Tuesday, 11 October 2011

ERP - Why it is Required for an Organization

We have seen some thing about ERP and some thing About SAP which is the primary focus area of this Blog, But why all these ERP Softwares are required, Can't we manage all these activities with Custom developed softwares? 


The Answer for the above question lies in various Factors, they are 


Cost, 
  The Cost that involves in the Development of the new Custom software. While developing the software from the Scratch, you need to invest a lot in designing the process and then develop the code for the right from the scratch. Imagine the cost involved in all of them. Hence Organizations are increasingly adapt the ERP packages which are already built for the standard Business Process, you just need to implement them and customize the areas where there are some gap.


Best practice 
What are the key observation you see in any common enterprise is that they have many Business units and every second these departments exchange data and communicate with each other to achieve organizational goals collectively. It is clear that Communication and proper exchange of information helps better in achieving the goals of your organization. Every one is linked with each other for one or other needs say for eg. Sales exchange information with customers, sales provide information to marketing, marketing exchange communication with finance HR and so on. This is not just the basic case where the communication is internally, Exchange of information is with external customers also such as Share holders, creditors, vendors, etc. 


Adaptability with other vendors,
ERP allows you to introduce the latest technologies like Electronic Fund Transfer (EFT), Electronic Data Interchange (EDI), Internet, Intranet, Video conferencing, E-Commerce etc.

Most organizations across the world have realized that in a rapidly changing environment, it is impossible to create and maintain a custom designed software package which will cater to all their requirements and also be completely up-to-date. Realizing the requirement of user organizations some of the leading software companies have designed Enterprise Resource Planning software which will offer an integrated software solution to all the functions of an organization. 

Below is some of the major features of a basic ERP system which can help in one or the other ways.

ERP facilitates company-wide Integrated Information System covering all functional areas like Manufacturing, Selling and distribution, Payables, Receivables, Inventory, Accounts, Human resources, Purchases etc.,
It provides core corporate activities and increases customer service and thereby enhances the Corporate Image.
It provides a bridge between other departments to communicate and exchange data.
It not only communicates and exchange data between other departments but also helps across departments.
ERP helps for better Project Management.

It helps in eliminating most of the business problems like Material shortages, Productivity enhancements, Customer service, Cash Management, Inventory problems, Quality problems, Prompt delivery and so on
ERP not only addresses the current requirements of the company but also provides the opportunity of continually improving and refining business processes.
ERP provides business intelligence tools like Decision Support Systems (DSS), Executive Information System (EIS), Reporting, Data Mining and Early Warning Systems (Robots) for better decisions.

Components of ERP
• Sales and Marketing
• Master Scheduling
• Material Requirement Planning
• Capacity Requirement Planning
• Bill of Materials
• Purchasing
• Shop floor control
• Accounts Payable/Receivable
• Logistics
• Asset Management
• Financial Accounting

1 comment:

  1. The narrator shares appropriate knowledge related to the ERP requirements which displays the needs of an enterprise for utilizing the interpreted applications for managing their business deals. Most of the individuals are often demanding for such kind of benefits for themselves.

    ReplyDelete