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.

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.

To successfully implement an enterprise resource planning software, the company should clearly mention its requirements to the vendor and there should also be sufficient software managing staffs employed by the company solely for operating and maintaining the ERP applications.

Studying enterprise resource planning requires studying different areas. This is not as simple as to learn single software. There are many areas involved in its study which varies from the implementation of the software, outsourcing of ERP, studying impact which it can cause to the international business economy, job opportunities, etc.

The main for the development of ERP is ultimately to increase the productivity and value of a company by assisting the company in fine tuning the manufacturing process. The first software which was implemented for a similar kind of management was named as ‘Material resource planning’ (MRP) in 1975. And later by incorporating many new technologies MRP got evolved into enterprise resource planning (ERP).

The enterprise resource planning systems will collect the data related to the company and stores into a single repository. It also takes into account the several processes and the data sources pertaining to the company. For implementing these data and product services, various software and hardware modules will be used. These hardware and software modules are integrated to form a single enterprise resource planning system.

If the ERP system is planned and implemented successfully then it is undoubtedly going to serve the company is raising its productivity. But there are many challenges involved in planning, implementing and integrating the ERP system.

The challenges involved starts from the point of selecting the right vendor. Failure of enterprise resource planning can never be analyzed or traced back. So, before implementing the software, lots of planning should be done. Also, the requirements posed by the vendor should be fulfilled completely. The vendor also should be in a position to provide successful implementation within time and the quality should also be good.

Some of the other challenges are lack in knowledge level of the employees. The management should thoroughly understand the process and should choose the right vendor. Lack in expertise might cause huge loss. Some companies limit the budget of implementing ERP software to a very minimal level. This in turn will result in less customization and templates.

The real usage of ERP software might be in a toss. Sufficient information can’t be managed and leading to very minimal information to be available. The other major challenge which every organization faces is the lack of support staffs. For a successful ERP implementation, there should be sufficient number of employees assigned by the company to work on the tools. If the companies are able to overcome these challenges, then certainly ERP is going to yield them a lot of profit.