Enterprise Resource Planning Overview

ERP (Enterprise Resource Planning) Overview coversWhy is it Necessary?
What isBy becoming the integrated information solution
ERP, Brief history of ERP, Why is it necessary,across theentire organization, ERP systems allow
Marketcompanies to betterunderstand their business. With
Leaders and the future of ERP.ERP software, companies canstandardize business
What is ERP?processes and more easily enact bestpractices. By
Enterprise Resource Planning or ERP is an industrycreating more efficient processes, companiescan
term forintegrated, multi-module application softwareconcentrate their efforts on serving their customers
packages thatare designed to serve and supportandmaximizing profit.
multiple businessfunctions. An ERP system can includeMarket Leaders
software formanufacturing, order entry, accountsThe top five ERP vendors, SAP, Oracle Corporation,
receivable and payable,general ledger, purchasing,Peoplesoft, Inc. (now Oracle Corp.), JD Edwards
warehousing, transportation andhuman resources.& Company,and Baan International, account for
Evolving out of the manufacturing industry,64 percent of total ERPmarket revenue. These
ERP implies the use of packaged software rathervendors continue to play a major rolein shaping the
thanproprietary software written by or for onelandscape of new target markets, withexpanded
customer. ERPmodules may be able to interface withproduct functionality, and higher penetrationrates.
an organization's ownsoftware with varying degreesSAP dominates the $6.7 billion ERP applicationsmarket
of effort, and, depending onthe software, ERPin Europe with 39% market share. Oracle and
modules may be alterable via the vendor'sproprietaryPeopleSoft come second and third respectively,
tools as well as proprietary or standardprogrammingfollowed by
languages.SAGE Group and Microsoft Business Solutions.
Brief History of ERPThe Future of ERP
The focus of manufacturing systems in the 1960'sIndustry analysts expect that every major
was onmanufacturingcompany will buy the software, which
Inventory control. Most of the software packagesranges in cost -- withmaintenance and training -- from
thenhundreds of thousands ofdollars for a small company
(usually customized) were designed to handleto millions for a large company.
inventory basedon traditional inventory concepts. InAMR Research of Boston says consolidation among
the 1970's the focusshifted to MRP (Materialthe majorplayers will continue and intensify. ERP
Requirement Planning) systems thattranslated thevendors areexpected to put more effort into
Master Schedule built for the end itemse-commerce, CRM and SCMinitiatives, with leaders
intotime-phased net requirements for theredirecting between 50% and 75% oftheir R&D
sub-assemblies,components and raw materialsbudget to these projects.
planning and procurement.According to Gartner research group, the rapid
In the 1980's the concept of MRP-II (Manufacturingevolution of
ResourcesERP has already lead to a new corporate must-have,
Planning) evolved which was an extension of MRP toERP II,which is supposed to help businesses gain
shopfloor and Distribution management activities. Inmore competitiveedge in the future. The major
the earlydifference is that ERP IIinvolves collaborative
1990's, MRP-II was further extended to cover areascommerce, which enables businesspartners from
likemultiple companies to exchange informationposted on
Engineering, Finance, Human Resources, ProjectseCommerce exchanges.
Managementetc i.e. the complete gamut of activitiesIn the next tutorial we will talk about popular ERP
within anybusiness enterprise. Hence, the term ERPProductsand the Modules and Application related to
(Enterprisethem.
Resource Planning) was coined.