July 13, 2012

What will ERP fix in my business?

There are five major reasons why companies undertake ERP.
  1. Integrate financial information—As the CEO tries to understand the company’s overall performance, he may find many different versions of the truth. Finance has its own set of revenue numbers, sales has another version, and the different business units may each have their own version of how much they contributed to revenues. ERP creates a single version of the truth that cannot be questioned because everyone is using the same system.
  2. Integrate customer order information—ERP systems can become the place where the customer order lives from the time a customer service representative receives it until the loading dock ships the merchandise and finance sends an invoice. By having this information in one software system, rather than scattered among many different systems that can’t communicate with one another, companies can keep track of orders more easily, and coordinate manufacturing, inventory and shipping among many different locations at the same time.
  3. Standardize and speed up manufacturing processes—Manufacturing companies—especially those with an appetite for mergers and acquisitions—often find that multiple business units across the company make the same widget using different methods and computer systems. ERP systems come with standard methods for automating some of the steps of a manufacturing process. Standardizing those processes and using a single, integrated computer system can save time, increase productivity and reduce head count.
  4. Reduce inventory—ERP helps the manufacturing process flow more smoothly, and it improves visibility of the order fulfillment process inside the company. That can lead to reduced inventories of the stuff used to make products (work-in-progress inventory), and it can help users better plan deliveries to customers, reducing the finished good inventory at the warehouses and shipping docks. To really improve the flow of your supply chain, you need supply chain software, but ERP helps too.
  5. Standardize HR information—Especially in companies with multiple business units, HR may not have a unified, simple method for tracking employees’ time and communicating with them about benefits and services. ERP can fix that.


  1. With these countless benefits, it’s no wonder the majority of companies has turned to ERP. It knows which business task to trim down and which to boost up. Another important benefit of ERP software is it offers immediate access to enterprise data, giving the employees new and easier ways to get information for their daily activities. I think it is impossible to turn down such complete set of incorporated, multifunctional business processes.

    Phyllis Stoffel

  2. “Standardize HR information” - is indeed a good aspect that ERP has. Having a standardized, and unified, source and flow of information in a company is an important matter to focus on. If there is an organized resource that relays the data for all the employees in a company, you would be able to prevent your employees from getting confused, especially with the amount of information that they receive everyday, which, in turn, makes the employees feel well-managed, which could result in better performance and more satisfied employees.

    Jamie Shellman

  3. You have provided the most informative and helpful information. I really learned a lot. ERP provides erp sales & distrubution module that offers a comprehensive set of best-of-bred component for both order and logistics management.Sales and Distribution module very actively interacts with the material management and financial accounting module for delivery and billing.

  4. Hi Fahad, these are a great list of ERP benefits for companies looking for business automation, intelligence and reporting.