*most of these leads came from this linkedin article by Jox Medalla The Editdor has added some of His own.
ERP, or Enterprise Resource Planning is an integrated computer system designed to manage all the existing resources inside a company including but not limited to financial resources, human resources, inventory and assets, etc. Usually an ERP system uses a centralized database, but recently, with the increased popularity of cloud services, the systems tend to become distributed.
Introduction:
As companies increased in size, and started to manipulate an increase number of entities (human, financial, inventory) it was obvious that a system was needed in place to manage them. Beside management, a complex decisional system was also needed that would manage various administrative workflows that are part of day to day operations.
Design:
ERP Providers usually implement standard business processes based on best operating practices. Depending on the company size, the company itself has to adhere to the business processes already modeled in the existing ERP packages, or, in the case of big corporations, it is usually the other way around, with new ERP packages build from scratch or adapted to adhere to the business processes already in use.
The main components that are part of a standard ERP package are:
- Customer Relationship Management (CRM)
- Human Resources Management
- Project Management
- Finance and Accounting
- Manufacturing Production, Service and Delivery management
- Supply Chain and Vendor Management
- Warehouse and Inventory Management
Not all the possible modules are listed here and no ERP deployment is the same. A company does not necessarily needs Manufacturing Management Module, if it is in the Service business, etc.
Pros:
- Unified system tracking various corporate entities from creation to consumption (ex. order tracking from acceptance through fulfillment, product manufacturing from design to shipment, project management from definition to completion and release or ever human resource from hiring campaign through hiring, promotion/demotion and termination)
- data centralization – eliminates redundancies and facilitate backup and data mining procedures
- structured data shaping, access and visualization – allow data access based on roles and offers views limited by scope
- optimizes inventory by providing sales analysis
- optimizes marketing campaigns by tracking customers and sales
Cons:
- Cost – ERP packages tend to be expensive and, due to the inherent complexity of both the software itself and the multitude of existing business processes already existent in a company, the time to deployment can take years
- When a company replaces its internal process with the ones modeled by the ERP package, it may result in a loss of performance
- additional time is needed to familiarize all employee with the new system and the end results might not be optimal
- insufficient initial funding might result in transition failure