Master of Business Administration in Information SystemMBA- Semester IVMI0029- Enterprise Resource Planning
. What do you mean by Enterprise Resource Planning? Also discuss the advantages of ERP?
An enterprise resource planning (ERP) system is an integrated computer-basedapplication used to manage internal and external resources, including tangible assets,financial resources, materials, and human resources. Its purpose is to facilitate the flowof information between all business functions inside the boundaries of the organizationand manage the connections to outside stakeholders. Built on a centralized databaseand normally utilizing a common computing platform, ERP systems consolidate allbusiness operations into a uniform and enterprise-wide system environment.An ERP system can either reside on a centralized server or be distributed acrossmodular hardware and software units that provide "services" and communicate on alocal area network. The distributed design allows a business to assemble modules fromdifferent vendors without the need for the placement of multiple copies of complex andexpensive computer systems in areas which will not use their full capacity.The initialism ERP was first employed by research and analysis firm Gartner Group in1990 as an extension of MRP (material requirements planning, later manufacturingresource planning) and CIM (computer-integrated manufacturing), and whilst notsupplanting these terms, it has come to represent a larger whole. It came into usebecause the creators of MRP software started to develop software applications beyondthe manufacturing arena. However, this does not mean that ERP packages havetypically been developed from a manufacturing core. Many of the major players startedtheir development of an integrated package from other directions, such as accounting,maintenance and human resources management. ERP systems now attempt to cover allcore functions of an enterprise, regardless of the organization's business or charter.These systems can now be found in non-manufacturing businesses, non-profitorganizations and governments.To be considered as an ERP system, a software package should have the followingtraits:
An integrated system that operates in (next to) real time, without relying onperiodic batch updates.
A common database, which is accessed by all applications, preventing redundantdata and multiple data definitions.
A consistent look and feel throughout each module (sales, manufacturing,accounting etc.)
The ability to access the system without specialist integration by the InformationSystem (or IT) department.
Advantages of ERP
There are a number of powerful advantages to Enterprise Resource Planning.