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Introduction to ERP

ERP is Enterprise Resource Planning. The current evolution of manufacturing resources planning (MRP and MRPII) systems. ERP provides the foundation for integrating enterprise-wide information systems. These systems will link all aspects of a company's operations including human resources, financial planning, manufacturing, and distribution, as well as connect the organization to its customers and suppliers.

ERPS (Enterprise Resource Planning Systems) comprises of a commercial software packages that promises the seamless integration of all the information flowing through the company - financial, accounting, human resources, supply chain and customer information.

ERP Systems provide information management and analysis to organizations.

Benefits.  There are five major benefits of ERP: 
1. On-line/real time information throughout all the functional areas of an organization.
2. Data standardization and accuracy across the enterprise.
3. Best-practices or optimized solutions are included in the applications.
4. Creates efficiencies that organizations would not otherwise have. 
5. The analysis and reporting that can be used for long-term planning.

Examples of ERP packages are HRMS, Financials, Manufacturing, Distribution, and Sales. Each ERP Package may offer different functionality for different industries.

In implementation, ERP systems include several basic features. They are installed on a Database Management System. Database platforms to chose from are: DB2/400, DB2/MVS, DB2/Unix, Informix, MS SQL Server, Oracle, SQLBase, and Sybase. They require initial setup according to the organization's process. They may be customized according to the organization's process through the ERP's tool set. Work flow can be setup to automate approval processes through chains of command. Once installed, the user only enters data at one point, and the information is transferred through processes to other modules. Finally, the ERP system includes reporting tools for main reports as well as ad hoc reporting.

ERP systems, fundamentally, integrate the different processes necessary in a business into a centralized pool that facilitates data sharing and eliminates redundancy.

Advantages of an ERP system
1.  Information entered once into system .
2.  Forces use of the best practices. 
3  Allows customization .
4.  Based on reliable file structure.
5.  Provides functionality to interact with other elements in the process. 
6  Provides tools for ad hoc queries. 

ERP is a business tool. 
Information Technology (IT) has always played a key role in providing businesses a competitive edge. In the beginning, IT performed mainly financial functions such as payroll, A/R, A/P, invoicing etc. and was used mainly as a reporting tool; what have we done and did we make or lose money. 

Over time, IT has evolved. Its overall reporting capabilities have become awesome with the surreal performances of computing power, and the refinement of software operating systems and application packages today. This reduction of processing time together with the proliferation of IT beyond financial functions and into sales and Marketing and Manufacturing, have pushed IT from the strict business reporting realm to the much larger and dynamic realm of business planning.  In other words, the more the information was accurate, available when needed, and applicable to the core areas of our businesses, the more we could dynamically plan our strategies and make concrete business decisions from it. This is where we started seeing concepts of Materials Requirement Planning (MRPII) come into light which over the 80s evolved into Enterprise Resource Planning (ERP). IT could no longer live in its own kingdom of data processing, it had become a business processing and business emulation tool, and thereby had to create a solid bridge with the business imperatives as its foundations. IT is in the midst of yet another change. This time though we facing a revolution rather than an evolution. We are now fast approaching the era of enterprise knowledge system. The combination of on-line/real-time information, ERP (all enterprise and 100% accuracy of data), supply chain rapport (internal and external links between all activities), e-commerce, and advanced planning and scheduling systems are causing a revolution in transforming a reporting and planning tool into an intelligent business execution tool.


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