),
named ABAP, and customers may use this language, if
they wish, to modify or enhance the standard R/3 modules.
Today, however, if companies are interested in developing
new SAP-related applications or extending SAP modules,
the best option is to use SAP’s NetWeaver platform,
especially SAP NetWeaver Developer Studio, to carry out
the development work. SAP NetWeaver Developer Studio
offers a convenient user interface and rich functionality for
developing Java 2 Enterprise Edition (J2EE; see Chapter 2)
applications.
In 1999, SAP launched mySAP, which was both an
umbrella concept for SAP’s strategy of allowing its users
to work through the World Wide Web anda brand name
for the new Web-enabled versions of its R/3 software. In
2007, SAP dropped the mySAP label, calling the newest
version of its ERP package simply SAP ERP 6.0. The all-
encompassing SAP Business Suite includes a wide variety
of enterprise software modules, including the robust ERP
module (see Figures 5.6 and 5.7).
The family of SAP ERP software products fits the
general description of an ERP system given previously. It is
a tightly integrated system consisting of several modules.
A company may choose to implement some or all of these
modules. Most important, implementation of SAP ERP
requires that the company change its business processes to
conform to the processes built into the software.
Let us take a closer look at SAP ERP and the SAP
Business Suite. SAP ERP consists of four primary sets of
modules—SAP calls each set a “solution”—financials,
human capital management, operations, and corporate
services. In addition, modules are available for end-user
service delivery and performance management (or analyt-
ics, to use SAP’s term). End-user service delivery includes
both an employee portal and a manager portal. We will talk
more about portals later in this chapter, but the employee
portal gives employees more active participation in the
organization’s human resources programs by permittingERP Systems are Essential
In a survey of chief information officers (CIOs) and other IT leaders, CIOmagazine found that the com-
panies represented were completely dependent on their ERP systems—they “could not live without
them”—but they also had major concerns. More than 85 percent of respondents agreed or strongly
agreed that their ERP systems were essential to the core of their businesses. Among the challenges of
using their ERP systems, IT leaders cited complex system integration, a lack of customization around
particular business strategies, high cost of ownership, difficulty of accessing useful information, and
systems that are difficult to use. They would also like to see more innovation from their ERP vendor
partners. Despite these concerns, the IT leaders appear reluctant to dump their present ERP systems and
move to a new vendor or try something new, such as ERP Software as a Service (SaaS). As CIOmagazine
states, “Can’t live with them, can’t live without them. That pretty much sums up how CIOs and IT
leaders feel about their ERP systems.”
[Adapted from Wailgum, 2008]