Wednesday, January 20, 2016

Advantages to Enterprise Resource Planning (ERP)

Organisations that have not implemented an ERP system are at a competitive disadvantage compared to other firms which make use of such a system. 
  • Better organizational control, especially in large companies, where the volume of information is more than in a small company.
  • Duplication of information is avoided.
  • Improved communication, both internally and externally.
  • Company profitability analysis can be carried out to analyze where costs are higher and where there are more sales.
  • Improved decision-making process within the company.
  • The company is able to react better to any unforeseen problem or situation.
  • Better use of time.

There are a number of powerful advantages to Enterprise Resource Planning. It has been used to solve a number of problems that have plagued large organizations in the past. Being able to weigh in the system’s vastness will allow a company to decide if this solution will properly meet their needs.
It should first be noted that companies that fail to utilize systems such as ERP may find themselves using various software packages that may not function well with each other. In the long run, this could make the company less efficient than it should be.
There are a number of processes that a company may need to integrate together. One of these processes is called design engineering. When a company is in the process of designing a product, the process of actually creating it is just as important as the end result. ERP can be useful in helping a company find the best design process. Another area where ERP can be useful is order tracking. When a company receives orders for a product, being able to properly track the orders can allow the company to get detailed information on their customers and marketing strategies. If different software packages are being used, this data may not be consistent.
Perhaps one of the most important advantages of ERP is its accounting applications. It can integrate the cost, profit, and revenue information of sales that are made, and it can be presented in a granular way. Enterprise Resource Planning can also be responsible for altering how a product is manufactured. A dating structure can be set up which can allow the company to be informed of when their product should be updated. This is important, because it will allow the company to keep better track of their products, and it can allow the products themselves to be produced with a higher level of quality.

Another area where ERP can be an indispensable tool is the area of security. It can protect a company against crimes such as embezzlement or industrial espionage.

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