Advantages of ERP Software

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Across an organization, particularly a large organization, there are multiple on-going processes to do with manufacturing, accounting, finance, sales and many other tasks. Enterprise resource planning (ERP) software offers a way of integrating these various processes into a software application that can be used across the organization. This integration of diverse processes and diverse parts of the organization has several advantages.

Without ERP it would be necessary to have multiple software packages dealing with these various processes. These different packages may not work well together and inconsistencies may emerge. By integrating these processes through ERP, such inconsistencies are avoided.

Having a fragmented set of processes can cost time and money. Integrating them within ERP software can therefore constitute a saving of both. With ERP there is no need to spend time converting between different systems to compare, for example, sales data with data from customer service. Instead, it is all in one place. ERP leads to less paperwork and documentation. There is no need to enter data in multiple locations or on multiple systems. One of the advantages of ERP is that data entered anywhere in the organization will be immediately available throughout the organization. With all of the relevant information in one place, decisions can be made more quickly and with greater confidence. Decisions made with complete information are obviously sounder than those made with incomplete information.

Information can therefore be easily shared across the organization. This can combat silo culture by facilitating collaboration between departments and an increased commitment to the overall goals of the organization. A benefit of ERP software is that it can lead to better forecasting of sales and more efficient order tracking since data from different departments is centralized. By ensuring that total information is available throughout the organization, sound decisions can be made from any and every department that fit in with the organization’s overall goals.

The streamlining made possible by ERP can make the manufacturing process a lot quicker by simplifying project management and optimizing capacity. ERP also allows organizations to respond to changing market conditions, quickly applying information garnered through market research to the design and manufacturing processes.

An additional advantage of ERP is it can help increase the security of an organization. Embezzlement can occur by taking advantage of the lack of fit between multiple tracking systems. By having all of the purchasing, costing and inventory going through the same system, ERP can protect against this. Sensitive data is also better protected, since a single system is easier to secure than multiple systems. This protects customer data as well as helping to prevent industrial espionage.

Product naming and coding can be standardized across the organization. Since the same system is dealing with the product at all stages, for example from manufacture to sale, the same code can be used to identify that product throughout its life cycle. This makes it easier to track products back to the different stages in their development. It is also possible to find out the status of a product at the press of a button. This can help to resolve customer issues quickly without having to follow a long paper trail between departments.

While ERP has traditionally been aimed at large organizations, small and medium enterprises (SMEs) have increasingly found benefits with the system, reporting quicker report generation, less paperwork, and better planning. ERP providers have started to make solutions available that are tailored to these smaller organizations.

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