An ERP (Enterprise Resource Planning) system's structure typically involves a

modular, integrated set of applications that share a common database to manage

various business functions. This structure allows different modules to
communicate and share data, streamlining operations and providing a holistic
view of the organization.
Here's a breakdown of the key aspects of an ERP structure:
1. Modular Architecture:
 Modules:
ERP systems are built with distinct modules, each focused on a specific
business area like finance, HR, supply chain management, etc.
 Interconnectedness:
These modules are integrated, meaning they can share data and communicate
with each other seamlessly.
 Flexibility:
This modular design allows for flexibility in implementation and
customization. Organizations can choose and implement modules based on
their specific needs.
2. Unified Database:
 Centralized Data Storage:
A central database stores all information used by the ERP system, ensuring
data consistency and accuracy across different modules.
 Reduced Redundancy:
This eliminates data duplication and the potential for errors that can occur in
fragmented systems.
3. Three-Tier Architecture (Common Model):
 Presentation Layer:
This layer provides the user interface, allowing users to interact with the ERP
system through web browsers or desktop applications.
 Application Layer:
This layer contains the business logic and processes of the ERP system,
managing the functionality of each module.
 Database Layer:
This layer manages the storage and retrieval of data, ensuring data integrity
and accessibility.
 ERP Components



An Enterprise is a group of people which has certain resources as its control to

achieve its goal. It acts as a single entity. This single entity is different from
traditional approach. It is an integrated software that integrates many small
modules to become a big organization. These small modules are said to be the
components of ERP. It has the ability to manage many fields like finances,
manufacturing , customers, projects and many more. With ERP systems , we
can adapt to changes leading to an improved and efficient working of
organizations.
Five Main Components of the ERP system are as follows :
1. Finance :
All financial data including Accounts receivable, Accounts payable,
General ledger, costs, budgets and forecasts. It helps to keep a record of cash
flow, lower costs, increase profits and make sure that all the bills are paid on
time.

2. Human Resources (HR) :

It is a software handling all personal-related tasks for managers and
employees. Employees play a very important role in any organization, without
them business would not exist. This component is responsible for automated
payments to employees, payment of taxes, generating performance reports,
attendance tracking, promotions, deciding working hours and holiday hours of
the staff.

3. Manufacturing and logistics :

It as a group of applicants for planning, production, taking orders and
delivering the products to the customers. It provides you a view of the
demanded and achieved levels which is very important to check whether you
are achieving your targets or not. It provides all the stock summary and
production plans beneficial for the business. It includes Production planning ,
order entry and processing also the warehouse management.
4. Supply Chain Management (SCM) :
A supply chain management is a network of facilities that perform the
procurement of the materials and transformation of these materials into
intermediate and finalized products and distribution of these products to the
customers. Planning, Manufacturing, Marketing, Distribution and the
purchasing organizations through a supply chain operate independently. These
organizations have their own goals and objectives.

5. Customer Relationship Management (CRM) :

This component interacts with the customers using data analysis to study large
amount of information. They target the audience and observe what is
beneficial for them. The component gathers customer data from multiple
channels. Hence, CRM stores detailed information on overall purchase history,
personal info, and even purchasing behavior patterns. The benefit it gains is by
keeping a track on the customer's buyer history and suggesting additional
purchases.
2.1 Better Collaboration
ERP is a unified system that has all the required business-related data which can
eventually help in improving the cooperation between various departments of an
organization. It helps reduce communication delays inside the firm and is
beneficial for any organization that has a distributed network of affiliates in
multiple places.

2.2 Improved Productivity

ERP is an approach that enables companies to automate their routine processes
and manual tasks which eventually benefits in saving a lot of time that goes
behind managing tasks and day-to-day business processes. Besides this, it also
eliminates instances of duplication and rework. This helps employees complete
their tasks in a shorter period of time and perform better. It also enables the
integration of various other systems that lessen repetitive work and generates
revenue for your business.
2.3 Faster Decision-Making
With a custom ERP system and integration in your core business processes,
employees can get access to a real-time view of data, with easy-to-use reporting
and analysis that empowers intelligent decision-making. For example, with an
ERP system, you can see which workflows are efficient and which ones are
losing you money.

2.4 Built-in Compliance

It’s important that your business maintains regulatory compliance. One of the
most powerful advantages of ERP systems is that they help keep track of
industry regulations and changes in compliance. This allows businesses to stay
ahead and comply with guidelines, relevant laws, and specifications.

2.5 Better Customer Service

Another major benefit of ERP is that it helps in offering better customer service.
Centralized data storage provides all necessary information on sales and
clientele. This makes it easier for sales managers and customer support staff to
communicate with clients and reduce delays in offering services to customers.

2.6 Scalability and Flexibility

ERP software allows adjusting its scale according to current needs and
situations. An ERP system easily adapts to the expansion or reduction of the
company on every level. ERP systems can easily handle changes such as
production increases, inventory extensions, and the addition of new functions,
services, or users. In short, it helps in enterprise digital transformation.
2.7 Enhanced Reports
ERP software leads to reduced paperwork and improved communication among
departments. It helps in the quick and easy submission of all kinds of reports
such as financial, customer behavior, technical maintenance, etc.

2.8 Better Availability of Information

Advanced ERP systems enable the effective and centralized collection,
processing, and storage of information on the product, sales, or customers. In
this way, we use a single data system instead of multiple databases that require
regular checks and synchronization to remove duplicate or obsolete information.
 ERP vendors
Several companies provide Enterprise Resource Planning (ERP) software
solutions. Major vendors include SAP, Oracle, Microsoft, Infor, and
Sage. These companies offer a range of ERP products designed for
different business sizes and industries.

Here's a breakdown of some prominent ERP vendors:



SAP:
A leading ERP vendor, known for its comprehensive solutions for businesses of all sizes,
though it particularly targets midmarket, large, and global entities.

Oracle:
Offers a broad suite of ERP solutions, including Oracle NetSuite, which is a popular cloud-
based option.

 Microsoft:
Provides Microsoft Dynamics 365, a suite of business applications with ERP and CRM
capabilities.

Infor:
A major ERP vendor with a focus on deep industry-specific expertise and cloud-based
solutions.


Sage:
A provider of business management solutions, including ERP software, with a focus on cloud-
based infrastructure.

Benefits & Limitations of ERP Packages.

ERP (Enterprise Resource Planning) systems offer several advantages and
disadvantages for businesses. Key benefits include improved efficiency, better
 data management, and enhanced collaboration, while drawbacks involve high
initial costs, complexity, and potential implementation challenges.

Advantages of ERP:
 Improved Efficiency and Productivity:
ERP systems automate and streamline business processes, reducing manual
effort and improving overall productivity.
 Better Data Management and Reporting:
ERP systems centralize data, providing a single source of truth and enabling
better reporting and analysis for informed decision-making.
 Enhanced Collaboration and Communication:
By integrating different departments and functions, ERP systems facilitate
better communication and collaboration across the organization.
 Cost Savings:
While there are initial costs, ERP systems can lead to long-term cost savings
through process optimization, reduced errors, and improved inventory
management.
 Better Customer Service:
ERP systems can improve customer service by providing faster response
times, better order management, and improved access to customer
information.
 Scalability and Flexibility:
ERP systems can be scaled to meet the needs of growing businesses and can
be customized to fit specific business requirements.
 Better Data Security:
ERP systems can enhance data security by centralizing data and implementing
security measures.
 Improved Decision Making:
Real-time data and comprehensive reporting tools enable better and faster
decision-making.
 Reduced Manual Work:
ERP systems automate tasks, freeing up employees for more strategic
activities.
 Better Supply Chain Management:
ERP systems can improve supply chain management by optimizing inventory,
forecasting demand, and streamlining procurement.

Disadvantages of ERP:
 High Initial Costs:
Implementing an ERP system can be expensive, including software costs,
implementation fees, and hardware expenses.
 Complexity of Implementation:
ERP systems can be complex to implement, requiring significant planning,
customization, and training.
 Time-Consuming Implementation:
The implementation process can be lengthy, requiring significant time and
resources.
 Potential for Resistance to Change:
Employees may resist changes to established processes and workflows,
potentially hindering the success of the ERP implementation.
 Ongoing Costs:
ERP systems require ongoing maintenance, support, and potentially
customization, which can add to the total cost of ownership.
 Potential for Data Silos:
If not implemented properly, data silos can still exist within the ERP system,
hindering the benefits of integration.
 Dependence on Vendor:
Organizations become reliant on the ERP vendor for support, updates, and
maintenance.
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