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Fundamentals of ERP


Enterprise Resource Planning plays a critical role in business, requiring people to have a general understanding of the key components of Enterprise Resource Planning to function well in any organization. Businesses have been transitioning to computer technology at an increasing rate since the advent of the desktop computer in the early 80’s. The focus of computer technology in business has always been to increase productivity through information management. Since the introduction of the Internet and advances in networking technologies and software, businesses must implement some form of computer technology to automate common tasks like word processing, accounting, and Internet access by employees, to more advanced software applications covering all or most of an organization’s business processes. These advanced software applications, generally known as ERP, capitalize on computer technology and enable businesses to have detailed perspectives into a wide range of business operations, allowing them to share information quickly between organizations, departments and personnel for better management.

ERP is an extremely complex subject best understood by looking at the major components of an Enterprise Resource Planning system including hardware, software, and primary areas of concern for business owners and managers.

The size of an organization dictates the type of hardware used in an ERP system. For small businesses, the hardware component of an ERP system could be a single microcomputer or a few microcomputers connected together over a local area network (LAN). Typically, in larger ERP environments, an enterprise will use a dedicated server, which, in most cases, is a mini-computer. Mini-computers have greater operating and storage capacity than desktop computers and can service many users at one time. Users access the server via either dumb terminals (a monitor and keyboard) or a smart terminal (a fully functional desktop microcomputer) networked to the server via a Local Area Network (LAN).

ERP software design uses a “best business practices” approach that helps ensure data accuracy and integrity. The selection of the software component(s) of an ERP system is one of the single most important issues facing a business considering an ERP implementation. Most businesses do not have the IT staff to oversee and manage the entire acquisition process, which requires careful management scrutiny from many different angles to safeguard the IT investment. Depending on the size and scope of the ERP acquisition, a business can expect to draw upon outside professionals to conduct a variety of analyses including feasibility, business process, and vendor/software performance. Implementing an ERP solution in an organization is a deep science requiring the best of business and IT minds, working together to help ensure the success of the project across a wide spectrum of issues

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