The main facts, purposes, benefits and things to know about ERPs (1)

October 19, 2018

Gartner coined the term ERP or Enterprise Resource Planning in 1990. When describing the evolution of planning from materials requirements and manufacturing resource to engulfing the Finance and Human Resources departments, the now familiar abbreviation came into being.

The rapid evolution of ERP systems during the 90s is also attributed to the Y2K and the Euro, since the new premises required a standardized way of replacing disparate traditional systems, and it needed to be cost-effective and efficient.

We selected this facts from a comprehensive CIO article about ERPs. It is never too soon or too late to understand the basics and the reasons that generated a certain phenomenon, especially that ERPs kept pace with trends and times and we are now looking at them being the only viable option for business operations at the threshold of what may be a fully automated age.

In what follows, we extracted other ERP-related key info, from the long and robust source article mentioned above.
“Enterprise resource planning (ERP) software standardizes, streamlines, and integrates business processes across finance, human resources, procurement, distribution, and other departments. Here’s what you need to know about these key IT systems”

What do all major ERP Systems have in common?

– End-to-end integration at enterprise level
– Real time process response and problem identification
– A shared/common database for all departments, allowing to define data once for all
– A consistent user interface, answering the need for speedy learning when it comes to system users


The 7 types of ERP, according to the size and complexity of enterprises served

– Tier I ERPs (global corporations and enterprises)
– Tier I Government ERPs
– Tier II ERPs (large organizations that operate internationally but don’t have an international reach)
– Tier II Government ERPs (providing for specific government organizations/needs, less complex that Tier I’s)
– Tier III ERPs (supporting enterprises that handle different languages with the same alphabet, for example)
– Tier IV ERPs (dedicated to small enterprises)
– Cloud ERPs – a different category, which gained a lot of traction recently and is on an upcoming trend

Proven areas of ERP efficiency, that motivate enterprises to adopt such a system

When adopting an ERP system the following main areas benefit in a considerable, visible way:

– Financial: by integrating information all across departments and organization activities;
– Orders: by centralized coordination within the ERP system;
– Customer feedback and information: by integrated processing with orders, deliveries and requests;
– Manufacturing: by enabling standardizing and a higher speed of the specific processes;
– Human Resources: by accepting inputs from various end points and integrating them into the central system;
– Procurement: by standardization and providing relevant resources for the purchasing teams;
– Reporting: by answering the increasing needs in this area of activity.

(more to follow)


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