ERP Systems

ERP Systems – Why Have Them?

Enterprise Resource Planning (ERP) systems started in the 1960s as software packages with inventory control functionality.  In the 1970s ERP systems evolved into MRP (materials requirements planning) solutions.  Materials Requirements Planning solutions enabled companies to schedule production events and manage materials.  In the 1980s MRP systems evolved into MRPII solutions.  The difference between an MRP solution and an MRPII solution was that the MRPII solution contained financial accounting functionality.  In the 1990s MRPII solution providers added manufacturing functionality and integrated all the components; financials, inventory control, materials management, and production scheduling.  In the late 1990s the Enterprise Resource Planning solution made its debut.

An ERP system contains a set of software tools that enable businesses to do many things.  With an ERP system you can manage your supply chain, receiving, customer orders, inventory, human resources, accounting, production planning, shipping and more.  Enterprise Resource Planning systems enable you to automate tasks and integrate your business processes.  Information can be easily shared with an ERP system and this information is real-time up-to-date data.  An ERP system also allows you to comply with industry standards by following best practices designed into the system.  Enterprise Resource Planning systems have a common set of applications.  For example, if you are viewing an accounting screen and a human resources screen, they will have the same look and feel.  Enterprise Resource Planning systems help you to remove inefficiencies that cost your business extra time and money.  Enterprise Resource Planning systems are a great solution to replace legacy systems, which typically are not integrated.

An ERP system is a major investment.  Depending on the size of your organization and the amount of functionality needed, an ERP system can cost you anywhere from fifty thousand dollars to millions of dollars.  However, because ERP systems lower operating costs, reduce cycle times, and enable better executive decisions, they are well worth the investment.

The Enterprise Resource Planning market is one of the fastest growing markets in the software industry.  Enterprise Resource Planning vendors have made billions of dollars off their ERP solutions.  As the ERP market evolves, the Enterprise Resource Planning industry continues to grow with new industry based Enterprise Resource Planning solutions, SaaS (software as a service) ERP solutions, and open source Enterprise Resource Planning solutions.  As more and more players jump into the ERP market, it will be interesting to see what the future holds.

Written by :

kristine H