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ERP Enterprise Resource Planning

Date Added: April 18, 2012 09:43:14 AM
Author: aalok
Category: Computers & Internet: Software

Enterprise Resource Planning ( ERP) What is an ERP System – definitions Simplistic Definition ERP - Enterprise Resource Planning Detailed Definition “a business strategy and set of industry-domain-specific applications that build customer and shareholder communities value network system by enabling and optimizing enterprise and inter-enterprise collaborative operational and financial processes” Historical system architectures Historically, companies created “islands of automation”. A hodge-podge of various systems that operated or managed various divergent business processes. Sometimes these systems were integrated with each other and sometimes they weren’t. Sometimes they were loosely interfaced and sometimes they were more tightly interfaced. What is an ERP – Key Characteristics Integration Seamless integration of all the information flowing through a company – financial and accounting, human resource information, supply chain information, and customer information. Packages Enterprise systems are not developed in-house 1.Mapping organizational requirements to the processes and terminology employed by the vendor and 2.Making informed choices about the parameter setting. •Organizations that purchase enterprise systems enter into long-term relationships with vendors. Organizations no longer control their own destiny. Best Practices •ERP vendors talk to many different businesses within a given industry as well as academics to determine the best and most efficient way of accounting for various transactions and managing different processes. The result is claimed to be “industry best practices”. The general consensus is that business process change adds considerably to the expense and risk of an enterprise systems implementation. Some organizations rebel against the inflexibility of these imposed business practices Some Assembly Required Only the software is integrated, not the computing platform on which it runs. Most companies have great difficulty integrating their enterprise software with a package of hardware, operating systems, database management systems software, and telecommunications suited to their specific needs. 1 Interfaces to legacy systems 2 Third-party bolt-on applications 3 Best of Breed Strategy Benefits of ERP • One common system • Less duplication • More efficient • Customer focus- better customer services • Open communications among business partner • Good reporting capabilities • Support for multiple currencies & languages Conclusion: •ERP systems provide a mechanism for implementing systems where a highdegree of integration between applications is required. •The Business Case or Value Proposition for implementation must be outlined. •To successfully implement a proper mix of people, processes and technology should be maintained.