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What the term Enterprise Resource Planning means and to whom.

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Introduction

What the term Enterprise Resource Planning means and to whom Enterprise resource planning "Enterprise Resource Planning software is a set of applications that automate finance and human resource departments and help manufacturers handle jobs such as order processing and production scheduling." This is a broad definition that explains in a sentence exactly what ERP software does. Yet, there is much more to it. ERP is an industry term for the broad set of activities supported by multi-module application software that will help a business manage the important parts of their respective businesses. Typically, an ERP system uses, or is integrated with a relational database system. ERP operates through integrated databases and basically one set of data. Therefore, the user will call upon these databases to retrieve information related to manufacturing, human resources and financial data. ERP has said to be the next generation of MRP systems. ERP, though, is much more. MRP, or Materials Resource Planning, can perform scheduling activities in one plant, while ERP can be connected globally (via an Intranet or an Extranet) so that the entire organization appears to be and functions as one seamless unit. The integrated ERP system, 71% of the time, utilizes a UNIX server and Windows-based PC Clients (client/server architecture). ERP can also be installed on a mainframe legacy system but the integration benefits achieved may not be as great as the client/server architecture. ERP is a form of reengineering that utilizes hardware, software and consultants. The hardware is the PC or terminal used, as well as a server or a mainframe. The consultants implement the software and train the users. ERP vendors provide the software. The top ERP vendors provide a generic software program, which functions as the backbone of the entire process. There are also a number of small software vendors that address the particular needs of particular markets, with products configured to "fit into the backbone systems." ...read more.

Middle

Yet the navel gazing has a pretty good payback if you're willing to wait for it-a Meta Group study of 63 companies found that it took eight months after the new system was in (31 months total) to see any benefits. But the median annual savings from the new ERP system were $1.6 million. What are the hidden costs of ERP Hidden costs are the costs that are not foreseen in the planning stage of an ERP project. Training, testing, customisation, consultants, post depression and replacing people are many of the costs that are over looked. Hidden costs are sometimes the determining factor if an ERP solution is effective or not. If a company over looks $50 million in hidden costs, this could greatly affect its TCO and ROI. What an ERP project consists of Discovery phase: In this phase of the project, business process are analysed and business practices are evaluated. This is just the phase where the company is looked at and it is decided what is needed in an ERP solution. Design/develop phase: This is where an application is choose and is configured for the company. The way the solution is function and any other design aspect of the solution. Testing: Here the ERP solution is loaded in a test environment and errors and flaws are looked for. Training phase: Here is where employees are trained on the system, so they know how to use it once the implementation is complete. Implementation phase: The ERP software is finally rolled out to the company and become functional for users . Evaluation: The ERP solution is evaluated, looking at what needs to be improved, what worked and what didn't. This is just an overall evaluation of the ERP project, for future references. Importance of ERP Importance of Importance of ERP ERP is very important to Business Process Re-Engineering (BPR). BPR is the process businesses under take to re-organize and re-structure the company. ...read more.

Conclusion

From an accounting standpoint, what used to be a three week ordeal to close out a month turned into a painless two or three day event. Since the ERP system was added, sales revenue has jolted from $7million a year to $14million a year. Where is ERP Now? ERP has now expanded from a human resource, accounting and manufacturing software into areas such as supply-chain management, customer service and sales force automation systems. The trend in the manufacturing industry is the "expansion of their ERP systems, done by integrating supply chain and front office software." Supply-chain management involves using the Internet so that the supplier and the company being supplied both have access to each others manufacturing information. This will allow the supplier and the one utilizing the supplied goods to better understand each other's needs in terms of amount produced, issues regarding JIT manufacturing and forecasting. "Companies are extending ERP systems to provide better values to businesses with a tighter collaboration with customers, suppliers and ultimately end-users both domestically and globally." The Future of ERP I believe the future of ERP is in question. It seems as if the vendors have already targeted and met the needs of those desiring ERP solutions. Vendors have expressed that the future of ERP looks promising. If ERP can survive in the future, they will probably concentrate on and include the following: Single backbones with add-on components from vendors and their partners. Attention to processes that don't fit the common, generic model. A focus on outward looking processes such as customer support and analytical processes such as decisions support. Vendor focus on smaller companies. In addition, ERP vendors must stay in touch with their customers needs, and offer superior customer service and end-user support at reasonable prices, in order to stay competitive and survive in the rapidly changing world of business and especially Information Technology. Move from client/server applications to internet-based applications "Enterprise applications for the internet economy" Electronic commerce, sales force customisation, and customer relationship management software Self-service applications: web-based order entry. ...read more.

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