What is ERP

ERP stands for Enterprise Resource Planning. ERP is a way to integrate the data and processes of an organization into one single system. Usually ERP systems will have many components including hardware and software, in order to achieve integration, most ERP systems use a unified database to store data for various functions found throughout the organization.

An ideal ERP system is when a single database is utilized and contains all data for various software modules. These software modules can include:

Manufacturing: Some of the functions include; engineering, capacity, workflow management, quality control, bills of material, manufacturing process, etc.

Financials: Accounts payable, accounts receivable, fixed assets, general ledger and cash management, etc.

Human Resources: Benefits, training, payroll, time and attendance, etc

Supply Chain Management: Inventory, supply chain planning, supplier scheduling, claim processing, order entry, purchasing, etc.

Projects: Costing, billing, activity management, time and expense, etc.

Customer Relationship Management: sales and marketing, service, commissions, customer contact, calls center support, etc.

Data Warehouse: Usually this is a module that can be accessed by an organizations customers, suppliers and employees.

Before ERP systems, each department in an organization would most likely have their own computer system, data and database. Unfortunately, many of these systems would not be able to communicate with one another or need to store or rewrite data to make it possible for cross computer system communication. For instance, the financials of a company were on a separate computer system than the HR system, making it more intensive and complicated to process certain functions.

It's effect in Productivity

Once an ERP system is in place, usually all aspects of an organization can work in harmony instead of every single system needing to be compatible with each other. For large organizations, increased productivity and less types of software are a result.

There are many advantages of implementing an EPR system; here are a few of them:

• A totally integrated system
• The ability to streamline different processes and workflows
• The ability to easily share data across various departments in an organization
• Improved efficiency and productivity levels
• Better tracking and forecasting
• Lower costs
• Improved customer service

While advantages usually outweigh disadvantages for most organizations implementing an ERP system, here are some of the most common obstacles experienced:

Usually many obstacles can be prevented if adequate investment is made and adequate training is involved, however, success does depend on skills and the experience of the workforce to quickly adapt to the new system.

• Customization in many situations is limited
• The need to reengineer business processes
• ERP systems can be cost prohibitive to install and run
• Technical support can be shoddy
• ERP's may be too rigid for specific organizations that are either new or want to move in a new direction in the near future.

Just want to add some more information about ERP which i think will be useful to you. For customizing ERP completely, the users have to make some changes in the implemented service package. Here is a list of most of the services where ERP is vastly in use:

Production Department

Engineering, Bills of Material, Scheduling, Capacity, Workflow Management, Quality Control, Cost Management, Manufacturing Process, Manufacturing Projects, Manufacturing Flow

Supply Chain Management

Inventory, Order Entry, Purchasing, Product Configurator, Supply Chain Planning, Supplier Scheduling, Inspection of goods, Claim Processing, Commission Calculation

Financials

General Ledger, Cash Management, Accounts Payable, Accounts Receivable, Fixed Assets

Any further clarifications would be welcomed.

ERP is Enterprise Resources Planning---RadhaKrishnan said everything true about ERP.

So I will just explain from other angle.

For long time, companies used to use softwares for their need and used to develop them according to their demand.

These softwares used to vary company to company.

After few decades companies like Oracle,SAP realized that they have the capability and understanding to develop a common and uniqe software that will be master of all these softwares developed earlier.

So they cameup with ERP software like Oracle Apps/SAP that covered most of the business needs for the company(GL,PO,AP,AR....HR.Pricing so on for Oracle),

So the advantage produced: All the company using a particular ERP started using same kind of software so less expense on training,development,understanding. Common type problems and easy support from same vendor.

Now people do not need to run to learn several technologies and can concentrate on a particular software and understand it.

It is tried and tested software used by huge number of company base all over world.

If you need slight difference--u can customise according to need.

ERP stands for Enterprise Resource Planning. ERP is a way to integrate the data and processes of an organization into one single system. Usually ERP systems will have many components including hardware and software, in order to achieve integration, most ERP systems use a unified database to store data for various functions found throughout the organization.