Sidebar: I Own This Software, Right? Well . . .
When you purchase software and install it on your computer, are you the owner of that software? Technically, you are not!
When you install software, you are actually just being given a license to use it. When you first install a software package,
you are asked to agree to the terms of service or the license agreement. In that agreement, you will find that your rights to use
the software are limited. For example, in the terms of the Microsoft Office Excel 2010 software license, you will find the
following statement: “This software is licensed, not sold. This agreement only gives you some rights to use the features
included in the software edition you licensed.”
Applications for the Enterprise
As the personal computer proliferated inside organizations, control over the information generated by the organization
began splintering. Say the customer service department creates a customer database to keep track of calls and problem
reports, and the sales department also creates a database to keep track of customer information. Which one should be used
as the master list of customers? As another example, someone in sales might create a spreadsheet to calculate sales revenue,
while someone in finance creates a different one that meets the needs of their department. However, it is likely that the
two spreadsheets will come up with different totals for revenue. Which one is correct? And who is managing all of this
information?
Enterprise Resource Planning
In the 1990s, the need to bring the organization’s information back under centralized control became more apparent. The
enterprise resource planning (ERP) system (sometimes just called enterprise software) was developed to bring together an
entire organization in one software application. Simply put, an ERP system is a software application utilizing a central
database that is implemented throughout the entire organization. Let’s take a closer look at this definition:
• “A software application”: An ERP is a software application that is used by many of an organization’s employees.
• “utilizing a central database”: All users of the ERP edit and save their information from the data source. What this
means practically is that there is only one customer database, there is only one calculation for revenue, etc.
• “that is implemented throughout the entire organization”: ERP systems include functionality that covers all of the
essential components of a business. Further, an organization can purchase
1 The software used to help you communicate should not
duplicate the presentation you want to give, but instead
modules for its ERP system that match specific needs, such as manufacturing or planning.
For the most part, these restrictions are what you would expect: you cannot make illegal copies of the software and you may
not use it to do anything illegal. However, there are other, more unexpected terms in these software agreements. For example, many
software agreements ask you to agree to a limit on liability. Again, from Microsoft: “Limitation on and exclusion of damages. You
can recover from Microsoft and its suppliers only direct damages up to the amount you paid for the software. You cannot recover
any other damages, including consequential, lost profits, special, indirect or incidental damages.” What this means is that if a