‘ERP System’ – How to pick right one

About ERP

An Enterprise Resource Planning (ERP) system is a single unified system developed for an organization for integrating all aspects of data and processes related to it. An ERP system covers all the basic functions of an organization, regardless of the organization’s business or charter. It began as a group of applications or software focusing on combining multiple systems into one integrated system where data could be shared across the enterprise, presumably reducing redundant data entry and processes.

An ERP system is a software package, which provides the functionality of an organization in a single package that would be covered by two or more systems. For example, a software package that provides both Payroll and Accounting functions such as QuickBooks is considered as an ERP software package. The software attempts to integrate all departments and functions across a company onto a single computer system that serves all those departments’ particular needs. Building a single software program that serves the needs of people in finance as well as the people in human resources and in the warehouse is a tall order. Each of those departments has its own computer system optimized for the particular ways that the department does its work. But ERP combines them all together into a single, integrated software program that runs off a single database so that the various departments can share information and communicate with each other more easily.

The term ERP originally implies system designed to plan the utilization of enterprise-wide resources. Although the acronym ERP originated in the manufacturing environment, today’s use of the term has much broader scope. A typical ERP system would replace two or more independent applications of an organization by eliminating the external interfaces previously required between systems and provide additional benefits which range from standardization and lower maintenance, to easier or greater reporting capabilities.

The need to undergo an ERP project is seen not only as an opportunity to integrate data systems but also to redefine processes in the interest of gaining efficiencies as well as to mote professional growth for employees by introducing new skills and knowledge in the areas of data management and procedures.

Selecting ERP software does not happen all of a sudden or as a result of an overnight’s discussion. There is lot of base work that needs to be done in this regard. There are many reasons for the uncertainty, with the foremost being advent of Internet. This has expanded the scope of computers and redefined the technological changes in the business. As a result there is more expectations and demand, which were not seen earlier. Advancement in computing indirectly implies the advancement in ERP. Needless to say the constant updating and innovating have become the benchmark of ERP packages.

Copyright © 2006