ERP (Enterprise Resource Planning) has provided an important breakthrough in IT applications for the overall development of business organizations of any size. In the context of ever changing economic scenario and highly competitive market, business organizations are fast implementing ERP for streamlining of different functional units integrating them in a common platform. The sole objective of ERP software is to integrate all the business functions and operations through synchronized data transfer enabling prompt decision making and improved productivity. ERP provides the right kind of tools to the business organizations as per their requirement to deliver better work performance.

Initiated from the Manufacturing Requirement Planning (MRP) II in the 1980's, ERP has come a long way in integrating and synchronizing all types of business processes. Previously, MRP was meant solely for manufacturing industry and was designed to control the different operations of manufacturing in order to increase productivity in a lesser amount of time. Presently, ERP software offers more flexibility through different tiered client-server architecture.

It will be totally wrong to consider ERP as a software system; on the other hand an ERP includes the software and essential business strategies to implement this special software package. ERP software applications improve the business performances through proper resource planning, management control and operational control. Planning, procuring, production controlling, billing, monitoring the inventory and tracking expenses and performances are the important functions of the different modules of the ERP software that help in integrating business processes. Managing human resources, finances, accounting, managing customer relationship are the common features of a standard ERP package. ERP packages can be customized according to the specific needs of an organization.

Components of ERP systems

The design of ERP is based on service-oriented architecture constituting of different hardware and software modules. Communication between different modules is carried out through a local area network. Other important components of running an ERP include business processes and users. Each of these components plays a vital rule in successful ERP application with a sole objective streamlining the business processes. Among these, the user is perhaps the most important component of ERP system as the intelligent use of ERP can only result in successful ERP implementation to achieve the desired targets. The users should be well acquainted with the use and purpose of the different modules for effective application of the software.

The significant benefits of ERP lie in uniform coordination of the different operational units increasing the efficiency of the business processes. ERP implementation also helps in managing daily activities and performances. The ERP benefits can be fully realized through proper functioning of all the major components of the system, failure in one or more than one component may lead to the failure of the whole ERP system causing heavy financial loss for the organization.

Find the list of top ERP Vendors and choose the right ERP vendor. Also know SAP HR Module. Read information about Disadvantages of ERP.

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