Enterprise Resource Planning, or ERP as it is popularly termed, was launched in the early 1960s, through a joint effort between Tractor-manufacturer J.I. Case, and their IT partner IBM. To run a modern business, the core processes are generally Finance, HR, Supply Chain, Manufacture, Procurement, Services and some others. Separately taken, they may not add up to a complete business. But united and aligned to form a common company objective, these processes can be an integral part of a successful business organization. At its most basic, this integration of processes to form a single system is done by ERP. What is ERP Software? — is a query that will be examined in brief in this review.
What is ERP?
In time, ERP has progressed from its basic function of Integration, to incorporate Cutting Edge technologies, to strengthen the system beyond recognition. Some of these technologies, such as Machine Learning and Artificial Intelligence (AI) have completely converted the total business system into an intelligent, responsive and almost living organism that co-relates Rapidity with Intelligence and Efficiency with Visibility. ERP applications support a vast range of operational and administrative processes across large number of industries. Conversion to control through ERP applications are not always simple, and include Line Of Business, Administrative and Asset Management, Handling of Customers and other aspects of a business process. Some of these ERP activity deployments occupy a high level of complexity. Often expensive, the benefits to business are sometimes questioned by a confused management. It should be understood that ERP is only as good as the management allows it to be. It is basically a computerized system responsible for the automatic management of Production, Sales, Marketing, Inventory, Accounting, Personnel and Finance. Thus, ERP is a MIS (Management Information System). Of course, there is a certain difference between MIS and ERP. While MIS is basically an Information Management System, and creates a single Data Base from Data received from various sources, and draws reports based on this Data, ERP takes over the planning and automation of different processes.
ERP, like MIS, uses a Centralized Data Base. However it takes actual command of running the various business processes, from this Central Data Base, in order to reduce human labor and to eliminate human interference to simplify existing business work-flows. Its applications include Automobile type ‘Dashboards’, where Management ‘Drivers’ can look at windows showing real-time Data collected by ERP, over a cross-section of the business, to display overall productivity and profitability. A typical example of ERP Application, is the Enterprise Resource Planning Software developed by the German company SAP SE. The latest version of SAP ERP (V. 6.0) has been launched in 2006. Some of the types of ERP Application systems are:
- JD Edwards
- Oracle ERP Software
- LN (BaaN)
- Microsoft Dynamics AX
- Microsoft Dynamics NAV
- SAP ERP (V. 6.0)
- SAP R/3
- SAP B1
ERP systems are used commonly by Supply-chain companies to help them keep track of all the moving parts of manufacturing and distribution.
The business benefits for modern ERP are generally categorized into four areas. Firstly, ERP can be platform for Business Process Efficiency. Secondly, ERP can act as a carrier for Process Standardization. Thirdly, proper utilization of ERP can result in large IT Cost Savings. And Fourthly, ERP can provide a Catalyst of Business Innovation. The easiest to quantify the results of application of ERP are in the Features of Process Standardization and IT Cost Saving. Immediate Structured Data, such as Tabulated Figures form Finance and Production can be immediately evaluated for the impact of ERP on the business system. But it is the other two, comprising Business Process Efficiency and Business Innovation that have, actually, the most significant effect on the enterprise.
Some of the other benefits of ERP are:
- ERP creates the ability to share information between all components and sections of the organization.
- Elimination of unnecessary operations and Data.
- Prevents duplication of Data and processes in the organization.
- ERP ensures accurate and timely accessibility to reliable information.
- The above benefits result in massive reduction of time and costs of litigation.