PROS AND CONS OF ENTERPRISE RESOURCE PLANNING

The Pros And Cons Of Implementing An Enterprise Resource Planning

The pros and cons of implementing an enterprise resource planning

Introduction

The term “Enterprise Resource Planning” is basically an industry term denoting the broad set of activities supported by multi-module application software(Packaged solutions) that helps a manufacturer or other business manage the important parts of its business, including product planning, parts purchasing, maintaining inventories, interacting with suppliers, providing customer service, and tracking orders. ERP can also include application modules for the finance and human resources aspects of a business.

Discussion

Typically, an ERP system uses or is integrated with a relational database system. The deployment of an ERP system can involve considerable business process analysis, employee retraining, and new work procedures. A collection of software programs connects together various functions—HR and of an enterprise's, finance, manufacturing, sales, etc. This software linked with the ERP extend the analysis of such data that may help plan production, manufacturing and prediction of sales etc (Turban et al. 2008b, 320).

ERM: The term ERM i.e. Enterprise Resource Management Systems is basically software that allows an enterprise run user access to its network resources competently. It generally lets a user sign on to different enterprise systems and applications using the same password. ERM software makes it easy for the enterprise to control and keep track of which systems and resources each user has access to, and provides consistent standards for creating and changing passwords. One system administrator can usually manage user access to all platforms - UNIX, mainframe, Windows NT, and so forth - and to the applications on these platforms that need restricted right to use.

Outsourcing: When one company provides services for another company, the outsourcing arrangement is said to be done in which that could have been provided in-house. Outsourcing is a trend that is becoming more common in information technology and other industries for services that have usually been regarded as intrinsic to managing a business (Monk, 2006, 21-23). In some cases, the entire information management of a company is outsourced, including planning and business analysis as well as the installation, management, and servicing of the network and workstations. Outsourcing can range from the large contract in which a company like IBM manages IT services for company X, to the practice of hiring contractors and temporary office workers on an individual basis.

The definition of the term as per the analyst David Caruso is: "The outsourcing model that began in the 1980s was simply taking the data-center operations and having someone else runs them, either on-site or at a remote data center. . . . In contrast, the new outsourcing model targets an application such as ERP and attempts to treat it like a utility or “Outsourcing is the third-party performance of functions once administered in-house.

Outsourcing is really two types of service: ITO - IT Outsourcing, involves a third party who is contracted to manage a particular application, including all related servers, networks, and software ...