What is ERP

What is ERP (Enterprise Resource Planning)

ERP stands for enterprise resource planning. In an organization, ERP is not only utilized for mechanizing business transactions and complicated business processes, but also for redesigning work management system. Attaining innovation and higher level improvements in business process performance becomes a complicated task without measuring the capability of ERP. With the help of ERP, organizations can improve coordination and information access throughout the organizational units and this in turn leads to successful management of task interdependence. 

ERP provides combined business software modules which acts as a base and supports the functional units of an enterprise. it follows a process oriented approach and considers the core processes such as order fulfillment, materials procurement, preparation of balance sheet etc.

ERP is 

1. Multifunctional system, which acts as a business model for planning, control and global optimization for the whole supply chain by making use of the IT technology which provides satisfactory services to all the parties involved.

2. An integrated suite of application software modules, which provide operational, managerial and strategic information for an enterprise, so that an enterprise can improve the standards of quality, productiveness and efficiency to withstand the competition,.

3. an important element through which an enterprise can balance its resources like human resources, materials, money on so to compete internationally.

4. Process oriented and cross functional approach

ERP can introduce business process re-engineering and can bring in radical changes in an organization. 

ERP provides following functions 

1. Human resources 

2. Corporate finance

3. Production Planning and Control

4. Materials Management

5. Quality Management, Sales Management

6. Plant Maintenance

7. Sales and Distribution etc.

ERP is important in the business because:

1. It helps in automating the processes in the business as it consists of in-built cross functional integration, and triggers the interdependent activities which are set by the business rules leading to effective business process automation in terms of efficient productivity, manpower productivity, lowering inventory carrying cost, etc.

2. ERP helps in availing right information at right time, which enables business intelligence capability in taking effective decisions leading to effective performance in the organization.

3. It has transformations effect on the business. 

Basic Features of ERP:

1. Process oriented

2. Cross functional approach

3. Radical changes

4. top-down concept

5. IT as a powerful enables

6. Integrated suite of application software Modules

7. Provides value-added services

Ur's 

AmarAlam