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Enterprise Resource Planning Essay

2384 words - 10 pages

Enterprise resource planning
DEFINATION
Enterprise resource planning (ERP) systems integrate internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application. The purpose of ERP is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders.[1]
Enterprise Resource Planning systems (ERPs) integrate all data and processes of an organization into a unified system. A typical ERP system will use multiple ...view middle of the document...

[8]
ERP systems initially focused on automating back office functions that did not directly affect customers and the general public. Front office functions such as customer relationship management (CRM) dealt directly with customers, or e–business systems such as e–commerce, e–government, e–telecom, and e–finance, or supplier relationship management (SRM) became integrated later, when the Internet simplified communicating with external parties.[citation needed]
"ERP II" was coined in the early 2000s. It describes web–based software that allows both employees and partners (such as suppliers and customers) real–time access to the systems. The role of ERP II expands from the resource optimization and transaction processing of traditional ERP to leveraging the information involving those resources in the enterprise’s efforts to collaborate with other enterprises, not just to conduct e-commerce buying and selling.[9] Compared to the first generation ERP, ERP II is said to be more flexible rather than confining the capabilities of the ERP system within the organization, it is designed to go beyond the corporate walls and interact with other systems. "Enterprise application suite" is an alternate name for such systems.
Characteristics of ERP
ERP (Enterprise Resource Planning) systems typically include the following characteristics:
• An integrated system that operates in real time (or next to real time), without relying on periodic updates
• A common database, which supports all applications.
• A consistent look and feel throughout each module.
• Installation of the system without elaborate application/data integration by the Information Technology (IT) department.
WHY ERP? :
• Complete integration of systems across the departments in a company as well as across the enterprise as a whole.
• Only solution for better project management.
• Better customer service.
• Automatic introduction of latest technologies.
• Expertise database.
Functional Areas of ERP
The following are common functional areas covered in an ERP System. In many ERP Systems these are called and grouped together as ERP Modules:
1.Financial Accounting
General Ledger, Fixed Asset, Payables, Receivables,Cash Management, Financial Consolidation
2.Management Accounting
Budgeting, Costing, Cost Management, Activity Based Costing
3.Human Resources
Recruiting, Training, Payroll, Benefits, 401K, Diversity Management, Retirement, Separation
4.Manufacturing
Engineering, Bill of Materials, Work Orders, Scheduling, Capacity, Workflow Management, Quality Control, Manufacturing Process, Manufacturing Projects, Manufacturing Flow, Product Life Cycle Management
5.Supply Chain Management
Supply Chain Planning, Supplier Scheduling, Order to Cash, Purchasing, Inventory, Product Configurator, Claim Processing
6.Project Management
Project Planning, Resource Planning, Project Costing, Work Break Down Structure, Billing, Time and Expense, Performance Units, Activity...

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