The term Enterprise Resource Planning or ERP has been frequently used in business processes past a decade. ERP software system provides a comprehensive solution to various simple and complex business processes streamlining the workflow with improved efficiency and output. Many small and large scale organizations are implementing ERP to stand out from the rest with improved margins. The term ERP not only implies a mere software system, but is also an effective tool in planning business strategies. ERP, with the help of various modules or software applications, helps in resource planning and controlling management and operation.
History of ERP
This software application, which evolved from MRP (Management Resource Planning), has come a long way with various customizable features and modifications streamlining the business processes through effective integration of different units on a common platform. MRP, released in eighties, was purported for manufacturing industries and was designed accordingly to control various processes of manufacturing starting from resource planning, managing production, distribution and delivery of the products. Proper inventory management in different manufacturing industries was the main objective of MRP, which later expanded in managing all operations and units across the enterprise. The evolution of flexible multi-tiered client-server architecture of ERP has led to its rapid expansion and implementation in different types of business.
What Constitutes The ERP?
Effective resource planning is not a simple process, and ERP is a complex system involving different software modules that help to integrate different functional units of the departments through uniform data migration. The software modules support planning, marketing, production, distribution, tracking, inventory control and logistics with special modules supporting accounting and finance, human resource and customer relationship management.
The components include ERP software, other processes supportive of ERP software, hardware, operating systems to run ERP software and the users.
Successful ERP Implementation
Although ERP installation has become mandatory in most of the business organizations especially those located in multiple geographic locations, still ERP implementation requires lots of planning. Successful implementation of ERP is an uphill task that demands expert guidance. Any faulty planning will lead to the failure of the ERP system causing heavy losses for the organization. ERP implementation is a long term process that involves huge capital investment and organizations must go for ERP packages matching their requirements. Only a successful ERP implementation will not produce the desired return on invest as it also depends upon the users. The benefits of ERP can be maximized through intelligent application and efficient usage.
Read Benefits of ERP for SME. Also know Advantages of ERP in an organization.
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