Enterprise resource planning |
Enterprise resource planning systems (ERPs) are management information systems that integrate and automate many of the business practices associated with the operations or production aspects of a company.
= Overview=
Enterprise resource planning is a term derived from manufacturing resource planning (MRP II) that followed material requirements planning (MRP). ERP systems typically handle the Manufacturing, logistics, distribution (business), inventory, shipping, invoicing, and accounting for a company. Enterprise Resource Planning or ERP Software can aid in the control of many Business activities, like sales, delivery (business), billing, production, inventory management, and Human Resource Management Systems.
ERPs are often called back office systems indicating that customers and the general public are not directly involved. This is contrasted with front office systems like customer relationship management (CRM) systems that deal directly with the customers, or the eBusiness systems such as eCommerce, eGoverment, eTelecom, and eFinance, or Supply chain management (SRM) systems that deal with the suppliers.
ERPs are cross-functional and enterprise wide. All functional departments that are involved in operations or production are integrated in one system. In addition to manufacturing, warehousing, logistics, and Information Technology, this would include accounting, human resources, marketing, and strategic management.
In the early days of business computing, companies used to write their own software to control their business Processes. This is an expensive approach. Since many of these processes occur in common across various types of businesses, common reusable software may provide cost-effective alternatives to custom software. Thus some ERP software caters to a wide range of industry from service sectors like software vendors and hospitals to manufacturing industries and even to government departments. by :pmen
=Implementation=
Because of their wide scope of application within the firm, ERP software systems rely on some of the largest bodies of software ever written. Implementing such a complex and huge software system in a company usually involves an army of analysts, programmers, and users, and often comprises a very expensive project in itself for bigger companies, especially Multinational corporation.
Enterprise resource planning systems are often closely tied to supply chain management and logistics automation systems. Supply chain management software can extend the ERP system to include links with suppliers.
To implement ERP systems, companies often seek the help of an ERP vendor or of third-party consultancy companies. Consulting in ERP involves two levels, namely business consulting and technical consulting. A business consultant studies an organization s current business processes and matches them to the corresponding processes in the ERP system, thus configuring the ERP system to the organisation s needs. Technical consulting often involves programming. Most ERP vendors allow changing their Software to suit the business needs of their customer.
Some risks to watch out for in implementing an ERP system include:
Today there are also web-based ERP systems. Companies would deploy web-based ERP because it s requires no client side installation, is cross-platform and centrally to maintain. As long as you have an Internet connection, accessing web-based ERPs is done through typical web-browsers.
=Advantages=
The benefits from enterprise resource planning are claimed to include:
=Disadvantages=
The limitations and pitfalls of the enterprise resource planning are claimed to be:
If the ERP system is integrated with a supply chain management system, other potential problems include:
=See also=
= External links =
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