Dear All,,
ERP (Enterprise Resource Planning) is a concept and SAP is a ERP tool (software), however SAP has become synonymous to ERP because it has been widely used in around 26 industry verticals and enjoys a market share of 60% across the globe.
The other ERP's in market are BAAN, JDEdwards, ORACLE ERP, MFG PRO, Microsoft Business Solutions (Navision and Axapta), RAMCO which are very familiar, however even Tally has also ERP functionalities in it.
ERP is such concept where the information flow from one function to another is integrated very tightly and each of this ERP products have their own uniqueness, and SAP scores over other ERP because of its evolution, and as a matter of fact SAP was the first company to design this ERP tool which linked the various functions of a organisation.
Let us take the case of Salary Processing
Case-1 - Without any ERP or any software (manual processing):
You calculate attendance based on the Register, arrive at no of days present and absent, manually reconcile leave and finally once the days payable are calculated you will arrive at what is the persons agreed salary, note down that, send the salary calculation sheet to accounts department, based on your sheet, the accounts with either prepare cheque or cash and handover the same to every employee with obtaining signature on the voucher
CASE-2 - With ERP Software
Imagine the attendance is taken through the access card machine / swipe card, or some sort of excel sheet - this data will flow to ERP for calculation for salary eligibility (how much to pay) and you also can cross cheque or allow system to process the salary slip and statement, Salary Slip automatically gets mailed to every employee, and the salary statement goes to the accounts department, which will have details like Employee Code, Name, Designation, Dept. and Salary payable and more important the BANK Account number, the accounts dept. based on the salary statement will send the intimation to the bank with a single cheque authorising to debit company account and credit the employee with his salary and all the relevant account entries are passed in the ERP software such as Basic, PF, etc which will be accounted in respective general ledgers as Expenses, Liability etc. - ALL THIS DONE WITHIN FEW HOURS or FEW DAYS
This is the fun of ERP!!!
Dont get lost between ERP and SAP, however as told earlier, SAP enjoys monopoly because of the standard business sets (configurations) which can be straightly used by organisation without re-inventing the wheel.
Hope this was useful.
CAclubindia
