Enterprise Resource Planning (ERP) is integrated and packaged software systems linked to a common database, handling basic corporate functions. It attempts to integrate all departments and functions across a company into a single computer system that serves different departments’ particular needs such as planning, manufacturing, accounting, distribution, sales, human resource, inventory management, service and maintenance, transportation and e-business. ERP can be viewed as a software solution that addresses the enterprise needs taking the process view of the organization, to meet the organizational goals tightly integrating all functions of an enterprise. (Cited in kong Jia Hui 2005).
Today, many public and private organizations worldwide are implementing ERP systems in place of the functional legacy systems that are not anymore well-compatible with modern business environment. However, according to Kroenke (2008), the process of moving from functional applications to an ERP system is difficult and challenging. Additionally, ERP as an integration of hardware technology and software has a very high investment value, the switch to ERP system is expensive and it requires development of new procedures, training and converting data. However a larger capital investment on ERP does not always give a more optimal return value to the company.
The implementation of ERP has become a challenging task to many organizations in the world. It involves the analysis of current business processes and the services they provide, their handling through bought software rather than designing an application system from scratch and internal control activities necessary to keep the system functioning at all times. The target is integration of middle and lower senior management functions, keeping in mind that business processes are complex (Cited in Japhet Stephen Mtuveta 2013).