ERP – Enterprise Resource Planning Software

Enterprise Resource Planning software, better known as ERP, is a software package integrates modules with business needs.  Modules are installed and customized to business specific needs, plus they also run independently.    The need for ERP software grew out of large businesses mandate for a central solution to manage all information system requirements.  The software may consist of various different business software modules listed below.

Manufacturing – Job costing, bill of materials, production scheduling, work order management, capacity requirements, equipment lifecycle, equipment monitoring, and scheduled maintenance.

Human Resources/Payroll – Automation of employee performance, payroll and benefits, labor tracking, recruitment functions, and employee training.

Inventory – Serial number tracking, multi-warehousing, quality control, stock transfer within warehouses, weighted average, purchasing and subcontracting.

Supply Chain – Forecasting, order management, logistics, procurement, event management, proof of delivery, and asset management.

Finance and Accounting – General ledger postings, budgeting, managing of accounts payable, accounts receivables, and collections, managing tax reporting and other reporting requirements.

Customer Relationship Management (CRM) –Managing customer records and order processing, e-commerce, rules for product returns, marketing campaigns, and flexible pricing.

With an ERP solution, each department or domain can be managed centrally while operating independently.

ERP vendors are classified as tiers depending on the size of clients they serve.

• Tier I – This market consists of multinational companies with a presence in many geographic areas.  The list of Tier I vendors consists of just two companies SAP and Oracle.
• Tier II – Focuses on mid-sized companies.  Most ERP Tier II vendors are confined to a specific industry.
• Tier III – Caters to smaller companies.  Many are located in a single location making installation much easier.

Let’s look at brief history of some vendors and what they have to offer.

SAP – SAP was founded by former IBM engineers.  SAP is the market leader and the third largest software company in the world.  SAP has many relational database tables that can allow it to handle extremely complex business situations.  SAP has been criticized at times for being too complex and difficult to handle.  If you are a small or medium company, this solution is probably more than what your company needs or can potentially handle.

Oracle – Oracle has been the leader in relational database software. As it has further developed technologies and acquired best-in-class companies over the years. Oracle took their database software and started building its own ERP solutions to compete with SAP.  Their first ERP product was Oracle Financials.  However, Oracle began to become a serious player in the ERP market and is now a well-established number 2 in the Tier I market.

Microsoft – Microsoft Dynamics is mainly focused on Tier II clients.  Microsoft offers various versions plus the software is built on the Windows platform making integration simple.  It also means that users have a familiarity, which enables them to adopt it and learn it more quickly.

There are some smaller vendors that are privately owned who provide ERP software to companies classified at the tier II and III level but I have not outlined them here as they do not largely affect my client base.  If you want information and Tier II and Tier III vendors, please contact me and I will be happy to assist you.

I hope you found this information helpful.  Please feel free to forward it to others.  If you would like to learn more about this topic or would like to request a topic, please contact me. If you missed any past newsletters or would like a printed copy, please visit my website www.mdsystemsolutions.com.

Until next time…Happy Computing!!!