The lowdown on ERP

What is it? ERP is an integrated suite of software applications used to execute a wide range of business processes. It attempts to combine the needs of all departments and functions of an organization into an integrated program that runs off a single database.

What does it include? Some suites include more than 50 modules that span the gamut of back-office business processes from manufacturing and engineering, finance, accounting and human resources to a host of front-office modules such as CRM. Others are industry-specific and less ambitious.

How much does it cost? It's expensive. Reports from buyers indicate that a full-scale ERP system can cost up to $15 million. Less-ambitious systems with fewer modules can be purchased for $500,000 or less.

Are government and private sector ERP requirements the same? Not usually. Commercial ERP solutions are generally designed to meet manufacturing requirements. Since most government organizations seldom require specialized manufacturing features, they tend to select modules that cover such functions as finance, budget, accounting, procurement, human resources, purchasing and payroll. Some ERP vendors specialize in solutions for local government and for the aerospace and defense industries.

Must-know info? Though the initial costs of ERP can seem high and the return on investment distant, most users are pleased with ERP within a few years. ERP II represents a new generation of Internet-based applications that let employees, customers and suppliers participate in a virtual workplace.

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