ERP stands for Enterprise Resource Planning and refers to software and systems usedtoplan and manage all

the
core supply chain, manufacturing, services, financial and other processes of an organization. Enterprise Resource
Planning software can be usedtoautomate and simplify individual activities across a business or organization, such
asaccounting and procurement, project management, customer relationship management, riskmanagement,
compliance and supply chain operations.

Individual ERP applications can offer software as a service (SaaS), while a complete suiteof ERP applications
forms an ERP system that can be used to effectively communicate andbring together business processes to
enable a flow of data between the applications, typicallythrough common databases either on-site/on-premise or
in the cloud.

ERPs connect every aspect of an enterprise. An ERP software system allows for better performance and
project management that helps plan, budget, predict and accurately report on an organization’s financial health
and processes.

The term “ERP” was first used in the 1990s by the Gartner Group, but enterprise resourceplanning software
and systems have been used in the manufacturing industry for over 100years and continue to evolve as
industry needs change and grow.

ERP History/Timeline:
● 1913: An engineer named Ford Whitman Harris developed the Economic Order Quantity(EOQ) model,
a paper-based manufacturing system for production scheduling. ● 1964: Toolmaker Black and Decker
adopted the first Material Requirements Planning(MRP) solution that combined EOQ with a mainframe
computer.
● 1970s-1980s: Computer technologies evolved and concept software handled businessactivities outside of
manufacturing, including finance, human resources data, andcustomer relationship management
(CRM).
● 1983: MRP II was developed and featured “modules” and integrated core manufacturingcomponents, and
integrated manufacturing tasks into a common shared-data system. ● 1990s-2000s: Gartner Group coins term
“ERP” to differentiate from MRP-only systems. ERP systems expanded to encompass business intelligence
while handling other functions such as sales force automation (SFA), marketing automation and eCommerce. ●
2000-2005: Cloud-based ERP software solutions arrive when ERP software makerscreate “Internet Enabled”
products, providing an alternative to traditional on-premiseclient-server models.
● Today: Software-as-a-Service (SaaS) and Anything-as-a-Service (XaaS) offer newdelivery models for ERP.
Remote web-based access for cloud ERP solutions providemobile solutions, security, and integration with
the changing industries and smart technologies, including integrations with the Internet of Things (IoT),
Internet of Everything (IoE), and even social media to provide comprehensive solutions for everyindustry.

The main purpose of an ERP system is to increase organizational efficiency of anorganization by managing
and improving how company resources are utilized. Improvingand/or reducing the number of resources
necessary without sacrificing quality andperformance are keys to effectively improving business growth and
profitability.
ERP systems typically cover all aspects of business operations and commonly provide: 1. An
integrated system
2. Common database
3. Real-time operation
4. Support for all
applications/components
5. Common user interface across
application/components
6. On-premise, cloud hosted, or
SaaS deployment

ERP software has the ability to collect

and compare metrics across
departments and provide a number of
different reports based on roles or
specific user preferences. The data
collected makes finding and reporting on data faster and gives a complete view of businessperformance with
complete insights on how resources are being spent. ERP synchronizes reporting and automation by reducing the
need to maintain separatedatabases and spreadsheets that would have to be manually merged to generate
reports. This combined data collection and reporting offers valuable insight, such as where to cut costs and
streamline processes, providing the information to make real-time businessdecisions.

Enterprise Resource Planning software is considered a type of “enterprise application”, whichrefers to software
designed to satisfy the software needs of an organization and improvebusiness performance. There are many
different ERP systems available today that rangegreatly depending on the size, function, and needs of an
organization. Types of ERP systemsgenerally refer to deployment options and include cloud ERP, on-premise
ERP and hybridERP (some systems in the cloud and some on-premise).

Each ERP solution system is often tailored to support different aspects of a business, meet
anorganization’s business requirements and have different methods of deployment.

Big Business ERP vs. Small Business ERP

In the past, “big business ERP” addressed large organizations that often deployed onsite/on- premise ERP
solutions and had an abundance of resources to dedicate to IT and other support to analyze, customize, upgrade
and deploy their software solutions. The phrase “Small Business ERP” or “SME (small and medium-sized
enterprise) ERP” commonly referred to ERP software systems with business management applicationstypically
created to meet the specific needs for a small to mid-sized business. Today, these phrases are used less
frequently as the important factor is not company size but determining if the ERP system is effectively addressing
current and future businessrequirements, no matter the size of the organization.It’s imperative that organizations
consider and select ERP systems that eliminate the need for costly customizations, adapt to the rapidpace of
business change, address future technologies and meet other identified requirements.

There are three main types of ERP systems that function with different deployment model options. The
most common types of ERP systems include cloud ERP, on-premise ERP, andhybrid ERP.
● On-Premise ERP software is implemented onsite and maintained in physical office spacewithin an
organization, hosted on the company’s own computers and servers for full control, support and ownership
of the entire system once implemented.
● Cloud-based ERP software is a web-based solution, known as Software as a Service(SaaS), where an
organization accesses and stores data on any device with an internet connection, usually through the
 purchase of a subscription. Continual support, updates, training, and flexible customizations supported by
the software provider.
● “Hybrid” ERP software refers to a combined implementation of cloud-based and on- premise ERP system
solutions. The combination of hosting and deployment servicesvary by provider. These models can provide
ERP users the flexibility to migrate betweendelivery models, or integrate benefits not available existing
implementation.
Different ERP vendors support different deployment model options. Combinations of options, often referred
to as “hybrid” deployment may offer a combination of hosting and deployment services. These models can
provide ERP users flexibility migrate between delivery models, or integrate benefits not available existing
implementation.

ERP software can be used in any industry to help a business become more efficient. It provides an effective
communication tool that can manage information between internal andexternal departments, assist with daily
activities to manage projects, track adherencetoguidelines, and handle day-to-day intricacies that come with
running a business. Due to ERP roots in manufacturing, there are robust Industry-specific ERP systems that cater
to the various manufacturing industries. ERP software systems are very diverse and are keyparts of many
industries, including but not limited to:
a. Manufacturing
b. Industrial Machinery and Components
c. Construction and Home Improvement
d. Electronics and Technology
e. Automotive
f. Aerospace and Defense
g. Healthcare, Pharmaceutical and Life Sciences
h. Agribusiness, Farming and Agriculture
i. Food and Beverage
j. Healthcare and Hospitality
k. Clothing, Consumer Goods and Retail

Over time, ERP systems have grown to include support for other applications and “ERPmodules" that support
day-to-day business function. In many ERP systems, these commonfunctional areas are grouped into ERP
modules, including but not limited to: a. Financial Accounting
b. Management Accounting
c. Human Resources
d. Manufacturing
e. Order Processing
f. Supply Chain Management
g. Project Management
h. Customer Relationship Management (CRM)
i. Data Services

Business development often focuses on goals that coincide with a company’s short-termandlong-term growth,
as well as analyzing potential business challenges. Conducting a regular analysis of systems and processes
helps identify when a business may need to integrateanERP system.

An ERP solution should be taken into consideration when existing business systems andprocesses are:

1. No longer function or function inefficiently (throttling/bottlenecking)

2. No longer support the growth of the company
3. Lack current security requirements to mitigate risk
Identifying broken processes is important for growth and finding areas of improvement. Hereare a
few examples of opportunities that may signal a process is no longer supportingcompany growth:

1. Use/Relying heavily on separate databases/spreadsheets/programs that require manual processes for data
management and fall out of sync regularly
Information and analytics are difficult to access and/or out of date 2. Day-to-day processes are
difficult or overly time consuming, such as paper-basedaccounting, financial reporting, etc.
3. Sales and customer experience are suffering due to inaccurate or incomplete data andcause poor reputation
for reliability and services
4. Inefficient/complex/complicated IT processes. Current systems have bad scalability, fragmented
systems legacy solutions.
5. IT time is spent fixing/patching legacy systems to try and keep up with growth 6. Does not support new
and advanced technologies like IoT, artificial intelligence, etc. 7. Once broken processes are identified,
businesses can take the next steps to overcomethese business challenges and support business growth.

Once broken processes are identified, businesses can take the next steps to overcome thesebusiness
challenges and support business growth.

ERP systems are used to help businesses of all sizes overcome challenges—fromsmall businesses to massive
enterprises. Early business practices may no longer keep up withgrowing demand and require more efficient
business tools, like ERP, to effectively manageabusiness’ systems and resources.

ERP software systems provide many benefits to the health and growth of a business.

1. Cost savings and improved ROI efficiency. Increased productivity and efficiency as aresult from the integration
and automation that ERP software provides 2. Improve business insight. Improve decision making with a single
aggregated sourceof truth and real-time data
3. Manage Regulatory Compliance. Manage and monitor compliance with regulatorystandards, and even
set up alerts for non-compliance
4. Mitigate and reduce risk. Automate core business operations, manual tasks, andreporting. Reduce
human errors, and free up employee time and resources
5. Enhance collaboration. Break down communication barriers for efficient collaborationand
coordination to improve job efficiency.
Improve supply chain and distribution network reliability. Use demand-driven MRPtoforecast supply and
demand and prepare for fluxes in orders and supply chain 6. Scalability. Consistent infrastructure for
streamlined operations can growas your business grows
7. Optimize customer and partner management. service, customer relationshipmanagement,
as well as partner and supplier management with insight fromseamlessshared information