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Enterprise resource planning (ERP) is business-management software—typically a suite of integrated applications—that an organization can use to collect, store, manage and interpret data from many business activities, including:
ERP provides an integrated view of core business processes, often in real-time, using common databases maintained by a database management system. ERP systems track business resources—cash, raw materials, production capacity—and the status of business commitments: orders, purchase orders, and payroll. The applications that make up the system share data across various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data. ERP facilitates information flow between all business functions, and manages connections to outside stakeholders.
Enterprise system software is a multi-billion dollar industry that produces components that support a variety of business functions. IT investments have become the largest category of capital expenditure in United States-based businesses over the past[which?] decade. Though early ERP systems focused on large enterprises, smaller enterprises increasingly use ERP systems.
The ERP system is considered a vital organizational tool[by whom?] because it integrates varied organizational systems and facilitates error-free transactions and production. However, developing an ERP system differs from traditional system development.ERP systems run on a variety of computer hardware and network configurations, typically using a database as aninformation repository.
An ERP Solution, if implemented successfully meeting the business requirements, allows an organization to have an integrated view of all business process which in turns allows efficiency and effectiveness in achieving business goals.
Once ERP is implemented, all business processes are integrated into a single unified system providing complete visibility and one unified reporting system. Employees are more efficient, deliver in less time, no redundant tasks nor data duplication; Collaboration is better across the whole organization, operation is more controlled, cost is reduced.
ERP must be dynamic and scalable enough matching the business growth and will form a centralized system with standard best-business processes on which are based on industry best practices.
Please note that implementing an ERP solution is not a straight forward process and requires managing and considering many aspects and requirements. After having the system stable, the organization will start measuring the advantages and ROI (return on investments) related to the ERP. This depends on many success factors.
An ERP will automate the system, based on which an organization hierarchy will be developed and growth will be sharp and could concentrate on advancing many areas in the company. Investing on right ERP will be an asset for the company.
An organization that has no ERP will be running on many kinds of software that do not allow interaction. Customization also may be difficult it in some cases. This will negatively affect the optimized functioning of organization's business activities.
The organization will be facing hardship in many areas of its functions. The engineering design of the software will be needed in order to improve the product, and to follow the client's behavior and choices since the first contact is quite important. Administration of the different receipts interdependence will be very complex, such as invoices regarding materials purchases, general expenditures or salaries.
All of these things change when an ERP system is implemented. Information flows constantly and allows you to follow a client's processes at any moment, no matter which part of the process they are going through. Purchases and expenditures are registered in a centralized database which allows you to have close control over these activities. In this regard ERP helps you to prevent possible abuse.
A powerfully integrated ERP system enables interactions of marketing, sales, quality control, products processes, supply lines, stocks and many other areas and it can be in a single database. This will eliminate the occasional loss of and retyping errors. It integrates all departments and functions across a company in a single computer system that is able to serve all those different department's particular needs.
An ERP system also automates business processes by placing them into a useful format that is standardized and common for the whole organization. Moreover it could even be used between their suppliers and customers.
