What is an ERP?

With the revisions of business models throughout the world, a simple Google search doesn’t yield the answer to the meaning of “ERP”. The term ERP which is an acronym for “Enterprise Resource Planning” is vague, but that vagueness offers it diversity. ERP systems for various organizations all over the world are meant to work differently, deliver different kinds of solutions and are tailored to be a perfect fit to that particular organization. Generally speaking ERP is business management software.

With the advancement of multi-billion companies all over the world much new advancement has occurred on the management field. Due to the transit of trade, finance, marketing and audience from the real world to the augmented one created by Internet, the web presence and high tech. management software of the organization has become vital to its success.

How does an ERP help?

The meaning of ERP is only limited by one’s imagination. An ERP maybe an attendance marking system in a university or even be an asset management system for a high end corporate. It permits an organization to use a system of unified applications to manage the business and automate many back office functions related to technology, services and human resources. ERP software integrates all features of an operation, including product planning, development, manufacturing, sales and marketing. It can manage salaries to automated email replies to certain audience. It is highly dynamic software, aimed for the ease of the corporate sector.

Considering a simple business, some of the aspects related to it are:

  • Inventory Management
  • Order management
  • Financial Management
  • Human Resource Allocation
  • Communication Support

These are just the basics of what a business might run on. Any organization that deals with people needs an efficient system that is not compromised by human error, is functional and reliable, and answers only to the CEO. An ERP system is a business solution that offers automation of key jobs, total control of the different aspects of the work-flow and most importantly a graphical bird’s eye view analysis of the entire operation from supplier end to the client end.

Problems faced by users that use freeware or generic software:

Some people might prefer low cost freeware over a personalized ERP, but they face problems like:

  • The software that manages the finance dept. can’t work for the human resource dept.
  • Even if separate software exists for each department, they cannot share the data with each other.
  • Such individual software may allow some level of automation but limit the decision making aids offered by ERP.

History of ERP Systems

ERP systems have been evolving for decades now. These systems transform and are ever changing. The systems used to be departmentalized in the early 1970s era, but they were obviously under developed and could not help in decision making process. In the late 1970s, the new kind of management software emerged which evolved into MRPs or “Management Resource Planning”. This model was greatly successful till the late 1990s. In the 1990s, Enterprise Resource Planning started using multi-modular systems and applications to increase organizations processes. As ERP integrates all such models into a single business module, it evolved into ERP or enterprise resource development systems.

Key Benefits offered by ERP

  • Complete customer satisfaction
  • Better information management from all departments
  • Higher productivity of the corporate making use of the data collected through ERP.
  • Shortening marketing time to a half through better management of funds and resources
  • Increased quality of the overall product.
  • Lessened product cost.
  • Shortened delivery time.
  • Inventory levels.

The Business Value of ERP

Basically, ERP helps employees do their jobs more efficiently by breaking down barriers between business units and help the employers understand and monitor their progress effectively. More specifically, an ERP solution:

  • Gives a global, real-time view of data that can enable companies to address concerns proactively and drive improvements
  • Improves financial aspects related to the business and enhances security
  • Automates essential business operations such as lead-to-cash, order-to-fulfillment, and procure-to-pay processes
  • Improves customer service models by facilitating a single source for billing and relationship tracking.

In conclusion, with an ERP solution, employees have easier access to correct and relevant information that empowers them to make better decisions faster. Not only that, but ERP software aids to eliminate redundant processes and systems, radically lowering the cost of doing business overall.

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