ERP is used to manage data of an organization and to gain information from the application. Sometime the business units of a company are located at distant geographical units and then it becomes very difficult for the organization to provide competent service from that unit. ERP enables the organization to get a centrally managed data system which can be updated anytime from any part of the world.
Earlier ERP was used only by large organizations but now a number of vendors are providing highly flexible and cheap ERPs to small units and shops. ERP can manage everyday transactions and also update the data immediately - which enables clarity in business and also prevents delays in work.
ERP architecture includes a number of modules such as Customer Relationship Management, Supply Chain Management, Human Resource Management, Finance, Inventory, Logistics, Manufacturing and Warehouse Management. The application includes the network, the database and the software solution.
1. Manufacturing: The engineering recourse planning, material planning, shop floor management, workflow management and bills of material are included in this module.
2. Financials: The module includes accounts payable, accounts receivables, cash management, general ledger, fixed asset and billing.
3. Human Resource Management: Human Resource management provides solution for recruitments, benefits, training, payrolls, labor rules etc.
4. Supply Chain management: The supply chain management, inventory management, scheduling, claim processing, procurement planning, distribution, transportation and sales order administration is managed in this module.
5. Customer Relationship management: The sales and marketing modules, customer contacts, after sales support, service and commissions are included in CRM.
6. Inventory: The information of store, stocks, data warehouse, customer, deliveries and products storage is included in Inventory.
Before ERP evolution the various department of an organization did their job at their respective locations and the files were manually transferred from one place to other which took much time for a transaction to compete.
The files moved from one department to other to finally get sanctioned from the management authorities. Sometimes during the process - discrepancies erupted in data which resulted in further inconveniencies but automated ERPs helps the organization to get fast and accurate data anytime - anywhere. The long procedure of moving from one department to other is prevented as all the data is located at one place and it is centrally updated every time. In the new system the entry is made from one department - the employee sitting in other departments can see the modifications done immediately on the computer and process the new information to send it to the next stage.
1. ERP helps in speeding up work procedures.
2. It prevents data redundancies.
3. The expense on data maintenance is reduced.
4. The performance can be increased as the decision is taken immediately by the management. The management can anytime view the complete overview of the organization and ensure global decision optimization.
5. It synchronizes workflow.
6. It enables forecasting, future planning and provides better customer satisfaction.
7. It improves communication and streamlines processes.
1. The cost of implementation is high and in case of lack of technical support - the organization may not utilize ERP features properly.
2. Systems make processes rigid - inflexible to accommodate customized work processes.