Enterprise resource planning is an information project, designed to coordinate all the resources, information, and activities necessary to complete business processes, such as accounting and human resources, in an organization.
ERP supports most systems processes that manage a variety of operational functions such as manufacturing, supply management, finance, projects, human resources, and customer relationship management, all in a single database.
Enterprise resource planning depends on a shared database (called Master Data) with a special software design. The shared database allows work departments to store and retrieve information during the activity period. The software design allows the work management to choose the necessary models, arrange them, link them to supplier models, and add new special models to improve performance. Ideally, data would be integrated between different business processes, but in practice, an ERP system might include a group of scattered applications, each managing separate data stores in a single database.
Enterprise Resource Planning (ERP) is the integrated management of key business processes, often in real time and mediated by software and technology. Enterprise Resource Planning (ERP) is usually referred to as a class of business management software - usually a set of integrated applications - that an organization can use to collect, store, manage, and interpret data from many businesses. ERP systems can be on-premises or cloud-based. Cloud-based applications are growing in recent days because information is easily available from anywhere with internet access
ERP provides an integrated and continuously updated view of the core business processes using the shared databases maintained by the DBMS. ERP systems track business resources—cash, raw materials, production capacity—and the status of business commitments: requisitions, purchase orders, and payroll. The applications that make up the system share data across the various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data. Enterprise Resource Planning (ERP) facilitates the flow of information between all business functions and manages communications with external stakeholders
Enterprise system software is a multibillion dollar industry that produces components that support a variety of business functions. As of 2011, IT investments have become one of the largest categories of capital spending in US-based companies. Although early ERP systems focused on large companies, smaller companies are increasingly using ERP systems. In 2019, the global ERP software market grew by 9%, resulting in a global value of approximately $39 billion in total software revenue.
An Enterprise Resource Planning (ERP) system integrates various organizational systems and facilitates error-free transactions and production, thus enhancing the efficiency of the organization. However, ERP system development is different from traditional system development. ERP systems run on a variety of computers and network configurations, and typically use a database as a repository of information.
The Gartner Group first used the acronym ERP in the 1990s to include capabilities for material requirements planning (MRP), post-manufacturing resource planning (MRP II), as well as computer integrated manufacturing. Without replacing these terms, ERP has come to represent a larger group that reflects the evolution of post-manufacturing application integration.
Not all ERP packages are developed from the core of manufacturing; Differently, ERP vendors have started to bundle their packages with finance, accounting, maintenance, and human resources components. By the mid-1990s, enterprise resource planning (ERP) systems had addressed all core enterprise functions. Governments and non-profit organizations have also started using ERP systems. The “ERP System Selection Methodology” is a formal process for selecting an Enterprise Resource Planning (ERP) system. Current methodologies include:
ERP systems experienced rapid growth in the 1990s. Because of the 2000 issue, many companies took the opportunity to replace their old systems with an Enterprise Resource Planning (ERP) system.
ERP systems initially focused on automating back office functions that did not directly affect customers and the public. Front office functions, such as customer relationship management (CRM), deal directly with customers, or electronic business systems such as e-commerce, e-government, e-communication, e-finance - or supplier relationship management (SRM) became integrated later, when the Internet made communication easier with external parties.
"ERP II" was coined in 2000 in an article by Gartner Publications called ERP Is Dead - Long Live ERP II. Web-based software that provides real-time access to ERP systems describes employees and partners (such as suppliers and customers). The role of ERP II extends the process of optimizing traditional ERP resources and transaction processing. Instead of just managing buying, selling, etc. - ERP II takes advantage of the information in the resources it manages to help the organization collaborate with other organizations. ERP II is more flexible than ERP 1 generation. Rather than limiting the capabilities of an ERP system within an organization, it bypasses company walls to interact with other systems. Enterprise Application Suite is an alternative name for these systems. ERP II systems are typically used to enable collaborative initiatives such as supply chain management (SCM), customer relationship management (CRM), and business intelligence (BI) between business partner organizations through the use of various e-business technologies.
Developers are now making more effort to integrate mobile devices with the ERP system. ERP suppliers are extending ERP to these devices, along with other business applications. The technical bets for modern ERP relate to integration – devices, applications, networks, and supply chains. ERP now covers more functions and roles - including decision making, stakeholder relations, standardization, transparency, globalization, etc.
ERP systems typically have the following characteristics
It works in real time (or close to it).
Shared database supports all applications.
Consistent look and feel across units.
System installation with detailed application/data integration by the IT department, provided that implementation is not done in small steps.
Enterprise Resource Planning (ERP) Term
The origin of the name "enterprise resource planning" is an Arabization of the name of planning in English, Enterprise Resource Planning, which roughly translates literally as "enterprise resource planning". Manufacturing" and provided by Gartner Research & Analysis. ERP systems currently seek to cover all basic functions of any organization regardless of whether it is commercial or not. Non-industrial organizations, non-profit organizations and governments are now all able to use ERP systems.
For a system to be considered an ERP system, a software suite must provide the functionality of at least two systems. For example, a software suite that provides both payroll and accounting functions can technically be considered ERP software, however the term is intended for larger and broader applications.
Offering an ERP system as an alternative to two or more independent applications eliminates the need for previously required internal interfaces between systems, and provides additional benefits from standardization and less maintenance (one system instead of two or more) to better and easier reporting capabilities (since the data is stored in a single database ). Examples of modules in an ERP system that were previously stand-alone applications include: Manufacturing, Supply Chain, Finance, CRM, Human Resources, Warehouse Management, and Decision Support System.
A look at planning solutions
Some organizations, which usually have the technical skill to integrate software products, choose to implement only parts of an ERP system and then develop external interfaces to other ERP systems or other stand-alone systems for their various application needs. For example, the organization can choose to use the human resource management system from one resource, and the use of financial systems from another resource, and then the integration between the same systems is established.
This is common in the retail sector, where the store has separate applications for point of sale products and finance, and then a series of specialized applications to handle business requirements such as warehouse management, employee rosters, merchandise marketing and logistics.
Ideally, resource planning provides a single database of all software designs data, which includes the following:
Engineering, billing of materials, scheduling, capacity, workflow management, quality control, cost management, manufacturing process, manufacturing projects and manufacturing path
supply chain management
Cash Orders, Inventory, Purchasing, Product Shaper, Supply Chain Planning, Supplier Scheduling, Inspection of Goods, Claims, and Commission Calculation
General ledger, cash management, accounts payable, accounts receivable, and fixed assets
Costs, billing, expenses and activity management
Salaries, training, daily preparation, list preparation and benefits
Sales, Marketing, Commissions, Services, Customer Contacts, Call Center and Technical Support