ERP stands for enterprise resource planning; it is an integrated management of internal business processes, usually on demand and mediated by various technology and software. The planning, execution, management control and analysis of activities within an organization are all executed through ERP systems. ERP plays a very important role in Indian organizations, as it has become a necessity for many small and medium scale businesses (SMEs) and also it helps big enterprises in their development. Enterprise Resource Planning can help in improving the overall efficiency and quality of service delivery in the organizations.
The term ERP basically refers to three things, enterprise resource planning software, the central repository, and the machine learning/notation software. ERP system plays an integral part in all the business processes of an organization and there are different types of ERP systems available in the market. Some examples of popular ERP applications are ERP software from Oracle, PeopleSoft and MS Business Solutions. All these applications help to manage the business activities of the companies. There are various benefits of ERP, one of which is that it helps to integrate the human resources, technical infrastructure and other aspects of the organization.
As far as the cost involved is concerned, it varies from one application to another. But majority of the ERP applications costs approximately about $5 per month. This price is inclusive of the license fee and other maintenance fees. A majority of the organizations use this application to monitor and track the business needs and the customers. It can integrate the customer relationship management (CRM), supply chain management (SCM), and accounting systems. This enables the company to monitor the sales, inventory, demand, and human resources.
According to most of the experts ERP, is a good option for SME because ERP helps them streamline the business processes and activities. Enterprise Resource Planning Software or ERP is a set of procedures that help to organize, develop and execute the business processes of an organization. ERP has four main components namely ERP software, domain-specific language (DSL), a data repository, and a management platform. Enterprise resource planning software can be defined as a complete and comprehensive tool that helps in the automation of business processes.
ERP is a must for every organization today as it not only helps to automate the business processes but also enhances the productivity of the employees. The on-premise ERP is mostly used by large organizations, whereas the Cloud ERP is utilizing to implement ERP in small and medium-scale organizations. Small and mid size enterprises or SMEs make use of cloud ERP system due to several advantages over the on-premised ERP like scalability, reduced IT cost, easy accessibility to data, easy integration with legacy systems and compliance obligations. On the contrary the Cloud ERP faces many challenges like lack of expertise, inability to implement in the small and medium scale businesses, inadequate bandwidth, poor IT infrastructure, lack of security, etc.
Cloud ERP uses a software application called Business Intelligence Application (BIA) which helps to monitor the on-premises Enterprise Resource Planning (ERP) and helps the business processes evolve and change. BIA is based on machine learning technology and supports both on-demand and on-premise versions of ERP. The machine learning technologies help to monitor on-demand business processes that include inventory, order processing, and customer service, while the on-premised BIA version supports configuration management, manufacturing control, distribution, financial process, human resource, and accounting processes. The machine learning technologies also help in integrating the on-demand ERP applications with the present day on-premised ERP applications. The Cloud ERP helps to provide complete integration and hence it can be termed as a very efficient ERP system.
On the other hand the Cloud ERP offers the benefits of on-demand capability, while on the other hand the on-premised ERP offers complete capabilities for managing the on-premise business processes. This is in accordance with the current reality that the modern business processes are changing very fast and growing at a phenomenal pace. The Cloud ERP offers the ability to adopt the state-of-the-art tools and technologies to support the business processes and this is in accordance with the reality that the modern business needs demand flexibility and changeability. The Cloud ERP software helps to create a cloud architecture which basically helps the companies to easily adapt to the changes in the business needs and requirements. The on-demand capability offered by the Cloud ERP is in accordance with the fact that the companies are growing and expanding at a faster pace and thus need flexibility in terms of availability of resources.
These Cloud ERP systems have made a tremendous impact on the industries and hence it has become a necessity for the companies to adopt the ERP software to streamline their business processes. In addition to all these Cloud ERP also offers better scalability and reduced costs. It is one of the most reliable ways of implementing an ERP in-house and this is because of the fact that ERP software offers better functionality and efficiency along with being easy to implement and manage and control. It also proves to be more advantageous to use the ERP, as you do not have to deploy and manage the physical infrastructure and you also get the capability to reduce costs involved.