ChAPTer 3 (ImPORTance of EnterPrise Resources PlannING)

Enterprise resource planning (ERP) systems integrate internal and external management information across an entire organization, embracing finance accounting manufacturing, sales and service, customer relationship management , etc. ERP systems automate this activity with an integrated software application. The purpose of ERP is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders

Why is ERP important to a company?

 

  ERP system enables interactions of marketing, sales, quality control, products processes, supply lines, stocks and many other areas and it can be in a single database.

 This will eliminate the occasional loss of and retyping errors. It integrates all departments and functions across a company in a single computer system that is able to serve all those different department's particular needs.

  ERP is greater levels of information flow, along with a higher quality of information. 

   

Given the fact that we are living in the Information Age, this is critically important. Companies must be able to rapidly transfer information from one place to another. When information is transferred quickly and efficiently, the company or organization will be able to act on the data within a short period of time.

  ERP is also powerful because it allows a company to effectively manage its inventory.

 When the products are manufactured, it will be done with a high level of precision. Perhaps the most important thing about this technology is that the costs will be decreased. When a company has to deal with large amounts of paperwork, managing it can be costly. It is also expensive to integrate various software tools that were not originally designed for each other.

  It is powerful because it allows a company to become highly flexible.

 An organization that uses this technology will be able to quickly adapt to changes that occur in the market. Though it may require a great deal of corporate restructuring, the benefits will pay off handsomely in the end. Flexibility is very important today. If an organization is not flexible, it will be difficult for them to stay competitive.

 ERP is the implementation of software. 

Even though Y2K didn't become the disaster that many people expected, it gave rise to the concept of making sure software was properly implemented. In addition to dealing with software issues, ERP can also help companies integrate their operations. At the same time, it is important to realize that there are a number of challenges involved with utilizing ERP. Perhaps one of the greatest of these challenges is cost. Enterprise Resource Planning tools are outside the price range of many organizations.

 TYPES OF ERP

Industry Specific ERP

ERP systems for large corporations are often built from the ground up to suit the organization's specific and unique needs. For a small business like yours, an off-the-shelf model will work fine. Most are grouped into three categories to service manufacturing, finance or logistics based companies.

Web-Based ERP

ERP programs tend to be complex, requiring high-end computers to run them. However, instead of purchasing the software to run on your computer in your office, many suppliers offer Software as a Service, or SaaS. In this case, you pay a subscription to access the software and your data over the internet. Because the program is running on a remote server, you are free to access it from anywhere you have an Internet connection.

Small Business ERP

Although ERP systems can cover everything from supply chain management to accounting solutions as well as customer relations management, your business may not need to automate all these functions. Therefore, software developers offer scaled-down models at a lower, more cost-effective price. For instance, your operation may work fine with a system that offers sales and order management, but leaves out the module for warehouse management.