Enterprise Resource Planning (ERP) is a way to integrate the data and processes of an organization into one single system. In order for a software system to be considered ERP, it must provide an organization with functionality for two or more systems. Most ERP systems today cover a wide range of functions and integrate them into one unified database. Functions such as Human Resources, Supply Chain Management, Customer Relations Management, Financials, Manufacturing functions and Warehouse Management functions can now all fit together in the one database.
So why should you implement ERP software into your business? Here are five very good reasons:
- A totally integrated system: ability to easily share data across various departments in an organization making business strategies and plans easier and quicker to format, implement and execute.
- Improved productivity, efficiency & flexibility: an integrated business system streamlines different processes and workflow, helps you get product or marketing messages out the door faster leading to decrease lead time and increased revenue.
- Expand your knowledge of key business data: integrates all business management functions, eliminating contradictory information from disparate systems. Reports, graphs and charts on key business data can be automatically generated to provide a higher level of business performance visibility, with the drill-down capability into details behind the data
- Enable new business and growth strategies: Updating and integrating your business processes with an enterprise system enables you to take on more business and grow in new directions. Take advantage of the Internet and wireless technology to connect to customers and partners. Introduce new product lines.
- Lower costs and inefficiencies: Using an enterprise system to standardize your business processes can dramatically improve your company’s bottom line. Better resource management results in more inventory turns. Management of your vendor relationships reduces costs for purchased items. Better customer service leads to repeat business.
While advantages usually outweigh disadvantages for most organisations implementing ERP software system, there are some common obstacles experienced. Usually many obstacles can be prevented if adequate investment is made and adequate training is involved, however, success does depend on skills and the experience of the workforce to quickly adapt to the new ERP Software system.
TIP: One of the most important things that an organization should do when implementing an ERP system is ownership of the project. Because so many changes take place and its broad effect on almost every individual in the organization, it is important to make sure that everyone is on board and will help make the project and using the new ERP software system a success.