When establishing a new company or even while already being part of one, management is key. Keeping track of everything happening around you is extremely important for several reasons and having a system is always a great idea to not only make your job a hundred times easier but also it is a key factor for keeping the company up and running at all costs. As a matter of fact, not having a proper system and/or management, has caused organizations to permanently close their doors in the past.
To not allow this to happen to your company, enterprise resource planning (ERP) comes along. In this article, we will be covering anything and everything about ERP systems that you need to know.
Source: Youtube - Oracle channel
(ERP) is a process that businesses use to supervise and coordinate the critical aspects of their operations. Many ERP software applications are important to businesses because they help them implement resource planning by coordinating all of the processes required to manage their businesses with a single framework. In addition to these, an ERP software framework can integrate:
· planning
• purchasing
• sales
• marketing
• Finance
• HR, and much more.
But what are the key aspects of ERP and what is the benefit of this process in the long run? Well, first thing to note here is the fact that ERP software can integrate all of the processes needed to run your company. Previously, ERP solutions were mostly conventional software models with physical client servers, but today, most of of ERP solutions are cloud-based software with web-based remote access.
Some advantages of ERP are:
· Open communication between business units;
· A single source of information
· real-time data reporting
However, ERP systems can also be ineffective if not implemented carefully, so caution and strategic thinking are very important when trying to avoid them.
UNDERSTANDING THE ERP PLANNING
ERP system can the glue that holds a large organization's various computer systems together. Divisions would have optimized their systems for specific tasks in the absence of ERP applications. Each division in ERP software has its own system, but all systems are accessible through a single application with a single interface.
ERP applications also assist businesses in developing identity by connecting data from finance, Sales, production, and HR. ERP applications connect divergent technologies used throughout an organization, limiting costly duplication and incompatibility.
BENEFITS OF ERP
Enterprise resource planning (ERP) is used by various businesses for a variety of reasons. It is intended to help your company grow, cut costs, or simply improve operations. Different companies seek and realize different benefits, but there are a few that are worth mentioning.
Business process integration and automation
This eliminates redundancy while also improving accuracy and productivity.
Reporting real-time data from a single source system
Some businesses benefit from improved real-time data reporting from a single source system.
Access the information you need in seconds
ERP provides businesses with quick access to the information their customers, suppliers, and business partners require, thereby improving customer and employee satisfaction.
Better collaboration opportunities and greater synergies
ERP enables more effective collaboration and knowledge exchange between company departments
THE BALL GOT ROLLING BACK IN 60’S
It all started in the 1960s with the birth of cloud computing. As the demand for factory production increased, so did the requirements for product management. This is why software for material requirements planning (MRP) was developed.
The whole process of having to stock only what is needed has allowed companies to invest and make better use of their resources. In fact, by 1975 almost all companies were using MRP software to run their manufacturing processes, but the cost of running it was affordable only for large companies, and the demise of the system Connected.
However, ERP systems reached another important milestone in his 1980s with the advent of the MRP II software. It was a more advanced and sophisticated solution than its "ancestor". It went far beyond stocking and sourcing raw materials to support the entire manufacturing process. Equipped with more advanced production planning skills, they were able to coordinate better with different departments of the company.
Development continued and in the 1990s he released more advanced and extended versions of MRP & MRP II. People called it Enterprise Resource Planning (ERP) and the functions of this system included CRM, HRM, project management, accounting and engineering.
ERP software appeared to have evolved significantly in the early 2000s in the software development department. The entire solution was then delivered over the internet, but it could still be integrated with a variety of software designed primarily for business use from a single platform.
Today's ERP solutions are mostly cloud-based. His ERP system, which employs software as a solution model, is also used by the company (SaaS). The use of mobile applications is growing. As a result, most ERP solutions are mobile-friendly and can be accessed from anywhere with internet access.
EVOLUTION THAT HAS COME TO FAR
ERP systems have come a long way over the years (from the 1960s to the twenty-first century), not to mention a revolution that has brought simplicity and convenience to managing almost any type of business process.
But it raises questions about what areas of the company they have developed and improved, and how. Over the past 60 years or so, ERP systems have evolved in the following ways:
• Supply chain management and inventory management
• Planning for Material Requirements (PMR)
• Planning Material Requirements II (PMRII)
• Enterprise Resource Planning (ERP)
• Advanced ERP
Source: Fedex - https://healthpayeintelligence.com/news/bluecross-blueshield-strikes-deal-to-improve-health-data-exchange.
EXAMPLES: SHOWCASING ERP IN THE “LIVE MODE”
This is no mystery that Internet or cloud-based applications are on the climb as a result of the Internet of Things' explosion (IoT). As a result, an increasing number of businesses are abandoning on-premises ERP systems in favor of more agile cloud-based ERP systems managed and maintained by the host or vendor. For example, Oracle, a well-known name in the technology industry, provides several cloud-based ERP products that are used by many household names such as FedEx and Blue Cross Blue Shield
THE BOTTOM LINE
Enterprise resource planning assists businesses in better resource planning and allocation. Without an ERP, businesses tend to operate in silos, with each division running its system.
An ERP system promotes open communication and knowledge sharing within an organization, as well as system integration to improve productivity and efficiency and greater cohesiveness between teams and divisions. However, if the corporate culture cannot adapt to the change and the company is unsure whether the organizational structure can sustain it, switching to an ERP system is counterproductive.
References
Bizowie. “A Different Kind of Enterprise Software Company.”
Harvard Business Review. “How Cloud Computing Is Changing Management.”
Microsoft. “Annual Report 2021.”
Microsoft. “Mondelēz International Moves to Microsoft Azure for Great SAP Performance and AI Innovation.”
Oracle. “Oracle for SAP Technology Update,” Page 42.
Oracle NetSuite. “Fulton & Roark.”
Oracle NetSuite. “3 Successful ERP Implementation Case Studies.”
SAP. “How Does Support From a Dedicated Engagement Team Accelerate Digital Transformation?,” Page 3.
Oracle. “FedEx Uses Oracle Cloud to Boost Back-Office Efficiency.”
Oracle. “6 Finance Teams Drive Digital Success with Cloud Technologies
Workwise. “About Us.”
Website - https://wperp.com/89774/history-and-evolution-of-erp-systems/
Website - https://www.investopedia.com/terms/e/erp.asp#citation-6
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