Enterprise Resource Planning (ERP)
- ERP is a hub of all departments involved in any business
Introduction to ERP
Gartner first used the term ERP in 1990, but it is as old as the 1960s. During that time, this method was used in Inventory management and control in the manufacturing sector.
Enterprise Resource Planning (ERP) is a complete software that helps businesses integrate (combine) and manage the different functional areas like marketing, finance, operations, and human resources. It integrates the various business functions to help them work better together.
- Communicating with suppliers
- Managing inventory deliveries
- Making payments to suppliers
- Handling quality problems
It is a business process management system that allows an organization or company to use an automated system of integrated applications to manage their business and automate many back-office functions related to technology, services, and human resources.
As compared to the traditional system, ERP is a more efficient way of organizing any business. Every department can update their current figures through ERP from time to time. This will create an environment for fast operation from order to delivery. The use of software for data sharing saves time and saves money spent on extra staff working for managing this data.
- A typical enterprise comprises many business units (BU).
- These Departments/BU continuously communicate and exchange data with each other.
- The success of any organization is ineffective communication and data exchange within these departments as well as associated third parties such as vendors, Outsources, and the Customers.
Advantages of Enterprise Resource Planning
- Low operational cost
- Customer satisfaction
- Less stages in the delivery cycle
- More productivity, more accurate budgeting and forecasting
- Less chances of corruption
- Faster communication between departments
- Improved quality of decision
- Integration of a single source of data
- Control over various business processes
- Eliminate duplication of data
- Increased inventory management
- Improved customer service and order fulfillment
- Improved communication with suppliers and customers
- Enhanced competitive position to increased sales and profits
- Helpful in Human Resource Management
Disadvantages of ERP
- The initial cost is very high (very expensive)
- Not always suitable for every business (particularly small business)
- Costly customization
- Many companies cannot adjust to it
- Renewal annual fee
- Extra consultants are needed
- The employee needs to get trained.
- SAP Business All in One
- Sage ERP
- Pilot ERP
- Oracle JG Edwards Enterprise One
- Office Books
- Microsoft Dynamics GP
- Apprise ERP