Enterprise Resource Planning
Enterprise Resource Planning may be defined as a software for the management of business processes, one that paves way for a company to apply integrated application systems in the management and automation of office tasks involving human resources, services, and technology (Almajali, 2016). All operation facets are typically integrated by ERP software including sales and marketing, manufacturing, development, and product planning. Since ERP software is structured for use by large organizations, it necessitates proficient and dedicated teams in the customization and analysis of data and in handling deployment and upgrades. Most companies have incorporated ERP systems since no other system exists. Most organizations incorporate ERP to replace outdated homegrown systems, to restore accounting software, and to restore other non-ERP systems. Some of the well-known ERP systems include Netsuite ERP, Sage ERP, and SAP ERP.
As an IT manager, in the integration of various entity functions, ERP proves essential as it offers a certain extent of synchronized reporting and automation. Rather than prompting employees to keep separate spreadsheets and databases that must be merged manually in reports generation, some ERP features pave way for the employees to obtain reports from a single system. Through illustration, order management sectors can process orders effectively and efficiently when sales orders flow into the financial system automatically, hence the books are closed faster by the finance department. Additional features of ERP include a dashboard or portal to assist employees to understand business performance more effectively.
One of the key advantages of ERP is that it paves the way for business functions integration. The essential process in running a business such as the management of customer relationships, human resources, accounting, inventory management, only to name a few can all be integrated by ERP. All these systems can be integrated into one system for the streamlining of information and processes across the entire company. The most essential function of these systems is a database that is shared and one that enables diversified functions for various units of business.
Almajali, Dmaithan (2016). “Antecedents of ERP systems implementation success: a study on Jordanian healthcare sector”. Journal of Enterprise Information Management. 29 (4): 549–565.
Shaul, L.; Tauber, D. (2012). “CSFs along ERP life-cycle in SMEs: a field study”. Industrial Management & Data Systems. 112 (3): 360–384.
The benefits of ERP go beyond the automation of business processes. With ERP, a more agile organization one that better adapts to change is created. Additionally, an organization becomes less rigid by enhancing flexibility such that the components of an organization function more coherently, improving the business both externally and internally. ERP also enhances the security of data in an environment that’s closed. A controlled system that is common, such as the one enabled by ERP systems paves way for the company’s capacity to ensure sensitive data is not accessed by cybercriminals. ERP also paves the way for enhanced collaboration. In the modern world of business, data may take various forms such as in files, video, audio, and forms. More often than not, to pave the way for collaboration, each data medium has a unique mechanism. A collaborative platform where employees have more time for content collaboration is provided by ERP.
Benefits such as a single integrated system, common data access, enhanced indicators of key performance, common processes standardization, and regular reporting are made possible through ERP. It is a system that is centralized, one that accords tight integration in all the functions of major organizations be it analytics, customer relations, procurement, planning, or sales. However, in ERP systems, customization may prove difficult compared to other approaches such as the best-of-breed. To meet certain organizational demands, a company may be prompted to devise workarounds. Additionally, higher switching expenses of ERP may boost the negotiating power of an ERP vendor which in turn increases upgrade costs, support, and maintenance. For large enterprises with a substantial market share, it is ultimately crucial to have an ERP solution that covers the crucial functions of the business while other aspects of the business are carried out by other software solutions extending to the ERP core. Speed and flexibility are the main advantages of incorporating ERP to business operations.
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