Introduction of ERP systems

What is ERP systems?

ERP stands for enterprise resources planning, which is a business software systems that support business or enterprise throughout the project in organizing, planning, maintaining, tracking and utilization of resources effectively. 

ERP is gate way to integrate the data and processes of an organization into single system with all modules that supports the core business areas.

ERP software system allows the business to achieve real time business process, increase productivity, improves delivery, reduce cost and increase profits, increase product quality,improve information and performance management.

 

The history of ERP systems

1.ERP System have took years to emerge and is still evolving. These systems are transformation and ever-changing.

2.Before early ERP-type systems emerged, in the prehistoric age of 1960 and early 1970’s Departmentalized systems came into picture.

3.In 1970’s manufacturing chain was the center of business operations. This led to the development of MRP systems.

4.The second phase of ERP development occurred in 1980’s which focused more on quality measures which led to the evolution of MRP II Systems.

5.In the 1990’s,Enterprise Resource Planning using multi-module application to increase organizations process. ERP Systems integrates with all the modules of organization’s business modules and this led to the evolution of ERP System.

6.The benefits of ERP systems are: customer satisfaction, better information, productivity, increased quality and decreases in time to market, product cost, delivery time, inventory levels.

 

Advantages of implementation of ERP system

1. Reduced redundancy in entering data

2. ERP system provides the real time information all needs of the organization in a single system.

3. It allow everyone to access same source and share same source of information.

4. It allow to access, update instantly and saves lot of time.

5. Integration among different functional areas to ensure proper communication, productivity and efficiency.

6. The Accounting for all of these tasks, tracking the Revenue, Cost and Profit on a granular level.

7. Allow standardization of business processes and enterprise’s information.

8. It is a single source of systems that can be use through out the organization.

9. ERP software enables real time information availability, reduction in inventory and cycle times.

 

Disadvantages of implementation of ERP system

1. Takes a lot of effort and time and requires a lot of training.

2. Customization of the ERP software is limited, you may not allowed to design application as per business requirements.

3. ERP systems can be very expensive to install.

4. ERP systems centralize the data in one place and this can increase the risk of loss of sensitive information in the event of a security violation.

5. The usage of ERP system can be different for users, so appropriate training is to required to use the ERP systems.