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Enterprise Resource Planning (ERP)

Enterprise Resource Planning (ERP)


An enterprise is a group of people with a common goal, which has certain resources at its disposal to achieve this goal. The enterprise acts as a single entity. This view of a company or organization is drastically different from the traditional approach where the organization is divided into different units based on the functions they perform. So we have a manufacturing or production department, production planning department, finance department, purchasing department, sales and distribution department, R&D department and so on. These departments are compartmentalized and have their own goals and objectives, which from their point of view is in line with the organization’s objectives.

These departments function in isolation and have their systems of data collection and analysis. So the information that is created or generated by the various departments, in most cases are available only to the top management and not to other departments. The result is that instead of taking the organization towards the common goal the various departments tends to pull it in different directions since one department does not know what the order does.
Enterprise Resource Planning An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. ERP modules may be able to interface with an organization’s own software with varying degrees of effort, and, depending on the software, ERP modules may be alterable via the vendor’s proprietary tools as well as proprietary or standard programming languages.

An ERP system can include software for manufacturing, order entry, accounts receivable and payable, general ledger, purchasing, warehousing, transportation and human resources. The major ERP vendors are SAP, Oracle (PeopleSoft and J.D. Edwards), SSA Global (Baan) and Microsoft. Lawson Software specializes in back-end processing that integrates with another vendor’s manufacturing system. See CRM, SAP, PeopleSoft, J.D. Edwards, Baan, Microsoft Dynamics, sales force automation, supply chain management and NRP.

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