Is ERP a Misnomer Let us know what do you think
ERP is acronym of Enterprise Resource Planning, integrated software for managing all the resources of the business for planning, recording and control by digitizing the business processes. In simple words ERP stands for modular software that help business manage every function of business from procurement, inventory management, production,sales and marketing, human resource management and financials providing capability to manage every aspects of your business to improve visibility and actionable insights through out the business. ERP acronym has evolved for business management software which evolved with improvement in underlying hardware and communication technology. Of course evolving operating systems played important role along with database technologies.
History of ERP
ERP is misnomer for what ERP does
So now you know why term ERP is misnomer. Sure it works at enterprise level. It handles resources across the enterprise. But there is very little planning in that. That planning has moved to SCM with which ERP interfaces. But that change in focus in evolution of ERP does not reduce ERP’s importance in enterprise value maximisation which is goal of every enterprise creating value for all its stake holders for business continuity and longetivity.
So what is Modern ERP of 2020s
ERP would continuously keep on evolving serving enterprise needs with higher efficiency and effectiveness. But in present times Modern ERP is modular system which covers all the functional areas of the business by interfacing with each other to ensure that there is single version of truth. Many vendors like to claim their software as ERP with basic modules for transactions processing and basic reporting. However these are at best business accounting solutions which can never provide scalability and competitive edge the business needs for profitable growth. Ease of use is important but it can not be at the cost of creating competitive edge for the business. From this perspective modern ERP should have following basic capabilities: