What Is ERP Solution?

by Pallab Dutta

Enterprise Resource Planning (ERP) is a business software solution or package that integrates key business processes, functions and allied business activities. Since the large-scale deployment of IT, computing systems and software applications in the 1990s, enterprises, large businesses and even small and medium business firms have invested in ERP solutions. Deployed and managed well, an ERP solution gives greater insight into voluminous enterprise information, ensures timely availability of key enterprise applications to corporate users and helps in informed management decision making.

Importance

Modern businesses run systems, IT networks and corporate applications and manage business processes that often become unwieldy, complex and difficult to manage. An ERP solution with its business process transformation capabilities is generally favored by enterprise IT managers, chief information officers (CIOs) and chief technology officers (CTOs) to integrate and better manage business operations and ever-increasing business applications and network systems. The solution in its early deployment stages integrates key business processes and functions such as finance, manufacturing, purchase, production planning, human resources, sales and marketing.

Widespread Industry Application

ERP solutions or systems were predominantly deployed in the manufacturing domain for years. In recent decades, sectors and industries such as retail, health care, education, pharmaceutical and life sciences, IT and high-tech, telecom, media and entertainment have deployed comprehensive ERP systems or key modules of ERP solutions. Vendors now manufacture and sell ERP software configured to address specific business challenges and unique issues of various sectors. New tools and applications are also available to help businesses customize key ERP modules to suit their business operations' environments.

Evaluation by Enterprise IT Team

ERP solutions offered by major vendors such as Oracle, SAP, Microsoft Dynamics, Autodesk, SAS and SYSPRO are evaluated and deployed by businesses and enterprises. The IT team and top management executives of an organization have to be clued into key business challenges, the long-term strategic premise for such a solution, the impact on business operations and employees, the possible pain-points and expected future benefits before sanctioning rollout of an ERP system. The business process transformation premise of an ERP solution also has to sync well with the emergence of Web-based software systems and new-generation IT technologies such as cloud computing and virtualization.

Training

The key to the success of any enterprise-wide ERP software implementation is training. Professionals, workers and other staff members who are expected to use key business applications must be trained to understand the ERP solution, its implications for business operations and the transition period issues related to phasing out legacy IT systems. The CIO or IT head, along with key ERP vendor professionals, devise comprehensive training programs and change management initiatives. ERP training involves a mix of in-house training sessions, Web-based tutorials and occasional vendor-sponsored external courses and certifications for key trainers and project leaders.

Enterprise Benefits

IT heads and decision makers are well aware that investing in an ERP solution might not result in overnight business transformation benefits. A successful and near glitch-free deployment of ERP software can result in medium-term business benefits. Top management are able to get real-time insight into business activities and operations across locations and can adjust short-term strategic objectives and goals. Employees can access and manage enterprise applications on demand. Over time, businesses learn to be more nimble, competitive and productive.

About the Author

Based out of the metropolitan Washington D.C. area, Pallab Dutta has written on business, technology and management issues since 1994. He has freelanced for “The Wall Street Journal," “The Economic Times” and “The Times of India." Dutta holds a Bachelor of Science in economics from Bombay University and a Diploma in modern information systems from IIT Bombay.