ERP stands for enterprise resource planning. For several years, I have seen the term ERP in newspapers and online but did not quite understand what it meant. Even after trying to search for its meaning and reading about it, I was still unable to grasp the real meaning of ERP and why is it becoming a very important part of IT today and having such high value .
It was not until I worked at a 1600-employee organization that the meaning and importance of ERP started to down upon me. The reason why I started to appreciate ERP after working for a couple of months at that organization was not that they used one, in fact they did not have any ERP system installed nor even had any plans for using one in the future. Instead, they were using a number of software systems that were separate from one another each doing a specific task (one for finance, another for human resources, still another for purchasing and so on). The financial department even had two separate software systems each doing part of the work (one of the two collected data from cashiers). The absence of any kind of real integration between those separate software (and hardware) systems resulted in them being highly fragmented. Employees in the financial department for instance had to get data out of one software system by exporting it to Excel files then feeding it into the other software system! Integration was far from perfect and a lot of the 'integration' work was done manually, despite the presence of a large hardware infrastructure and a fully connected network .
The lack of integration of such software systems inside this organization resulted in a lot of delays, extra work being done and of course more possibility of error. It took a lot of work just to get the slightest of results that depended on information from several of those fragmented software systems. It was at that time that I realized how ERP would have actually saved us a lot of time and frustration. It would have streamlined the work process, made much more information available for management and reduced time, effort and even costs dramatically, not to mention headache and impossibility to get certain types of information due to the lack of integration between the fragmented software systems .
ERP is simply the glue that integrates all these separate software systems together to arrive at a fully integrated information system at the end in which data and information can flow seamlessly and effortlessly. ERP enables management to easily take a bird's eye view of the performance of the whole organization and track problems discovering which areas need attention. ERP also helps management in performing strategic planning by making the enough of the right information available. ERP is not only good for senior management, but it helps departments share information easily and provides a better information workflow for them. Long hours of delay cause by lack of integration between software systems at the same organization are saved as well as a lot of frustration and manual work which reduced the chance for error and results in more satisfied management and staff. ERP enhances the overall performance of the company making it more healthy which reflects on its business bottom line .
Sure ERP is not for the small-size organizations that only have one or two software systems maximum. ERP is for large organizations that have hundreds (or thousands) of employees and that use software systems extensively in managing their business. Nevertheless, many large organizations have yet to discover the importance of ERP, as that organization I used to work at in the past which had 1600 employees, several software and hardware systems and were having a hard time trying to keep up with rapid expansion without an ERP solution to integrate their fragmented systems.