Enterprise Resource Planning (ERP) is the use of a business-wide information management system to integrate all internal and external IT services and applications. This is typically accomplished with one comprehensive software program.
The purpose of an ERP is to allow seamless communication between all parts of an organization and with all outside partners and customers. Using one software program allows all users to interact with the system using a common interface. This minimizes miscommunications and simplifies problem reporting and resolution.
There are two general delivery methods available. The one chosen will depend on the size and scope of the ERP needed.
One option is web-based ERP services. When this type of service is used, all of the computer hardware, databases, and other ERP programs reside at the service company. Software is provided to interface with the ERP. This may be the ideal solution for companies that want a turn-key solution that eliminates the need for upgrading their infrastructure or adding IT support for the ERP.
The other option is for the business to own the hardware and buy or rent licenses for the necessary software for their ERP. In this case, all of the necessary equipment will reside at the company’s locations. The company will need hardware such as servers to store databases and network hardware to connect the various departments and communicate with external entities. Depending on the status of the existing equipment, hardware may need to be purchased or upgraded. Maintenance, repair and support will typically be the responsibility of the business implementing the ERP.
Scope of the ERP
Whether a web-based service is chosen or the business chooses to implement their own ERP, the required scope of the ERP must be taken into consideration.
A nationwide enterprise business may need a comprehensive ERP system encompassing human resources, sales, inventory management and warehousing. In this case, the company will often hire an expert in this area to evaluate the company’s existing infrastructure and software and design a customized ERP.
A small business with one store may only need a smaller scale ERP to integrate such activities as inventory and sales. In this case, the business may be able to purchase an off -the-shelf system from a company that designs and sells ERP software.
An ERP can be designed or purchased for a business that needs a large-scale enterprise solution or a small business that has only limited needs. An ERP can help a business be more efficient and facilitate communication between departments and with outside organizations.