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What is an ERP System?

An ERP which is also known as “Enterprise Resource Planning” system is made up of certain applications and tools that help all the functional and operational areas of your business for communicating with each other more effectively and accurately.

ERP systems are developed to integrate all departments of a company into a comprehensive and centralized information system. ERP contains all the data to be is available in real-time that enables employees in making rapid and informed business decisions.

With ERP systems, these purposes are fulfilled:

  • The collection of data is streamlined
  • Storage is enabled
  • Right use of your organization’s data

Just the right ERP system will help you manage all your data into one centralized place from the following departments and functional areas:

  • Human Resources
  • Warehouse Management
  • Inventory Management
  • Supply Chain Management
  • Finance & Accounting
  • Business Intelligence
  • Point-of-Sale (POS)
  • Customer Relationship Management
  • Production Management
  • E-Commerce

History of ERP

The origin of the abbreviation “ERP” dates to the history of 1990s. The idea was originally given by a famous analyst from the market, The Gartner Group. It has been evolved from the term “MRP”. The term ‘MRP’ also known completely as Material Requirements Planning was already known and considered in business in those times.

These MRP and MRPII systems were created on the dates back to the history of 1960 years. In was launched in the time, when manufacturing and production based companies were finding multiple ways to know about the enhancement of their quality. They were also focusing on to improve the decision making tasks for the production managers.

Evolution of the Enterprise Resource Planning in Industry

In the 1990s days, The Gartner Group and some of other businesses identified the requirement and business needs to upgrade the MRP systems according to the desired systems of expanded capabilities. Thus ERP or the “Enterprise Resource Planning” as was invented.

In the early existence days of ERP, the system focused on managing the data and organizing the processes. These tasks were mainly regarding the head office departments, such as:

  • Inventory Management
  • Human Resources
  • Fulfillment
  • Information Technology
  • Manufacturing
  • Planning
  • Purchasing
  • Accounting
  • Scheduling etc.

After that, the wide usage of facilities like Internet was invented and spreading. The ERP was upgraded further and these functions of an organization were included, such as:

  • Supplier Relationship Management (SRM)
  • Customer Relationship Management (CRM)
  • Human Resource Management (HRM)
  • Business Intelligence
  • Supply Chain Management (SCM)
  • E-Commerce Solutions

Current Trends of ERP Industry

In the present day, as the technology is progressing on a very fast pace, the ERP systems have been developed to integrate with all the functions and departments of an organization.

The core purpose of these systems is to help the leaders, team heads and managers in understanding all the moving processes and parts of their daily functions and in identifying upcoming opportunities for the business. They help the managers in taking more accurate decisions which may generate the success in future and more responsive productivity of their firm and businesses.

How do the ERP Systems Benefit Your Organization?

You must have heard about every organization getting a computer software deployed for better management of their organizations. Ever wondered why? Nearly all sizes of businesses are implementing ERP systems today.

There are a wide range of benefits and revenue generating factors behind the idea and development of the Enterprise Resource Planning systems. Below here, we are listing some of the main purposes and benefits of the ERP systems for the organizations:

  • Accuracy in the management of Finance & Accounting departments

  • The business leaders get the live visibility of their operations in detail

  • Business heads and their teams get the access their worldwide known supply chains instantly in the nick of time

  • Business leaders are enabled to

    • Identify certain upcoming challenges
    • Hit the potential opportunities
    • Make decisions faster
  • Better automation and streamlining the monotonous tasks and longer processes

  • Employees are provided with data and tools in time

  • The system allows the users to access from anywhere (mobile devices and other systems)

  • Productivity is enabled among the team and employees

  • Collaboration is made easier with in the organization, vendors and other stakeholders outside organizations

  • Accurate reporting tools and prediction tools are offered that help in making informed decisions by proper forecasting

  • Data security is ensured

Deployment Options and their Types for ERP Solutions

The deployment is certainly not a very easy task to accomplish. Experts and industrially trained people are send for such tasks. Basically, two main options are there for the deployment of the ERP solutions which are currently available:

  • Cloud Based
  • On Premises
  • On Premises

  • The Enterprise Resource Planning solutions can be deployed locally on the organization’s servers and other hardware devices such as computer systems. This is called the On Premises deployment. The system is managed by the organization’s IT staff or teams. Greater autonomy over their implementation is one of the values for such businesses.

  • Cloud Based

  • Cloud based software are as same as the traditional ERP solutions as per the working and evaluation. However, the deployment is the only difference there. The cloud based ERP solutions are not hosted by the organizations’ servers. The storage hardware is also not done on-site.

    The ERP provider is responsible for hosting the ERP solutions for the organizations. A simple login or sign up system is provided to access such ERP systems i.e. web or application based system hosted over the cloud.

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