ERP

ERP which stands for Enterprise Resource Planning consists of many components which include hardware and software components required to integrate all the data and all the processes of the required organization into a single system. To store the data of different functions found in the entire organization ERP system makes use of a unified database.

ERP originally tells how the massive organizational resources of a large organization are used. Throughout the past ERP systems have been used in large types of industrial companies. These days use of the ERP has become extremely comprehensive and today this term refers to any type of company with all types of industries coming under it. As a matter of fact all the large and small types of organization use the ERP systems.

Any organization being provided with functionality for more than two systems by a software system can be considered as an ERP. Mostly several functions are covered by ERP systems but there exist some packages for a particular organization covering only two functions (QuickBooks : Accounting & Payroll).

The ERP systems of today’s times can cover huge ranges of functions and combine all of them into a unified database. For example, functions like Supply Chain, Customer Relations, Human Resources, Financials, Warehouse Management, Manufacturing functions were some time back just single software applications using their own network and database, today they all come under ERP SYSTEM.

KEY OF ERP: INTEGRATI ON

Integration is one of the extremely essential parts to the ERP’s. The main goal of an ERP is integration of processes and data from all the areas of a particular organization and combine it so that it is easily accessible for work flow. ERP systems usually integrate by making a single database which use different software modules giving various arenas of a particular organization with varied business functionalities.

The idyllic configuration for an organization would be a single ERP system but the larger organizations create an ERP system then construct on the system external interfaces which are for the rest of the systems which can perform better and are more powerful in fulfilling the needs of an organization. This form of configuration usually is time consuming requiring loads of hours of the labors.

THE PERFECT ERP SYSTEM

A database when is utilized and has all the data for all the software modules is called a perfect ERP system. The software modules include:

Manufacturing: This includes; workflow management, manufacturing process, quality control, engineering capacity, bills of materials, etc.

Financials: This includes; fixed assets, cash management, accounts payable, general ledger, accounts receivable, etc.

Human Resources: This includes; training, time, payroll, benefits, attendance, etc.

Supply Chain Management: This includes; planning of supply chain, claim processing, inventory, order entry, supplier scheduling, purchasing, etc.

Projects: This includes; activity management, time, billing, expense and costing, etc.

Management of Customer Relations: This includes; service, customer contact, marketing and sales, call centre support, commissions, etc.

Data Warehouse: The module accessed by the customers, employees and suppliers of an organization.

IMPROVEMENT IN PRODUCTIVITY BY ERP

Before the use of an ERP system, all the departments of an organization would have their own database, computer system and data. Unfortunately since some of the systems would be unable to communicate data with each other so there was a need to rewrite or store data for possible inter communication of the computer systems. For instance, financials of some company were in a different computer system and not with HR systems, hence making it complicated and intensive for the processing of certain functions.

When the ERP system is used all the aspects of the organization works properly instead of all the systems being compatible with respect to each other, the result being less software and increased productivity for larger organizations.

IMPLEMENTATION OF ERP SYSTEM

To implement an ERP system is not easy, it takes from 3 months to a year and more with a lot of consulting and planning. The ERP systems have an extraordinarily wide scope and are extremely complex for most of the large organizations. Implementation of ERP system requires changes on the work practices and staff. It seems reasonable that a project is headed by the IT staff though it is advised to use the consultants of ERP implementation because consultants are trained specifically for these systems and are cost effective.

The ownership of project in an organization is the most significant trait for implementing the ERP system. It is very essential that every individual involved of an organization is in and will help in making the project because all the changes that take place has a wide effect on every individual of the organization hence making the ERP system successful.

The customized version of the ERP system needs to be implemented by organizations which are done by using consulting companies or ERP vendors. On the implementation of the ERP system three professional services are provided, they are Customization, Consulting and Support.

Consulting Services: These services are responsible for all the initial stages in the ERP implementation, they also help the system to go live for the organization, with workflow, improving the use of ERP in an organization, product training, etc.

Customization Services: They work by increasing the use of the ERP systems. The use of these ERP systems can be changed by creating adapted interfaces with underlying codes of application. The ERP systems have been made for the core routines but there are a few needs that have to be customized or built for a given organization.

Support Services: These services include maintenance and support of the ERP systems. For example, assistance and trouble shooting with ERP problems.

ADVANTAGES OF USING ERP SYSTEMS

Some of the many advantages of implementation of ERP systems are as follows:

1. Low costs
2. Improved productivity and efficiency levels
3. It has the ability with which it can streamline different workflows and processes
4. Improvement in customer services
5. A completely integrated system
6. It has the ability with which it can share data among various departments of an organization
7. Better forecasting and tracking

DISVANTAGES OF USING ERP SYSTEMS

Even though the advantages are far more than the disadvantages for all the organizations that have implemented ERP systems, some of the common problems experienced are as given below:-

Most of the obstacles can be avoided if there is adequate investment and adequate training, but success always depends on the experience and skills of the working body in an organization to adapt and get used to the new system.

1. The technical support in the organization can be substandard
2. Business processes need to be reengineered
3. The ERP systems may be very rigid for a particular organization that is new and wants to work in new directions for future
4. Customization may be limited in many places
5. The installation and running of these ERP systems may be unreasonably expensive

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