Definition of Enterprise Resource Planning (ERP)
Multiple definitions have been provided for Enterprise Resource Planning (ERP), all conveying a similar concept. Here are a few examples:
- ERP is a science and technique for resource management.
- It is a software solution that integrates all activities of various organizational units into a single software system.
- It is a commercial software package aimed at achieving information integration and ensuring the flow of information between all departments of an organization, including finance, accounting, human resources, supply chain, and customer management.
Difference between Management Information Systems (MIS) and ERP
ERP should be considered the latest tool available and an evolved form of Management Information Systems (MIS). The basis of ERP's functionality is process-oriented thinking instead of functional structures and converting customer demands into quantitative data to increase customer satisfaction. ERP strives to link all organizational processes in an integrated, process-oriented manner. In addition to integration, ERP also showcases superior options, which is why large software companies provide examples of all stages such as production, distribution, and broadcasting in their versions offered to organizations, and technology is introduced to the organization through these new software systems. Generally, the following can be considered the main differences between MIS and ERP systems:
- ERP systems consist of related and integrated software packages, while MIS may not necessarily be so.
- ERP software packages are not developed within an organization; they are purchased from software vendors and cover a significant portion of the organization, facilitating information flow throughout the entire organization.
- ERP software packages are based on business processes rather than business functional components, which is their main difference from MIS.
- ERP uses only one database, whereas MIS might have its own specific data centers that may not necessarily be interconnected.
- The production technology and development environment of ERP packages are uniform and similar, while in MIS, each section might be developed and executed in a separate environment.
Domestic and Foreign ERP
Like other software products, ERP is used in our country with the difference that, unlike the significant improvements it has brought for foreign companies, it hasn't significantly increased the efficiency speed of domestic companies. According to experts, the main reasons for this lack of success are the organizations' lack of awareness of the differences between ERP and MIS and the different implementation processes of ERP. For the implementation of ERP, the concerned organization needs to gradually shift its task-oriented view and behavior to a process-oriented perspective.