ERP orEnterprise Resource Planning is a class of software solutions that empowerscompanies to consolidate internal and external data and to manage essentialbusiness processes. It is a recognized suite of software tools and processesthat when used together, streamlines corporate systems, focusing employee timeand company's earning where it can generate the best return.

An ERP isdefined as a "method for the effective planning and controlling of all the resourcesrequired to take, make ship and account for custom orders in making,distributing or service company."

The ERPsystems consist of software components called modules, each module focus on animportant business function. ERP is as indispensable as the electricity thatkeeps the light on.

What is ERP?

Enterpriseresource planning refers to a type of software that organizations use to managetheir business activities like project management, risk management, accounting,procurement, supply chain operation, and compliance. When it comes to completeERP suites, it covers enterprise performance management, software that helpsplan, budget, predicts, and reports of an organization's financial results.

ERP systemstie together a lot of business processes and allow the flow of data betweenthem. It eliminates data duplication and provides data integrity with a singlesource of trust by collecting the shared transactional data of an organizationfrom multiple sources. In this modern age, the ERP system is vital to managethousands of businesses of all sizes and in all industries.

The History of ERP

The conceptof ERP was coined in the year 1990 by Gartner, but its roots date to the 1960s.Back then, the concept applied to inventory management and control in the manufacturingsector. It was created by software engineers to monitor investor, reconcilebalances and report on status. By the 1970s, it had evolved into a MaterialRequirements Planning system that was used to schedule production processes.

In the year1980, MRP developed to encompass more manufacturing processes, prompting manyto call it MRP- II or Manufacturing Resource Planning. By 1990, these systemsexpanded beyond inventory control and other operational processes to otherback-office functions such as accounting and human resources, setting the stagefor ERP that we know.

In the late1990s, cloud ERP arrived which was the next fundamental shift in how ERP wasdelivered and consumed. Cloud computing made it feasible for companies toconnect their ERP system to customers, suppliers as well as partners. It alsocreated web browsers the standard UI for most new ERP systems.

Major Features of ERP Systems

Here are thefour ERO concepts that differentiate it from most other types of businessapplications:

  • Comprehensiveintegrated business processes
  • Modularity
  • Centraldatabase
  • Consistentlook and feel in the application

Most of theERP software solutions handle some important and core business processes eitherin dedicated modules or in the sub-function of other modules, which are commonto all types of business. The ERP finance module is the single one, which is inevery ERP product, as every company requires the ability to process financialtransactions and account for them.

Here are theother commonly used cores ERP modules are as follows:

  • HumanCapital Management
  • OrderManagement
  • SalesManagement or CRM
  • Purchasingor Procurement

Companiesinvolved in manufacturing or distributing products require additional moduleswith specialized capabilities. Some common modules include:



ManufacturingManagement or Production Management

Supply ChainManagement: Complex process for demand planning and logistics coveringtransportation management systems and warehouse management systems.

Some companiesstill add another layer of muddles that are even more specialized or offeradvanced capabilities that go beyond what is possible within a standard module.

Benefits of ERP

  • Increased Productivity: ERP helps you instreaming and automating your core business processes to support everyone inyour company to do more with fewer resources.
  • Better Insights: It eliminates informationsilos and presents a single source of the face. You also get fast answers tomission-critical business questions easily.
  • Accelerated Reporting: ERP keeps track ofbusiness and financial reporting and shares output. It acts on insights andenhances performance in real-time.
  • Enhanced Agility: When you get an ERP foryour business, you can quickly identify and react to newer opportunities witheffective operations and ready access to real-time data.
  • Lower Risk: ERP maximises business visibilityand control, at the same time, it ensures compliance with regulatory needs andpredicts and prevent risk.
  • Better Financial Consolidation: ERP solutionseliminate the data silos that arise from disparate systems. It works for youand virtually eliminates the task.
  • Simplified IT: If you wish to simplify yourIT to give everyone an easier way to work, get an integrated ERP applicationthat shares a database.  

Selecting ERP Software

When youdecide to take support from an ERP system, consider providing your futureobjectives. Before starting with ERP, outline these objectives so that yoursystem can be able to support these goals and projected progress.

People of the Major Team

Employeesfrom major departments should be involved in finding the important needs fortheir areas. Working as a project team will find the needs of the business andhow it needs to be resolved. You can allocate responsibility individually forsoftware maintenance post-implementation.

The Strategy

It isimportant to review the daily process in your business to map out during theearly stage of the project. It will provide you a better picture as to how thesoftware will perform for your business and what kind of impact it will bring.You need to make sure that you have included an external process likespreadsheets in it.

Try that theERP software you are going to bring in your business, it would be utilised byall members. It needs to be covered in the scope of the software needs once thefunctional needs have been agreed upon.

Think about the Future

When itcomes to investment, we always check longevity and future scalability. Advancetechnology is a vital attribute in your selected solution. This solution willbe needed that can adapt to changes and growth of the business without becomingobsolete. 


Cost is amajor game player. The price of the software is going to be determined by thefunctionality and resource needs, hence careful consideration should be givento these factors when setting your budget. The larger the project, the morelikely it will bring the extra ERP modules are needed, coming quite possiblywith an additional expense to buy or extra development work.

Finding Perfect ERP for Your Business

Now, youhave a proper idea about this solution and you have decided to purchase theone. But wait, careful consideration is compulsory before your select software.

  1. Price- Buythe software that comes under your budget.
  2. Return-Before buying makes sure that the solution provides a return on investment.
  3. MinimalDisruption- bringing anything new is great, but your new softwareimplementation should not disrupt your day-to-day business
  4. Functionality-Your ERP software should be supportive and always buy it to improve yourcurrent business process.
  5. Reputation-Do sufficient research to find the best ERP software provider who can deliverwhat he claims
  6. Expansion-The software should be such that can expand and grow with your business
  7. Support- Buyyou software from the company that provides support all-time support andpost-implementation

Advantages and Disadvantages of ERP Software

The sheersize, interconnectedness, and complexity of ERP are a blessing as well as a curse.

When an ERPsystem performs well, it makes things run smoothly and opens up newpossibilities. But when its deployment is delayed or the system goes down, itcan bring business to a standstill and force users to scramble, looking formanual alternatives. Here is the list of major advantages and disadvantages ofERP system;


  • It can save businesses money over the longrun by streamlining the process.
  • ERP brings a unified system that low IT,Labour and training costs.
  • Through improved data and analytics, itfacilitates reporting and planning
  • Bringing better compliance and security


  • ERP software is expensive to deploy andmaintain
  • Many people finding it tough to implement
  • ERP needs significant change management
  • ERP modules are less sophisticated thanspecialized software

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