Enterprise resource planning (ERP) system is a business management system that comprises integrated sets of comprehensive software, which can be used, when successfully implemented, to manage and integrate all the business functions within an organisation. These sets usually include a set of mature business applications and tools for financial and cost accounting, sales and distribution, materials management,human resource, production planning and computer integrated manufacturing, supply chain, and customer information. An ERP system can be used as a tool to help improve the performance level of a supply chain network by helping to reduce cycle times. However, it has traditionally been applied in capital-intensive industries such as #manufacturing, #construction, defence and off lately #education.
It is a fact that ERP is for big firms and smaller firms who have to adjust their business model and approach according to the practices and software adopted by the big firms. With the opening up of the economy, small to medium sized enterprises have found the going very difficult. Since they do not have the robustness associated with large companies, SMEs have to tap the power of IT and an integrated information system to stay competitive and customer oriented.
ERP allows companies to integrate various departmental information. It has evolved from a human resource management application to a tool that spans IT #management.For many users, an ERP is a “do it all” system that performs everything from entry of sales orders to customer service. It attempts to integrate the suppliers and customers with the manufacturing environment of the #organisation.
The successful implementation of an ERP system increases competitiveness by increasing quality, reducing redundancy, speeding up processes, reducing lead times and inventory levels and increasing customer satisfaction. It has become increasingly clear that implementing an ERP system requires extensive efforts to transform the organisation’s processes. ERP systems are supposedly based on best practice generic #business processes.