ERP stands for “Enterprise Resource Planning,” but its name actually is a misnomer as it has little to do with planning. ERP is a software system that integrates all the departments of an organization by acquiring the information from all of the departments and centralizing it on one computer. This way managing becomes much easier as all the information is available on one site. The whole process becomes more efficient in terms of time and money. Problem, progress, and needs for each department are reported here and so ERP manages the needs of all the departments from finance to HR.
ERP and Business Management
Why should you use ERP for your business management? Because it saves you the trouble of having to utilize stand-alone computer systems for retrieving information. Replacing them with a software system that present information from all the departments is much easier and feasible. ERP makes it possible for you to manage inter-departmental monitoring and judgment. With ERP it is so much easier to record customer histories, process costumer demands, integrate all financial information, and allow inter-departmental reporting of data.
ERP Implementation
There are generally some changes that come about as ERP is implemented. To help with the implementation there are three services: consulting, customization, and support. Most ERP systems come in modules, allowing the automation of certain functions. Time taken on implementing depend on several factors that include the number of modules among other things size as business size, customer response, and customization. On average, the process takes around 14 months if 150 consultants are there.
Apart from providing a comprehensive view of the organization, the ERP allows standardized naming or coding of the products. The ERP makes the data very secure through multiple systems that protect it. So data theft is not an issue, neither is cyber attack a problem.
There are certain disadvantages of this highly advanced system. Consider the inter-departmental sharing of some sensitive information and how unwanted that might be at times, and to prevent sharing such information can distract the management with extra work. There could be integration of purely independent aspects and be absolutely unnecessary. Moreover, ERP is expensive as compared to systems that are not so highly integrated. Customization being so troublesome also makes ERP a little disadvantageous.
Considering the needs of an organization and it manageability, one has to decide how suitable ERP is. For large organizations, ERP is a very good choice as significantly it aids management.
Read More What is ERP?
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