Sunday, November 1, 2009

Enterprise Resource Planning

Enterprise Resource Planning or ERP is actually a process or approach which attempts to consolidate all of a company's departments and functions into a single computer system that services each department's specific needs. It is, in a sense, a convergence of people, hardware and software into an efficient production, service and delivery system that creates profit for the company.

While the idea is easy to grasp in theory, the reality has been different.
  • Employee records (including payroll, medical and other benefits) are held by Human Resources.
  • Financial data and processing, which includes payroll computations and employee compensation as well as invoicing and billing for company products and services, are held by the Finance Department.
  • Production data is held by manufacturing. Inventories are held by warehousing.
  • Customer orders are held by Customer Relations.

The 'dream' of ERP is to have a single software solution integrating the different functions and activities into a seamless whole where information needed for decision-making is shared across departments, and the action taken by one department results in the appropriate follow-up action up and down the line.

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