ERP or Enterprise Resource Planning is a complete business management tool which is used to collect and manage all the business activities like, planning, marketing, sales, inventory etc. It allows an organization to use integrated applications or modules to manage and automate business functions related to services, technology etc. ERP systems are built to keep track of all business resources like stock of raw material, current production details and capacity; apart from that it also take care of business documents like purchase order, payroll, invoices etc. All the data which is stored or updated in ERP is shared with the various departments which are directly or indirectly gets affected due to any change in the information like change in raw material stock, available stock etc.
ERP software is made or consists of various modules like material, purchase; stores etc. and these modules can be purchased in a suite or individually depending upon the business requirement and financial feasibility of the business. Each Module focuses on business process or operation like Material Management, or product marketing & sales. Some of the more common and widely used ERP modules include those for product planning, material purchasing, inventory control, distribution, accounting, marketing, finance and HR.
Apart from managing various business processes, using ERP have the following benefits:
- Centralized system for everyone in the organization for all the product and services related information – such as information related to suppliers, vendors, customer orders and the products themselves.
- Due to the centralized nature of ERP systems, organizations can track inventory levels on a daily basis, including inventory in transit and future consignments to be received. This visibility can enable organizations to control their working capital requirements to a great degree.
- ERP provides a better control over product and service delivery, financial compliance declaration and many more other details and reports.
- ERP reduces the operating cost as it avoids the duplication of information without affecting the business process, providing more accurate data when required, lower production cost and it increases margins.
- Effectively managing projects holistically fosters decision making at critical levels in the development and/or manufacturing process
Future of ERP
Many organizations are now moving from traditional ERP to Cloud ERP. A recent Gartner survey found that 47% of respondents will be moving their ERP to the Cloud in the next 5 years with 26% moving in the next 3 years. According to WhatIs.com, Cloud ERP is an approach to enterprise resource planning (ERP) that makes use of cloud computing platforms and services to provide a business with more flexible business process transformation.
Moving from traditional ERP system to Cloud has many advantages like increase in productivity as the information will be available round the clock to anyone who have access to it, the cost of managing the infrastructure will reduces, better return on investment. If you are planning to go for Cloud ERP you can check Autodesk PLM 360 (for Product Life Cycle Management), Acumatica (Distribution and accounting), Netsuite, Plex Systems etc. Just make sure to understand what you need, what is your requirement and select the vendor accordingly otherwise you will end up paying for the modules you dont need.