ENTERPRISE RESOURCE PLANNING
It is not a question of how well each process works the question is how well they all work together.
Enterprise Resource Planning refers to the broad set of activities supported by multi-module application software that helps an entrepreneur manage and co- ordinate the important parts of his/her business. It attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different departments’ particular needs.
An ERP package includes applications for Production Planning, Finance & Human Resources Management, Customer service and many more which adds to the coordinated working of the organization.
ERP, when installed will act as a bridge to link the functioning of different departments in the organization. The independent computer systems in finance, HR, manufacturing and the warehouse will be replaced with a single unified software program. The departments will still have their own software, except now the software is linked together
The advantages of ERP are:
Traditionally, different departments in an organization worked independently. All the departments did their job well. But if, anything went wrong outside the department’s walls, nobody was there to take responsibility of the same. ERP adds professional values in the employees and trains them to work as a single unit.
Different departments may be playing their role in the financial status of the organization. Some may be contributing, some consuming, and some departments doing both. Every department will produce their own versions of financial statements. ERP integrates the revenue and helps to create a single version of the financial statement that cannot be questioned because everyone is using the same system.
By having an ERP system companies can keep track of orders more easily and coordinate all the processes happening in separate geographical locations. To conclude,
* ERP helps in augmenting the production.
* Using a single, integrated computer system can save time, increase productivity and reduce number of employees.
* ERP helps to reduce the cost of inventory as all the processes are integrated.
* Helps manage HR files more effectively, since all the information will be available in a single system. This will be especially beneficial for organizations with multiple business units employing different types of employees.