Everything you need to know about ERP

In the ever-growing business environment, companies are challenged every single day with the increasing demand of aggressive cost control, flexibility to respond to changing business requirements, changes in ways of doing business by their industry. To overcome these hurdles, companies can incorporate a fully integrated business management system covering functional areas of an enterprise like Logistics, Production, Finance, Accounting and Human Resource known as Enterprise Resource Planning (ERP) System.

With the use of ERP, a company can manage all functional areas like manufacturing, selling and distribution, payables, receivables, inventory, accounts, human resources, purchases etc. This would eventually increase productivity across the department which would in turn build an efficient corporate management. ERP is the solution for better project management which eliminates most business problems like material shortages, productivity enhancements, customer service, cash management, inventory problems, quality problems, prompt delivery etc.

As a company, information presentation is very important for decision making process. ERP creates a single version of the truth that cannot be questioned because everyone is using the same system. Similarly, by having information in one software system companies can keep track of customer orders more easily, and coordinate manufacturing, inventory and shipping among many different locations simultaneously.

Manufacturing companies -especially those with an appetite for mergers and acquisitions—often find that multiple business units across the company make the same transaction / recording / report using different –methods and computer systems. ERP systems come with standard methods for automating some of the steps of a manufacturing process. ERP helps the manufacturing process flow more smoothly, and it improves visibility of the order fulfilment process inside the company. That can lead to reduced inventories of the materials used to make products (work-in-progress inventory), and it can help users better plan deliveries to customers, reducing the finished good inventory at the warehouses and shipping docks.

ERP is a result of a modern Enterprise’s concept of how the Information System is to be configured to the challenging environments of new business opportunities. However merely putting in place an information system is not enough. The success of an implementation is also important which mainly depends on how closely the implementation consultants, users and vendors work together to achieve the overall objectives of the organization. It is worthwhile to remember that ERP is an enabling tool, which makes one do his work better, which naturally needs additional efforts.

ERP aims at one database, one application, and one user interface for the entire enterprise which when well-managed and implemented provides a 200 percent return on investment where as a poorly implemented one can yield a return on investment as low as 25 percent.

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