Enterprise resource planning

[Juliawilliams]

Enterprise resource planning (ERP) is an enterprise-wide information system designed to coordinate all the resources, information, and activities needed to complete business processes such as order fulfillment or billing.

An ERP system is based on a common database and a modular software design. The common database can allow every department of a business to store and retrieve information in real-time. The information should be reliable, accessible, and easily shared. The modular software design should mean a business can select the modules they need, mix and match modules from different vendors, and add new modules of their own to improve business performance.

Ideally, the data for the various business functions are integrated. In practice the ERP system may comprise a set of discrete applications, each maintaining a discrete data store within one physical database.

ERP vendors have designed their systems around standard business processes, based upon best business practices. Different vendor's have different types of processes but they are all of a standard, modular nature. Firms that want to implement ERP systems are consequently forced to adapt their organizations to standardized processes as opposed to adapting the ERP package to the existing processes.

Research indicates that the risk of business process mismatch is decreased by:

* linking each current organizational process to the organization's strategy;
* analyzing the effectiveness of each process in light of its current related business capability;
* understanding the automated solutions currently implemented.

[Monalisa]

Good article, Prior to the concept of ERP systems, it was not unusual for each department within an organization - such as human resources, payroll and financial - to have its own customized computer system.

Typical difficulties involved integration of data from potentially different computer manufacturers and systems. For example, the HR computer system (often called HRMS or HRIS) would typically manage employee information while the payroll department would typically calculate and store paycheck information for each employee, and the financial department would typically store financial transactions for the organization. Each system would have to integrate using a predefined set of common data which would be transferred between each computer system. Any deviation from the data format or the integration schedule often resulted in problems.

ERP software combined the data of formerly separate applications. This simplified keeping data in synchronization across the enterprise as well as reducing the complexity of the required computer infrastructure. It also contributed to standardizing and reducing the number of software specialties required within IT departments.

[marc77]

And all this wants to say us ... what ?