April 23, 2014

ERP – Enterprise Resource Planning

Enterprise Resource Planning systems (ERPs) are process controled and information management systems, that integrate and automate many of the business practices associated with the operations or production aspects of a company.  What this simply means is that ERP allows a company to cut costs while increasing IT system procifiency thru properly integrated hardware and software

This is ERP’s true ambition. It attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different departments’ particular needs.

That is a tall order, building a single software program that serves the needs of people in finance as well as it does the people in human resources and in the warehouse. Each of those departments typically has its own computer system optimized for the particular ways that the department does its work. But ERP combines them all together into a single, integrated software program that runs off a single database so that the various departments can more easily share information and communicate with each other.

That integrated approach can have a tremendous payback if companies install the software and hardware correctly.

An Enterprise Management system that integrates all facets of the business, including planning, manufacturing, sales, and marketing. As the  ERP methodology has become more popular, software applications have emerged to help business managers implement ERP in business activities such as inventory control, order tracking, customer service, finance and human resources.

Streamline your order processing and Point-of-Sales (POS) customer commerce and care, manage your inventory, automate accounting, provide customer service, manage distribution networks and more.

Enterprise resource planning is a term derived from manufacturing resource planning (MRP II) that followed material requirements planning (MRP). ERP systems typically handle the manufacturing, logistics, distribution, inventory, shipping, invoicing, and accounting for a company. Enterprise Resource Planning or ERP software can aid in the control of many business activities, like sales, delivery, billing, production, inventory management, and human resources management.

ERPs are often called back office systems 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 deal directly with the customers, or the eBusiness systems such as eCommerce, eGoverment, eTelecom, and eFinance, or supplier relationship management (SRM) systems that deal with the suppliers.

ERPs are cross-functional and enterprise wide. All functional departments that are involved in operations or production are integrated in one system. In addition to manufacturing, warehousing, logistics, and Information Technology, this would include accounting, human resources, marketing, and strategic management.

In the early days of business computing, companies used to write their own software to control their business processes. This is an expensive approach. Since many of these processes occur in common across various types of businesses, common reusable software may provide cost-effective alternatives to custom software. Thus some ERP software caters to a wide range of industries from service sectors like software vendors and hospitals to manufacturing industries and even to government departments.

Because of their wide scope of application within the firm, ERP software systems rely on some of the largest bodies of software ever written. Implementing such a complex and huge software system in a company usually involves an army of analysts, programmers, and users, and often comprises a very expensive project in itself for bigger companies, especially transnationals.

Enterprise resource planning systems are often closely tied to supply chain management and logistics automation systems. Supply chain management software can extend the ERP system to include links with suppliers.

To implement ERP systems, companies often seek the help of an ERP vendor or of third-party consulting companies. Consulting in ERP involves two levels, namely business consulting and technical consulting. A business consultant studies an organization’s current business processes and matches them to the corresponding processes in the ERP system, thus ‘configuring’ the ERP system to the organisation’s needs. Technical consulting often involves programming. Most ERP vendors allow changing their software to suit the business needs of their customer.

Today there are also web-based ERP systems. Companies would deploy web-based ERP because it’s requires no client side installation, is cross-platform and maintained centrally. As long as you have an Internet connection, accessing web-based ERPs is done through typical web-browsers.

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