Enterprise Resource Planning
(ERP) is the latest high end software solution, Information Technology has lent
to the world of business application. An ERP software solution seeks to
streamline and integrate operations, processes and information flows in an enterprise,
to synergize the resources of an organization namely men, material, money and
machine. In other words, ERP systems integrate all data and processes of an
organization into a unified system. A typical ERP will use multiple components
of computer software and hardware to achieve the integration. A key ingredient
of most ERP systems is the use of a unified database to store data for the
various system modules.
Most organizations across the world have realized that in a rapidly changing
business environment, it is impossible to create and maintain a custom designed
software package which will cater to all their requirements and also be
up-to-date. Realizing these requirements of organizations, companies have
designed and developed ERP software, which offer an integrated software
solution to all the functional processes in an organization.
Although, in the initial stage ERP originated in the manufacturing environment,
now ERP software solutions typically cover all basic business process/functions
of any organization, regardless of the organization's business or charter. A
typical ERP module include: Manufacturing, Supply Chain, Financials, Customer
Relationship Management (CRM), Human Resources, Warehouse Management and
Decision Support System. These solutions are often incorrectly quoted as back
office solutions indicating that customers and the general public are not
directly involved. This is contrasted with front office systems like Customer
Relationship Management (CRM) systems that directly deal with customers, or
ebusiness systems such as eCommerce, eGovernment, eTelecom, and eFinance, or
Supplier Relationship Management (SRM) systems. In reality, ERP modules are
cross-functional and enterprise wide software solutions. All functional
departments that are involved in operations or production can be integrated in
one system using it. In addition to manufacturing, warehousing, logistics, and
Information Technology, it also includes; accounting, human resources,
marketing, and strategic management.
There are many different flavors of ERP that serve businesses' varying
procedure types. An ERP solution has numerous benefits depending on the type of
business that it serves; these are business solutions and industry solutions.
The industry solutions are designed for people who are working in specific
industries, like finance, communications, education, healthcare to name a few.
Importance of ERP software for businesses:
ERP softwares business solutions are designed for companies that work in a
wide variety of areas. IT combines a large number of different elements into a
single unit. Three of the most important ERP tools available today are
manufacturing, human resources, and finance.
The finance tools allow companies to successfully maintain their financial
information like that of the assets, accounts, budgets and cash. ERP can also
assist a company in managing internal as well as external factors affecting it.
A company that uses ERP financial products can save a great deal of money over
the long term, the reason being, the productivity of the organization will be
improved. Enterprise Resource Planning is instrumental in getting rid of time
consuming activities as paper management. A company is able to study their processes, earnings, and performance by merging their operational information with their
financial information. Once this information is connected together, a company
can become more competitive and productive. Synergy is an important part of ERP
solutions. The concept of combining multiple processes into a single whole
will allow the company to become successful in the long term.
In addition to finance and business processes, it is also important to look at
materials maintenance. Enterprise Resource Planning will allow a company to
successfully automate the process of buying materials and maintaining them.
There are modules that track the supplies that are purchased and can also make
calculations about how these materials should be distributed. It also becomes
possible for a company to predict the demand of the market based on history,
economic statistics, and data from their employees. They can even decide when a
product should be produced, and they can do this based on the raw material
that is available.