Solved: Enterprise resource planning (ERP) systems, such as SAP’s R/3, consist of

The Enterprise Resource Planning systems include various IT applications that serve key corporate functions, and involve centralized information shared by many users that includes one or more databases programs to add, delete, change, analyse, or otherwise act upon data elements in those databases. The ERP model may look as under:

The characteristics of ERP is that is that integrates many software applications and business functions using a common database with the following potential benefits-

–         Cycle time reduction

–         Faster information transactions

–         Better financial management

–         Laying the groundwork for electronic commerce

–         Encourages organizations to manage processes more explicitly

However, it also suffers from certain potential risks which are as under:

•          Potential risks-

–         Difficult to implement

•          Often easier to adapt business processes to the software than vice versa

–         Inflexible

–         Overly hierarchical

Certain examples of ERP package would include the ERP package for Customer Relationship Management and that for the Supply Chain management.

In case of the web selling of CRM model, it shall help in the following ways:

•          On-line sales-

–         product catalogues

–         shopping carts

–         credit cards

–         shopping lists

–         product configuration for complex products

•          On-line service-

–         help

–         track on-line activities

•          on-line marketing analysis

In case of SCM, ERP can help in the following ways:

•          Managing interrelated activities “from your suppliers’ suppliers to your customers’ customers.”

•          May involve-

–         changing information flows and decision-making within a firm

–         changing information flows and decision-making between firms

–         using new software tools to enable these changes

•          ERP systems » Cross-organizational planning, scheduling, and optimization tools

•          Increase responsiveness to supply and demand fluctuations without sacrificing margins

–         linking with suppliers, customers, and transportation providers

•          Reduce inventory

•          Improve reliability of delivery commitments

–         ATP (Available To Promise)

•          Manage changes in product mix

–         including new product introductions

However, various other examples of ERP packages could include:

•          EAI – Enterprise Application Integration

•          Enterprise portals

•          ERM – Employee Relationship Management

•          Product Lifecycle Management (PLM)