Enterprise resource planning is a software system in which various department's data transaction done through centralize database. It implemented in an organization, to increase efficiency of the all departments and enable efficient utilization of resources. It is a bunch of various modules of application software; sales, purchase, inventory, finance, planning, manufacturing, project management, human resource and MIS, that are connected to the single database.
ERP software implementation utilizes various software applications to get better performance of organizations for their resource planning, management control and operational control. ERP system integrate activities across functional departments - from product planning, supply chain, inventory control and product distribution, to order tracking. Most of the software systems include application modules to support common business processes - finance, accounting, costing and human resources.
ERP system can save huge inventory cost of the company by reducing their cycle time and implementing JIT (just in time) techniques. ERP using departmental databases to manage information, such as employee records, customer data, vendor data, purchase orders and inventory, everyone in the company relies on the same database. This allows employees in different departments to access the same information simultaneously.
ERP system can increase the productivity of organization. It can improve speed and efficiency and more complete access to information at any time. Using this information, employees and managers can gain a better understanding of what's going on in the company so that they make better business decisions on information based.
ERP system works in real-time; it means that the exact status of every process is always available on a click of a button. Further, many of these systems are global. Since, integrated system can be deployed at sites around the globe and it can work in multiple languages and currencies.
We have identified the four components of an ERP System which are responsible for implementation success or failure - software, business processes that software supports, users, and hardware and operating systems that run software applications. The failures in one or more of these four components could cause the failure of an implementation.