Monday, September 1, 2008

What is an ERP

ERP stands for Enterprise Resource Planning. The word enterprise means a business, a company or an industry, all its processes and functions in entirety. Resources stand for people, raw material, finished goods, capacity, factory, money etc. of the said industry or business. In any organization there is usually a constraint on resources; Planning therefore represents the activity of utilizing resources to the extent possible so as to maximize the enterprise benefits.

ERP is business support software which is used enterprise wide. It captures all the enterprise processes across all functional tracks in one single data base. Entire organization runs on one software.

ERP solutions have a modular structure. Each of the business functional tracks is usually represented by a separate module. For instance, Materials Management, Human Resources, Finance and Controlling, Sales and Distribution, Transportation Management are separate modules in an ERP solution.

ERP – Characteristics
  • All data available in central database. It is updated and available real-time.
  • One point entry of data
  • Best business practices inbuilt
  • Modular system. This enables to implement only required functions. Other functions can be integrated later.
  • Transparency and Control to extent required
  • Managers can utilize more time in analysis and less in coordination

ERP Vendors
There are several vendors which provide ERP solution. Some of the leading ones are as under,

  • SAP
  • Oracle Applications
  • Microsoft Dynamics
  • The Sage Group
  • Ramco Systems etc.

SAP is the market leader in ERP solutions. Its closest competitor is Oracle Applications which stands as a distant second to SAP.

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