ERP means entrepreneur resource planning system is a business system which helps in integrating the business functions of various areas like logistics, production, finance, accounting and human resource by using the best business practices.
Example:- Amul is a big producer of dairy products. If it doesn’t get the information that what are the consumer's demands on what time, then it won’t be able to produce new products like amul Lassi, Amul cool and much more. It's all became possible due to best business practice opt by the Amul enterprise.
Evaluation of ERP:-
Need for reduction in cost, advancement of technology, changing dynamics of decision-making, customer oriented products, timely availability of information gave birth to ERP evaluation. ERP evolved over a period of time with constant improvements in the tactics and technology.
ERP has evolved over a period with the various improvements in the information systems namely as:-
1. TPS (Transaction Processing system)
2. MIS (Management Information system)
3. IIS (Integrated Information system)
4. EWS (Enterprise wide system)
5. MRP (Material resource planning)
6. MRP II
Where the other information system except MRP II offers commercial business task integrated information system. MRP II offers the integration of the above process with LAN and WAN as well. MRP II helps in providing what if questions, MRP reports, purchasing order releases and more.
ERP Vendors in the market:-
There are many ERP vendors in the market such as BAAN, BPCS, ORACLE, SAP etc.
Features of ERP:-
Flexibility:- Due to dynamic environment ERP has evolved. For example if we need to have a change in the tally, that can be done by an administrator but ERP is far more flexible than ERP.
Best business practices:- ERP uses the best business practices. For example in old day cash withdrawal process was done by 2-3 persons. And it takes too much time as well. But now such process is done with ease with the introduction of ATM.
Open/Modular:- ERP system is available in modular forms which makes it more useful. An enterprise can define what modules are needed for the organization. For example where manufacturing company needs a production module, such module may not be needed by a financial organization such as Banks.
Comprehensive:- ERP supports various kinds of organization functions and systems. It also offers online and offline support system.
ERP or No ERP:-
ERP or No ERP is the big question for every organization. This question can be answered by assessing the critical success factor of the organization. For example an organization which is a very small firm may not need ERP whereas for a big organization it will be an essential element.
After assessing the need of ERP in the organization, it’s time to define whether the organization should follow the software’s process or should make its own procedure to follow the functions. Normally some processes are adopted from the software as in form but some are adopted with some changes.
In-house or outsource
For in-house implementation organization needs the internal expertise of employees which means recruiting a special staff for it and adds to additional cost. So organizations normally rely upon outsourcing due to low cost and expertise.
Big Bang or phased implementation
Afterwards now organization decides whether all modules should be implemented at the same time or one by one. In this stage organization match the business process with ERP process. And after gap analysis between the business process and ERP process customization of process is made to suit the organization needs.
Successful implementation of ERP depends not just upon the real expectations and analyzing of key performance indicators but also needs constant strive for improvement.