ERP Systems - Its Types, Benefits And DisadvantagesERP, or Enterprise Resource Planning, is a systems approach to plan the optimum utilization and integration of all the resources of an enterprise. An ERP system is primarily a type of management information system (MIS) which integrates the various activities of different departments in an organization. The prime objective of implementing these systems is to streamline different processes of an organization. The attempt to integrate the various activities of an organization begins with the creation of a centralized database. Created with the help of various ERP software solutions, it stores information of different departments. The implementation of ERP systems facilitate in the daily management of the company by making the relevant data easily accessible. It becomes easier to take strategic decisions since the requisite data is stored at one place. Increased complexities and competitiveness induced by globalization has forced all industries, big and small, to seek ERP solutions to get an edge over the others. There are primarily three types of systems which have been designed for different sectors of the industry. These cater to production or manufacturing, logistics or distribution, and finance. This is essentially because basic requirements of these three segments vary from each other. All the businesses implementing ERP solutions, irrespective of their size or type, greatly benefit from this system. Besides providing quick access to all types of data, it helps in keeping track of all the activities and inventory. With specific modules for accounts related activities, it becomes easier to make projections regarding finances. Since there is an integrated system for all the processes, it saves time and money for the company. Apart from cutting down on the need to implement several application systems for the various processes, it assists in the forecast of market trends. The integrated picture not only helps in planning but also in making the necessary adjustments. These software solutions are available with an inbuilt security system to protect against all types of possible crimes. Even though ERP has several advantages, of late many disadvantages have been highlighted. The key problem relates to its implementation. To get optimum results from these IT systems it is essential that the personnel implementing these solutions should be formally trained. In an effort to cut down on training and personnel costs, the companies fail to draw maximum benefits from these systems. Apart from implementation, the installation of ERP systems is an expensive affair in itself. Difficulties often arise in the application of the system due to its rigid nature. Due to the failure to adapt to certain processes in the workflow, it fails to prove cost effective for the company. However, in spite of all the limitations, ERP remains the best solution to maintain seamless integration of data collection in present day competitive market. |