What Does ERP Systems Mean?
ERP systems come in many shapes and forms, but basically they are all devoted to the concept of Enterprise Resource Planning or ERP. When we mention ERP, we are talking about the attempt of an ERP applications developer to integrate all information systems and processes within the client organization into one comprehensive and unified ERP application or ERP system. This means that all ERP systems rely on ERP software and hardware, which themselves are composed of many kinds of components, will pursue ultimate ERP integration within that one client organization. A core element of ERP systems is that they rely on a unified database which will keep all pertinent information needed for the different system modules. In their most primitive sense, ERP systems, regardless of how they are made, are supposed to help in planning usage of resources within the client organization. It does not matter what business or organizational activities the client organization is involved in, or what its mission for existing is the point is that all and any functions of the organization will fall under the integration effort to produce one cohesive and unified ERP system. This is why, if we observe how ERP systems are deployed throughout the industries of the world, we see that not only are ERP applications installed in businesses, but they are also widely employed for non-profit organizations and even government agencies as well.
What are the components that are common to all ERP systems? First, the ERP software used should be able to combine the functions of at least two other stand-alone systems within the client organization into a single independent ERP system. It should be remembered that it is not necessary for the entire ERP integration effort to be finished at one blow rather, it is recommended that implementation of an ERP software installation be conducted in gradual steps due to the complexity inherent to ERP applications. The software modules that the ERP system would encompass would be: the Manufacturing Module, which is concerned with Manufacturing Flow, Manufacturing Projects, Manufacturing Process, Cost Management, Quality Control, Workflow Management, Capacity, Scheduling, Bills of Materials, and Engineering; the Supply Chain Management Module which includes Commission Calculation, Claim Processing, Inspection of Goods, Supplier Scheduling, Supply Chain Planning, Product Configurator, Purchasing, Order Entry, and Inventory; the Financials Module including Fixed Assets, Accounts Receivable, Accounts Payable, Cash Management, and General Ledger; the Projects Module with Activity Management, Time and Expense, Billing and Costing; the Human Resources consisting of Benefits, Time and Attendance, Training, Payroll, and Human Resources; the CRM or Customer Relationship Management Module like Call Center support, Customer Contact, Service, Commissions, and Sales and Marketing; and finally, the Data Warehouse Module which is concerned with Employees, Suppliers, and Customers with regards to the self-service interfaces they need. The forebears of ERP systems would be the original concept of Material Requirements Planning or MRP that evolved into Manufacturing Resource Planning. In turn, the latter became ERP when newer forms of software architecture were able to encompass routings, and when the capacity planning process of a client organization were eventually merged into standard software packages. |
