Enterprise resource planning software, or ERP, coordinates the swift and easy distribution of information across a business network and catalogs that information for use not only by the business' rank-and-file employees but by its executives and managers. It represents the combination of a great many smaller programs that help manage individual aspects of a company and ensures easy communication and standards compliance between all of those programs.
Business Information Management
A large business organization accumulates and uses a great deal of information, the sources of which can be distributed over an extremely wide area--wide not only in the geographical sense but in the sense of personnel and function. The consequences and actions taken as a result of this information must then be relayed back to executives and managers. A large business will likely employ many different computers and servers, all accessed by different users for different functions. Coordinating all of this activity and making it legible from the top level of command is the function of ERP software.
In the past, business owners and managers might have employed computer programs to help manage many different aspects of the business, including human resources, customer relations management, finance, warehouse management and logistics. These computer programs would use their own databases and run on their own networks, and any information that needed to be transferred between them would have to be handled manually. Modern ERP programs consolidate management software for all such functions within a single structure and database.
The integration of all the various management systems under the umbrella of the ERP allows data to be exchanged much more swiftly and reliably between various departments, which can greatly increase efficiency and performance levels in all areas of a business. The recording format of information is standardized across departments, minimizing problems with information exchange. As employees become familiar with the ERP software, they also become more familiar with the effect of their work on the enterprise as a whole. And as employers master ERP, they become more familiar with the day-to-day operations of the various parts of the company.
Implementing ERP software in an existing organization--an organization that has not been built from the ground up using an ERP program--can be extremely costly, difficult and time-consuming. Though a perfect ERP connects and manages all aspects of a business, employers "phasing in" ERPs may choose to connect it at first to only a few departments or tasks, bringing more of the company under its umbrella over time. Companies also often hire external consultants to plan the transition to ERP-based management and teach employees about the new system.
Successful ERP designers and vendors include SAP, Oracle, PeopleSoft, Invensys and many others.
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