The Evolution of ERP Systems: A Historical Perspective 1

Chapter I

The Evolution of ERP Systems: A Historical Perspective

Mohammad A. Rashid Massey University Al!any" #e$ %ealand &ia'uat Hossain Syracuse University" USA (on )avid Patric* University of Sydney" Australia

ERP systems are now ubiquitous in large businesses and the current move by vendors is to repackage them for small to medium enterprises (SMEs) !his migration has many consequences that have to be addressed through understand" ing the history and evolution of ERP systems and their current architectures !he advantages and disadvantages of the ERP systems will impact their penetration in this new market !he market position and general strategy of the ma#or systems providers in preparation for this push are described !he chapter concludes that the growth and success of ERP adoption and development in the new millennium will depend on the legacy ERP system$s capability of e%tending to &ustomer Relationship Management (&RM)' Supply &hain Management (S&M) and other e%tended modules' and integration with the (nternet"enabled applications

INTROD CTION
!he unprecedented growth of information and communication technolo" gies ((&!) driven by microelectronics' computer hardware and software systems has influenced all facets of computing applications across organi)a"
&opyright * +,,+' (dea -roup Publishing

+ Rashid" Hossain , Patric*

tions Simultaneously the business environment is becoming increasingly comple% with functional units requiring more and more inter"functional data flow for decision making' timely and efficient procurement of product parts' management of inventory' accounting' human resources and distribution of goods and services (n this conte%t' management of organi)ations needs efficient information systems to improve competitiveness by cost reduction and better logistics (t is universally recogni)ed by large and small"to" medium"si)e enterprises (SME) that the capability of providing the right information at the right time brings tremendous rewards to organi)ations in a global competitive world of comple% business practices Starting in the late ./0,s and the beginning of the .//,s new software systems known in the industry as enterprise resource planning (ERP) systems have surfaced in the market targeting mainly large comple% business organi" )ations !hese comple%' e%pensive' powerful' proprietary systems are off" the"shelf solutions requiring consultants to tailor and implement them based on the company$s requirements (n many cases they force companies to reengineer their business processes to accommodate the logic of the software modules for streamlining data flow throughout the organi)ation !hese software solutions' unlike the old' traditional in"house" designed company" specific systems' are integrated multi"module commercial packages suitable for tailoring and adding 1add"ons2 as and when required !he phenomenal growth of computing power and the (nternet is bringing ever more challenges for the ERP vendors and the customers to redesign ERP products' breaking the barrier of proprietorship and customi)ation' and embracing the collaborative business over the intranet' e%tranet and the (nternet in a seamless manner !he vendors already promise many 1add"on2 modules' some of which are already in the market as a sign of acceptance of these challenges by the ERP vendors (t is a never"ending process of reengineering and development bringing new products and solutions to the ERP market ERP vendors and customers have recogni)ed the need for packages that follow open architecture' provide interchangeable modules and allow easy customi)ation and user interfacing

ERP S!STE"S DE#INED

Enterprise resource planning systems or enterprise systems are software systems for business management' encompassing modules supporting func" tional areas such as planning' manufacturing' sales' marketing' distribution' accounting' financial' human resource management' pro#ect management' inventory management' service and

The Evolution of ERP Systems: A Historical Perspective -

maintenance' transportation and e"busi"

. Rashid" Hossain , Patric*

ness !he architecture of the software facilitates transparent integration of modules' providing flow of information between all functions within the enter" prise in a consistently visible manner &orporate computing with ERPs allows companies to implement a single integrated system by replacing or re" engineering their mostly incompatible legacy information systems 3merican Production and (nventory &ontrol Society (+,,.) has defined ERP systems as 1a method for the effective planning and controlling of all the resources needed to take' make' ship and account for customer orders in a manufacturing' distribution or service company 2 4e quote several definitions from the published literature to further e%plain the concept5 1ERP (enterprise resource planning systems) comprises of a commercial software package that promises the seamless integration of all the information flowing through the company6financial' accounting' human re" sources' supply chain and customer information2 (7avenport' .//0) 1ERP systems are configurable information systems packages that integrate informa" tion and information"based processes within and across functional areas in an organi)ation2 (8umar 9 :an ;illsgersberg' +,,,) 1<ne database' one applica" tion and a unified interface across the entire enterprise2 (!ad#er' .//0) 1ERP systems are computer"based systems designed to process an organi)ation$s transactions and facilitate integrated and real"time planning' production' and customer response2 (<$=eary' +,,.) !he concept of the ERP system can be illustrated' following 7avenport (.//0)' with the diagram in >igure .

E%O& TION O# ERP S!STE"S

!he evolution of ERP systems closely followed the spectacular develop" ments in the field of computer hardware and software systems 7uring the Figure 1: ERP systems concept
#ront'Office
Corporate Reporting

(ac)'Office

C S T O " E R S
Sales 9 7istribution Service 3pplications

S
>inancial 3pplications

Central Data$ase
Human Resources Management

Manufacturing 3pplications (nventory Management

P P & I E R S

./?,s most organi)ations designed' developed and implemented centrali)ed computing systems' mostly automating their inventory control systems using inventory control packages ((&) !hese were legacy systems based on pro" gramming languages such as &<@<=' 3=-<= and ><R!R3A Material requirements planning (MRP) systems were developed in the ./B,s which involved mainly planning the product or parts requirements according to the master production schedule >ollowing this route new software systems called manufacturing resources planning (MRP (() were introduced in the ./0,s with an emphasis on optimi)ing manufacturing processes by synchro" ni)ing the materials with production requirements MRP (( included areas such as shop floor and distribution management' pro#ect management' finance' human resource and engineering ERP systems first appeared in the late ./0,s and the beginning of the .//,s with the power of enterprise"wide inter"functional coordination and integration @ased on the technological foundations of MRP and MRP ((' ERP systems integrate business processes including manufacturing' distribution' accounting' financial' human resource management' pro#ect management' inventory management' service and main" tenance' and transportation' providing accessibility' visibility and consis" tency across the enterprise 7uring the .//,s ERP vendors added more modules and functions as 1add"ons2 to the core modules giving birth to the 1e%tended ERPs 2 !hese ERP e%tensions include advanced planning and scheduling (3PS)' e" business solutions such as customer relationship management (&RM) and supply chain management (S&M) >igure + summari)es the historical events related with ERP

Figure 2: ERP evolution *+++s .//+s ./3+s ./4+s ./6+s E,ten-e- ERP Enterprise Resource Plannin0 1ERP2 "anufacturin0 Resources Plannin0 1"RP II2 "aterial Re5uirements Plannin0 1"RP2 Inventory Control Pac)a0es

ERP S!STE"S AND OR7ANI8ATIONS

(t is generally a misleading perception that implementing an ERP system will improve organi)ations$ functionalities overnight !he high e%pectation of achieving all"round cost savings and service improvements is very much dependent on how good the chosen ERP system fits to the organi)ational functionalities and how well the tailoring and configuration process of the system matched with the business culture' strategy and structure of the organi)ation <verall an ERP system is e%pected to improve both backbone and front"end functions simultaneously <rgani)ations choose and deploy ERP systems for many tangible and intangible benefits and strategic reasons (n many cases the calculation of return on investment (R<() is weighted against the many intangible and strategic benefits !he benefits that an industry standard ERP system may bring to organi)ations are shown in !able . !o reap the benefits of ERP systems' however' organi)ations need to over" come certain problems and disadvantages' which are listed in !able + (t was estimated that the spending on ERP systems in .//0 was about CSD.B billion following annual growth rates ranging from E,F to G,F &ompanies also spend a multiple of licensing costs on services related to implementation and maintenance of the software !he worldwide license and maintenance revenue for ERP systems was CSD+. G billion in +,,,' which represented a growth of .E .F from the ./// market value of DCS./ billion (@roatch' +,,.) !he continued growth of the ERP systems market is Table 1: Advantages of ERP systems 9hat $enefit
Reliable information access 3void data and operations redundancy

Ho:
&ommon 7@MS' consistent and accurate data' improved reports Modules access same data from the central database' avoids multiple data input and update operations Minimi)es retrieving and reporting delays !ime savings' improved control by enterprise"wide analysis of organi)ational decisions &hanges in business processes easy to adapt and restructure Structured and modular design with 1add" ons 2 :endor"supported long"term contract as part of the system procurement E%tended modules such as &RM and S&M (nternet commerce' collaborative culture

7elivery and cycle time reduction &ost reduction

Easy adaptability (mproved scalability (mproved maintenance -lobal outreach E"&ommerce' e"business

Table 2: Disadvantages of ERP systems Disa-vanta0e

!ime"consuming E%pensive

Ho: to overcome

&onformity of the modules

:endor dependence

>eatures and comple%ity

Scalability and global outreach

E%tended ERP capability

Minimi)e sensitive issues' internal politics and raise general consensus &ost may vary from thousands of dollars to millions @usiness process reengineering cost may be e%tremely high !he architecture and components of the selected system should conform to the business processes' culture and strategic goals of the organi)ation Single vendor vs multi"vendor consideration' options for 1best of breeds'2 long"term committed support ERP system may have too many features and modules so the user needs to consider carefully and implement the needful only =ook for vendor investment in R97' long" term commitment to product and services' consider (nternet"enabled systems &onsider middle"ware 1add"on2 facilities and e%tended modules such as &RM and S&M

attributed to the fact that the vendors are adding applications such as supply chain management' customer relationship management and the integration of (nternet"enabled applications for e"business More than ?,F of the >ortune .,,, companies have installed or are in the process of implementing packaged ERP systems to support their back"end business activities (8raft' +,,.) !hese packages implemented by the >ortune .,,, companies run well over the (! budgets for most SMEs ERP vendors are targeting this untapped SME market with suppos" edly scaled"back systems suitable for smaller firms by offering simple' cheaper and pre"configured easy"to"install solutions within budget and time constraints >or some vendors this may lead to offering centrally managed (nternet"enabled ERP"system"based services for SMEs to ac" cess and use anytime from anywhere

ERP S!STE"S ARCHITECT RE

ERP vendors' mostly e%perienced from the MRP and financial software services fields' reali)ed the limitations of the old legacy information systems

The Evolution of ERP Systems: A Historical Perspective /

used in large enterprises of the ./B,s and ./0,s Some of these old systems were developed in"house while others were developed by different vendors using several different database management systems' languages and pack" ages' creating islands of noncompatible solutions unfit for seamless data flow between them (t was difficult to increase the capacity of such systems or the users were unable to upgrade them with the organi)ation$s business changes' strategic goals and new information technologies 3n ERP system is required to have the following characteristics5 H Modular design comprising many distinct business modules such as financial' manufacturing' accounting' distribution' etc H Cse centrali)ed common database management system (7@MS) H !he modules are integrated and provide seamless data flow among the modules' increasing operational transparency through standard interfaces H !hey are generally comple% systems involving high cost H !hey are fle%ible and offer best business practices H !hey require time"consuming tailoring and configuration setups for integrating with the company$s business functions H !he modules work in real time with online and batch processing capabilities H !hey are or soon they will be (nternet"enabled 7ifferent ERP vendors provide ERP systems with some degree of specialty but the core modules are almost the same for all of them Some of the core ERP modules found in the successful ERP systems are the following5 H 3ccounting management H >inancial management H Manufacturing management H Production management H !ransportation management H Sales 9 distribution management H ;uman resources management H Supply chain management H &ustomer relationship management H E"@usiness !he modules of an ERP system can either work as stand"alone units or several modules can be combined together to form an integrated system !he systems are usually designed to operate under several operating platforms such as CA(I' MS 4indows A!' 4indows +,,,' (@M 3(I' and ;P"CI systems S3P 3-' the largest ERP vendor' provides a number of modules with its famous RJE ERP system' which are shown in !able E Aew modules are introduced by S3P and other vendors in response to the market and technological demand such as the (nternet technology

0 Rashid" Hossain , Patric*

Table 3: ome of t!e modules of AP"s R#3

>inancial 3ccounting Pro#ect System ;uman Resources Production Planning (nvestment Management #I PS HR PP I" &ontrolling 4orkflow Plant Maintenance Materials Management Enterprise &ontrolling CO 9# P" "" EC 3sset Management (ndustry Solutions Kuality Management Sales 9 7istribution !reasury A" IS ;" SD TR

Modules of (nternet ver sion mySAP<CO" myS3P 4orkplace myS3P myS3P E"Procurement myS3P Supply &hain Mgmt myS3P Product =ifecycle Mgmt myS3P &ustomer Relationship Mgmt @usiness (ntelligence myS3P myS3P >inancials Mobile @usiness

myS3P ;uman Resources myS3P Marketplace by S3PMarkets myS3P ;osted Solutions myS3P !echnology

Enterprise systems employ thin clientJserver (&JS) technology or clientJ fat server (&J>S) architecture' creating a decentrali)ed computing environ" ment (n a &JS system a number of client devices operated by end users such as desktop P&s request services from application servers' which in turn get the requested service"related information from the database servers !he requests may be simple data files' data values' communication services' transaction processing or master file updates !he general practice is to have three"tier architecture such as in >igure E (n this three" tier system the user interface runs on the client !o run ERP systems relatively powerful P&s (clients) and powerful servers are required where most of the hundreds of thousands of operations are performed !he clientJserver system functions are performed following three layers of logic5 = Presentation &ayer: -raphical user interface (-C() or browser for data entry or accessing system functions = Application &ayer: @usiness rules' functions' logic' and programs acting on data receivedJtransferred fromJto the database servers = Data$ase &ayer: Management of the organi)ation$s operational or transactional data including metadataL mostly employs industry standard R7@MS with structured query language (SK=) provisions !his logical arrangement helps the ERP user interface to run on the clients' the processing modules to run on the middle"tier application servers' and the database system to run on the database servers

CO""ERCIA& ERP S!STE"S

!he five dominating ERP software suppliers are S3P' <racle' PeopleSoft' @aan and M 7 Edwards !ogether they control more than ?,F of the multi" billion dollar global market

Figure 3: T!ree$tier ERP systems arc!itecture Presentation &ayer 1#ront Tier2 Application &ayer 1"i--le Tier2

Client 9or)stations

Application Servers

Data$ase &ayer 1(ac) Tier2 Data$ase Servers Each vendor' due to historic reasons' has a specialty in one particular module area such as @aan in manufacturing' PeopleSoft in human resources management' S3P in logistics and <racle in financials !here are also about G, established and a few more newly emerging smaller and midsi)e ERP vendors including third"party developers competing for the ERP market !he result is stiff competition and feature"overlapping products difficult to differentiate 7ue to keen competition for control of the lucrative ERP market share' the vendors are continuously updating their products and adding new technology"based features =ong"term vision' commitment to service and support' module features' specialty' e%perience and financial strength for R97 are considered the ma#or vendor qualities for product selection and turnkey implementation (n the following sections we provide brief profiles of these five ERP giants

SAP A7>#la0ship mySAP.COM

Pro-ucts

R/3,

S3P 3(1Systeme' 3nwendungen' und Produkte in 7atenverarbeitung2)' or Systems' 3pplications and Products in 7ata Processing' was started by five former (@M engineers in -ermany in ./B+ for producing integrated business application software for the manufacturing enterprise (S3P' +,,.) (ts first ERP product' RJ+' was launched in ./B/ using a mainframe"based centrali)ed database that was then redesigned as clientJserver software RJE in .//+ System RJE was a breakthrough and by ./// S3P 3- became the third largest software vendor in the world and the largest in the ERP sector with a market

share of about E?F serving over .B',,, customers in over .,, countries (n ./// S3P 3- e%tended the ERP functions by adding &RM' S&M' sales" force automation and data warehousing S3P has also invested significantly in its R97 sector with the result of newer versions of RJE E .' N ,' N ? including (nternet functionalities and other enhancements S3P$s (nternet"enabled ERP solutions are provided by the recently launched ERP product called myS3P &<M S3P has the broadest ERP functionality' capacity to spend significantly on R97' strong industry" focused solutions and long"term vision

Oracle Corporation>#la0ship Pro-uct Oracle Applications

<racle (<racle' +,,.)' founded in ./BB in the CS3' is best"known for its database software and related applications and is the second largest software company in the world after Microsoft <racle$s enterprise software applica" tions started to work with its database in ./0B (t accounts for D+ G billion out of the company$s D/ E billion in .///' which places <racle second to S3P in the enterprise systems category with over G',,, customers in .N, countries <racles ERP system is known as <racle 3pplications' having more than G, different modules in si% ma#or categories5 finance' accounts payable' human resources' manufacturing' supply chain' pro#ects and front office <racle has other strong products in the software field including 7@MS' data warehous" ing' work flow' systems administration' application development tools (3P(s)' and consulting services 3 notable feature of <racle is that it is both a competitor and a partner to some of the industry leaders in the ERP market such as S3P' @aan and PeopleSoft because of the use of <racle$s 7@MS in their ERP systems <racle has integrated its ERP solutions with the (nternet and has introduced several applications in the electronic commerce and (nternet" based commerce areas <racle$s (nternet infrastructure is created around two powerful products5 <racle/i 7atabase and <racle/i 3pplication Server 3nother significant feature of <racle is its <S@S' or <racle Small @usiness Suite which provides consistent financials' payroll' inventory control' order entry' purchase orders' and &RM functionality6all delivered as a 4eb service <racle also offers an easy"to"activate 4eb presence that helps companies to sell their goods via the (nternet

PeopleSoft Inc<>#la0ship Pro-uct PeopleSoft8

PeopleSoft is one of the newest ERP software firms started in ./0B in Pleasanton' &alifornia' with speciali)ation in human resource management and financial services modules PeopleSoft quickly managed to offer other corporate functions and attained a revenue of DE+ million in .//+

Enterprise

solutions from PeopleSoft include modules for manufacturing' materials management' distribution' finance' human resources and supply chain plan" ning S3P 3- and <racle6with longer e%perience' stronger financial base and worldwide presence6are the main competitors to PeopleSoft Many customers comment that PeopleSoft has a culture of collaboration with customers' which makes it more fle%ible than its competitors <ne of the strengths of PeopleSoft is the recognition by its customers that it is fle%ible and collaborative !he flagship application PeopleSoft0 with scores of applications was developed by PeopleSoft with an e%penditure of DG,, million and +',,, developers over + years as a pure (nternet"based collabo" rative enterprise system 1<ur revolutionary e@usiness platform is the first open IM= platform to offer scalability and ease of use for all users PeopleSoft 0 requires no client software other than a standard 4eb browser' giving you the ability to securely run your business anytime' anywhere2 (PeopleSoft' +,,.) 1<ur e@usiness applications and consulting services enable true global operations6managing multiple currencies' languages' and business processes for more than N'N,, organi)ations in .,/ countries2 (PeopleSoft' +,,.) PeopleSoft with about .,F market share' is the third largest ERP vendor after S3P 3- and <racle

The (aan Company>#la0ship Pro-uct Baan RP

>ounded in ./B0 in !he Aetherlands' @aan (@aan' +,,.) started with e%pertise in software for the manufacturing industry and by .//B claimed an ERP market share of roughly GF @ann$s revenue in .//0 was roughly DBG, million and while facing a slight slowdown in ./// started growing again in +,,. with sales up .+F at OB'+E.million and operating profit of O/+? million @aan has more than .G',,, customer sites all over the world and more than E',,, employees @aan believes that 1the (nternet is the ultimate enabler2 and 1(nternet technologies help companies become order"driven and customer" focused by enabling collaboration across the Pvalue chain $ Suppliers' dis" tributors' manufacturers and customers can work together to deliver the right product at the right price 2 ERP solution areas that @aan covers include finance' procurement' manufacturing' distribution' integration and imple" mentation' planning' sales' service and maintenance' business portals' col" laborative commerce and business intelligence @ann$s flagship product is @aanERP (formerly called !riton' then @aan (:)' launched in .//0 <ne innovative product from @aan is the <rgware tool that can cut implementation cost significantly by automatically configuring the enterprise software @aan$s ERP software is best known in the aerospace' automotive' defence' and electronics industries

?<D< E-:ar-s @ Co<>#la0ship Pro-uct One!orl"

M 7 Edwards was founded in ./BB in 7enver (cofounded by ?ack !hompson' Dan -regory and & E-:ar- Mc:aney) with long e%perience of supplying software for the 3SJN,, market M 7 Edwards$ flagship ERP product called <ne4orld is 1capable of running on multiple platforms and with multiple databases' QandR revolutioni)es enterprise software by liberating users from infle%ible' static technologies2 (M7 Edwards' +,,.) !he product includes modules for finance' manufacturing' distributionJlogistics and human resources' quality management' maintenance management' data warehousing' customer support and after" sales service M 7 Edwards$ rev" enue #umped to D/NN million in ./// from D.+, million in.//+' having more than G',,, customers in over .,, countries !he <ne4orld system is considered to be more fle%ible than similar competing products and within the reach of smaller enterprises M 7 Edwards$ (nternet"e%tended version of <ne4orld was launched recently as <ne4orld Ie (1Ie2 stands for 1e%" tended enterprise2)

EATENDED ERP
!he proliferation of the (nternet has shown tremendous impact on every aspect of the (! sector including ERP systems becoming more and more 1(nternet"enabled2 (=awton' +,,,) !his environment of accessing systems resources from anywhere anytime has helped ERP vendors e%tend their legacy ERP systems to integrate with newer e%ternal business modules such as supply chain management' customer relationship management' sales force automation (S>3)' advanced planning and scheduling (3PS)' business intel" ligence (@()' and e"business capabilities (n fact ERP is becoming the e" business backbone for organi)ations doing online business transactions over the (nternet (nternet"based solutions are destined to improve customer satisfaction' increase marketing and sales opportunities' e%pand distribution channels' and provide more cost" effective billing and payment methods !he e%tension to S&M and &RM enables effective tri"party business relationships between the organi)ation' suppliers and the customers 3 supply chain management has sub"modules for procurement of materials' transformation of the materials into products and distribution of products to customers 1Successful supply chain management allows an enterprise to anticipate demand and deliver the right product to the right place at the right time at the lowest possible cost to satisfy its customers 7ramatic savings can be achieved in inventory reduction' transportation costs and reduced spoilage by

matching supply with actual demand2 ((@M' +,,.) 4ith the deployment of a &RM' organi)ations are able to gather knowledge about their custom" ers' opening opportunities to assess customer needs' values and costs throughout the business life cycle for better understanding and investment decisions !he sub"modules found in typical &RM packages are market" ing' sales' customer service and support systems using (nternet and other access facilities with the intention of increasing customer loyalty through improved customer satisfaction E"commerce is the conduct of business transactions among organi)a" tions with the support of networked information and communication tech" nologies' especially utili)ing (nternet applications such as the 4eb and e" mail' effectively reaching global customers 3doption of e"commerce and e" business solutions' especially business"to"business (@+@) solutions' are seen by many as the wave of current and future e%tensions of traditional ERP systems of most small' medium and large vendors !he front"end 4eb"based (nternet"business applications are integrated with the back" office ERP"based applications' enabling business transactions such as order placement' pur" chasing' inventory updates' employee benefits' etc to take place between the customers' suppliers and the enterprise based on reliable' relevant data and applications instantly in a border"less domain !he legacy ERP systems designed to integrate enterprise functions within the four walls of the enterprise have introduced software solutions with a 4eb"interface essentially e%tending to (nternet"enabled &RM' S&M and other (nternet"business models E%amples of such e%tended ERPs are avail" able from most of the ERP vendors !hus S3P$s (nternet"enabled integrated ERP system called myS3P &<M (S3P' +,,.) is a suite of ERP' &RM and other products that can be linked together using (nternet portals !he concept of the (nternet"enabled e%tended ERP system is shown in >igure N 3n e%ample of an e%tended ERP system may be <racle$s e"business suite of ERP systems that connects to &RM and S&M <racle$s >ast>orward 4eb Store (<racle' +,,.) provides applications for establishing online stores for handling transactions and services with the possibility of linking into <racle$s ERP applications ERP and e"commerce applications of an enterprise can share a common database with the deployment of <racle 3pplications ..i (<racle' +,,.) integrating 4eb sites with ERP back"office applications @aan has integrated its ERP' &RM and S&M with manufacturing management software M 7 Edwards$ <neworld ERP package is reengineered to <ne4orld Ie (1Ie2 stands for 1e%tended enterprise2)' which enables the organi)ation to e%tend the enterprise beyond physical walls to collaborate with customers' partners' and suppliers with additional tools for business"to"business (@+@)

Figure %: &eb$enabled e'tended ERP system

CR"BSC" Application Server

ERP Application Server

( A ! 9e$ Server R 9e$ Portals 3 E'mail Server A E ! Enterprise Systems

( A ! E R A E !

9e$ (ro:ser "ail Client Customer

success !he Swedish ERP vendor (ntentia (nternational 3@ ((ntentia' +,,.) has a product suite called Move% that integrates ERP' &RM and other management software

S ""AR! AND THE # T RE

!he ma#or industrial information systems manufacturers that emerged from the ./0,s and early .//,s defined the history of the development of ERP systems ;ence the ma#or providers are representatives of certain industries as much as competitors in a common marketplace !o this e%tent there are still opportunities for new ERP vendors to emerge from industries that so far have not contributed to the ERP phenomenon Some obvious e%amples are the aerospace industry' the finance industry and the logistics industry 3nalysis of the market penetration of ERP systems shows clearly that the current players have to downsi)e their products and offerings to be attractive to SMEs !here appears to be no public discussion as to how this will be achieved and whether it requires a significant change in software architecture !his situation again is an opportunity for smaller players to sei)e the day and offer smaller systems running on smaller hardware platforms more effi" ciently !hese innovators will ultimately take the lead in the ERP software market as large systems will not produce the continual income stream that small' robust' easy"to"use systems can achieve (mportantly these attributes contribute to a system becoming ubiquitous in the same way that Microsoft has achieved ubiquity for its operating system >uture successful vendors will

capture large markets of smaller businesses' who will provide a more consistent and enduring income stream

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Shields' M - ' (+,,.) E$)usiness and ERP: Rapid +mplementation and Pro4ect Planning Aew Sork5 Mohn 4iley 9 Sons !ad#er' R (.//0) Enterprise resource planning +nternet-ee3' Manhasset' 3pril .E