Primer to ERP

Enterprise resource planning (ERP) is a company-wide computer software system used to manage and coordinate all the resources, information, and functions of a business from shared data stores.

The origins of ERP lie with MRP systems which was primarily focused on production planning, inventory control and manufacturing processes. Over the last 20 years, the industry has matured and adopted a number of best practices and has significantly increased the scope and functionality offered. Today the higher end ERP systems offer an integrated package or a suite of functionality which includes Product lifecycle management, Supply chain management (e.g. Purchasing, Manufacturing and Distribution), Warehouse Management, Customer Relationship Management (CRM), Sales Order Processing, Online Sales, Financials, Human Resources, and Decision Support System.

In a number of companies, ERP systems form the backbone of the IT application infrastructure. In terms of architecture most ERP systems have 3 tiers, a presentation layer, a business logic layer and a database layer. Some of the software vendors offer a number of options for the presentation layer like windows based GUI or a web based interface. In terms of business logic or application layer, proprietary code is used in addition to some common standards. Programming might have to be done in the proprietary language…recently most of the vendors have embraced J2EE standards and allow programmers access to their APIs to enhance capabilities.


Some of the benefits of ERP systems include
(1) real time information for all functional areas of the enterprise
(2) data standardization and accuracy
(3) best practices and one location for all business process execution
(4) analysis and reporting to support strategic planning

Popular ERP Vendors
• Microsoft Dynamics
• Oracle e-Business Suite
• SAGE
• SAP Business One
• Infor Global Solutions
• NetERP from NetSuite
• Lawson Software
Overall revenue of the ERP software market is in excess of $21.4 billion worldwide. This is a huge space, with a lot of consolidation occurring. As SaaS adoption grows, hosted solutions are becoming increasing competitive and look very attractive to CIO’s under pressure to reduce costs.
This is a mature space and a number of software providers offer a wide portfolio of capabilities which encompass the whole enterprise including
(1) financials (general ledger, accounts payable, accounts receivable, cost accounting, project accounting, fixed assets…)
(2) human resources (workforce management, payroll, benefits, personnel management, training)
(3) sales management
(4) quality management
(5) Supply chain management
(6) Manufacturing management (product costing, shop floor control, production planning…)
(7) Quality management
(8) Field service and repairs

In addition, most of the ERP software vendors have invested heavily into technologies/modules to support PLM, CRM, and Portals to increase their footprint within customers by offering integrated solutions.

"Disclaimer: The views and opinions expressed here are my own only and in no way represent the views, positions or opinions - expressed or implied - of my employer (present and past) "
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