April 2, 2011

Why Every Company Should Use ERP Software


An Enterprise Resource Planning system (ERP) is sometimes thought of as an expensive software system which needn't be acquired because local information technology (IT) staff can just write the applications the business needs. Here are 5 reasons why every company should use ERP Software: 

1. One stop financial shopping - ERP software pulls all your financial information together for easy access and reporting.

2. Integration and coordination - ERP software integrates your information, avoiding the need to gather data from multiple, independent systems.

3. Ease of learning and use - ERP software has a uniform feel and similar methods are used across all of its modules. This makes it easier to learn as it only has to be learned once. In addition to this, it makes it substantially easier to use, with knowledge transferred from module to module.

4. Flexibility - ERP software with its unified design, adapts to your business as your business grows. Unlike disparate systems, ERP systems are created with growth in mind. Changes are made centrally in a rapid and effective manner.

5. Updates with legal and business climate changes - ERP software is supported by the software vendor which means you will get regular updates as legal requirements change and the business climate evolves. Compliance issues are eased and competitive advantage is maintained without staff being saddled with time-consuming, expensive programming work.

Case Study

The following case study is a composite of numerous real-life situations and illustrates the problems faced by a certain large corporation struggling to cope with independent financial systems.

Company X had taken self-importance in the development of their own financial systems. They had a large information technology staff who had produced separate systems for general ledger, accounts receivable, accounts payable, payroll, human resources, and inventory. The IT staff ran these systems in the Company X data centre, and processed change orders when business needs demanded modifications to the systems. Because each change order had to be reflected in each individual system, typical turnaround time for an average change order was about three months from start to finish. Large changes took longer, sometimes six months or more.

Everything came to a head when the company considered flexible work hours, requiring significant modifications to the human resources system, and these changes rippled out into the other systems. The IT department estimated a year of work to get everything ready if overtime wasn't authorized.

Senior management didn't understand why this should take so long, and hired a consultant to study the problem. The consultant came up with the only possible recommendation: an integrated, flexible ERP system which would easily handle work schedule variations and much more. It would also take a year to set up, but it would properly position the company far into the future and provide untold additional benefits. Senior management eagerly adopted this recommendation.

Integration and flexibility are key in today's competitive business world. An ERP system uniquely provides these advantages, and every business should be using one.

7 comments:

  1. I think ERP system will enable company to obtain information quickly for better business decision.

    ReplyDelete
  2. ERP is an integrated computer-based system used to manage internal and external resources including tangible assets, financial resources, materials, and human resources.

    ERP Software

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  3. Thanks for posting all these genuine reasons that helps one to understand the need of ERP for every company. Its true that this software solution do offers a number of promising benefits which can't be overlooked but the implementation is time consuming which people find difficult.
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    ReplyDelete
  4. Hi Fahad,

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  6. It looks like you spend a large amount of time and effort in writing the blog. I am appreciating your effort.ERP software training is as important as evaluation & selection of ERP system. ERP software training is necessary to perform day-to-day activites in the ERP system.Thanks for sharing such a nice blog...

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  7. ERP systems consolidate all business operations into a uniform and enterprise wide system environment.


    Cloud ERP Market Share

    ReplyDelete