Services  >>  Software as a Solution – ERP

How an ERP works

Typically in an organization, each department, be it finance, human resources or warehouse has its own computer system that does not effectively interface with each other. An ERP attempts to integrate all departments and functions across a company with a single unified software program.

Let us take the example of tracking a customer order both pre and post ERP installation. In a typical organization, the paper based order moves from department to department keyed into respective computer departments. This journey causes delays and errors. At any given point of time the finance department for example wouldn’t know the status of the order.

In the post ERP scenario, where a single software program replaces stand-alone departmental systems, ERP takes a customer order and provides a software roadmap for automating the process involved in fulfilling the order. When a customer service representative for instance enters a customer order into an ERP system, he will have all the necessary information to complete the order. For example, the customer’s credit rating and order history from the finance module, the company’s inventory levels from the warehouse module and the shipping dock’s trucking schedule from the logistics module. The entire order process moves speedily through the organization. Personnel from different departments can access the same information and update it. They can track down the order at any point by logging onto the ERP system. This reduces cost and time overruns, brings in overall efficiency, minimizing errors and helps in serving the customers faster.
ERP thus can be used for other business processes to optimize resources.

ERP in India is gaining popularity among corporate. For effective implementation ERP should be done on a modular basis, should be grounded in reality and should be a complete package in its coverage.
Most MSMEs (Micro, Small and Medium Enterprises) in the manufacturing sector due to lack of awareness, technical know how and low monetary resources continue to use inflexible, stand-alone applications. But they are fast realizing the necessity for developing intra and inter networks and leveraging IT applications for achieving reduction in costs and product development time.

There is tremendous scope for adoption of ERP among MSMEs. In today’s times of intense competition, as large corporations are streamlining their business processes, they would require MSMEs to streamline and upgrade their operations to facilitate integration with supply chain systems to gain competitive advantage.
ERP should be viewed not as an expense but an investment that will reap benefits in terms of higher sales, profitability and better customer services.

Some companies have invested in IT applications for logistics and supply chain management using computer software, hardware ensuring connectivity through Electronic Data Interchange, Bar Code System, ERP, Intranet and Extranet as follows:

Primers for ERP implementers

Successful ERP implementation would involve what?

• Sensitization process in the organization, to change mindsets, as people are generally resistant to change.
• Transformation in business processes to ensure optimal utilization of software.
• Selection of suitable software that meets the needs of the enterprise and helps in project planning.
• Training of personnel to learn a new set of processes and new software interface.
• Selecting a cross functional team with the best people to oversee the implementation. ERP project will take how long?
• Customized packages are being offered by vendors that can be implemented within 2 to 12 months backed up with pilot testing.

ERP project will take how long?

• Customized packages are being offered by vendors that can be implemented within 2 to 12 months backed up with pilot testing.

What would the ERP costs involve?

• Hardware
• Software
• Training
• Data conversion
• Customization