ERP ( Enterprise Resource Planning)

                    ERP stands for Enterprise Resource Planning. ERP is an enterprise-wide information system that facilitates the flow of information and coordinates all resources and activities within the business organization. Functions typically supported by the system include manufacturing, inventory, shipping, logistics, distribution, invoicing, and accounting. Some solutions now embed customer

relationship management functionality. A wide variety of business activities including sales, marketing, billing, production, inventory management, human resource management, and quality control depend on these systems. The ERP system assists in managing the connections to outside stakeholders as well as enhancing performance management. It uses a centralized database and usually relies on a common computing platform. It provides the user a unified, consistent, uniform environment.

Figure below shows how information is integrated into a typical organization using an ERP system.

ERP system is thus a mirror image of the major business processes of an organization.

The following new and continuing trends affect enterprise ERP software:

1. Mobile ERP 

Executives and employees want real-time access to information, regardless of where they are. It is expected that businesses will embrace mobile ERP for the reports, dashboards and to conduct key business processes.

2. Cloud ERP

The cloud has been advancing steadily into the enterprise for some time, but many ERP users have been reluctant to place data cloud. Those reservations have gradually been evaporating, however, as the advantages of the cloud become apparent.

3. Social ERP

There has been much hype around social media and how important —or not — it is to add to ERP systems. Certainly, vendors have been quick to seize the initiative, adding social media packages to their ERP systems with much fanfare. But some wonder if there is really much gain to be had by integrating social media with ERP.

4. Two-tier ERP

Enterprises once attempted to build an all-encompassing ERP system to take care of every aspect of organizational systems. But some expensive failures have gradually brought about a change in strategy – adopting two tiers of ERP.

ERP MODULES :- 

Diagram showing some typical ERP modules

Need For ERP -Why ERP :- 

     The implementation of ERP systems has helped small and mid sized companies, significantly improve their business metrics by process optimization, improving the entire supply chain process, better inventory control, better reporting to take decisions, integration across functionalities and increasing transparency across the company. Purchase department can see the sales department data, Sales department can see inventory data, and top management can see any data on a click of single button. 

The successful implementation of an ERP system will have many advantages, as indicated below:

Business Integration and Improved Data Accuracy: ERP system is composed of various modules/ submodules where a module represents a particular business component. If data is entered in one module such as receiving, it automatically updates other related modules such as accounts payable and inventory. This updating occurs at real time i.e. at the time a transaction occurs. Since, data needs to be entered only once at the origin of the transaction, the need for multiple entries of the same data is eliminated. Likelihood of duplicate/ erroneous data is, therefore, minimized. The centralized structure of the database also enables better administration and security provisions, which minimizes loss of sensitive data.

Planning and MIS : The various decision support tools like planning engines and simulations functions, form an integral part of an ERP system that helps in proper utilization of resources like materials, human resources, and tools. Constrained based planning help in drawing appropriate production schedules, thereby improving the operation of plant and equipment. As a part of MIS, an ERP system, contains many inbuilt standard reports and also a report writer that produce ad hoc reports, as and when needed.

Improved Efficiency and Productivity : In addition to provision of improved planning, ERP system provides a tremendous boost to the efficiency of day to day and routine transactions such as order fulfillment, on time shipment, vendor performance, quality management, invoice reconciliation, sales realization, and cash management. Cycle time is reduced for sales to cash and procurement to pay sequences.

Establishment of Standardized Procedures : ERP system is based on processes of international best practices, which are adopted by the organizations during implementation. Department silos are purged, and maverick practices are done away with. Because of top-down view available to management, chances of theft, fraud and obsolescence are minimized.

Flexibility and technology : Due to the globalized environment, where production units, distribution centers, and corporate offices reside in different countries, organizations need multi-currency, multi-language and multi-accounting modes, in an integrated manner. These provisions are available in most of the ERP systems, particularly in products offered by tier 1 and tier 2 vendors. ERP vendors are also quick to adopt latest technologies, from mainframe to client server to the internet. Unlike a bespoke system, Upgrading to latest technology for a running ERP system is uncomplicated, involving mostly adoption of service packs and patches.

Major ERP Packages :-

SAP R/3 and B1 

                  SAP is probably the best known supplier of ERP software. SAP offers two solutions. The first is the R/3 suite and the second is the B1 suite, sometimes called "business one." R/3 is an integrated software system that can support everything from very small companies to very large corporations. R/3 is customizable to meet your specific business needs. R/3 uses a client/server architecture that runs on a variety of platforms, including UNIX, Windows Server and OS/400. It can be implemented using a number of database packages, including Oracle, SQL Server, or DB2. B1 is targeted more at small and medium-sized businesses and offers pre-built modules for finance, warehousing, customer relationship management (CRM), e-commerce, purchasing and reporting.

LN/Baan

                Baan ERP software was originally created by The Baan Corporation in The Netherlands. It was purchased by Infor Global Solutions in 2003. Baan ERP software is designed for manufacturing industries working on complex products with complex supply chains that work on different methodologies. Baan is especially suited for large made-to-order and engineering-to-order companies. Baan is used by companies like The Boeing Company, Ferrari, Solectron, Fiat, Flextronics, Evenflo, Navistar and British Aerospace & Engineering Systems. Baan is highly customization and supports flow chart based process and procedure documentation.

Microsoft Dynamics NAV and AX 2009

               Microsoft offers two ERP software packages. Microsoft NAV is targeted toward small and medium-sized businesses and offers modules for analysis, e-commerce, CRM, supply chain management, manufacturing and finance. Microsoft AX 2009 is designed for medium to large organizations and has functions that are useful for companies doing business in multiple countries. It is focused on improving individual productivity and is best suited for service organizations, manufacturing companies, wholesalers and retail-oriented companies. AX 2009 is more customizable than NAV.

JD Edwards EnterpriseOne 

        EnterpriseOne from JD Edwards is an Oracle-based ERP system. EnterpriseOne is currently owned by the Oracle Corporation. EnterpriseOne offers pre-designed modules that focus on standards-based process engineering and deep understanding of different business processes and requirements. Available modules include, among others, analytics, capital asset management, CRM, finance management, human capital management, manufacturing, ordering systems and project management. Higher level modules can be added for specific industries like real estate, construction, and food and beverage production.

Oracle E-Business Suite Financials and People Soft Enterprise

            Oracle offers two other ERP products. The first is E-Business Suite Financials. The other is PeopleSoft. E-Business Suite Financials is an easy to use package targeted to the financial services industry. It supports distributed organizations and offers modules for financial and operational information, dynamic planning, and budgeting, forecasting and multidimensional profit analysis. PeopleSoft is a highly customizable suite that can support complex business requirements. It offers customizable modules for a wide range of business types and styles and runs on a wide range of database systems and hardware architectures.