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Enterprise resource planning (ERP) software is software that helps various types of companies manage their businesses. An ERP vendor is a supplier of this type of software. The software is usually available in modules categorized by business function.
An ERP vendor may offer modules covering financial functions, such as accounting, inventory control, and purchasing, along with operational functions, such as manufacturing or supply chain management. The ERP modules are usually part of a suite, and companies may choose which ones to implement. Various modules typically use the same middleware, or software that links other applications.
ERP software evolved from Material Requirements Planning (MRP) software, which was geared toward manufacturers. In most cases, the manufacturing and product design functions of the ERP software were first developed; subsequently, customer relationship and other non-operational functions were added. The need for Year 2000 system corrections encouraged growth of ERP vendors in the 1990s.
A company that has implemented this software may choose to have ERP hosting of the software outsourced to a different company. Outsourcing is often to another country with lower human resource and infrastructure costs. Other pressures for outsourcing ERP occur when the company using the ERP system has difficulty finding enough knowledgeable employees to implement and support the software.
Pressures to insource ERP may occur as well; as the ERP products and processes mature, skilled workers may become more available. The company may wish to retain or regain control of important business processes and may wish to respond more quickly to changing business needs. These actions become easier when the ERP software is insourced.
This genre of software has created opportunities for ERP careers. Some careers involve consulting for specific business functions. As an example, an accountant who has gained experience in an ERP program while working for a customer may be in a good position to help other new customers implement their accounting modules. Information technology (IT) also offers career opportunities in areas such as system design, development and infrastructure support. Other opportunities exist for project managers to lead implementation teams, and sales and customer service staff to sell products and maintain customer relationships.
The software is available on different technical platforms. Some common platforms are .NET and AS400. A suite may be installed on the customer’s equipment, or it may be a hosted ERP solution.
When looking for an ERP vendor, the customer will want to analyze its business needs to find the supplier that can best meet them. Factors to consider include the size and type of industries for which the software is designed, and the software module selections. The ERP service, ERP support and maintenance offerings should also be evaluated. Implementing an ERP system is a long-term investment, so the financial stability of the ERP vendor is another crucial factor.