: Explain the significance of ERP in contemporary business environment? Explain, how an ERP is different from conventional packages? Also, describe the components of an ERP system.

^{Ans. Conventionally, companies have created islands of automation. A hodge-podge of distinguishes systems that operated or managed a diversity of contradictory business processes. Companies have had analogous complicatedness with each new wave of information technology since the first mainframe systems. It takes years to apprehend some envisioned IT-enabled changes in organisational processes and performance, and there are many ways to fail along the way. An ERP can be defined as a coordination in which various functions of a company (accountancy, marketing, and production) are connected each others by the use of an information system centralized on the basis of a client/server configuration. It is regarding the integrated management system of a company, constructed on an integrated software package undernourished.}

^{The few  elaborated benefits are:}

^{Automatic Updation to new Technology: ERP systems can automatically update itself according to the new technology.}

^{Enhanced flexibility: ERP is multi-module application software and is very flexible and frequent, e.g., production manager can access ample number of information through his lap-top of marketing department by sitting at his home.} 

^{Improved customer satisfaction: with the help of ERP, customer have an individual login name and password and they are able to solve their grievances by Internet alone specifically no need to waste time in visiting personally.} 

^{Information Technology: Reduced support costs. Reduced infrastructure costs.}

^{Lead-time minimization: “time gap between ordering the goods and its delivery is known as lead time” so if this could be minimized then there will be reduction in inventory cost burden.}

^{Process Improvements: Eliminate redundant transactions and multiple reconciliations; extra efficient job rotation process; more efficient staff and succession planning.}

^{Related initiatives: Better focus, reduced spending.}

^{Strategic Direction: Improved resource allocation, More flexible organisation, and better future decision making.}  

^{Conventional packages are very much confined and restricted. In a general term it is known as legacy system. The features are very less and a slighter possibility to explore. ERP packages are miles away from these petty things. It follows the back-office and front-office concepts. The back-office job is to look after the raw material, financial issues, logistics and in brief internal matters. On the other hand front-office job-profile is to directly interact with customer. CRM is coming up as a front-office package. If we go into the depth of following figure, legacy system are very much condensed and compressed where as ERP system at the same time as compared to it are auto transactional, self helping, and mould itself in different crucial conditions i.e as a generalist and specialist. Figure 2, explains the comparison between the legacy and ERP systems.}

^{ERP COMPONENTS}

 ^{If your requirements go ahead of the capabilities of accounting software, and you find the prospect of implementing conventional ERP software overwhelming, you need ERP. All application modules share data through the ERP database, which contains the data for all modules. This is a new implementation of the old key database concept of entering data one time and then using it in all other processing. The world's finest easy-to-use ERP solution is fully web-enabled, seamlessly integrated and can be implemented in weeks. And it can computerize your complete operations globally. ERP can furnish assistance in accomplishing unimaginable efficiency of operations, significant cost savings, and maximize profits. ERP is packed with powerful features, tremendously easy to implement and use, comprehensive in its scope, modular and flexible, fully customizable, totally secure, and incredibly robust. It is the way companies will manage their businesses tomorrow. With ERP, you can assimilate transactions of any pulse of the entire organization, all the time. This drives costs number of your company’s branches into one system. ERP can be completely web-enabled and from any type of software on any platform, you can deal with your entire business by exception. ERP modules are a most excellent way to integrate all the departments. It is like a four-wheeler which can not shift single steps without its underneath, for ERP the underneath are its modules which sometimes also known as components. These modules enables all the employees of an enterprise to operate like CEO, giving them the tools, information, and insights they necessitate detecting problems earlier and taking action faster. To facilitate the easy handling of the system the ERP has been divided into the following core subsystems as shown in Figure}

 ^{The ERP Learning Community Framework}

^{a) Finance: ERP takes care of complete financial accounting of the enterprise over the web. It maintains all the books and records that are essential for proper bookkeeping and accounting. All transactions affect and update the entire system, and the entire reporting is on the fly, for the most accurate information 52 Information Management at all times. ERP helps you to manage all kinds of taxes, bank reconciliation and everything else that is required for efficient and complete financial accounting. Thus, financials provide real-time visibility into financial results, minute-byminute control over expenditure, and guidance for better decisions,}

 ^{b) Human Resources: Handling Software for personnel-related tasks for corporate managers and individual employees of the organisation. Examples: human resources administration, automatic personnel management processes including recruitment, business travel, and vacation allotments, payroll handles accounting and preparation of cheque related to employee salaries, wages, and bonuses. Thus, human resources offers comprehensive HR solutions, from recruitment to compensation to work-force development}

 ^{c) Manufacturing and Logistics: A group of applications for planning production, taking orders, and delivering products to the customer. Examples: production planning performs capacity planning and creates a daily production schedule for a company’s manufacturing plants. Materials management controls purchasing of raw materials needed to build products.}

 ^{d) Purchasing: Empower the Purchase function just like sales, indents, and orders. ERP covers all aspects of production, including issues quality control, material receipts, purchase invoices and production receipts, multiple bills of material. Thus, purchasing saves the time by simplifying and improving vendor evaluation, performance tracking and quality examination.}

 ^{e) Production, Planning and Control: ERP enables you to plan for material requirements based on a production planning process. The system reports inventory requirements based on work orders initiated, stocks committed and existing stocks. Thus, PPC provides all possible reports and analysis, which facilitates in managing and keep good control of inventory.}

^{f) Multi currency and Forex: ERP supports accounting for multi-currency operations, with exchange rate tables, transactions in any currency, accounting and reporting in all currencies, and accounting for forex gains and losses.}

^{g) Business 2 Business (B2B): ERP is a virtual portal that can be accessed by customers, distributors, suppliers, and auditors. Anyone with a computer and a modem, and the necessary access permissions, they can place orders and monitor deliveries, and view account statements. To improve your service efficiency you can allow your business associates to manage their own interaction with your enterprise. All reporting can be individual, grouped, or instantly consolidated across the enterprise.}

^{h) Funds Management: ERP enables you to manage funds efficiently. For each wing maintains your complete customer database and does kind of transaction type you may specify its effect on funds flow.}

 ^{i) Marketing, Sales and Distribution: Helps to optimize all the everyday jobs and activities carried out in sales, delivery and billing. Key elements are: pre-sales support, inquiry processing, quotation processing, sales order processing, delivery processing, and billing and sales information system. This module also includes a Point-of-Sale, which comes under retailing, can optimize the sales figures and also facilitate in having more delighted customers. Billing system with barcode label provides better reading, printing, quick billing and collections.}