Enterprise Resource Planning (ERP) is a planning philosophy enabled with software that attempts to integrate all the business processes of different departments and functions across a company onto a single computer system that can serve particular needs of the different departments.
Typically, before ERP implementation, each department has its own computer system optimized for the requirement that a department needs. Each department will maintain separate databases and design applications as per their functionalities. These will result in local optima and overall very poor results across all the departments or within the company.
ERP combines all the business requirements of the company together into a single, integrated software program that runs off a single database so that the various departments can more easily share information and communicate with each other. Conceptually ERP replaces the old standalone computer system in finance, HR, manufacturing, etc., with a single software program that facilitates various functional modules.
Thus everybody from the finance, manufacturing, purchasing etc will get their own advantages of software, along with the added feature of availability of information across other departments to improve decision quality. For example, someone in finance can use ERP to see if any sale order has been shipped from the warehouse so that he can now confidently plan for working capital management for the next period.
With the advent of Web-based ERP solution working environment started witnessing a tremendous change. Web-based simplified back-office process automation for mid-sized and growing business. It provided real-time information about finance, order management, purchase, inventory, employee management, e-commerce and much more. With web-based ERP solution, you can accelerate business cycles, improve productivity and reliability, and provide higher levels of service to customers, suppliers and partners.
Needless to say eresource ERP is the most reliable enterprise resource planning application available today, providing organizations with the strategic insight, ability to differentiate, increased productivity and flexibility.
For nearly two decades, ERP software systems have evolved from hype to fad to fixture. Moving forward, the concept of an organizational unified information system will remain relatively unchanged. Sure, the scope will grow to include those Web 2.0 and Enterprise 2.0 tools that graduate from the dormitories to the enterprise, but the underlying premise of a single real-time application will continue to promote strategic value and remain intact.
Where we will see profound changes are pricing models, delivery methods and vertical market adaptations. Software as a Service (SaaS) has clearly entered the ERP industry as a disruptive technology. SaaS brought with it a pricing model which replaced large capital expenditures with monthly subscription pricing, removed data center hardware requirements and reduced the need for internal IT resources and labor simply to keep the business systems humming. SaaS ERP hosted delivery has also reduced IT complexity while promoting ubiquitous, anytime and anywhere access.
At this point we are only seeing the tip of the SaaS ERP ice burg. SaaS CRM software systems are achieving hyper-growth and more comprehensive SaaS ERP systems are clearly following the CRM software trend. However, the SaaS seismic shift is still in its early phase. Analyst firm Gartner forecasts continued SaaS double digit growth and suggests that SaaS will account for 25 percent of all new business software by 2011. This ramp up period provides traditional, licensed-based ERP software manufacturers with an opportunity to re-innovate themselves, modify their value proposition, penetrate a more narrowly defined industry, join the SaaS revolution - or see their market erode.
While the industry trend is obvious, the alternatives are harder to digest. SAP, the largest ERP application vendor in the world, approached SaaS by chastising it and surrounding the once new concept with FUD (fear, uncertainty and doubt) before ultimately recognizing the trend was bigger than SAP itself and finally (sort of) getting on board with the trend by announcing (but not actually delivering) a limited SaaS ERP product offering.
Other recognized vendors are showing similar reluctance. Microsoft and Oracle have dipped their big toes in the SaaS water, however, we view their participation as largely a defensive tactic and an effort to avoid cannibalizing their licensed-based business software revenue stream. The third largest ERP vendor, Infor, continues to sit on the sidelines. Other market leading software vendors such as Lawson and Epicor seem to bury their heads in the sand and hope the SaaS movement will dissipate. This disregard for a major and sustained market movement has opened the door for smaller players such as NetSuite, Aplicor and Intacct to build out their impressive ERP products, achieve measurable market share and successfully challenge the industry stalwarts. The ERP software industry is ushering in a new competitive playing field and tomorrows winners are unlikely to be today’s most recognized players.
