What is ERP?

http://it.toolbox.com/blogs/bi-applications/what-is-erp-10564

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What is ERP?
Nilesh Jethwa Jul 17, 2006 | Comments (98)

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(Also known as e-business suite) Lets take an example. Suppose you are running a small grocery shop named "Janata Grocery", so the typical operation as a shop owner is you basically buy groceries from some big seller and stock it in your shop . Now people come to your shop for day-to-day needs and buy stuff from your shop at a slightly higher price than what you originally bought and stocked it in your shop. Ocassionally you may not be carrying items or run out of stock that people ask for so you make a note of it and promise the person to come back tomorrow and they will get their item. So far so good, now lets name some entities before we proceed and things get complicated. The big seller from whom you buy stock is called as Vendor, the people who come to your shop to buy things are known as customers, the stock in your shop is known as inventory. So far we have identified few entities that play an active role in your day-to-day operations. As time goes by, your business expands and now you take orders over the phone and provide service to deliver the items to your customers, so you hire people to help you out in maintaining the inventory, do the delivery part and all the necessary stuff to keep the business running smoothly. The people you hire are known as employees. So in this small shop, you typically manage the bookkeeping activities by hand using a notepad or something similar. Now imagine the same setup on a larger scale where you have more than 10,000 customers, have more than 1000 vendors, have more than 1000 employees and have a huge warehouse to maintain your inventory. Do you think you can manage all that information using pen and paper? Absolutely no way! Your business will come to a sudden stop sign. To facilitate big businesses, companies like Oracle Corporation have created huge software known in the category of ERP (Enterprise Resource Planning) as Oracle Applications. Now coming to think of it, Oracle Apps is not one huge software , instead it is a collection of software known as modules that are integrated and talk to each other. Now what is meant by integrated? First let us identify the modules by entities. For e.g Purchasing and Account Payables deal with the vendors since you typically purchase from vendors and eventually have to pay the dues. Oracle Purchasing handles all the requisitions and purchase orders to the vendors whereas Oracle Accounts Payables handles all the payments to the vendors. Similarly Oracle Inventory deals with the items you maintain in stock, warehouse etc. Dealing with customers is handled collectively with the help of Oracle Receivables and Oracle Order Management. Order Management helps you collect all the information that your customer is ordering over the phone or webstore etc whereas Receivables help you collect the money for the orders that are delivered to the customers. Now who maintains the paychecks, benefits of the 1000 employees? right! it is managed by Oracle Human Resources. So you get the idea by now that for each logical function there is a separate module that helps to execute and maintain that function.
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Business Intelligence Applications

by Nilesh Jethwa Oracle BI Consultant

I have over 10 years of experience working with various Oracle Apps and BI technologies, most recently with Daily Business ... more Receive the latest blog posts:
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What is ERP?

http://it.toolbox.com/blogs/bi-applications/what-is-erp-10564

So all the individual functions are being taken care but how do I know if I am making profit or loss? That's where integration comes into play. There is another module known as Oracle General Ledger. This module receives information from all the different transaction modules and summarizes them in order to help you create profit and loss statements, reports for paying Taxes etc. Just to simplify the explaination, when you pay your employees that payment is reported back to General Ledgers as cost i.e money going out, when you purchase inventory items the information is transferred to GL as money going out, and so is the case when you pay your vendors. Similarly when you receive items in your inventory it is transferred to GL as money coming in, when your customer sends payment it is transfered to GL as money coming in. So all the different transaction modules report to GL (General Ledger) as either "money going in" or "money going out", the net result will tell you if you are making a profit or loss. All the equipment, shops, warehouses, computers can be termed as Assets and they are managed by Oracle Fixed Assets. Initially Oracle Applications started as bunch of modules and as time passed by they added new modules for different and new functions growing out of the need for today's internet world. So if you come across a module that you are trying to learn and work on, first try to understand what business need is it trying to fulfill and then try to understand what the immediate modules that it interacts with. For e.g lets say you come across Oracle Cost Management module, you will learn that it helps to maintain the costs of items in your inventory and the immediate modules that it interacts with are Oracle Inventory (ofcourse), Oracle Bills of Material, Order Management and so on.. (Continue Reading...ERP Basics ) --> Did you like this article? If yes, then I am sure you would like my product Dashboard. In 2006, I quit my full time job and started my own company that produces this beautiful piece of software. If You can, please take a look at it, if you have more time, please try it out and if you like it, please send me your feedback, recommend to your colleagues and show it to your Management. --------------------------Checkout this Wireframe Software - Just works in Latest Chrome or Firefox browser. Nothing to install and no need to login

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98 Comments
Unknown User Jul 19, 2006 the explaination u provided is very helpful for a beginner. i got much from it. it cleared and firmed many concepts. i am very new to oracle apps. we are about 10 people recently join the company here in pune(presently working as management trainee). we want more such contents,as u r planning to brief different modules too. it would be a great help for us. we will wait for that. thanks a lot...

Nilesh Jethwa Jul 24, 2006 Thanks for your comments. I will definitely add more contents and you can check at out the original blog at http://www.appsbi.com. Thanks Nilesh

Unknown User Sep 6, 2006 yeah, really very cool. expect more from ur side.
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What is ERP?

http://it.toolbox.com/blogs/bi-applications/what-is-erp-10564

Unknown User Oct 12, 2006 Thank You for this information. I am happy to have come across your site. Please add more "layman" information on Oracle modules like CRM, GL, iProcurement. I work with some Oracle genieses that feel they are too inteligent to explain anything to leptons such as myself in a way we can understand. Thank you again

Unknown User Oct 19, 2006 Thank you for you article. Working in an environment where a basic knowledge of all areas is helpful (can anyone keep up?), this sort of information ios very useful. Can I suggest that paragraph 5 is moved to the top. ERP isn't mentioned until then and I (bear of very little brain type of thing) had to catch up. Cheers, Simon.

hexgeet Nov 8, 2006 Thanks a lot . Its too good article to provide basic idea about ERP. Its really useful article.

ravi_kiran20012001 Dec 7, 2006 This is what i am searching for ,thanks a lot,i am afresh engineering graduate and willing strongly tobuild a career in ERP,can you please forward any further info to me ? please.

Unknown User Feb 2, 2007 thanks for this excellent article,one request will u provide some more information about all the modules of ERP

Unknown User Feb 7, 2007 Thanks for your kind words and support. Actually I have put some information on other modules here at http://www.appsbi.com

Unknown User Mar 11, 2007 Absolutely its too cool and the best explaination which am looking for... Thank you very much... Its very helpfull for beginner...

Roh Apr 2, 2007 Thanks..its absolutely helpful to me. Specially information abt different modules and how these modules really get interfaced... its very helpful for beginer to make a vision for proper understanding

Unknown User Apr 4, 2007 Hi, I am a B.Tech with MBA in Mkt n Ops.I have 10 months of experience in an Indian MNC (IT) in the field of different phases of SDLC, as a part of my training. But now I want to have a career in ERP cnsltn. Please guide me as to what is the requirement and what should i need to prepare for the same.

Unknown User Apr 9, 2007 good one vey helpful came to know about erp. Thanks.

Unknown User May 22, 2007 Thanx... this ws gud to start off wid !!
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What is ERP?

http://it.toolbox.com/blogs/bi-applications/what-is-erp-10564

Unknown User Jun 26, 2007 the explaination u provided is very helpful for a beginner. But, it would be better if you talk "What is ERP" generally not from the Oracle perspective, and it will be good if you provide the information regarding how it helps in future planning (Inventories, Loss ETC.).

Unknown User Aug 6, 2007 Thanks Nilesh, It has very well introduced me to the beginning concept of ERP, with out confusing the beginner. Ragd, Sree

Unknown User Aug 11, 2007 i am very happy to come here plz defined erp in purchase and material term. thanks

Unknown User Sep 21, 2007 Thankyou Nilesh. This article was of great help to me as I am from a NON-IT background but have been working on a project ERP. I would appreciate if you could have more detailed info about ERP and the Differnece between ERP and SAP.

Unknown User Oct 23, 2007 Thnks for such a Simple & meaningfull article, its really help me a to understand the blue print of ERP.

Unknown User Nov 3, 2007 Hii an u plz comment on the below mentioned topic? "ERP Excels on the Performance of any organisation but erp is not suitable for all organisation" would appreciate ur views on the same. SEEMA

Unknown User Nov 4, 2007 Anshoo, I have not worked on SAP so I would not be able to give any comparison between the two. Regards Nilesh http://www.infocaptor.com

Unknown User Nov 29, 2007 Hi Nilesh, Thankyou. Really a great examples to beginners to understand about ERP, it's really appriciatable. This article was of great help to me as I am from a NON-IT background.

Unknown User Dec 1, 2007 it is amazing , i have merely heard the name of ERP, but this gradually developed condition cleared all the doubts.

Unknown User Dec 5, 2007 This is perfect for any layman. Wish you luck with ur software.

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What is ERP?

http://it.toolbox.com/blogs/bi-applications/what-is-erp-10564

Unknown User Dec 17, 2007 thank you very much for this informetion i am realy cnfused before read this artical....but right now i am setisfy ...and i now what is ERP...thax again dear...

Unknown User Dec 27, 2007 hi iam B.tech in cse 2007 batch passout i want make my carrier in Data Base Management side So what i can adopt ERP/ORACLE . pls tell me thet what is difference is in oracle & ERP and it is benfical to me adopt any one of them being a fresher level.

Ajay Dhiman

Unknown User Jan 7, 2008 thank you very much for this informetion i am realy cnfused before read this artical....but right now i am setisfy ...and i now what is ERP...once again thanks...

Unknown User Jan 12, 2008 thank,s for this informetion. i wann do erp course if any one can help me then plz mail me and tell more abt ERP thanks

Unknown User Jan 14, 2008 Dear Sir, I have read your article what is ERP, now i am little confidence to explain about ERP , i am a research student , doing Ph.D in management science , my topic is related to ERP only, "TO STUDY ERP MODEL WITH REFERENCE TO EDUCATIONAL INSTITUTE " KINLDY GUIDE ME HOW TO GET LITERATURE AND INTEGRATE DIFFERENT ACADEMIC MODULES WAITING FOR YOUR CO-OPERATION , WITH LOTS OF HOPE THANKS

Reema G Jan 14, 2008 please help Hi Nilesh, I am an OCP 9i DBA with a years exp.Currently am working as an IT Manager.I was interested in pursuing a course in Oracle Financials.. I have been speaking to a lot of people about the same ,but I guess you would be in a better position to help me.I have done my B.E and have a base in project management.Please advice me as to what are the pre-requisites(in education) to set a foot in the ERP market.And how well a chance do i stand in the functional domain.

hamed saboor Jan 14, 2008 thanx alot

Reema G Jan 15, 2008 please help

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6/16/2013 11:39 PM

What is ERP?

http://it.toolbox.com/blogs/bi-applications/what-is-erp-10564

Hi Nilesh, I am an OCP 9i DBA with a years exp.Currently am working as an IT Manager.I was interested in pursuing a course in Oracle Financials.. I have been speaking to a lot of people about the same ,but I guess you would be in a better position to help me.I have done my B.E and have a base in project management.Please advice me as to what are the pre-requisites(in education) to set a foot in the ERP market.And how well a chance do i stand in the functional domain.

ravi Jan 21, 2008 hey thanks for the article. its really very nice and easy to understand. iam a fresher in this industry want to have some more knowledge on oracle financials. its like a vast sea the more u explore the more u get the knowledge abt this field.

ravi Jan 21, 2008 hey, iam a fresher in this industry learing about oracle financials. its seems interesting and lots of things to learn its like a vast sea the more u explore the more u get the idea about this field. ERP is really an interesting field.

koteswa Jan 24, 2008 hi, this is koteswra rao. finished mba and traying to oracle apps functionals. i am very interesting to settle down in the ERP's. And, also i request to the senior member that to give me good suggestions to enter in ERp's, because i am fresher in oracle functionals.

Unknown User Jan 24, 2008 Dear Nilesh.... This is somewhat a very good explanation abt ERP. I really appreciate the examples that u have given for beginners. I did my MBA in Banking and Marketing... and also i am interested in starting a career in ERP systems. I just want to clarify the difference between SAP and ERP? Is SAP coming under ERP? plss guide me regarding to my area of interst.

Unknown User Jan 24, 2008 Is anyway ERP is implemented in banks??

Nilesh Jethwa Jan 25, 2008 Plaban, yes SAP comes under the ERP umbrella. There are lots of vendors selling ERP software and SAP is one of the biggest vendor. Yes ERP is implemented everywhere, banks too.

Unknown User Jan 26, 2008 Nilesh sir.. would it be fruitful if i start learning SAP after my MBA as i have mentioned above? What r the prerequisites of learning SAP?? Pls guide me details regarding its future opportunities..and the institutes giving training in SAP for the beginners...its duration, course fees..etc

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What is ERP?

http://it.toolbox.com/blogs/bi-applications/what-is-erp-10564

Unknown User Feb 2, 2008 Hi Nilesh, Currently I'm working on ERP application. Your article is very help ful to beginners. Thanks a lot

Unknown User Feb 11, 2008 hey my training is going on. was not getting what is erp actually is. your article is really very helpful for a beginner. thanks a lot..

vivek garg Feb 26, 2008 Excellent Buddy !!! Fresh way of explanation a very fresh concept to all fresher's in the field of ERP. Cheers!!!

Unknown User Mar 13, 2008 Hi , its realy very good way to explain the ERP. As you did in example . very interesting article on ERP. Thank you very much

Unknown User Mar 18, 2008 aah! a great way to explain, what ERP is all about. Good example, good language. Hope your tool capture the market. Cheers Jayanth Adimulam.

Unknown User Apr 15, 2008 really it is a good example to understand regarding enterprise resource planning.i have cleared my problems with this good example.thank u very much.

Unknown User Apr 23, 2008 pls give me hole information about ERP thanks gaurav joshi

Unknown User Apr 24, 2008 Hi, The above information is very interesting and I require lots of information about ERP packages. Please reply back to these mail. Regards G.Gangadhar

Unknown User Apr 25, 2008 Hi,

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What is ERP?

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I find your information very handy. Thanks a lot. regards, Deepak Kalita.

Unknown User Apr 30, 2008 Hi i m bcom student and passed out 2007 wants to get in IT feild can u please suggest me which erp course will good for me and also i m working for computers company as bussiness and sales consultant

vinit rai May 4, 2008 Thanks for such a wonderful article....... I am a 3rd year B.E comp sc student and i seriously wanted to have some knowledge about ERP.. and this BLOG provided me a clear idea of the ERP...

I am expecting more such articles from u...

thank you

Sanjay williams May 20, 2008 Dear Mr.Nilesh, Your blog on ERP is very enlighting and infomative, the language used is simple and to the point for a person with no previous exposure to IT knowdelage it was delight.Please keep up the good work and post more about ERP like the other player in this products please also explain about the other modules you were talking about ...... regards sanjay

Unknown User May 27, 2008 hi... The information given is realy helpful and no need to go anywhere else..really thank you for such a helpful article.. regards ijasali

Unknown User May 28, 2008 This is the best article. It is very well explained with a simple example.

Unknown User Jun 23, 2008 Nice matter is given by you about ERP Please tell about the SAP also.

vijay11iapps Aug 27, 2008 Hi this is vijay iam working as a Functional Consultant i really proud to it toolbox +91 9739948820
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What is ERP?

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Unknown User Sep 8, 2008 Hi I am planning to migrate one of the third party ERP solutions to People Soft. There are many complications involved where I have to map data, table-by-table, columnby-column. Is there any tool available to facilitate such migrations? Requesting your help

Unknown User Sep 25, 2008 this is the best ever explanation i have read, especially for a beginner... i usually dont write comments....but such a wonderful article forced me to :) good going..

Unknown User Sep 25, 2008 Thank you Radhika. Nilesh http://www.infocaptor.com

Ram Seeram Sep 25, 2008 Thanks a lot in giving such a meaningful information regarding ERP system.After reading your article, i can say one thing is everyone can read books and gain knowledge,but no one can read a book named Brain.

Madhu Sep 26, 2008 Hello Nilesh, Thanks a lot for making me understand the real concepts of ERP. Regards, Madhu

Dec 16, 2008 Thanks for your article.I got idea about ERP.But I dont know much about technical as I am not technical background. I want to start my own businees. It is possible to apply ERP without knowing much technical knowlwdge? Please help if possible My ID romitadevi1@gmail.com

Jan 18, 2009 hello there.. this is luthfi from srilanka, doing my 3rd year in production engineering, just stepped into learn about manufacturing systems and other related staffs. especially,my concern is most on "lean thinking for third world country" like where i have been.... on my way of searching on the tittle, since ERP is a part of role play, i am writing to you this... fantastic, absolutely fantastic.... no find words to tell the way that you have used to explain the think that want to convey. and the content also was marvelous. well, here i just want to make clear that the point where the LEAN and ERP are intersected
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What is ERP?

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in order to gain the maximum utilization from this two concept? hope to get the answer from this side or my first prefer is getting personal mail to my id "ahamed.lu@gmail.com" thanks a lot for the time that you are going to spend for me with you very busy schedule. luthfi regards

Gaurav Kumar Jan 31, 2009 Hi Nilesh, Really its a Nice comment but I would like to know one advice from your side please give me good advice. I have completed BCA,MCA & pursuing MBA in IT I want to learn ERP from Basic is it possible i can learn if learn then how I can plz say from basic. Gaurav

Feb 3, 2009 Dear Nilesh, I am happy to see too mnay persons, those are interested in variety of tools, I want to ask like I am PHP Developer, now I am planning to move in ERP end what should I do first in order to make efficient ground to progress ahead with sound knowledge and strong foundation. Thanks your Tahseen

Feb 3, 2009 Dear Nilesh, I am happy to see too mnay persons, those are interested in variety of tools, I want to ask like I am PHP Developer, now I am planning to move in ERP end what should I do first in order to make efficient ground to progress ahead with sound knowledge and strong foundation. Thanks your Tahseen

Feb 6, 2009 Hi,, Is there any microsoft cirtification needed for the ERP? Please let me know

Feb 20, 2009 you have a very good way of explaining the things........ keep going

Mar 25, 2009 hi i am from pakistan and it engineer student i want more info about erp plz send me

Purshotam Singla Apr 11, 2009 please check eManage.in for ERP Software Detail.

Apr 27, 2009 I am a student writing reports on ERP and this article made the section of the assignment that asked about ERP so easy to execute. Thanks. I hope to have a go at your products in future, you never know.
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What is ERP?

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May 29, 2009 Good intro for biggeners. Regards, Sandeep Reddy

USER_1621478 Jul 7, 2009 i hav completed my 2nd yr in computer engineering ...the explanation about ERP is simply wonderful for a Layman like me...I wish , always the technical terms should be explained in context to daily examples and then rising to the complexities,,

Aug 4, 2009 Hi Nilesh, It's good example to the beginners who don't know about ERP ...

NAGESH VEETURI Aug 28, 2009 very nice descrption..even for a layman in IT also can understand easily... expecting some more such articles from you... sir... thank you.

NAGESH VEETURI Aug 28, 2009 very nice descrption..even for a layman in IT also can understand easily... expecting some more such articles from you... sir... thank you.

USER_1826911 Dec 15, 2009 Thanx for a brief info which I was looking for and indeed very explainery.

USER_2085736 Jul 8, 2010 Dear Nilesh, Sees, I am one same like others impressed by your kind explanation so clearly on the ERP term. Thank you very much for setting this article up to other many ppl understand better in those terminology. Keep up the good work ! and most importantly you provided it for free ! One of the beneficially guy, Mr Teo

USER_2090129 Jul 12, 2010 very nice my frnd .tanx 4 a brief info i was looking for ths

gautham hegde Sep 3, 2010 Hi nilesh, its Gautham. I am a BE (civil)n Mtech (construction management)Graduate.I would be working as a ERP coordinator for a construction company.My training would start in a weeks time. I am really happy with the info that u ve provided.Just wanted to know what;s the future prospectus in this field as m not interested in the core construction. Please let me know at the earliest as my doubts would be cleared. Thank you..tata

USER_2152262 Sep 8, 2010 thank u for explaning the epr its really written in a easy language very easy to understood

ashish bhattacharya Sep 20, 2010 A perfect explanation is given in this link http://www.oraclechamps.com/oraclefunctional-documents/278-what-is-erp-enterprise-resource-planning.html

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What is ERP?

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ashish bhattacharya Sep 20, 2010 A perfect explanation is given in this link http://www.oraclechamps.com/oraclefunctional-documents/278-what-is-erp-enterprise-resource-planning.html

USER_2329478 Feb 6, 2011 Hi Nilesh, Thanks a lot for this article. i was very confused with the concepts of ERP. But , by reading this example am very cleared and understood the concepts. please update me more information friend

USER_2357849 Feb 28, 2011 Hello Nilesh, Thanks a lot for the article. As a fresher in this domain there was lot of ambiguity in my mind b4 reading your article. It helped me a lot. Thanks again

Anil Kumar Jun 28, 2011 Thanks for a brief info which I was looking for and indeed very explanatory.

USER_2523870 Jul 22, 2011 Hi Nilesh, Thank you so much.Really you explained very very clearly about ERP.This article helps me a lot..Like this can you please explain about COTS , SOFTWARE PRODUCT LINE and APPLICATION FRAMEWORK.I will appreciate it with thanks. Sincerely Rama.

USER_2547955 Aug 30, 2011 Thanks for this article. I am a MCA student and it's a whole 1 subject about the ERP in our study. But m not cleared by reading my book regarding this topic but after reading this article m cleared about what is erp and how it helps company to expand their business .. Can you mail me all your article regarding this topic. my email id is email@removed

umer sayeed Sep 13, 2011 Hmm,what an article! I am working last from 9 months on Oracle but I never came across this article. It's very good for the freshers. Keep updating this. Thanks and Regards, Umer

tkame Dec 27, 2011 Hi,

I am a new joiner in wipro technologies, actually i trained in one course and i got project in another course(SAP/BW).So what i want to tell is that ur explaination about ERP is so nice, and it clarified all my doubts.We are expecting something more about these explanations......please try for that sir. Thanks and Regards,
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Satya

mugdhapednekar Dec 30, 2011 Your explanation is so realistic. I tried reading books on ERP but none were so interesting. We expect a lot more from you. Regards, Mugdha

minalgirme Feb 8, 2012 Really very great article ! Regrads Minal

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6/16/2013 11:39 PM