The word Enterprise Resource Planning or ERP conveys a sense of planning the use of enterprise-wide resources to achieve enterprise objectives in the best possible manner. However, ERP has come to mean something much less ambitious. It simply means integrating two or more separate applications.

Integration of a number of systems results in:

Creation of a unified database that results in greater reporting capabilities, Elimination of external interfaces between different applications that were needed earlier to exchange information between them, and Standardization and lower maintenance costs as a single system replaces the earlier multiple systems.
Typical modules in modern ERP systems:

ERP System Modules

Manufacturing: This module facilitates manufacturing and related operations such as plant engineering, production scheduling, materials requirements lists, workflow and process management, quality control and cost control. Supply Chain Management: Inventory control and purchasing functions, including supply chain planning, and supplier performance monitoring, are the major functions facilitated by this module. Customer Relationship Management: Sales and Distribution, Commissions and Customer Support are covered by this module.

Financials: This module covers the traditional accounting and cash flow management functions, including accounts receivable, accounts payable, cash flow control, and general ledger. Other typical modules include Human Resources (including payroll), Project Management and Data Warehouse. ERP systems also provide direct interfaces for external entities like customers and suppliers, and internally for employees.

The separation of modules in this manner has resulted in some large organizations selecting different modules from different ERP vendors. Some functionality might be better with one vendor’s module while other vendors’ modules better manage other functionalities.

Implementing ERP in Organizations

Implementing ERP typically involves significant changes in working practices. Either the ERP vendor or a third-party consultant usually helps implement ERP in an organization. New user interfaces and even some processing might have to be coded where the ERP system does not meet certain work practices in the organization. The ERP system should ideally accommodate such customization. Implementation will also involve training to the organization’s personnel to work with the ERP system, and continuing support to keep the system running with minimal additional costs.

Why ERP?

In the absence of ERP, the different applications in use might not be able to exchange information.
ERP and Enterprise Content Management Systems

Enterprise Content Management systems seek to create a knowledgebase consisting of both structured and unstructured content generated all over the enterprise. Enterprise Resource Planning systems facilitate this goal by combining applications and using a common database. The word Enterprise Resource Planning or ERP conveys a sense of planning the use of enterprise-wide resources to achieve enterprise objectives in the best possible manner.