ERP – Working and Importance

Enterprise resource planning – erp/ ERP has provided  one of the most important technological advancement in Information technology – IT applications for an overall development of any organization weather small – midsized of big organization.

Today in the dynamic economic scenario and cut throat competitive marketing, organizations are quickly implementing erp solutions to streamline all the different functions in one tool. The main objective of any erp software is to integrate all your business processes and functionalities including the sales, purchase, inventory, accounting, operations etc into one common software for all these departments for easy access and information. ERP synchronize all the data from different department and helps you in quick decision making and improved productivity. An ERP system also helps you in providing business organization to have a check on correct path thereby enhancing the work performance and better delivery.

As we go back in the technology we can see that there were tools which used to provide technology a new face such as accounting software, software specifically designs for a single purpose such as Human resource systems etc. But ERP introduction have changed the era of IT as it provides you with a single tool to manage all your business activities. ERP software and applications have done a lot of improvement in the business performance through proper control, organizing, planning, monitoring, tracking etc, ERP tools have integrated all the business processes such as managing human resource management, Finance management, accounting, crm, purchases, manufacturing Bill of materials, inventory or warehouse management etc These are some of the basic features of any erp package. Furthermore there are ERP solutions available which can be customized as per the needs and requirements of the business.

How ERP works:

The designing of an ERP system is based on service-oriented architecture which constitutes of different software module and hardware. The Communication between these modules is carried out through a LAN (Local area network). Other important components of running an ERP system include Business processes and the users. These components are very important for a successful erp application running to stream line all the business processes. The user is considered as most important component of an erp system as they are the only one who would be using the erp system to achieve their targets. Hence the user training should be very well acquainted for an effective software implementation.

Failure of one or other component of an erp may lead for a failure of whole system which might cause financial loss to an organization.