5 Minute Guide to ERP
The Information technology (IT) Industry has brought in a revolution in business. Enterprise Resource Planning (ERP) is an extensively used software system in business. This ERP has been implemented at large by almost all types of industries and organizations. Here is a concise outline on the ERP.
When we use the term ERP, we refer to both the ERP Software as well as the Business stratagem that employs ERP system. By employing ERP in an organization, there are various benefits that could be reaped out of it. ERP enhances the performance of the establishment - Resource Planning and to have better control over the Management and other operational activities. This ERP software comprises of various modules that link the activities across various functional departments. These functional departments include Product planning, purchasing, Inventory control, product disbursement or tracking orders. Almost, all the ERP software systems contain application modules that assist general commercial activities like finance, accounts and Manpower.
ERP Systems –ERP contributes much more than simple soft-wares do. It consists of ERP software, Business processes, ERP users and Hardware that are used to operate the ERP software. An ERP system is something that is beyond just a collection of components that interact concurrently to accomplish a common goal. It also helps in streamlining and enhancing the activities of the business.
ERP History: Enterprise Resource Planning (ERP) has evolved from the Manufacturing Requirement Planning II (MRP II) during 1980s. Whilst, the MRP had evolved from the Inventory Management & Control formulated during 1960s. ERP, which was earlier used to coordinate various manufacturing activities, is now been used on a wider scope in integrating the enterprise-wide backend processes. Technology-wise, ERP has progressed from legacy execution to more accommodating and complex client-server architecture.
Uses of ERP: ERP helps in integrating varied business activities across departments against a single enterprise-wide information system. ERP assists to enhance various activities like synchronization between functional departments, better efficiency to do business and other essential management activities on a day-to-day basis. ERP software systems is basically and specifically designed to support the strategic planning activities mainly resource planning. Due to the complication of strategic planning and lack of sufficient integration of ERP with Decision Support Systems, resource planning is still considered to be the ineffectual link in ERP.
Failure of ERP: Without giving a mention to the ERP failures, this guide might not seem complete. Identifying the failure of expensive ERP projects are reported very rarely, even after twenty years of its implementation. The 4 key components of an ERP System are the ERP system, The Business activities supported by ERP software, ERP users and the Hardware components & operating systems that support ERP applications. If any of these key components fail, then an ERP project fails.
