Enterprise Resource Planning or in short ERP, is a practice by which a company manages and integrates the essential portions of its business activities. Areas such as planning, purchasing, inventory, sales, marketing, finance and human resources are generally handled using an ERP system. In general software applications have been developed to help companies implement ERP. While in the early stages of the invention the concept applied exclusively to inventory management and controlling the manufacturing sector where programs were created only to monitor inventory, reconcile balances, and report on status. Later on these systems extended well beyond its basic functions like inventory control and other operational processes to other back-office functions like accounting and human resources and much more.
Today the ERP has protracted to the extent of incorporating business intelligence, sales force automation, marketing automation and e-commerce into its ever growing services. Cloud-based solutions one of the key types of these applications not only makes ERP software inexpensive but also makes these systems stress-free to implement and manage. Cloud ERP solutions enable real-time reporting, making them even valuable to executives and staff seeking visibility in their on-going business. Today companies of all sizes and sectors are transitioning to cloud ERP systems.
ERP systems are intended across a collectively defined data schematic that usually has a common database. Since the ERP systems provide access to enterprise data from multiple activities using common archetypes and definitions and common user experiences the key principle is the central collection of data for a wider distribution.
ERP systems create, store, and use the same data derived through common processes integrated with a secure and centralized data repository thus enabling everyone in the organization to be assured that data is accurate, up to date, and complete. Assurance of data integrity for every task performed throughout the organization is the main concept on which an ERP is developed. In developing a ERP solution certain factors are considered as vital and essential. Since ERP has potentially the most direct impact on reducing costs a precise study on the financial frame is considered. However an ERP system has to possess few other key characteristics to qualify for a true solution. These are:-
To respond to the changing needs of an enterprise the solution must be flexible and hence emphasis on this is given thereby enabling the ERP to run across various database back ends through Open Database Connectivity.
This means that a particular integrated module can be interfaced or detached whenever required without affecting the other modules.
Support on multiple hardware platforms for the companies having heterogeneous collection of systems is a must.
Efficiently supporting variety of organizational functions along with suitability for a wide range of business sectors is one of the factors that are considered while developing an ERP solution.
Exhaustive analyses, careful planning, are the aspects that lead an organization to a successful implementation of an ERP.
The first step to a successful ERP system implementation is defining the organization’s goals and identifying the need for an Enterprise Resource Planning system.
it is imperative that the front line staffs are included in defining what is expected from the system since they are the ones who use it extensively.
To understand business requirements better, and evaluate the ERP development process a detailed documentation is very much necessary.
The common functional areas that an ERP usually covers are grouped together as ERP modules, these modules carry out the designated functions. The following are the areas where these modules are developed and integrated into a ERP system to achieve the desired functionalities.