The Current State of Enterprise Resource Planning
ERP evolved from manufacturing resource planning (which originated from material resource planning).The functioning of ERP has gained much prominence and utility with the intervention of web enabled and open source technologies.ERP II the latest advancement in ERP software deserves special mention.
A D V E R T I S E M E N T
ERP has a significant impact right from the time it is conceived in the organization. It paves way for restructuring which would not have otherwise happened in organizations sticking to traditional and conventional values. ERP is an eye-opener for organizations because they get to realize the fine distinction involved in modifying the business processes. Organizations now disclose vital information in the public domain, which was otherwise, considered confidential and not meant for dissemination.
ERP has undoubtedly become an important business application to all industries. It has almost become a must for all organizations irrespective of the type of business manufacturing or service .If companies feel that coordination and enterprise communication are their only problems they don't have any other alternative but to go for ERP, provided they want to make profits and remove the existing setbacks.
Needles to say ERP has helped companies in monetary and nonmonetary aspects if they are keen in utilizing it to the core and take the necessary steps to overcome the setbacks. However ERP needs lot of improvement (this statement included the latest versions also).ERP is an effective application. It will be great if one can bring an ERP system that id devoid of the drawbacks from the existing ones. The latest intrusions namely open source and web enabled technologies has increased the effectiveness of the application. However they are not enough (technically speaking).ERP applications should be designed to make the maximum use of internet so that the user can access data from any part of the world just by a click of the mouse. This has further deepened the future of ERP. ERP's future is yet to reach saturation.
According to a research on predominantly Fortune 1000 companies, some startling results have been revealed. About 48 per cent reported that returns from their ERP project were lower than expected while only 17 per cent reported gains which exceeded expectations. However, 76 per cent of all respondents report not having done a business case for their ERP projects.
According to the research, following is the current situation of ERP:
- Over 42 per cent indicated that additional user training, better skilled people, and/or change management are required to fully leverage ERP;
- 32 per cent indicated that changing or standardizing processes, organizing differently, changing the work culture, or "adapting to the power of ERP" are necessary to leverage ERP;
- 32 per cent indicated that full implementation, better integration, or economies of scale are necessary.
Formerly ERP was purely restricted to fortune 500 companies, in the sense only they could afford to invest on them. This put the small and Medium Industries at a large disadvantage. They were not able to make use of the application to gain the necessary benefits. ERP's future seemed to be dooming on them.
However this drawback has been removed after the intervention of open source facilities. The concept of outsourcing has helped in removing the difficulties faced by small and medium enterprises. Hence a large potential for ERP still exists in the S.M.E. market.
The ERP vendors are targeting this market effectively. However both the vendor and the companies in this segment have to remember that there are lot of competition in this sector and one is not likely to succeed unless he serves the best product.
ERP has thrown open opportunities for many companies to trade with foreign counter parts in the name of outsourcing, implementation and deployment of the existing ones. It has contributed lot to the economy .Academics also boast its own share of ERP relations.
It has promoted lot of employment and educational opportunities. India happens to be a key beneficiary in this aspect.