ERP (Enterprise Resource Planning) Overview covers What is

ERP, Brief history of ERP, Why is it necessary, Market

Leaders and the future of ERP.

What is ERP?

Enterprise Resource Planning or ERP is an industry term for

integrated, multi-module application software packages that

are designed to serve and support multiple business

functions. An ERP system can include software for

manufacturing, order entry, accounts receivable and payable,

general ledger, purchasing, warehousing, transportation and

human resources. Evolving out of the manufacturing industry,

ERP implies the use of packaged software rather than

proprietary software written by or for one customer. ERP

modules may be able to interface with an organization's own

software with varying degrees of effort, and, depending on

the software, ERP modules may be alterable via the vendor's

proprietary tools as well as proprietary or standard

programming languages.

Brief History of ERP

The focus of manufacturing systems in the 1960's was on

Inventory control. Most of the software packages then

(usually customized) were designed to handle inventory based

on traditional inventory concepts. In the 1970's the focus

shifted to MRP (Material Requirement Planning) systems that

translated the Master Schedule built for the end items into

time-phased net requirements for the sub-assemblies,

components and raw materials planning and procurement.

In the 1980's the concept of MRP-II (Manufacturing Resources

Planning) evolved which was an extension of MRP to shop

floor and Distribution management activities. In the early

1990's, MRP-II was further extended to cover areas like

Engineering, Finance, Human Resources, Projects Management

etc i.e. the complete gamut of activities within any

business enterprise. Hence, the term ERP (Enterprise

Resource Planning) was coined.

Why is it Necessary?

By becoming the integrated information solution across the

entire organization, ERP systems allow companies to better

understand their business. With ERP software, companies can

standardize business processes and more easily enact best

practices. By creating more efficient processes, companies

can concentrate their efforts on serving their customers and

maximizing profit.

Market Leaders

The top five ERP vendors, SAP, Oracle Corporation,

Peoplesoft, Inc. (now Oracle Corp.), JD Edwards & Company,

and Baan International, account for 64 percent of total ERP

market revenue. These vendors continue to play a major role

in shaping the landscape of new target markets, with

expanded product functionality, and higher penetration

rates. SAP dominates the $6.7 billion ERP applications

market in Europe with 39% market share. Oracle and

PeopleSoft come second and third respectively, followed by

SAGE Group and Microsoft Business Solutions.

The Future of ERP

Industry analysts expect that every major manufacturing

company will buy the software, which ranges in cost -- with

maintenance and training -- from hundreds of thousands of

dollars for a small company to millions for a large company.

AMR Research of Boston says consolidation among the major

players will continue and intensify. ERP vendors are

expected to put more effort into e-commerce, CRM and SCM

initiatives, with leaders redirecting between 50% and 75% of

their R&D budget to these projects.

According to Gartner research group, the rapid evolution of

ERP has already lead to a new corporate must-have, ERP II,

which is supposed to help businesses gain more competitive

edge in the future. The major difference is that ERP II

involves collaborative commerce, which enables business

partners from multiple companies to exchange information

posted on eCommerce exchanges.

In the next tutorial we will talk about popular ERP Products

and the Modules and Application related to them.

For more visualization of this article along with the screen shots and more visit with step by step instructions, http://www.exforsys.com/content/category/17/260/342/

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