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Chapter 8. Building the e-Business Backb... > ERP Use in the Real World: Three Cas...

ERP Use in the Real World: Three Case Studies

The success of the ERP solutions has been phenomenal. However, ERP is widely misunderstood as essentially production scheduling, which is simply not the case. The basic ideas behind ERP apps have a broad range of applicability to everyday business functions. What do we mean by everyday functions? As consumers, most of us are oblivious to the processes that produce the products we buy and use every day. We are also oblivious to the raw materials used to make them. But the acquisition of a product's raw materials, the accounts payable and receivable processes that fund its development, and the manufacturing and distribution processes that make and deliver it provide the basic building blocks for virtually every commercial product in existence. By examining how three firms in three separate industries—Microsoft in software, Owens-Corning in building supplies, and Colgate-Palmolive in consumer products—have used ERP in their organizations, we can better understand its benefits and issues.

Microsoft

In general, ERP software is used for division-wide or enterprise-wide integration purposes. Its purchase involves significant capital commitments. Microsoft spent 10 months and $25 million installing SAP R/3 to replace a tangle of 33 financial-tracking systems in 26 subsidiaries. As a result of the implementation, Microsoft estimates annual savings at $18 million, leading Bill Gates to call SAP "an incredible success story."[8]


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