Editorial

Enterprise resource planning (ERP) systems are comprehensive packaged software solutions that integrate organizational processes through shared information and data  ows. With their promise of being cheaper to acquire and maintain than custom-built applications, they are often the preferred replacement for legacy computer systems. Although highly con gurable to different situations, ERP systems’ data structures, program code and in-built assumptions about processes can impose patterns of behaviour on organizations that some  nd very dif cult to accept. Today’s ERP systems have evolved from packaged software and now support material requirements planning (MRP) and manufacturing resource planning (MRP II). With additional functionality, including sales,  nance, human resources and purchasing, today’s ERP systems provide support for most commercial functions of any organization. They may be con gured for organizations in many different sectors. In response to developments in electronic business, ERP systems are now being extended to include World Wide Web capability, customer relationship management (CRM), supply chain management (SCM) and support for the electronic market-places, thereby creating a suite of enterprise applications software. ERP vendors experienced rapid growth throughout the 1990s and most Fortune 500 companies now have them installed. Revenues  attened out in 1999 because both year 2000-related implementations were being completed and the market was saturating: many large organizations have now converted to ERP systems. Notwithstanding this, the 1999 market for ERP software and services was estimated at US$17 billion and is forecast to grow to US$21 billion by 2004 (AMR Research, 2000). Five major vendors dominate the ERP market. Market shares in 1999 were SAP 30%, Oracle 14%, Peoplesoft 7%, J. D. Edwards 5%, Baan 3% and ‘other’ 41% (Gilbert, 2000). ERP system implementation costs are often reported to be  ve to ten times the cost of software licences (Davenport, 2000, p. 68). If so, organizations worldwide spent something like US$90–180 billion on ERP systems in 1999. Looking to the future, AMR Research forecasts that, by 2004, sales of CRM, SCM and electronic marketplace software will each match the current US$20 billion per annum sales of ERP software, up from only a few billion dollars each today. Today, there is also a sizeable and growing market in upgrading ERP software to accommodate new software releases, particularly as ERP vendors Internet enable their product offerings. In addition, there is a growing market in enterprise application integration (EAI) tools for binding various software packages together and a move to outsourcing the provision of enterprise application services through what are known as application service providers (ASPs). Developments on so many fronts make it hard to predict what the enterprise application software market will look like in even a few years time, but the future looks bright. In this special edition of the Journal of Information Technology, we focus on the core systems in today’s enterprise applications market-place, namely ERP systems. ERP systems in organizations have been likened to nervous systems in people. Because they affect so many parts of an organization, ERP systems can provide a huge range of bene ts and problems, often with different bene ts in different organizations. In a recent study of 233 organizations that had implemented ERP systems, Shang and Seddon (2000) classi ed the bene ts of ERP systems into  ve categories.