ERP Applications: A very simple and basic explanation

This incident happened years ago when I was on the phone with a tech support discussing an issue with my notebook. She asked me the version of the operating system and I was lost, murmured that I did not know what she meant with that question, clearly embarrassed. On the other end, she was unfazed with my inability or my ignorance and explained to me what an operating system is on our computers. This incident told me, it is perfectly all right not to know all the technical details and mechanism of an application that you use in your everyday life.That was then and this is now, as one must know enough to save skin!

Which brings us to this article about ERP applications. These applications are now used and discussed by Institutions world wide, millions are spent in their evaluation and implementation. If you Google about ERP applications, within seconds you will be faced with a very detailed answer via a Wikipedia, “Enterprise Resource Planning (ERP) is an integrated computer-based system used to manage internal and external resources, including tangible assets, financial resources, materials, and human resources”

Reference http://en.wikipedia.org/wiki/Enterprise_resource_planning

Well, if these definitions could answer everything, we would not require consulting partners for IT Projects! So in one of my ERP projects, questions that one of the senior stakeholders asked me, ”What are  data fields or the pages that we fill information. …Where is this data stored? What do you mean by records / tables or a database where these tables are organized? How do web pages display data to us, based on our search criteria? In short he was asking me to explain ERP applications to him in a very simplified and basic language.

Following were my explanations to him,

All  ERP applications like CRM, Supply chain management, Financials to name a few are built  on or reside on database platforms. Database platforms are nothing but a structured place where information is stored in the form of many tables. For example the excel sheet that you use can act as a database where you might store your phone numbers/names of people/addresses in separate columns.

In the ERP world, if you want to store the basic information of an individual in a system like CRM, we use web pages. These web forms/pages are made to look presentable via graphics and logic to make them very easy to use. When you fill these pages with information like-First Name/ Last Name / Address, the information gets stored in the database tables,

1. First name information will go into the First name table
2. Last name information will go into the Last name table
3. Address information will go into the Address table

To summarize the above, the information that you filled in these web pages is sent to the tables in the database. Since information is stored in different tables that are allocated to that specific information only, it is very well organized and can be retrieved easily and efficiently. This is very similar to filing your paper work in separate folders so that you know where to find the specific papers. ERP applications that are built on databases manage tons of information and need to keep all your enterprise (company/institution) people connected to each other. Without these ERP applications that help us capture information into databases, one would have to email that information as an attachment and the person who received it would than have to  fill the same information on his system to store it. Avoiding such redundant steps,ability to retrieve information on time and in the right reporting format, manage & monitor the performance of resources help enterprises save a great deal of  time and money.

This explanation did manage to provide a rough idea on how ERP applications work to my stakeholder and hope it did the same for you. In the next coming articles I will try to explain about workflows and automated processes, how ERP can help us define them to make our every day work spaces efficient and easy.