ERP systems were originally deployed to facilitate business processes associated with manufacturing, such as raw materials management, inventory control, order entry, and distribution.

However, these early ERP systems did not extend to other functional areas, such as sales and marketing. They also did not include any customer relationship management (CRM) capabilities that enable organizations to capture customer-specifi c information. Finally, they did not provide Web-enabled customer service or order fulfillment.

Over time, ERP systems evolved to include administrative, sales, marketing, and human resources processes. Companies now employ an enterprisewide approach to ERP that utilizes the Web and connects all facets of the value chain.These systems are called ERP II.

ERP II systems are interorganizational ERP systems that provide Web-enabled links among a company’s key business systems-such as inventory and production-and its customers, suppliers, distributors, and other relevant parties.

These links integrate internal-facing ERP applications with the external-focused applications of supply chain management and customer relationship management.

Figure below illustrates the organization and functions of an ERP II system. The various functions of ERP II systems are now delivered as e-business suites.

The major ERP vendors have developed modular, Web-enabled software suites that integrate ERP, customer relationship management, supply chain management, procurement, decision support, enterprise portals, and other business applications and functions.

Examples are Oracle’s e-Business Suite and SAP’s mySAP. The goal of these systems is to enable companies to execute most of their business processes using a single Web-enabled system of integrated software rather than a variety of separate e-business applications.

ERP II systems include a variety of modules that are divided into core ERP modules- financial management, operations management, and human resource management-and extended ERP modules-customer relationship management, supply chain management, business intelligence, and e-business. If a system does not have the core ERP modules, then it is not a legitimate ERP system.