Enterprise systems and the integrated business processes
I thought about writing this article as an introduction to the Enterprise (ERP) systems, with the goal to explain their role in today’s business environment.
Historically, the term ERP was introduced in the 90's and the ones who created it meant: “We developed something better than just material requirements planning (MRP)” – basically extending the capabilities of the systems beyond manufacturing.
ERP stands for “Enterprise Resource Planning”, but this name can be sometimes misunderstood, especially by people who have never worked with such systems.
ERPs are basically enterprise systems which can manage the integrated business processes across multiple functions or departments of a specific company.
The most common organizational structure we encounter nowadays is the functional structure. The functions or departments of an organization are responsible for a set of related activities. These functions include: purchasing, operations, warehouse, sales and marketing, research and development, finance and accounting, human resources and information systems.
A specific process consists of multiple activities that can happen in different departments or functions of the organization. Therefore, the business processes are cross-functional, and a coordinated approach needs to apply in each functional group of the organization in order to complete them.
Every ERP system you will find on the market will come with a suite of modules, covering the functions of different departments of the business.
A simple way to look at it is using the Buy – Make – Sell approach of any company. You will find additional functions like design/plan/store/service or people/projects/finance which all support the goal of the organization to provide quality products/services to their clients.
When I started to write this blog, the ERP industry has reached somewhere close the 60 proprietary ERP vendors selling over 100 software products and close to 20 free and open-source ERP software (source: Wikipedia).
In this space, I hope to show the current and future ERP users that any change of system can be tackled with adaptation. The actual simplification of a process or task in hand, can have incredible benefits when it comes to the adoption of the new system. The evolution will continue, as the future digitization will create more opportunities for the software companies to develop more.
In the last 4 years I’ve worked with the most common ERP system in New Zealand - MYOB EXO Business (Exonet) and recently Acumatica ERP (MYOB Advanced) and SAP Business ByDesign.
Acumatica has the Open University learning platform, providing the install files and learning resources for free, once you sign up.
SAP has the Open SAP learning platform, where they provide a multitude of free online training courses for beginners and advanced users. For the SAP Business ByDesign courses, they even provide a test system for you to have a play and see how it works.
So go and have a look at these products if you are interested in finding out more about ERP systems.
Please subscribe to my blog, I will keep on posting tips and tricks for using these 3 ERP systems and also, I’ll start introducing some of the online apps that companies can use to manage projects, track time or pay their people.