What constitutes ERP?
ERP typically comprises a client server architecture, fourth generation language, RDBMS and graphical user interface in an open systems environment.
It operates in a client server environment forming a software layer having the application logic and business rules. A ERP package solution meets the needs of the business application through basic modules such as manufacturing, financials, sales & distribution, human resources. These modules are developed to cater to the wide functionality of every process and are benchmarked against the best business practices worldwide. These modules can be customized to meet the specific requirements of individual businesses.
ERP streamlines the organization from the back-office to the board room. It does so, by first giving the existing business a hard look. The working of the organization is split into a logical process not tasks. Often many practices arise which are unnecessary, complex or simply exist by habit or are developed without keeping the whole picture in mind. The core processes are identified. Once the wholistic business analysis is complete, integration with the modules begins. Each business process is interwoven into the ERP package, thus ironing out inefficiency. In short, the entire functional knowledge and working of the firm is simulated on the system keeping in view the right business practices.
The ERP packages enable operational efficiency, implement continuous change and lead an organization through management by fact. It achieves this by operating at all management levels. Since the basic business processes have been specified, the package system has supporting procedures and system developed. At the lowest level or the actual operational level, all transactions are captured through office automation and transaction processing systems. The data is captured only once, at the point of origin and routed appropriately through the work flow.
At the next level, the interface level, it enables seamless integration of information across operating groups by maintaining a common data warehouse from all activities be it, marketing, sales, finance, HR, manufacturing. Changes in any individual activity have a ripple effect throughout related areas through this interfacing.
At the top management levels is the tactical and strategic levels ERP can be used as a source of competitive advantage, as it leads to transparent departments where relevant information is available instantaneously. Informed decision-making may well serve to take correct decisions at the right time.