What is ERP

ERP, which is an abbreviation for Enterprise Resource Planning, is principally an integration of business management practices and modern technology. Information Technology (IT) integrates with the core business processes of a corporate house to streamline and accomplish specific business objectives. Consequently, ERP is an amalgamation of three most important components; Business Management Practices, Information Technology and Specific Business Objectives. 

ERP Stands for Enterprise Resource Planning 

 It allows you to track and manage all your internal and external resources. These include your business assets, materials, cash deposits and people. Using an ERP system helps you to understand how your resources are working within the business. With an ERP system you can control your supply chain, maximize the use of supplies through a manufacturing process, keep track of projects and manage your workforce.

The use of an ERP system will therefore help you to maximize revenues, minimize costs, streamline processes and help your business to run more smoothly. 

Integration is Key to ERP Systems

Integration is an exceptionally significant ingredient to ERP systems. The integration between business processes helps develop communication and information distribution, leading to remarkable increase in productivity, speed and performance. 

The key objective of an ERP system is to integrate information and processes from all functional divisions of an organization and merge it for effortless access and structured workflow. The integration is typically accomplished by constructing a single database repository that communicates with multiple software applications providing different divisions of an organization with various business statistics and information. 

Although the perfect configuration would be a single ERP system for an entire organization, but many larger organizations usually deploy a single functional system and slowly interface it with other functional divisions. This type of deployment can really be time-consuming and expensive.

Implementation of an ERP System

Implementing an ERP system in an organization is an extremely complex process. It takes lot of systematic planning, expert consultation and well structured approach. Due to its extensive scope it may even take years to implement in a large organization. Implementing an ERP system will eventually necessitate significant changes on staff and work processes. While it may seem practical for an in-house IT administration to head the project, it is commonly advised that special ERP implementation experts be consulted, since they are specially trained in deploying these kinds of systems.

The ERP implementation process goes through five major stages which are Structured Planning, Process Assessment, Data Compilation & Cleanup, Education & Testing and Usage & Evaluation.

1. Structured Planning: is the foremost and the most crucial stage where an capable project team is selected, present business processes are studied, information flow within and outside the organization is scrutinized, vital objectives are set and a comprehensive implementation plan is formulated.
2. Process Assessment: is the next important stage where the prospective software capabilities are examined, manual business processes are recognized and standard working procedures are constructed.
3. Data Compilation & Cleanup: helps in identifying data which is to be converted and the new information that would be needed. The compiled data is then analyzed for accuracy and completeness, throwing away the worthless/unwanted information.
4. Education & Testing: aids in proofing the system and educating the users with ERP mechanisms. The complete database is tested and verified by the project team using multiple testing methods and processes. A broad in-house training is held where all the concerned users are oriented with the functioning of the new ERP system.
5. Usage & Evaluation: is the final and an ongoing stage for the ERP. The lately implemented ERP is deployed live within the organization and is regularly checked by the project team for any flaw or error detection.