Understanding ERP - Enterprise Resource Planning

Information technology has transformed the way we live in and the way we do business. Since last decade, IT has made a drastic change in our life. As compared to earlier stage, when computer was used just as a typewriter, nowadays users have become more intelligent and IT literate. Now the user knows that a PC can do many more things rather than just typing a letter in a word processing software or making balance sheets in excel. They expect more things out of their PC. During this phase of industry, every one of us must have heard the word ERP in one or the other form. It may be in title of any IT magazine or may be a point of discussion in any IT Seminar or may be in an advertisement of big IT Company. Thus in any form, we all have been through this word. In this short article, I’ll try to concisely explain the basic yet important concepts relevant to ERP.

What is ERP?

ERP is one of the most widely implemented business software systems in a wide variety of industries and organizations. ERP is the acronym of Enterprise Resource Planning.
ERP is just not only software. ERP definition refers to both; ERP software and business strategies that implement ERP systems.
ERP implementation utilizes various ERP software applications to improve the performance of organizations for

1. Resource planning
2. Management control
3. Operational control.

ERP consists of multiple software modules that integrate activities across functional departments - from production planning, parts purchasing, inventory control and product distribution to order tracking. Most ERP software systems include application modules to support common business activities like finance, accounting and human resources.

Type of ERP

Few ERP products available are PeopleSoft, Oracle financials, SAP, JD Edwards etc.

Now a day’s most of the companies go for custom ERP package which suet there need and of number of advantage over other ERP package.

What can ERP do for you?

The fundamental purpose of ERP is to establish a process that links projected demand plans to supply plans, so that the resources of manufacturers, their suppliers, and especially their customers are utilized in the most efficient and cost effective way. To do so requires a process for anticipating demand and planning and scheduling resources in a manner that supports a company's strategic and financial goals.

An ERP System includes ERP Software, Business Processes, Users and Hardware that run the ERP software. An ERP system is more than the sum of its parts or components. Those components interact together to achieve a common goal - streamline and improve organizations' business processes.

ERP helps in integrating management processes extend horizontally across the company, including product development, sales, marketing, manufacturing, and finance. It also extends vertically throughout the company's supply chain to include the acquisition of raw materials, suppliers, customers, and consumers

There are five major elements in this:

1. An integrated business operating process that links strategic plans and business plans to sales plans and operation plan.
2. A people-driven process that is supported by computer system.
3. A formal resource planning process that involves all functional within a company.
4. Defined responsibility and performance measurements for all functions in a company.
5. Communications among all function in a company as well as communications among all divisions and sister companies. 

My Learning Experience

Systems Plus has given me chance to work on ERP software build for a manufacturing company located at Masjid Bunder – Mumbai. As a team we have successfully implemented and following things we have learn.

Many companies buy into an ERP solution only to find that it does not live up to its promise. The thing that they fail to understand about the process is that it is just that, a process and a tool. The software does not fail or not work or not live up to its promise. It does exactly what it is supposed to do. However,

ERP is a people process supported by the computer, rather than the other way around. People and their behavior and discipline in utilizing the ERP process are vital.

If information have not entered in accurate then perform its functions to the best of its abilities is not going to work. ERP begins with data collection. Then that data must be collated and entered. Finally, you need a trained Manager who can work with the software and understand the results and reports it issues.

When people understand how to utilize the ERP process, tools, and techniques, the data and information will be highly accurate, and they will make sound decision

About Author:
Hemal Fofaria is a consultant in Systems Plus Pvt. Ltd. Within Systems Plus, he actively contributes to the areas of Technology and Information Security. He can be contacted at hemal.f@spluspl.com