Enterprise Resource Planning (ERP), refers to a series of software and systems designed to manage and plan all aspects of an organization’s business. It is a comprehensive system that enables companies to effectively manage their operations and projects. ERP has four key components – Business Information Technology (BIT), Information Technology (IT), Financial Management, and Control (FMCC) and Supply Chain Management. ERP aids in the successful management and coordination of various processes that are necessary to run any businesses’ daily operations. ERP helps organizations improve customer service, reduce operational cost, and boost profits.
Organizations need an elaborate set of plans and strategies to ensure smooth running of their projects and operations.
The key aim of the ERP is to help in increasing the organizational productivity, reducing costs, and improving efficiency in an organization’s business. The main objective of the ERP implementation is to increase the control and integration of the business processes across an enterprise. Enterprise Resource Planning is aimed at providing organizations with the tools and information they need to successfully implement an ERP system. ERP enables collaboration across an enterprise by linking all the processes and information across an enterprise. This integration results in real-time visibility of the organization’s activities and in increasing the speed of decision making.
A note in BI (Business Intelligence)
Business Intelligence or BI is the buzz word in the business world these days. BI refers to information provided by accounting systems and software to support strategic business decisions. Organizations require accurate data so that they can make informed decisions. Without data the decision-making process cannot be completed and implemented correctly. To get hold of Business Intelligence a company requires an ERP system, which will in turn provide the company with the tools to access all the important information for decision making.
Advantages of ERP over Traditional Management
The major advantage of ERP over traditional management approach is that ERP enables organizations to gain a competitive advantage through better control over the business processes. Companies can conduct business in a more streamlined manner and achieve increased productivity. The project management software helps in reducing costs by automating certain business processes and project management software in turn also assists in decision making. It provides complete solutions for an organization’s business by enabling easy access to all information and data. ERP implementation improves the overall efficiency of the organization through better control over the business processes. Enterprise Resource Planning helps enterprises achieve financial stability and targets.
Cloud Based ERP
Cloud-based ERP offers many advantages over the traditional model and one of them is the deployment of Enterprise Resource Planning software across the enterprise. Cloud-based accounting platform gives organizations the flexibility to choose the best business management software according to their requirements. The cost of deployment of an ERP solution depends on the features that an organization opts for. A large enterprise may have complex and expensive requirements and so more advanced ERP solutions will be deployed to a small organization may require simpler and affordable solutions. The most popular ERP systems available in the market today are: Oracle, Microsoft, IBM, and Sybase.
ERP has enabled businesses to streamline their operations, improve productivity, and minimize costs. ERP helps in better utilization of human capital and reduces wastefulness which ultimately helps in improving the quality of the manufacturing process. By streamlining the operations, ERP helps in increasing the speed of production, thereby improving the quality of product. The introduction of supply-chain management and procurement capabilities in ERP has also increased its demand.