Why it is Required?

Answer

• The very basic question is  why Enterprise Resource Planning also called ERP is required ?To answer this , lets examine this typical business scenario
• Sales Team approaches the  Inventory department to check for availability of the product.
• In case the product is out of stock ,the sales team approaches the Production Planning Department to manufacture the product.The Production planning Team checks with inventory department for availability of raw material
• If raw material is not available with inventory , the Production Planning team buys the raw material from the Vendors then Production Planning forwards the raw materials to the Shop Floor Execution for actual production.
• Once ready , the Shop Floor Team forwards the goods to the Sales Team , who in turn deliver it to the client. The Sales Team updates the Finance with revenue generated by sale of product
• Production planning Team update the finance with payments to be made to different vendors for raw materials.All departments approach the HR for any Human Resource related issue.
• That is a typical business process of in a manufacturing company
• Some Key Inferences one could derive from the scenario would be.
• A typical Enterprise has many Departments or Business Units.
• These Departments or  Business Units continuously communicate and exchange data with each other.
• The success of any organization lies in effective communication, and data exchange, within these departments ,as well as associated Third Party such as Vendors, Outsourcers ,and Customers.
• Based on the manner in which communication and data exchanged is managed
• Enterprise systems can be broadly classified as 1) Decentralized System. 2) Centralized System which are also called as ERP.