Cover Stories

Enterprise Resource Planning (ERP) for SMEs: Random Musings

Dr. Ipshita Basu Guha
Mar 2011
Page 1 of 6
There has to be a system

In India, during Diwali many business houses, enterprises and families perform a ritual called Chopdi Pujan. The stock market also does Muhurat Trading. The purpose for all this is to bring in good luck and the favor of the Gods with a fresh start after reconciling the books of accounts. It is considered to be highly auspicious in the merchant community.

Today with advancement in technology, the conventional chopdi is steadily getting replaced by applications to fulfill similar aims albeit with greater efficiency and effectiveness. What does a chopdi generally do? Casting a cursory glance will reveal that it helps manage the receivables, payables and highlights the gain or loss position of the business.

The complexity and the environment of conducting business are getting proliferated. Establishing systems to manage enterprises from its fledgling days is becoming paramount if we look around for examples. The effort pays off handsomely in the long run. This compounded with use of technology to manage the systems can be a marvelous arrangement.

Computers came into existence way back in the early 1930s. This machine has evolved in heterogeneous ways in the last 80 years. The concept of Networking (most commonly known concept being the Local Area Network (LAN)) and Electronic Data Interchange (EDI) which created a framework for transactions between computers over a network gravely changed the way for doing business.

Parallel to technological improvement, management techniques and thoughts are also undergoing ceaseless change. One of the management concepts which erupted from the rudimentary Bill of Material and Material Requirement Planning (both sub-parts of Production and Operations Management) was planning and management of the entire resources of a business. This later on became well-known as ERP. ERP is the acronym for Enterprise Resource Planning. ERP is not software as many people mistake it to be. It is a concept, a framework, architecture to build a business.
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