ERP stands for Enterprise Resource Planning. Enterprise Resource Planning (ERP) software integrates and automates core business processes for optimal performance. It is used to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations.
ERP software and systems support multiple functions across enterprise, mid-sized, or small businesses. At the same time, there are designed around a single, defined data structure that typically has a common database. ERP software coordinates the flow of data between a company’s business processes, providing a single source of truth.
To be clear, ERP software is not accounting software. Accounting software helps companies manage and automate a company’s financial activities. For example, it can help companies manage their accounts payable, accounts receivable, and general ledger. It can help with the generation of trial balance. It produces reports based solely on financial information, while ERP software can incorporate financial and operational data into reports for all business aspects.
We say there are five components of an ERP system. These are finance, human resource, logistics and manufacturing, supply chain management, and customer relations management. These are the basics. In reality, an ERP system can have over a dozen integrated modules.
ERP Systems in Today’s World
Before there was ERP business management software, there was Manufacturing Resource Planning (MRP II) (1983). Before then, it was Material Requirements Planning or (MRP) (1964). MRP was just a change of name from the Economic Order Quantity model first developed in 1913.
There are several benefits to Enterprise Resource Planning in today’s world. Just one of those is improved business insight from real-time data reporting. An organization taking advantage of ERP technology is likely to see lower operational costs through streamlined business processes and best practices. The right ERP solution can help your organization save time by automating time consuming tasks,
Benefits of ERP in the Cloud
In today’s world, organizations have more than one deployment option to deploy a software solution. An organization can choose an on-premises option, a cloud option, or even a hybrid of both. Some may refer to these as the three types of ERP systems.
The ERP landscape has shifted with the rapid evolution of software as a service (SAAS) cloud applications. This was partly caused by more organizations discovering that their on-premises ERP systems couldn’t keep up with modern security demands or emerging technologies such as smartphones. They also noticed the cost of ERP implementations continued to climb. In a recent report, the IDC (International Data Corporation) stated “demand for cloud-based ERP systems continues to grow because of their ability to access and analyze massive amounts of data in near real time.”
In this competitive digital business environment, organizations cannot afford to allow their complex legacy ERP system to be the weakest link in their digital transformation journey. In the current environment, cloud-based ERP applications are often embedded with next generation technologies, such as Internet of Things (IoT) and Artificial Intelligence (AI).
Today’s cloud-based ERP systems can optimize business functions across any organization. Commerce is one example. A shopping experience made personalized and seamless through AI recommendations is likely to improve productivity for employees. Another example is manufacturing, where ERP software can optimize project management, cost management, and production planning.
These modern ERP solutions can also support the support supply chain management through automation. With this integration, dashboards, business intelligence (BI), and IoT technology can be used to get a handle on inventory management.
Follow the Leader
I applaud the fact some ERP vendors have taken the step to retrofit their software to run on their own interconnected data centers, but this does not take full advantage of the cloud data center model like Oracle’s solutions do. Oracle’s solutions run on a massive pool of resources versus a dedicating infrastructure to individual software components. This is one of the reasons Oracle is the undisputed leader in Enterprise Resource Planning (ERP) in the cloud.
With Oracle Fusion Cloud ERP, it is easier to identify and launch new business models—and monitor results in real time so you can constantly refine your approach. Oracle Fusion Cloud ERP includes several platforms like Oracle Fusion Cloud Financials, Oracle Project Management, and Oracle Fusion Cloud Procurement.
Each platform has its own modules with essential and advanced features. For example, Oracle Project Management has a cost management and control feature. This feature includes an Oracle Digital Assistant that can answer project costing questions. Oracle Fusion Cloud Procurement has a Procure-to-Pay module.
One of the many things that set the Oracle cloud ERP offerings from those of other cloud ERP vendors is Oracle offers additional modules to extend a traditional ERP’s capabilities. For example, Oracle gives the option of including a Customer Relationship Management (CRM) module to its core financial and accounting functionality.
It would be irresponsible of me not to acknowledge competitors. Oracle has set a high standard with their Cloud ERP product, but there may be legitimate reasons why it may not be a fit for your organization. I argue, though, knowing what it offers will bring you closer to being able to find the right cloud ERP solution for your organization.
One competitor that’s been getting a lot attention lately is Rootstock. This is a modern cloud-based ERP solution built on the Salesforce Cloud Platform. Unlike Oracle’s offering that is meant to be a more general-purpose solution, Rootstock is designed exclusively for Manufacturers, Distributers and Supply Chain organizations.