What Is ERP

What is ERP? ERP or simply enterprise resource planning refers to the general application software used by various manufacturers to manage various aspect of their business like product planning, parts purchasing, maintaining inventories, interacting with suppliers, providing customer service, and tracking orders. At times, ERP can be used to help companies handle their finance and human departments. But the whole ERP system is often integrated to a company's database system.

So after that text book definition, the question still remains, what is ERP? Integration is a key phrase here. By implementing ERP, a company will be able to integrate all the data and processes it has so far into a single system or database. With such huge capability, ERP usually cannot be handled by the present company resources alone. That is why in every ERP planning, implementation involves the use of new sets of hardware components and the much needed software applications that will help the ERP system to unify all the existing data into one system.

The whole concept of ERP systems originated from industrial types of companies. They were the frist ones who found the urgent need to simplify their processes and work flow. But through the years, the ERP concept itself has evolved in something that is more comprehensive. ERP became more widely available to companies outside the industry sector. It is now possible to use this ERP systems technique regardless of the nature of the organization as well as their size.

What is ERP? The system is capable of handling processes and projects of Human Resources, Supply Chain Management, Customer Relations Management, Financials, Manufacturing functions and Warehouse Management. The unified ERP system ideally should be contain all the data from various software modules. For manufacturing, software applications need to cover the fields of engineering, capacity, workflow management, quality control, bills of material, and manufacturing process. For finances and monetary related functions, the software modules that should be covered by an ERP system include accounts payable, accounts receivable, fixed assets, general ledger and cash management. For human resources, the areas of employee benefits, training, payroll, time and attendance are just some of the needed software modules. And the list goes on with each major industry involving specific software modules.

The implementation of an ERP system might take months or even years depending on the complexity of the various software and database of each department invovle in the system integration. Also, implementing an ERP system might require employees to adopt a new working style or work ethic along with the other changes being made which is normal in a company that is starting to implement this integration. A company may choose to deligate the job of system integration to one of their department, the IT department being the most popular choice. However, it is ideal for companies to hire an ERP implementation consultants. In the long run, having such consultants are more cost effective and do their job more efficiently because they have undergone specific training for this kind of job. specifically trained in implementing these types of systems.

So what is ERP? It is an indespensable tool for organizations who wants to unify the processes and fucntions of their various departnments. The use of an ERP system will result to having better or improved business process analysis, will result to employee retraining, and will have the outcome of new work procedures.

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