Technology is full of acronyms, some are easily recognised and understood, others require a little bit of explanation.
Enterprise Resource Planning, commonly known as ERP, is one of those that requires a little more detail to flesh out the bones.
ERP is basically business process management software that allows a business to use a system of integrated applications to manage the business and automate numerous back office fuctions that are related to technology, services, and human resources.
One of the roles of ERP is to help facilitate the flow of information so that business decisions can become more data driven. To this end, ERP suites are designed to collect and organise data from various levels of an organisation in order to provide insights.
Modules can be used to monitor and manage supply chain, procurement, inventory, finance, product lifecycle, human resources, and numerous other components of a business’s operations.
A core requirement of an ERP system is that it is highly integrated with other software that an organisation uses.
Some of the leading ERP vendors include SAP, Oracle, Infor, Sage, and Microsoft.
SAP offers Business One, which is business management software that is designed for small and medium sized businesses. It aims to automate key business functions in operations, financials, and human resources.
Business One currently offers 14 functional models that cover many of the typical functions in a business, such as administration, and financials.
Other modules include production, where bill of materials master data are maintained and production order are created. Additional modules cover inventory, purchasing, resources, and project management.
Key benefits of a good ERP system include able to have one central database where there is no duplication of data, and a single view of the organisation. Some of the drawbacks are usually seen around the expensive and time consuming nature of buying and implementing a system.
This is typically a problem because of the size and scale of the ERP system.