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ERP System - What is it?

Definition:

ERP, or Enterprise Resource Planning is an integrated computer system designed to manage all the existing resources inside a company including but not limited to financial resources, human resources, inventory and assets, etc. Usually an ERP system uses a centralized database, but recently, with the increased popularity of cloud services, the systems tend to become distributed.

Introduction:

As companies increased in size, and started to manipulate an increase number of entities (human, financial, inventory) it was obvious that a system was needed in place to manage them. Beside management, a complex decisional system was also needed that would manage various administrative workflows that are part of day to day operations.

Design:

ERP Providers usually implement standard business processes based on best operating practices. Depending on the company size, the company itself has to adhere to the business processes already modeled in the existing ERP packages, or, in the case of big corporations, it is usually the other way around, with new ERP packages build from scratch or adapted to adhere to the business processes already in use.

The main components that are part of a standard ERP package are:

  • Customer Relationship Management (CRM)
  • Human Resources Management
  • Project Management
  • Finance and Accounting
  • Manufacturing Production, Service and Delivery management
  • Supply Chain and Vendor Management
  • Warehouse and Inventory Management

Not all the possible modules are listed here and no ERP deployment is the same. A company does not necessarily needs Manufacturing Management Module, if it is in the Service business, etc.

Pros:

  • Unified system tracking various corporate entities from  creation to consumption (ex. order tracking from acceptance through fulfillment, product manufacturing from design to shipment, project management from definition to completion and release or ever human resource from hiring campaign through hiring, promotion/demotion and termination)
  • data centralization – eliminates redundancies and facilitate backup and data mining procedures
  • structured data shaping, access and visualization – allow data access based on roles and offers views limited by scope
  • optimizes inventory by providing sales analysis
  • optimizes marketing campaigns by tracking customers and sales

Cons:

  • Cost – ERP packages tend to be expensive and, due to the inherent complexity of both the software itself and the multitude of existing business processes already existent in a company, the time to deployment can take years
  • When a company replaces its internal process with the ones modeled by the ERP package, it may result in a loss of performance
  • additional time is needed to familiarize all employee with the new system and the end results might not be optimal
  • insufficient initial funding might result in transition failure

ERP Vendors

You can find most well known ERP Providers in the following list. Help us to keep the list updated by sending us information about related companies currently not listed.

Company Name Package Name Comments
SAP SAP Business Suite, SAP Business ByDesignb, SAP Business One, SAP Business All-in-One
Oracle JD Edwards EnterpriseOne, Oracle e-Business Suite, PeopleSoft
Microsoft Microsoft Dynamics (AX, NAV, GP, SL)
NetSuite NetSuite
CDC Software
Epicor Epicor Enterprise
Syspro SYSPRO
Plex Systems Plex Online
Infor Global Solutions ERP Adage, ERP LN, ERP LX, ERP SL, ERP Swan, ERP SX.Enterprise, ERP VE, ERP XA
The Sage Group Sage ACCPPAC, Sage Pro ERP, Sage ERP X3
Lawson Software Lawson M3, Lawson S3
IBM Maximo (MRO)
QAD QAD Enterprise Applications
Comarch Comarch Altum
COA Solutions Ltd Smart Business Suite
ABAS Software ABAS ERP

ERP Investments to Slow in 2011

According to a recent article in PC World citing a Forester Research report, many companies will stop investing in ERP suites are a lot of them go over budget and take longer than planned to implement.

Twenty-five percent of the roughly 900 companies surveyed by Forrester plan to upgrade, expand or implement an ERP system, down from 29 percent in a study last year, according to the report by analyst Paul Hamerman.

But 72 percent are “in a holding pattern for 2011, with plans to stand pat or no specific plans to invest in ERP,” Hamerman wrote.

Roughly half of ERP customers are running product releases that are two versions behind the current one, according to the report. But expiring support windows and related price increases will spur more upgrades over time.

Still, overall the ERP market has nonetheless rebounded well from its “disastrous” 2009, Hamerman wrote.

Although many customers may not adopt them for some time, ERP vendors will continue to roll out features and functionality. Those trends include cloud-based deployment options, mobile applications and embedded business process modeling, Hamerman said.

One of the most significant ERP product launches in recent memory, Oracle’s Fusion Applications, is expected to happen this quarter.

Perhaps with one eye on the economy, Oracle has set modest public expectations for adoption of the long-delayed software, which is supposed to combine the best attributes of its various ERP lines into a next-generation suite.

Fusion Applications will be available in modular fashion and available for deployment both on-premises and in the cloud. Oracle has stressed that customers will be able to adopt Fusion at their own pace.

SAP is also expected to make news this year, with the release of a series of SaaS (software as a service) applications that are meant to be extensions of its on-premise ERP systems, as well as mobile software based on a platform that combines its technology with that acquired through the purchase of Sybase.

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