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.
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