Many people use enterprise system (ES) and ERP as interchangeable terms but the fact is that there is lot of difference between an enterprise system and an ERP system. Enterprise system is a superset of ERP, an ES includes ERP, SCM and CRM whereas ERP is an application which provides solutions in the form of modules. Enterprise resource planning software is deployed for improving internal functioning of an organization. This system covers all the aspects of any organization and interrelate all the processes so that transfer of information from one process to another is quick, accurate and in real time.
Basically an Enterprise resource planning software is implemented to monitor and streamline internal functions of the organization and facilitate decision making by providing reports in consolidated format to the management. On the other hand ES works to deal matters related to people associated with the organization like buyers and suppliers, this system comes in the form of applications which help the management in making decisions such as whom to deal with, where to market, from where to purchase raw material, ways to increase customer retention etc.
The difference between an ES and an ERP system can be understood by an example, an ERP will get active when an order arrives, it will check the availability of raw material and will help in production planning and material management and keep a track of every activity till the finished goods are shipped, invoice is raised and payment is received. But an enterprise system is active beyond these lines, it helps the management in getting more orders by suggesting new market areas, how to give better offers than competition, generate more business form existing customers and also in choosing vendors and suppliers who can give best offers in terms of quality of raw material and prices. Enterprise system monitors the external relationships of the organization. It can be said that major difference between an enterprise system and an ERP system is that actual ES begins where role of ERP ends.
Technically too there is difference between an enterprise system and an ERP system, ERP system are designed to improve internal functioning of the organization hence come with a database and architecture like one-tier, two-tier or N-tier architecture whereas ES does not have any architecture and its applications utilize the data available in organization’s main database to provide suggestions. Enterprise resource planning modules require customization to matchup with organization’s present working though proper implementation of ERP also needs some changes in the present system of working to improve organization’s efficiency whereas in case of enterprise applications no changes are made and these are deployed as they are and business is run according to the suggestions of these applications.
Another difference between an ES and an ERP system is that enterprise system takes long time to implement as it needs bulk data collected over a period of time to analyze and provide suggestions. Enterprise system is for large organizations and not for small or medium sized organizations, it involves high risks and if not implemented properly can incur heavy losses. But if implemented properly it can be excellent tool to increase profit margins and grow business rapidly.