5 Minute Guide To Erp

5 Minute Guide To Erp



5 Minute Guide to​ ERP
Information technology has transformed the way we live and the way we do business .​
ERP, or​ Enterprise Resource Planning, is​ one of​ most widely implemented business software systems in​ a​ wide variety of​ industries and organizations .​
In this short article, we’ll try to​ concisely explain the basic yet important concepts relevant to​ ERP.
What is​ ERP - ERP is​ the acronym of​ Enterprise Resource Planning .​
ERP definition refers to​ both ERP software and business strategies that implement ERP systems .​
ERP implementation utilizes various ERP software applications to​ improve the performance of​ organizations for 1) resource planning, 2) management control and 3) operational control .​
ERP software consists of​ multiple software modules that integrates activities across functional departments - from product planning, parts purchasing, inventory control, product distribution, to​ order tracking .​
Most ERP software systems include application modules to​ support common business activities - finance, accounting and human resources.
ERP Systems - ERP is​ much more than a​ piece of​ computer software .​
a​ ERP System includes ERP Software, Business Processes, Users and Hardware that run the ERP software .​
An ERP system is​ more than the sum of​ its parts or​ components .​
Those components interact together to​ achieve a​ common goal - streamline and improve organizations' business processes.
History of​ ERP - Enterprise Resource Planning (ERP) is​ the evolution of​ Manufacturing Requirements Planning (MRP) II in​ 1980s, while MRP is​ the evolution of​ Inventory Management & Control conceived in​ 1960s .​
ERP has expanded from coordination of​ manufacturing processes to​ the integration of​ enterprise-wide backend processes .​
In terms of​ technology, ERP has evolved from legacy implementation to​ more flexible tiered client-server architecture.
Benefits of​ ERP - ERP software attempts to​ integrate business processes across departments onto a​ single enterprise-wide information system .​
The major benefits of​ ERP are improved coordination across functional departments and increased efficiencies of​ doing business .​
The implementation of​ ERP systems help facilitate day-to-day management as​ well .​
ERP software systems is​ originally and ambitiously designed to​ support resource planning portion of​ strategic planning .​
In reality, resource planning has been the weakest link in​ ERP practice due to​ the complexity of​ strategic planning and lack of​ adequate integration of​ ERP with Decision Support Systems (DSS).
ERP Failures - We couldn’t conclude our brief guide to​ ERP without mentioning ERP failures .​
The failure of​ multi-million dollar ERP projects are reported once in​ a​ while even after 20 years of​ ERP implementation .​
We have identified the four components of​ an​ ERP System - 1) ERP software, 2) Business Processes that ERP software supports, 3) Users of​ ERP systems, and 4) Hardware and Operating Systems that run ERP applications .​
The failures in​ one or​ more of​ those four components could cause the failure of​ an​ ERP project.
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