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The reason enterprise resource planning software (ERP) was developed to have an integrated computer-based program for managing resources from both external and internal sources. These sources can include substantial assets, monetary resources, raw materials, and the manpower to drive the project.
The enterprise resource planning software can be the tool that connects the different sectors of the business so interactions between them can course through in an efficient manner. This use of a software program to initiate the connection of the different sectors of a business so communications and data can efficiently flow between them is the heart of this type of system. This is accomplished by placing the enterprise system environment on one consolidated platform, like a centralized data base, where all parties can access it easily.
To be categorized as enterprise resource planning software, it should be in real-time operations and integrated and does not require periodic updates. There should be a single database for all applications. This will prevent any redundancy in data or their definitions. Every module in the system should react and perform with similar characteristics, and any user should be able to have access to all the information without assistance from the IT department within the company.
Although this type of system helps to prevent a company from having applications that do not interface with each other, causing communication problems and inefficiency in their business units they do not come cheap. The acquisition, implementation and ongoing cost can be out of reach for many SMEs.
The alternative, stand alone application software for different sectors of the business and integrate the relevant processes via growing number of service options.
As technology improves, independent software vendors have been able to offer increasingly advanced software at lower prices. This software is suitable for companies at multiple stages of growth. Many of the features of Mid Market and High End software (including advanced customization and extremely scalable databases) are required even by small businesses as they open multiple locations or grow in size.
Additionally, with more and more companies expanding overseas or allowing workers to home office, many smaller clients have a need to connect multiple locations. Their options are to employ software-as-a-service or another application that offers them similar accessibility from multiple locations over the internet.