What is ERP? ‘“ An Introduction
ERP stands for Enterprise Resource Planning and it is an integrated computer-based application that helps integrate information between all business functions. It is usually used by organization to process information systematically between departments. The idea of ERP started out from the MRP, a system used by organizations in manufacturing settings.
In 1990, Gartner group initialized the ERP and at that time, they are developing a system or software to be used beyond the manufacturing arena. Although the idea of developing ERP was inspired by MRP, it does not mean that the system was developed from manufacturing core. ERP is different from MRP in various ways.
ERP has traits that make it different from MRP systems. First, it is an integrated system operating in real time and it means it does not rely on periodic batch updates. Second, it uses a general database that is accessed by all applications or departments within the organization. Third, each module has a consistent design. Lastly, the system can be accessed by person given proper rights even without the intervention from the Information System department.
ERP systems became popular in the 1990s and developers saw its capacity to aid many business activities. Typically, ERP systems deal with many business operations such as, logistics, distribution, shipping, accounting, and even manufacturing. Within the organization, ERP systems can also handle different department’s transactions like sales, marketing, invoicing, inventory management and even human resource management.
ERP systems cover a wide range of applications and processes. It is a complex system typically requires substantial changes on the internal work practices of the staff. Usually, companies or organizations hire external consultants for the reason that the system may be too complex for in-house developers. In implementing the ERP system, three types of services are usually employed.
This is the phase when representatives from an organization give all the details of the transaction process within the company. The consultant evaluates the processes and gives out ideas and introduction on how ERP system could help the organization.
This is the phase of planning and customizing the ERP system to fit within the organization’s needs. As much as possible, ERP system must be able to be designed very well for the smooth integration of the different functions of the each organization’s unit. On the other hand, the organization must also be willing to adapt to the ERP system. This would mean adapting to significant changes on the work practices of the staff.
This service is when the ERP system is put to test or on hands-on. This is when staff or people who are given access rights are being trained. The company hired to develop the ERP system guides and support the organization for problems encountered. Further development and adjustments are being done at this phase.
The length of time that ERP system implementation will take depends on several factors. It depends on how big is the business, how many modules are to be used, changes and modifications and the readiness of the customer in taking the ownership of the system.