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ERP Guide : Organisations that use ERP

Tutorial by:Sandy      Date: 2016-04-11 00:10:59

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Because of their two most important characteristics, data integration and best practices, ERP systems
can substantially improve business processes. In the forty years of their existence, the use of ERP systems
has spread extensively.

From the start, ERP has been used by large multinational companies. Caldwell & Stein [1998] estimate that
around forty percent of all US companies with an annual revenue of 1 billion US$ or more use an ERP
system. he use of ERP is also wide-spread in Europe. In Table 1.1 an overview is presented of companies
with a listing on the AEX, the main Dutch stock exchange, that worked on an ERP implementation
between 1995 and 2005. During these eleven years, a total of 42 companies had a listing during at least
one year on this exchange. Of these 42 companies, 26 have been working on ERP implementations
during this period [Sneller, 2010]. his means that ERP has penetrated over sixty percent of the AEX
listed companies.

At least one remarkable conclusion can be drawn from Table 1.1: many of the companies use more
than one ERP system, which implies that they can only beneit to a limited extent from the ERP data
integration characteristic.

In Below given second table, an overview is presented of companies with a listing on the Belgian BEL20 stock exchange
that were mentioned in press releases about ERP implementations between 1995 and 2009. In these
iteen years, 53 companies have had a BEL20 listing, 24 of which worked on ERP during this period.
In Belgium, ERP has spread less widely than in he Netherlands. In Belgium, like in he Netherlands,
companies tend to have more than one ERP system. It is remarkable that JD Edwards and Microsot
Business Solutions are not used by Belgian listed companies.

ERP is also used by governmental organisations and agencies. In he Netherlands, both the Ministry of
Education, Culture and Science and the Ministry of Finance have used ERP for several years. Decentralised
governments, such as the provinces of North Holland and North Brabant, as well as the Dutch Vehicle
and Driving Licence body have implemented ERP systems. he Municipality of Hengelo implements
ERP in order to allow the municipality to better anticipate information requests of other parties. he
mayor of Hengelo explains his reasons for the decision to implement ERP in the following way: “because
of this system, the transparency and the accountability for the city council’s policies and resource usage
towards the citizens can in the future be further improved.“ [Nieuwsbank, 2005]

AEX-listed companies that worked on ERP between 1995 and 2005

Some of the ERP implementations in government organisations have an enormous size. As an example:
with the various ERP implementations at the Dutch Ministry of Defence an amount of around €400
million is involved; in ive to ten years 12.000 users have to be trained [Hulsebos, 2008]. he ERP
implementation that supports the full centralisation of the payroll and staf administration for the Dutch
central administration has an estimated time to completion of seven years and involves 130.000 users
[PR Newswire, 2004].
ERP is not exclusively meant for large organisations. Despite this, in the years before the Millennium,
ERP penetration in medium-sized European companies was not very deep: not even thirty percent of
them used ERP [Everdingen et al., 2000]. Recent developments however bring ERP systems within the
reach of small and medium-sized businesses. Firstly, ERP has become less demanding for the computer
hardware; in its early days, ERP could only be implemented on mainframes, whereas today a small server
or even a personal computer is suicient. Secondly, ERP has spread so far in large organisations that
this market has become saturated and suppliers that want to grow have to adapt their systems to it the
requirements of smaller organisations. Lastly, knowledge of information technology is increasing also
in smaller organisations, which means that the beneits of ERP are being recognised in this market. he
growth of the ERP penetration in the next decades can therefore be expected to mainly take place in
small and medium sized organisations.

BEL20-listed companies that worked on ERP between 1995 and 2009

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