Enterprises Resource Planning (ERP)

ENTREPRISE RESOURCE PLANNING (ERP)

What does it mean?

ERP is an acronym for Enterprise Resource Planning. It is a consolidated system that can be used to organize and integrate business functions such as accounting, sales quoting, production, supply chain, reporting, human resource and finance. The main purpose of ERP is to automate the activities of employees across the company. It facilitates an entrepreneur for unprecedented performance and assists to plan business strategies, predict and provide an authentic report of financial results and forecasts.

History

The history of ERP goes back to more than 100 years, because, in 1913 Ford Whitman developed a paper-based, manufacturing system ‘Economic Order Quantity’ (EOQ) for data collection and scheduling. After decades, in 1964 ‘toolmaker Black & Decker’ changed the whole story of the manufacturing system by introducing Material Requirements Planning (MRP), which attach EOQ with the main computer to perform well.

In the 1990s the first ERP came into use. On the basis of inventory control and manufacturing processes, this system was further expanded.

Modern ERP solutions provide numerous advantages such as advanced reporting, business intelligence, sales force and many more.

necessity

This system provides complete visibility into core business process and management, for more efficient and accurate results. We consider ERP as a brain of a business that controls all aspects of your business. Several solutions are available for the same purpose but its unique features make it more representative in the software industry. ERP increases the security and accessibility of your business, enhances efficiency, productivity and saves unnecessary costs of your business.

FUNDAMENTALS

ERP software has been around for a long time and helped a lot of organizations. This software works as a mind of a business with crucial integration. One instant impact of ERP solution is the systematic and uniform flow of business data and information across all departments in an organization. Here are some of its few business values:

Improved Efficiency:

ERP eliminates repetitive processes and reduces the time and effort required by your workforce to carry out daily activities. This innovative technology can manage business activities, collects all data and provide peace of mind to the decision makers to handle the day-to-day challenges and ensure the growth of an organization.

Increased Productivity:

ERP’s implementation increases the productivity of employees across all tiers of an organization. High productivity improves costs, system performance, processes and reliability of your business. It has currently become a crucial part of the business to increase its efficiency and authenticity. If your business has been struggling to achieve the desired goals, then ERP should be your next priority, irrespective of your business level.

Optimization of inventory Costs:

The systems can assist any business to optimize its inventory holding costs by providing an accurate overview of data records and supply chain management. You will be able to control all aspects of entire operations of your business from one system and be able to make your organization more effective and efficient.

Reduced Risks:

Business and risks are not good at a single platform, ERP systems provide several functions that can control uncertainty and risks of your business. Mistakes that occurred by a person can cause many risks but automation can reduce the potential of human error. Moreover, it reduces risk of compliance variance by monitoring your firm’s process.

Accurate Forecasting:

Every business must know whether the next quarter will enable them to hit their targeted goals or not. ERP makes it easy by providing accurate forecasts. You can get a tighter grip on real-time data of your business, inventory, and strengthen relationships with suppliers. You can easily prepare demand forecasts on the basis of season, products, geography and customers to manage a profitable trajectory of business.

Advantages

Challenges

Accurate access to reliable information

System can be difficult to use

Reduction of time and costs

ERP consultants are expensive

Easy and codeless customization

Different Implementation approaches

Lower management and operational costs

Resistance by the staff to implement

Dedicated Security resources

Boosted cash flow