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MBA 2nd sem. School of Management Studies, Nagaland University.

Enterprise Resource Planning - ERP

A process by which a company (often a manufacturer) manages and integrates the important parts of its business. An ERP management information system integrates areas such as planning, purchasing, inventory, sales, marketing, finance, human resources, etc.

There are many different systems in a large company's "back office," including planning, manufacturing, distribution, shipping, and accounting. Enterprise resource planning (ERP) is a system that integrates all of these functions into a single system, designed to serve the needs of each different department within the enterprise.

An ERP system spans multiple departments in a corporation, and in some cases an ERP will also transcend the corporate boundary to incorporate systems of partners and suppliers as well, to bring in additional functions like supply chain management. Each implementation is unique and is designed to correspond to the implementer's various business processes. An ERP implementation can cost millions of dollars to create, and may take several years to complete.

Once implemented however, the ERP system brings tremendous advantages. Because all systems are joined together, all departments can more easily share information. The workflow that takes place between departments can become much more automated, and ultimately, customers are better served because the individual using the customer-facing applications will have access to every bit of information regarding each relevant process. For example, someone in sales would easily be able to log into a single system to determine the status of a customer order that is still in manufacturing. All this comes at a cost though; training costs are high because employees must not only learn how to use new software, they must also learn new processes.

MIS and ERP:

Both MIS And ERP Systems Focus On The Automation Of Business Processes, Data Transfer, And Information Sharing Across The Organization. MIS Is An Information System Designed For Providing Information To Support Operational Control, Management Control, And Decision-making Functions In An Organization

ERP Systems Are Some Of The Most Advanced, State-of-the-art Management Information Systems In Todays Business World. An ERP System Integrates Information Systems And Business Processes To Enable Information Entered Once To Be Shared Throughout The Organization.

Characteristics of ERP:
Many Distinct Business Modules Such As Financial, Manufacturing, Accounting, Distribution, etc. are integrated. Use Centralized Common Database Management System (DBMS) The Modules Are Integrated And Provide Seamless Data Flow Among The Modules They Are Flexible And Offer Best Business Practices They Require Time-consuming Tailoring And Configuration Setups for Integrating With The Companys Business Functions The Modules Work In Real Time With Online And Batch Processing Capabilities They Are Internet-enabled.

Benefits of ERP:
Gives A Company An Integrated Real-time View Of Its Core Business Processes Helps Improve The Quality And Efficiency Of Customer Service Reductions In Transaction Processing Costs And Hardware, Software, And Its Staffs Leads To Improved Performance, Better Decision Making, Competitive Advantage Replaces A Multiplicity Of Different Systems And Databases Allows Replacement Of Disparate Systems Increases Organizational Real Time Information Flow

Process Reengineering -- Update Old Processes Foundation For New Processes, Such As E-procurement Lays Foundation For Electronic Commerce

MIS Vs ERP:
MISs Role: 1. To Generate Reports-for Example 2. To Answer What-if Questions Asked By Management 3. To Support Decision Making ERPs Role: 1. Staff Reduction 2. Better Inventory Management 3. Improve Customer Responsiveness 4. Efficient Procurement 5. Enhanced Financial Management And Corporate Governance: 6. Software Security: E.G. Seradex ERP 7. Encouraging Uniqueness 8. Changing the Working Pattern 9. Web-enable ERP

ERP Impact in Organizations

Nowadays, with the fast developing of industries and the need for managing procedures and resources, it has become very important to have a tool which can help you coordinate several activities, and the best one is ERP. The advantages of having ERP are many. It gives you the opportunity of integrating every procedure of your business while improving the quality of several areas simultaneously. These areas include human resources, accounting and operations. In addition, ERP helps to increase your production levels and to control your costs more efficiently, and this means that you will be able to control the whole enterprise more efficiently. A very important facility of the ERP systems is that they increase the availability of the information, helping companies to have information in real time to make decisions and accurate prognostics regarding the organization. It

is important to mention that ERP systems are a very powerful tool when it comes to processing and organizing financial data. It improves the development of the commercial activity in the short and long term. In the enterprise management module you can perform integral strategic planning, keeping an eye on the daily activities and having fluent communication with the investors. The human resources module allows you to make decisions and optimize the companys investments regarding employees. With all of this we can see that an ERP system brings visible advantages. You might find that implementing an ERP could be expensive, or that only big organizations can reach it. Another important consideration to make is that the implementation of ERP takes time and generates deep changes in the way you do business. But the important thing to remember is that every enterprise can see the benefits of the ERP systems, although for the first period it may only seem like an investment. The benefits indeed are really bigger than the costs, and it is very valuable l to invest in an ERP system.

ERP For a Competitive World These days we are living in a globalized world, where competition is not absent. This is why it is essential for managers of the enterprise to develop different strategies to satisfy client needs, many of which have become hard to see. They are trying to anticipate what clients will want or need, and in that way they work to offer customized products. Companies are looking for a software that can be capable of administrating every aspect of their business integrally. Many of them have been seeking new technological tools that can optimize their internal procedures and make them more efficient. The main consequence of this is the consolidation of the company and the satisfaction of their clients. ERP systems are a fundamental element for organizations these days. Companies must identify their needs in order to know which system can fit better with their inquiries. In this way you will avoid choosing a software that is too sophisticated for the regular activities of the enterprise. Or you might choose a very simple system that will not satisfy your needs, making you lose money through too many updates. The chances of success when implementing ERP lay in the ability of the organization to integrate and consolidate the functionality of the system. If the enterprise has a defined structure and the methods are well defined, they can get to progress from the selection phase to the operational one and reduce the risk, increasing the probability of success. Recent studies in Israel show that many companies have achieved important benefits when implementing ERPs, although being different between each other.