What is ERP or What is SAP? Why we everyone is running after ERP/SAP these days?

The answer for this question could be given in a general manner but many of you cannot understand that bookish language at first time. So I will answer this question after elaborating an example.



Just think about the era before 30 years back. Take a scenario of a Bank. Lets say you some person Raghu has an account at a particular Bank ,e.g. SBI Branch, Delhi. And in that branch he has a savings account, fixed deposit and a demat account.

In that case how those bank people used to maintain his records? Each an individual department have their own record book where everyone manually entered Raghus details to that book. And no one knows about the other department data. So in any case that branch manager need to analyze Raghus transaction/relation with the bank, he has to check all the 3 record book and then come to some conclusion. So just imagine how much effort he has to spend after Raghus analysis only.

So, this is the situation which is completely replaced by the technology ERP and gave the manager a huge flexibility and improve the productivity  of that branch.

So how this ERP will remove all this problem and give us flexibility to access data?

Actually every ERP has a very common architecture. It has a centralized database, to which every department's computer will be connected. Now Ragus details will be stored in that database and the Manager can get his details of all the departments very easily within spending very less time.

So we are here spending on implementing the system and computers only. Which further improves the performance and productivity of any business in a huge way. Definately as this is replacing the manual work, so those positions will be removed now. But new job opportunities will be created.

So, I hope now any one can understand What is an ERP is with this simple example.