ERP or Enterprise Resource Planning is a suite of integrated business applications that is most often used by companies to collect, store , manage and interpret data from various business activities. ERP uses a common or centralized database to store and process information. ERP Software comprised of many business processes like Accounting, Manufacturing, Production, Sales, Marketing, and Procurement etc.
Why ERP Software
Regardless of the size or nature of the business, every business organization has a common problem of managing data. Data or information plays a crucial role in the organization as it is the primary source of decision making. In order to stay ahead in the competition, organizations need a dependable system that can stores data in one place and allows access from anywhere within an organization. ERP systems remove duplicate data and provide integrity.
History of ERP Software
ERP was originally evolved from MRP. MRP stands for both Manufacturing Resource Planning (MRPll) and Material Requirement Planning (MRP). MRP was created way back in 1960 to improve the decision-making process in manufacturing companies. Initially, in 1990, Gartner had started advocating to use the system in other business lines to improve efficiency and thus the ERP System was born.
Benefits of ERP Software
- ERP can enhance efficiency of the business by running internal business process smoothly.
- ERP Systems help senior management in decision making by giving useful insight.
- It offers enhanced security for company data.
- ERP systems increase opportunity for collaboration.
- Reduces management and operational costs.
- ERP Systems increase productivity in the organizations.
- Information can be accessed from anywhere on the desktop as well as mobile devices.
- Can automate and streamline difficult and redundant tasks.
- It gives effective, powerful and real-time reporting system.
Types of ERP Software
Traditional ERP Software: Traditional ERP systems refers to the system that is installed on-premises. Such ERP System uses its own server and other hardware infrastructure. This type of systems gives more autonomy but is expensive as compared to web based ERP.
Cloud based ERP Software: Cloud based or web based ERP Software is installed on centralised server and are distributed over internet. This type of ERP System is available to end user on monthly subscription or pay-as-you-go models.
Modules of ERP Software
There are many vendors available in the market who offers their ERP Systems to lure the customers. Modules are basically depends on the business niche. Like school might have different types of modules as compared to an engineering company. Though all ERP has some basic modules like listed below:
- Supply Chain Management (SCM)
- Sales & Marketing
- Finance & Accounting
- Production and Services
- Human Resource
- Customer Relationship Management (CRM)
- How to choose ERP
In this article, I have tried to cover every aspects of ERP in brief to help you understand easily. If you have something to say on topic, please comment below your opinion. You can alternatively visit Software Streets to find bets ERP Software available for small and medium enterprise.