Previously, enterprise resource planning was used only of large business companies. It required lots of money to be invested. Small scale and medium sized companies were not ready to invest a large amount for buying software and employing staffs for managing ERP software.

Keeping this in mind, ERP vendors started diversifying their enterprise resource planning software by releasing many versions of the software which could assist small companies too.

Also, small sized companies might not require all the tools and customizations available for the big companies. The ERP software got tailored particularly to meet the small sized companies and for increasing the productivity. After this, small sized business people also started buying ERP software which matched their investment amount.

From the early 1990’s ERP helped the companies in driving down their cost and also helped them in operating more efficiently. Effective data management also helped streamlining the business process effectively. Planning, manufacturing, marketing, sales and quoting services kept on improving. Stock control, financial tracking and customer service also got better with ERP. Many time consuming and labor related processes were eliminated by the small business with the usage of enterprise resource planning software.

The flexibility which ERP offers is definitely a very big advantage which interests the small business. Flexibility and the real time control over the price and the jobs are the key features for a small sized company. Concise reporting is also a main factor which decides the quality of the company.

Based on these needs, ERP vendors have made installation of the related software as very less complex with much less manual job needed. The user friendliness of the applications also got improved. Adding more users or customers will no way affect the functionality of ERP.

Many small businesses are already enjoying the benefits after successful ERP implementation. The profit of the company has certainly increased after the usage of ERP provided the implementation procedures are followed perfectly. Business which implemented ERP successfully saw their business profit increasing within one year itself.

A good ERP system comes with essential features that will provide the functionality of comparing the hours of working of the professionals and the actual hours of work which was paid as a salary. In fact, many small businesses just doubled their return on income with just using this service effectively. With this ERP, they were able to monitor the time of production, cost, employee activity, overall performance of the company and many more crucial information.

Before setting up ERP systems, small business must first identify the business requirements. The impact which the ERP is going to have on the business should be well analyzed. Cost factor involved in implementation should be set aside initially. Once the requirements are well planned, then comparison can be made on different vendors available and the vendor which provides cost effective service and be opted.

For example, the sales unit should be aware of how many products are there in the inventory and the inventory department should be aware of how much products are in the middle of manufacturing and the manufacturing unit should be aware of the raw materials available for further manufacturing. If these data are properly communicated, then the productivity of the company can be increased to a huge level.

Synchronizing the information is of most important to manufacturing company because every part of their business units requires communication with the other part. In order to achieve this synchronicity usage of Enterprise resource planning software is necessary. Enterprise resource planning software is designed specifically to integrate all data available across the company and produce meaningful result from the data. Every data is collected and integrated into a unified system.

Though enterprise resource planning is an integrated system, it requires many software and hardware modules for its functionality. If the requirements posed by the vendors who provide enterprise resource planning software are successfully met the company, then the ERP system implementation should be successful. There are a very few challenges involved in the ERP implementation. If those hurdles are crossed and if the ERP system in is installed successfully, then it is definitely going to serve the company in raising the productivity to a high level.

Here are some of the benefits which the enterprise resource planning software gives to its clients specifically to the manufacturing companies:
1. Integrated service – ERP systems helps in integrating the data and providing synchronized service to its users.

2. ERP systems require feeding of data only once. When data is fed to one of the systems, then it gets automatically populated to every part of the software in no time.

3. The amount of paper work required is reduced to a huge amount. There is no need to keep loads of records in paper to keep track of the company’s performance. There are lots of applications and customizations available with the tool itself which could produce reports with a single click.

4. The inventory cycle time can be reduced to a huge level. The inventory cycle is the time taken for the product to get fully manufactured and delivered to the customer. Reduction in inventory cycle time means increase in the production. With this, the satisfaction level of the customer gets improved and also attracts more customers.

5. Labor costs are reduced to a considerable amount of time. With the availability of data in real time managing employees and managing real time production data can be in control.

6. Production time can be decreased with the usage of enterprise resource planning software. It helps in eliminating repetitive process and helps in breaking down the production time.

These benefits over takes some of the minor disadvantages of the ERP software and because of this reason many companies opt for enterprise resource planning rather than any other methods.

Every company is looking to increase its market value. For, this they are re-looking into the factors which affect the company’s productivity and management. Every company is looking to use their resources effectively so that their business is done more effectively and efficiently. Most of the companies decides to use software which could manage their whole enterprise and the information should be available with the enterprise.

With this need, enterprise resource planning came into picture. Enterprise resource planning is a software based system which helps in managing every functionality and operation of the company. It ensures that there is proper and reliable data communication between various parts of the business units. This helped many businesses to increase their productivity and cut costs on management related funds.

Usage of enterprise resource planning software have helped many companies in analyst and optimize their business process, enhancing the supply chain management, efficient control of inventory, enhanced decision making by providing precise reports, integrating various business units and developing transparency all over the business.

In a typical corporation which implemented ERP successfully , the customer sales department can get access to the purchase department, inventory department data can be viewed by the sales department and the top management can see the overall structure and the work flow of the company with a single click. This is what a comprehensive enterprise resource planning software is capable of.

The impact of the enterprise resource planning can be seen evident with the company even before 12 months of implementation. With proper planning and successful implementation ERP can provide a strong platform for better productivity. The implementation of ERP helped many companies in increasing the value chain in the market. It also created confidence among its customers. Share holders also bought shares of these companies with confidence.

In previous stage before ERP comes into practice, companies used separate software for each service. Separate tools were used for sales tracking, financial management and for human resource management. Lots of employees were employed for managing separate software. This resulted in redundant technology, service was poor and the staffs found it very difficult to integrate data from these services and create a report out of it.

Critical information could be extracted from such independent software. But, with the advent of enterprise resource planning software, managing all the resources under a single system was made much easier. Also, lots of manual work involved in resource management was cut down to a large amount.

Compared to the big industries, small and medium sized industries used the ERP efficiently. In general enterprise resource planning can be used to introduce standard industry process, implementing integration across various inter related business units within the company, real time access to the information and creating analytical report with a single click.

Implement an enterprise resource planning software has lots of ups and downs. The anticipation that a company expects might differ. It is very essential for the ERP vendors to make sure that the anticipations of the staffs who are going to use the tool is met successfully.

Some of the essential points and challenges that should be noted during the implementation of the ERP software are as follows:
1. Effective planning and implementation :
As with any other software installation, enterprise resource planning software also requires high level of planning for the successful ERP System implementation. The requirements from the company which opts for installation should be taken and customizations should be done accordingly. The customers should also ask for more templates based on the skills of the staff.

Templates are better used to reduce the time involved in customizing the tool manually. Before implementing a template, the impact which the template poses on the work flow should also be well determined. The changes to the template should also be done proactively. Instead of dwelling on the changes, templates which have customizable feature can be readily used.

2. Training :
Similar to the customization in the implementation, the vendor of enterprise resource planning software should also decide on customizing the training needs. It is always better to choose the vendor who has lots of experience in implementing the ERP to similar companies. These types of vendors will have more knowledge and they have better understanding of the business and try to fit in the ERP’s smartly and easily.

Based on their experience, they also know the right path of training to be provided. Most vendors would have a general session for explaining the whole ERP system architecture on user level. Then, separate trainings will held based on the nature of work they are going to do using ERP.

3. Mock live experience :
Mock live experience is a live training before starting operations. For performing this mock live experience, ERP would be implemented on some of the systems and trainings are given to the staff so that they can get an idea about what they are going to work. They can better understand the platform.

The hands-on experience will definitely throw some light on their understanding of ERP. Mock live experience also helps the staffs for providing valuable points on customization before enterprise resource planning software gets fully implemented in their company.

4. Anticipation management :
Anticipation management is one of the essential keys for an effective ERP implementation. Staff should have a clear understanding of the daily routine work with the ERP.

5. Follow up and support :
Experts of ERP should always be present in the site where ERP is used to handle problematic situations.

Material resource planning is also a software based management of inventory and product productivity managing. It was also used for managing the process of manufacturing. Enterprise resource planning got evolved from material resource planning when the software architectures got ‘routing’ as one of its major part.

Material resource planning didn’t take care of capacity planning of a company. The method of finding the capacity of production which the organization requires and meeting the demands in the market is termed as capacity planning. As with increase in the demand and supply of products got increased, demand for software which could manage capacity planning also got increased.

By incorporating capacity planning, material resource planning got changed into enterprise resource planning. Enterprise resource planning handled improvement in planning of every operation within a company like inventory, shipping, invoicing, manufacturing, accounting and logistics. Every business units present in the company like human resource management, quality management, marketing, sales, billing, delivery and inventory management are also covered by ERP.

Before ERP was developed, many software were available just to manage an individuals to manage their income. But, with the complexity involved in managing resources for corporations, many vendors started developing software in the name of ERP.

During the 1990’s period, many companies faced the Y2K problem. The systems other than ERP didn’t have the capability to eliminate this problem. Many companies which foresaw this Y2K problem thought wisely and they started replacing existing systems with ERP systems.

From then on, the ERP systems had a boost in their production. We can say that, a considerable amount of risk involved in the Y2K was reduced to a huge amount by the ERP systems. There was a rapid growth in sales after companies started implementing ERP.

ERP systems are sometimes called as back office. This is because, ERP systems doesn’t include data which are related to customer or general public. They are not directly involved in this system instead only the information which are closely related to the company are take into account by ERP. But this may not be 100% correct. Because, a type of ERP called as customer relationship management ( CRM ) deals with data directly related to customers. This type of ERP is called as front office.

In the early 2000’s, the term ‘ERP II’ got evolved. This is to indicate that the next generation of ERP software was available. ERP II based software had many more new features included. The key feature is that they came as web based software tool. This ensured that there is a real time access to the systems for everyone including customer, suppliers and to the employees. Now, the ERP software is being called as Enterprise Application Suite or EAS. EAS systems are now including every segments of the business and using browsers as thin clients, information is made available to its users.

With the help of enterprise resource planning the company can streamline their work flow, can provide enhanced support to their customers, real time availability of data on sales, inventory and raw material availability, reducing a considerable amount of paper works and finally it assists in the global operations.

As a whole enterprise resource planning is software designed to boost the company’s productivity. Though there are lots of advantages with enterprise resource planning, there are also few drawbacks with this. One of the main drawbacks is that it takes more time and amount to implement.

Let’s see some of the key features which make this software a huge success in the market:
1. Financial management:
Corporate Financial administration is always a big and important task in any company. Every company is under scrutiny of monetary bodies which regulates the financial flow. ERP has a good financial administration component which makes it a attraction for many companies. There are several benefits in enterprise resource planning related to financial management.

Starting from the invoices to the cash receipts, ERP can be customized to store much information and if effectively used, ERP can help in stabilizing the financial situation of a company. ERP provides real time tracking of cash flow and timely financial reports can be created.

2. Human resource management:
Some of the key factors in the human resource management are payroll management, employee administration, tracking the personal information of the employees and little other legal information. Using the traditional human resource management was complex. Managers found it very difficult to track the progress of an employee and also on tracking the information regarding the employees.

With the advent of ERP, a lot more information can be gathered and maintained related to human resources. This involves talent management, recruitment management, scheduling, attendance and time management, etc. The tools can also be customized based on the need of the human resource managers.

3. Supply chain management:
Assessing the demand and matching the needs of the customers is also one of the key functions of the business. With increase in the competitions, this part is gaining much importance in a business. Failing to collect and forecast this information can have adverse affect on the productivity. It can also degrade the company’s status in the economy. ERP software can take care of the supply chain management right from the beginning till the end.

4. Customer relationship management:
This method also called as CRM is the most required part in sales. Customers are the most valuables to each company and they work based on the needs of the customers. CRM ensures reliable and proper communication of customer related information to the sales team and then to the marketing team.