Enterprise Resource Planning in this Era

P. Kiran
Institute of Management in Kerala

Enterprise applications have been talked of for quite some time now, but still remain an enigma for many. The term ERP is back in the reckoning and is fast descending on to Indian medium and small organizations

ERP is a software solution that takes the process view of an enterprise to meet the organizations goals while integrating and interlinking the various functional areas of the business. It performs the role of an enterprise-wide information system that tracks all business transactions, internal or external and is considered as the transaction backbone of the business.

ERP software's such as SAP, People Soft or JD Edwards helps to follow the best business process for the particular organization because it is highly configurable. Designing the business process is a separate exercise but is the starting point of an ERP implementation and is typically handled by process consultants.

ERP software comes in the form of various modules technical and function-specific modules in areas of

* Material requirement planning
* Bill of materials
* Master scheduling
* Shop floor control
* Accounts payable/receivable
* Distribution
* Financials

ERP software integrates the relational database, the base ERP module, the various functional modules opted for, other organizational applications, tools and interfaces between the applications and the database so that the business process designed is satisfied. The design is done from an "events based" philosophy i.e. if such-such actions happens such-such is the action that has to succeed.

ERP helps in tackling day to day business problems like

* Excess of inventory
* Shortage of inventory
* Gap between planned output and realized output
* Unutilized cash beyond certain limit
* Potential working capital crunch

ERP provides benefits to the whole of the enterprise rather than a part of it assuming it is applied across all the sites and functions of the organization.

The entire enterprise gets aligned to handling processes in the same manner and the performance of the business gets reported from one place.


There are two choices that companies could make here is to:

* Build an ERP in house
* Go for a packaged product

Benefits are more for latter one as it consist most of the business logic culled from successful organizations already built in, quality of documentation, standardization on technology, room for growth, adding more functionality, availability of other talents etc. Globally ERP vendors are adding additional functionality and capability to their products in the areas of SCM, CRM, data mining, business intelligence, e-business enabling, enterprise portal and some industry specific templates. Newer generation ERP that enables collaborative commerce is called ERPII.

Promoting factors

* Enable improved business performance.
* Supports business growth requirements
* Provides flexible, integrated real time decision support.
* Eliminates limitations in legacy processing
* Advantage of the untapped medium size organizations.

SCM and CRM are two types of extended-enterprise applications, which is also ripe for adoption in the industries, so in this technical era to be a step ahead with the competitors, it is essential to adopt new ERP techniques.

P. Kiran
Institute of Management in Kerala

Source : E-mail March 21, 2005



Important Note :
Site Best Viewed in Internet
Explorer in 1024x768 pixels
Browser text size: Medium