Enterprise Resource Planning (ERP) is a suite of software that supports the information management needs of the entire enterprise. ERP systems are available for a number of vertical markets including manufacturing, distribution, retail, services and others, but are best known as the successor to Manufacturing Resource Planning (MRP II), which was developed for manufacturing companies.
When selecting an ERP package, look closely at individual ERP applications, definition of functions as they fit your specific needs, and how well the supplier supports implementation and continued maintenance of the software product.
Enterprise ERP, a redundant term, is available from a large number of suppliers, with four developers sharing the majority of market share: SAP, Oracle, Infor and Microsoft. Other significant ERP software suppliers are Epicor, QAD, IFS and others.
These suppliers evolved their businesses under the traditional licensing model wherein the customer company licenses the software and installs it on its own in-house servers. All of these suppliers now also offer a hosted option and Software-as-a-Service (SaaS) licensing model. Under SaaS, there is no up-front software license fee and the software is not installed locally. The system is hosted and supported by the supplier for a monthly fee, usually based on the number of users.
Many additional suppliers exist, most targeting small and midsized manufacturers. That list might include companies like MetaSystems and Interprise ERP as well as SaaS-only vendors like Plex and NetSuite.
In addition to the usual sources for enterprise ERP systems, there are a limited number of Open source ERP software solutions available. While the concept of open source enterprise ERP might seem risky, some companies choose to go this route for cost reasons, confidence in their own IT resources (to provide support), or enthusiasm for the cutting edge, community driven architectures and technologies found in open source stacks.
When choosing to use open source ERP, manufacturing companies are assuming a calculated risk—open source programs are not controlled and supported by an industrial-strength corporate infrastructure, such as is provided by the above-mentioned software vendors and supported by licensing and maintenance fees. On the plus side, most open source ERP software solutions are relatively new and incorporate the latest (open source) technology and tools. With open source ERP, web based resources are generally the only support available—via community information exchange facilities. Some companies offer for-fee support of open source ERP software solutions.