Enterprise resource planning is known in short as ERP and this is a process that attempts to consolidate all of a company's departments as well as functions into a single computer system that is capable of servicing each department's specific needs. In a sense, it is a convergence of people, hardware and software into an efficient production, service as well as delivery system that is capable of creating profit for the company. Most companies are known to have a conglomeration of different systems, procedures as well as hardware and software that are designed specifically for their own needs. This may include employee records such payroll, medical and other benefits that are normally held by the Human Resources Department.
Other may include financial data, processing that will include payroll computations as well as employee compensation, and also invoicing and billing for company products and services that are usually held by the Finance Department. Others will include production data held by Manufacturing department, inventories held by warehousing and customer orders held by customer relations. The dream of ERP is to be able to have a single software solution that integrates the different functions as well as activities into a seamless whole where information that is needed for decision-making is shared across departments. Additionally, the action taken by one department results in the appropriate follow up action up and down the line.
An example of an ERP software that is quite common is customer ordering and delivery and this is where a customer's order moves smoothly from sales where the deal is consummated to inventory and warehousing. Here, the order is retrieved and packaged for delivery to finance where invoicing, billing and payments are handles and lastly to manufacturing where replacement of the bought and paid for product is done. Without ERP, each department in the company was independent and when each department completes its function it never cares what happens afterwards and this will make it hard for customers when they are following up on their order as they will be told to check with different departments.
However, ERP, anyone can easily access all elements in the supply and production chain and this leads to efficiency in customer management as well as perceived company effectiveness in delivering on customer expectations. ERP is also known to save on consumption of energy as well as data management costs. An ERP system will mean that you will have a single hardware system that can handle all the different requirements and this will translate to reduce power consumption operating off a single database which will translate into savings on storage.
These savings that are generated from a minimum of hardware and storage coupled with operational efficiencies that are created from a single system across all departments will translate into measurable profit for the company. ERP systems can also run on a variety of hardware and network configurations that will typically employ a database to store its data. An ERP system has several characteristics including a common database, which supports all applications, a consistent look and feel throughout each module, an integrated system that operates in real time without relying on periodic updates as well as installation of the system without elaborate application by the IT department.
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This article touched the basics of the topic. I have 2 more resources related to the above. They are erp and enterprise resource planning . They are worth a read.
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