Enterprise Resource Planning
An enterprise is a group of people with a common goal, which has certain resources at its disposal to achieve that goal. The group has some key functions to perform in order to achieve its goal. Resources included are money, manpower, materials and all other things that are required to run the enterprise. Planning is done to ensure that nothing goes wrong. Therefore, Enterprise Resource Planning or ERP is a method of effective planning of all the resources in an organization.
Enterprise Resource Planning, a business management system that integrates all facets of the business, including planning, manufacturing, sales, and marketing. ...view middle of the document...
Because it is so vast and all-encompassing, the ERP system goes far beyond being just a simple piece of software. Each implementation is unique and is designed to correspond to the implementer's various business processes. An ERP implementation can cost millions of dollars to create, and may take several years to complete.
An ERP system likely represents a company's largest IT investment, so some companies prefer to implement ERP in a more incremental fashion rather than all at once. Some ERP vendors provide modular software units together with a unified interface to allow for this gradual approach.
Regardless of how a company approaches it, ERP is sure to bring significant changes to how a company does business. It tinkers with the workflows, and alters long-standing processes. Companies often meet with resistance on the part of employees who are reluctant to let go of their proven methods. Employees may also fear for their jobs; since ERP makes such radical changes to business processes, it's not unusual for job descriptions to change or be eliminated altogether.
Once implemented however, the ERP system brings tremendous advantages. Because all systems are joined together, all departments can more easily share information. The workflow that takes place between departments can become much more automated, and ultimately, customers are better served because the individual using the customer-facing applications will have access to every bit of information regarding each relevant process. For example, someone in sales would easily be able to log into a single system to determine the status of a customer order that is still in manufacturing. All this comes at a cost though; training costs are high because employees must not only learn how to use new software, they must also learn new processes.
There are many reasons a company undertakes an ERP implementation. The ERP system integrates information, such as order information and financial data. It can speed up the manufacturing process by automating processes and workflow, and as a result, it also reduces the need to carry large inventories. Although the up-front costs may be enough to give the CFO nightmares, in the end, if implemented correctly, the rewards will give the company implementing the system a major competitive edge.
Like any other project, ERP implementation project has also to go through different phases. There are no clear separating lines between these phases and in many cases, one
Phase will start before the previous one is completed. But the logical order is followed. Also, all the phases that are discussed here may not be applicable in all the cases.
The different phases in implementation of an ERP are as follows:
Once the company has decided to go in for the ERP system, the search for the package starts. But there are hundreds of ERP vendors all aiming to have the solution ideal for the...