Enterprise Resource Planning

ERP is an abbreviation for Enterprise Resource Planning and means, the techniques and concepts for the integrated management of businesses as a whole, from the viewpoint of the effective use of management resources, to improve the efficiency of an enterprise. ERP systems serve an important function by integrating separate business functions - materials management, product planning, sales, distribution, finance, and accounting and others - into a single application.

However, ERP systems have three significant limitations:

  • Managers cannot generate custom reports or queries without help from a programmer and this inhibits them from obtaining information quickly, which is essential for maintaining a competitive advantage.
  • ERP systems provide current status only, such as open orders, Managers often need to look past the current status to find trends and patterns that aid better decision-making.
  • The data in the ERP application is not integrated with other enterprise or division systems and does not include external intelligence.

There are many technologies that help to overcome limitations of ERP systems. These technologies, when used in conjunction with the ERP package, help in overcoming the limitations of a standalone ERP system and thus, help the employees to make better decisions. Some of these technologies are:

  • Business Process Reengineering
  • Management Information System
  • Decision Support Systems
  • Executive Information Systems
  • Data Warehousing
  • Data Mining
  • Online Analytical Processing
  • Supply Chain Management
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