Enterprise Resource Planning (ERP) is a method used byorganisations for integrating its data and processes into one system. To beable to achieve integration, this method will usually have many components suchas hardware and software. Throughout an organisation the majority of itssystems will utilise a unified database for storage of data.
The original use of this term referred to the planningwithin a large organisation to use its wide resources. Larger, more industrialtypes of organisations used this system in the past. Today, however, the termcan relate to any company and the use of this planning is very comprehensive. Acompany's software system will need to provide the organisation withfunctionality for at least two systems for it to be considered ERP. Most ERPsystems will cover several functions, although some packages only cover twofunctions (QuickBooks: Payroll and Accounting).
A unified database can be created with today's ERP systemscovering an extensive range of functions that can be integrated. Previously,functions such as Warehouse Management, Manufacturing, Financial, CustomerRelations Management, Supply Chain Management and Human Resources werestand-alone software applications. Today, these can fit under one umbrella,instead of being housed with their own database and network
A very important part to Enterprise Resource Planning isintegration. The aim is to achieve the full integration of an organisation'sdata and processed to enable easy access and work flow. A singly base usingmultiple software modules can result in such integration. This providesdifferent areas of an organisation with various business functions.
Many larger organisations create this system that can bebuilt upon, although the perfect configuration would be one system for thewhole organisation. This form of configuration will require a lot of labourhours and thus is very time consuming.
The ideal Enterprise Resource Planning system uses adatabase that contains all the data for various software modules. The modulescan include: Manufacturing-for example, engineering, capacity, workflowmanagement, quality control, bills of material and manufacturing process; HumanResources-training, benefits, time and attendance and payroll; Supply ChainManagement-inventory, planning, supplier scheduling, claim processing, orderentry and purchasing; Projects - costing, billing, activity management, timeand expense; Customer Relationship Management-sales marketing, service,commissions, customer contact and call centre support; Data Warehouse-thismodule can usually be accessed by a company's customers, suppliers andemployees.
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