Enterprise resource planning or ERP can be defined as a software whose main purpose is to integrate various departments of an organization in one single system and then make sure it works in such a way that the requirements of all the departments in question can be catered to properly. This includes dealing with the needs and requirements that are unique to various departments. However, making an ERP programme is always easier said than done. In some organizations there are diverse functions such as finance and human resources. Then, a company may have a warehousing division as well, whose needs have to be taken into consideration.
Difficulties in creating an ERP software system
The biggest problem in making an enterprise resource planning software is that all the different departments have their own ways of working that are completely separate from others in the same organization. The computers in these departments are optimized in such a way that they will benefit the particular department. However, the benefit of ERP is that it can fuse all these asynchronous elements together and create the perfect whole. Here a single database is used in order to help different departments share information easily with each other and communicate as well.
This integrated approach can really benefit a company and pay high returns on investment. However, for that to happen, the software needs to be installed properly. Quite often it so happens that without proper coordination, companies are not able to access data properly. In a system that has not been integrated it is hard for departments to access data from other departments since they cannot access their setups. At times, even customers face inconvenience because of this.
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Why should you choose ERP?
With ERP there is no need to use the standalone computers that have been the norm till date. It allows the creation of a single system that has several modules whereby every department still has its own setup but it is linked to other divisions in the same company. Majority of the ERPs these days are built in such a way that companies are able to buy some modules instead of the entire package at once. In fact, most companies actually go that way by availing modules that are necessary for them and leave out the rest.
ERPs and improvement in business performance
ERP adds the maximum value in what is referred to as order fulfillment process. This way your company would be able to take orders much better and then process it into revenue and invoice. This is also one reason why ERP is also known as back office software. ERPalways does not the process of selling right up-front. However, a lot of ERP vendors these days are developing CRM software or they have bought or are connected with companies that are able to create such software. ERP basically creates a software-based roadmap that automates the different steps of an order fulfillment process. It also shows the path, which can be used to achieve the same.
How does it function?
When a customer service representative uses an ERP system and enters customer orders over there he will be able to access all the data that is needed to finish the order. This includes, but is not limited to, the following:
- Credit rating of the customer
- History of the said order – these two can be taken from the finance module
- Inventory levels at the disposal of the company – this can be taken from the warehouse module
- Trucking schedule at the shipping dock – this can be taken from the logistics module
Ease in working
When information and data are placed in an ERP system everyone working in a company is able to view it and update it as necessary. As soon as one department finishes working on an order it is automatically taken to the next department. If someone wants to determine the status of a particular order all it needs to do is log into the system and track the same. ERP also helps the entire system function like a well-oiled machine. There are lesser errors than before and customers also get information pretty quickly, which pleases them no end.
ERP can also function similarly in other processes such as financial reporting and employee benefits. This system also plays a major role in elevating the work standards in a company. When these systems are incorporated by companies professionals such as customer service representatives become much more important. No more are they mere typists performing some mundane functions. Their efficiency increases a lot. They are able to access a lot more data. This system also helps a company keep track of whether a client is going to be a nuisance or not and decide the next course of action on the basis of those findings.