What is an ERP – Enterprise Resource
Planning
An ERP stands for Enterprise Resource Planning; it is a business software system
that support entire business or enterprise throughout the project life cycle in
organizing, planning, maintaining, tracking and utilization of resources (Man,
Machine, Material and Money) effectively.
Let discuss briefly about what is ERP software and how it helps in business
achievements.
1. History of ERP systems
2. Why do we need ERP software
3. ERP Advantages and Disadvantages
4. Common ERP modules
5. Why ERP
6. Top ERP Vendors List
7. ERP Software Packages
8.
What is ERP – Enterprise Resource Planning
ERP stands for Enterprise Resource Planning. It is a gateway to integrate the data
and processes of an entire organization into single system with all modules that
supports the core business areas.
ERP systems cover all basic functions of an organization
Enterprise Resource Planning is developing into a Multi-Module Application
Software Package that enables business processes across the supply chain
management.
Allows integrating all the operational units such as financing, human resources,
manufacturing, sales, marketing, finance & accounting, procurement, inventory
management and so on.
ERP software system allows the business to achieve real time business process,
increase productivity, improves delivery, reduce cost and increase profits,
increase product quality, improve information and performance management.
In Simple terms, we can explain an ERP as: –
ERP is a business suite with number of applications that are integrated together
between system and assist an organization in collecting, managing and reporting
information on real time throughout the business process.
History of ERP Systems
ERP System have took years to emerge and is still evolving. These systems are
transformation and ever-changing.
In 1970’s manufacturing chain was the center of business operations. This led to
the development of MRP systems.
The second phase of ERP development occurred in 1980’s which focused more on
quality measures which led to the evolution of MRP II Systems.
In the 1990’s, Enterprise Resource Planning started using multi-module
application to increase organizations process. ERP Systems integrates with all the
modules of organization’s business modules and this led to the evolution of ERP
System.
Why do we need ERP Software
ERP is an integrated systems of different business process for e.g. if a
company has different departments like sales department, production
department, material management, finance department, etc, so in ERP we
have an integration of all the departments and they all use common
database.
We can have standardization of systems across locations. For e.g. for MNC
companies can have different plants in different locations with standard
systems.
ERP systems helps to have a better controlling over the different process.
An ERP is an integrated systems, it helps to provide the better reporting.
ERP Software components
The important and major components of ERP systems are manufacturing,
SCM, Financial Accounting management, Human resources
management and Customer relationship management.
ERP Advantages and Disadvantages
Advantages of Implementation of an ERP system :
Reduced redundancy in entering data
ERP system provides the real time information all needs of the organization in a
single system.
It Allow everyone to access same source and share same source of information
It allow to access, update instantly and saves lot of time.
Integration among different functional areas to ensure proper communication,
productivity and efficiency
The Accounting for all of these tasks, tracking the Revenue, Cost and Profit on a
granular level.
Allow standardization of business processes and enterprise’s information.
It is a single source of systems that can be use through out the organization.
ERP software enables real time information availability, reduction in
inventory and cycle times.
The benefits of ERP systems are: customer satisfaction, better information,
productivity, increased quality and decreases in time to market, product cost,
delivery time, inventory levels.
Disadvantages of ERP Systems:-
The disadvantages of ERP systems are as follows :-
Takes a lot of effort and time and requires a lot of training
Customization of the ERP software is limited, you may not allowed to design
application as per business requirements.
ERP systems can be very expensive to install.
ERP Systems centralize the data in one place and this can increase the risk of loss
of sensitive information in the event of a security violation.
The usage of ERP system can be difficult for users, so appropriate training is to
required to use the ERP software.
Read more for ERP Advantages and Disadvantages
Common ERP Software Modules
Sales Order (SO)
Purchase Order (PO)
Finance and Accounting
Manufacturing Resource Planning
Customer relationship management (CRM)
Human Resources
Procurement
Marketing
The important modules in ERP SAP Systems are as follows-
Manufacturing – A manufacturing company could use an ERP system to track and
manage virtually every operation in the organization. Requests for Proposal (RFP)
and corresponding quotes can be entered and assigned to any large database of
customers. Quotes can be changed to Sales orders upon receipt of purchase orders,
with line items and corresponding prices that represent goods to be delivered to a
customer.
Why ERP
It is a single application integrated software program.
It is a single database systems.
ERP systems allows to share the information and communicated more effectively.
It automates customer orders, order fulfilment, billing, shipping and tracking and so
on.
The different between before ERP and After ERP system shows, why ERP
software is important to implement for any business.
Before ERP
After ERP
Top ERP Vendors list
ERP Vendors are classifies based upon clients they service. We have three types of
ERP vendors they are Tier I, Tier II, Tier III. Here we are going to list top ERP
Vendors in the following sectors.
1.
Manufacturing and Distribution Industry.
2.
Transport, Communication, Energy and Sanitary service.
3.
Service Sector and finally
4.
Retail Sector.
Top ERP vendors in Manufacturing and Distribution Industry.
SAP OracleMicrosoftInforEpicorIFSLawsonOthers
Market
Share 28%15% 12% 7% 5% 2%2% 29%
TOP ERP vendors in Transport, Communication, Energy and Sanitary service.
Oracl
SAP e MicrosoftInforEpicorIFSQADOthers
Market
Share 35%23% 15% 4% 2% 1%1% 19%
Top ERP Vendors in Service Sector.
Microsof Epico lawso
SAP Oraclet Inforr Netsuiten Others
Market
Share 30%21% 15% 2% 3% 2% 2% 25%
Top ERP vendors in Retail Sector.
SAP OracleMicrosoftInforQADSAGElawsonOthers
Market
Share 31%22% 22% 2% 2% 2% 2% 17%
ERP Software Packages
Baan by Baan corporation.
Peoplesoft from oracle corporation
Oracle Application
JD Edwards from oracle
Navigen
SAP from SAP AG (With total 65% market share).