We need to understand the problems faced by conglomerate before getting to know ERP Fundamentals. Business houses always find great difficulty in releasing reports its management requires because of the voluminous data, improper segregation, departmental arrangements and unprecedented delays. Organizations were constantly searching for some means or mode to overcome this debacle. The inconvenience was not only pinching on monetary profits but also antagonized customers who were made to wait for a long time for a small piece of data. Enterprise Resource Planning or ERP as it is shortly referred, has overcome this menace. It is a boon to organizations that were in need of this kind of facility since very long time.
ERP helps to integrate the data in an organization under one common platform. The purpose behind this is not only to ensure transparency but also to facilitate tracking down information regarding the status of a particular order or its dispatch and so on… With an appropriate ERP customized for your organization, overall benefits arising out of the implementation would be solely beneficial to your company.
An organization has to undertake meticulous planning and devise strategies before going ahead with ERP. ERP can cut down costs and improve the quality of working time by and large. In short, it helps in making the maximum use of technological advancements. For instance, the executive in the sales department will be able to respond to a customer’s query immediately by finding the status of the product's delivery which would not have otherwise been possible but for the intervention of ERP in the organization. ERP has enabled organizations to part way with laborious and time consuming processes. A strong understanding of ERP basics will help to know and reap ERP benefits better.
ERP is often well said that done. No company can progress without proper grasping of the ERP fundamentals. The company has to properly understand ERP fundamentals in order to derive maximum outcome. These are crucial factors deserving attention when it comes to ERP. The effects of ERP are not visible in short run in any organization. It is a long drawn process. The spade of work that needs to be done may require a couple of months and even years depending upon the nature of business, planning and development matrices, levels within the organization and not the least, volume capacity and targets.
Companies have to be vigilant enough more so when it comes to question of choosing the appropriate platforms and ERP software. This becomes crucial when it comes to the point of corporate amalgamation. The software used by the different companies need to be brought under one common platform to reap maximum benefits.
When a company goes in for ERP, it must ensure that the information is updated as past facts and figures will have no relevance to the current system. The progression must be constant to make sure that ERP intervention accounts the most relevant facts. In a nutshell, an understanding of ERP basic is necessary to ensure all this.
Companies need to clearly know what ERP is before thinking of implementing it. The catch word of ERP implementation is speed. The faster it is implemented, the quicker and better are the advantages and delivery in terms of results. This early process has another hold. The returns are sought at a shorter period. This deviation from the conventional practice has become the order of the day as far as many companies are concerned. Formerly business process re-engineering played a vital role with respect to implementation. Therefore, it is important to know the components of ERP. Merely defining or mere implementing ERP will not help.
This automatically paved way to development of gaps between the actual results and the one derived during the process of forecasting. Tunning ERP as per the whims and fancies of the practices followed in the company became a routine affair. This led to slogging and dragging beyond the time limits permitted. It showed negative financial effects and drew havoc in the customer's trust. It is also necessary to understand that mere ERP planning does not guarantee the benefit of ERP. It has to be implemented as planned after understanding the components of Enterprise Resource Planning. In spite of having improved the implementation issues, what remains static and unfettered is the manner in which companies go ahead with ERP implementation. They just do it as it is required, without following systematic procedures. Some issues that an organization has to address after defining its own Enterprise Resource Planning are -
If an organization is able to answer these questions without any ambiguity and substantiate the results then it can be said that it has a focused path in taking ERP. The questions mentioned above are crucial and will even decide the business model of the company. ERP implementation is vital in the whole process of ERP. They can take place only if one understands what is Enterprise Resource Planning.
ERP is a vast subject and its scope of study extends to diverse areas. In order to have a good understanding, one needs to keep abreast with issues ranging from implementation and deployment of ERP to the areas like ERP outsourcing, technical advancements, impact on international business, job consultation opportunities, education and so on. It is therefore not possible to know them in one ERP article.
ERP calls for constant modification and upgradation. ERP developers are facing tremendous pressure both, from vendors and companies. In this context, it becomes important to analyze the ERP trends and modalities. Some of the relevant issues are as follows:
Organizations had to implement ERP through their systems irrespective of the fact whether they help in all the functions or in one particular function. This was proving to be a big hurdle to the firms. In addition, this remained as the main disadvantage or setback of ERP. They had to purchase the whole application even if it meant that most of them would be idle except for the core function.
The latest ERP software programs have overcome this menace. They offer need based applications. The firms need not be worried even if these software programs were not available. They were given the liberty to purchase and install software programs pertaining to that particular function. This advantage has helped to increase the scope of ERP not only among large firms but also small and medium businesses as well.
ERP was a very costly affair. Thanks to the intrusion of internet and open source applications. This has helped small and medium enterprises(SMEs) to enter the market of prospective buyers. This has not only widened the horizon for SME's but also increased the applicability among large firms.
These large firms were not able to invest huge money in spite of adequate funds. Now that the spending on ERP gets reduced there are no hesitations to show the green signal for fear of heavy monetary outlay. It is encouraging to notice the improving IT ERP trends.
ERP was discouraged by companies because they took very long installation time and set the whole process into action. Since this resource was spent excessively, there were chances for reduction in potential business and losing man-hours. The current day ERP applications are less complex to install and train. This has reduced the amount of time spent on ERP. Companies are thereby assured of spending lesser time for ERP.
Open Source, Web Enabled and Wireless Technologies are important elements that have rejuvenated the functioning of ERP. Open Source ERP has done away with the hassles of paying license fees not only during installation but also whenever a modification is made. The company is relieved from being dependent even for mince matters.
Web enabled ERP helps in making the enterprise operations go online. Any stakeholder or third party can access the required information very easily from anywhere across the globe. This proves to be of great help especially during emergencies when the details are to be sourced immediately.
Wireless ERP has helped organizations to make use of the communication channels effectively and efficiently. It has made possible for many elements to operate in ERP which were otherwise not possible. Wireless ERP is nothing but sharing enterprise information through devices like internet and other devices making it possible for outsiders to access the same.
ERP helps in the business of an enterprise.There are some technical details about ERP and the tools used which needs to be covered. ERP technicalities are given below briefly and analyzed in depth in the later articles.
The technical information on ERP can be covered under the following four heads
There are no specific platforms exclusively dedicated to the functioning of ERP. However two platforms are popularly used in this context. They are dot net and j2ee. Dot net is a comparatively cost effective platform and mostly preferred by ERP developers, vendors and users. However, j2ee has also carved a niche in the ERP market with its customers remaining ever loyal. Dot net comes with lots of facilities for the user. However, j2ee caters to some special needs which make it compatible to some players like ERP-home builder and ERP-financials.
Open source ERP provides the users with free software programs devoid of licensing and other formalities. The user is also able to access the source code. This has been citied as one of the main reasons for SME's to select ERP apart from outsourcing and development of applications suited exclusively to SME's. Open source ERP platforms out beats commercial ERP in almost every aspect but still the awareness among companies is not sufficient to encourage its use. In addition, ERP technicalities require greater clarification especially for packages like ERP-home builder.
The manufacturing sector has been citied as the core beneficiary of ERP. The three departments that enjoy the maximum benefits within the manufacturing sector are Supply Chain, Logistics and Warehousing. A proper coordination of these three departments is essential not only for the upliftment of the manufacturing sector but any other sector that deals with commodity and products.
Supply chain is the flow of action that controls the movement of goods and services in the organization. Any activity whether falling under the scope of this condition, directly or indirectly, can be clubbed under the head supply chain. Supply chain is the map that outlines the functions duties and responsibilities of the individuals in the organization in terms of delivering the enterprise objectives. Any process in the supply chain must have proper coordination and transparency. Organizational problems will erupt if there is a lack or absence in any or both of these. Enterprise Resource Planning helps the organizations to maintain and control this process by a click of mouse. It ensures and facilitates the flow of the work and make corrections and periodical checks besides constant monitoring.
Logistics refers to the department in charge of maintaining details about transportation and its network. A proper detail of the goods in transit is mandatory for organizations to face the mantle. ERP provides a common database that helps in getting these details immediately. Warehousing refers to the place where inventory is stored in an organization. The authorities in warehouses should coordinate and reciprocate with others regarding the stock of raw materials and relevant details. These are provided by the common database of ERP.
The latest advancement in ERP has revolutionized the enterprise operations. It has helped in expanding the scope and usage. Some of the novel features of ERP include extending ERP to all departments, industries and functions. It has increased the penetration of internet and exploited modern technology to the maximum. The financial operations have been made easier by ERP financials.
ERP II is regarded as the "next generation” ERP and offers several advantages over traditional ERP systems. ERP systems have historically been limited to the manufacturing sector, primarily serving logistics, supply chain, and warehousing functions. ERP II expands the scope of ERP to offer solutions for a broader range of industries and sectors.
An ERP II solution offers greater flexibility in the integration of functions between departments and even industries. And, generally speaking, an ERP II system is a much more “web-friendly” application that makes better use of the Internet, especially as a means for support. ERP II encourages user participation facilitating interaction between customers and vendors, which effectively eliminates the difficulties that resulted from limited communication.