Enterprise resource planning and management with strategic decisions in terms of contributions to the operating costs of a manufacturing industry management study

Rapid changes in economies have created certain transitions in the structure of businesses and hence required them to step forward in becoming institutionalized. In order to achieve a higher performance level, firms especially in the manufacturing industry have started to take measures both in developing a standardized work flow design and in reducing the cost of connection and information. Due to technological improvements and globalization, Enterprise Resource Planning (ERP) Systems have emerged as a necessary economical tool. ERP is currently becoming an important and useful means, provided that it fosters firm performance through lowering costs and facilitating strategic decision making for management. This study starts with the presentation of the evolvement of business process in an historical overview from agriculture and industrial revolution to information technologies, along with the explanation of basic terms regarding each of these stages. The second section delivers assessments over the prospects of ERP and ERP's impacts on the cost structure and performance of firms. The section also provides new approaches on ERP and the review of the related literature. The last section contains a case study conducted on a sample company. Operated in a manufacturing industry, the chosen firm has been subject to analysis regarding both financial and non-financial aspects of its ERP implementation. The results underlines that we should be well aware of the fact that ERP is rather a tool than a goal. Moreover, the outcomes reveal that, on the contrary to current perception in the literature, ERP may produce beneficial results even for companies of incomplete institutionalization provided that its implementation is conducted by an expert team with a deliberate planning manner. Therefore, it may be concluded that ERP is expected to bring about a transformation of a firm by means that necessary changes are implemented on various practice fields (e.g. personnel policy, organizational structure, investment decision) of the firm by taking managerial initiatives. Keywords: Enterprise Resource Planning (ERP), Tacit Knowledge, Institutionalization.