Enterprise Resource Planning (ERP) Systems
Enterprise Resource Planning (ERP) can generally be defined as a company wide computer software system that is used to coordinate and manage information, resources and functions of an organization that has shared data stores. Therefore, ERP is an approach or process in which an organization consolidates all the departments and functions into a single entity in terms of computer system that ensures that all departments’ needs are serviced. Hence, it is a convergence of software, people and hardware into an efficient service, product and delivery system towards profitability of the company.
Different departments within an organization fulfill different duties that complement each other. For example, the accounts department and human resource department (Curtis and David 66). The human resource department manages the employees and staff ensuring that they recruit and retain the best staff and ensuring that their personal and collective needs are addressed. On the other hand, the accounts department deals with most monetary requirements such as salaries to the employees.
Thus, the ERP ensure that the human resource department and accounts department are linked and can share information seemliness depending on authority bestowed to different individuals (Grant 6). ERP provides a foundation and structure in which organization data are integrated while the same time ensures that the process and activities within the organization are also integrated. Thus, ERP ensures that data and processes are integrated ensuring easiness of access and decision making processes. Benefits of ERP Some of the benefits that are associated with incorporation of ERP are:
• Enhanced Work Efficiency – the use of ERP ensure that efficiency is embraced throughout the organization because the activities within the different divisions are smoothly integrated. The use of this system ensures that paper documents are reduced, provides a system that ensures quick storage and retrieval mechanisms. Thus, it provides an environment in which it champions unified working and eliminates the issue of single systems within different division and departments within the organization (Monk & Wagner 33).
• Integration of Business Functions – the use of ERP ensure that process and data from different departments are integrated resulting in easier access and thus work flow. The ERP with its capability of multiple software modules provides a platform for various departments to share a unified database resulting in better and proper business communication within the given organization. Moreover, the centralization of data eliminates the complexities associated with synchronization of changes that are made by the different departments (Curtis and David 66).
• Improved Customer care – all the activities within the organization can be traced afterwards easily. For example, there is a customer who bought something –e. g. sales department may be told to check with the Warehouse, then to the delivery and then to the finance department to determine whether the invoice has been cleared. Thus, with the help of ERP, the customer activities can be traced from a single point provided the person accessing the information have appropriate authorization resulting in effectiveness by the organization and satisfaction from the angle of customers (Grant 8).
• Cost effectives – the use of ERP ensure that the organization meets minimal costs. The need of paper documentation, many hardware within a given region and effectiveness of the staff and satisfaction by the customer ensures that minimal costs are exposed to the organization. For example, few hardware reduces amount of energy consumed, the database reduces movement of employees and saves on storage single the data are centrally stored.
Thus, operational efficiencies, storage and minimum hardware are translated to the profitability of the organization. • Security and confidentiality – the use of centralization and consolidation of appropriate authorization mechanisms ensures that specified people can access certain information. The can be achieved through utilizing appropriate network security model that ensures that confidentiality and privacy is maintained. Moreover, centralization of data ensures that when systems crash, the data and other information can easily be recovered.