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Introduction to
ERP

Enterprise resource
planning is an innovative system that integrates all data flowing in the
company’s different department into one single database. In the past business
was working on formation of different departments and with separate functions.
All departments were independent in their data flow and working, sometimes it
became difficult to work and share data with other departments. The technology
which holds the data of all departments into single point of reference is known
as ERP (Enterprise Resource Planning). The software package is customizable
according to the need of departments. (“Samwel Matenda &  Patrick Ogao”, 2013). This technology is used by many mega companies around the globe to
synchronize all the departments into 1 single layer of pearls. Even different
companies can collaborate to make database for better understanding between
them. (“David Hwang”, 2015)

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Enterprise
resource planning is directed to integrate all important electronic variable of
a company’s business operations which may include product planning, raw
material purchase list, inventory of different other things, logistics and
support, accounting, finance, marketing, and human resource management by
creating a single depository of the database that can be shared by all of the
departments of company and also to the suppliers if needed in order to produce
a stable line of chain and command. This helps a lot when more than 1 people
are working on different sites and they need to update the data at same time.
With one database running in company it is very easy to do it by manager
himself rather giving it to someone else. We can assume that  ERP system is an
enterprise information system designed to optimize the business processes and financial
transactions in a corporation. The ERP is an revolutionary concepts and is
universally accepted by the industry as a practical solution to achieve an
integrated company. (“Young Moon”, 2007)

.The
origin of ERP system may go back to half a century ago. With the arrival of
Information Technology in the our life it captured the market due to its vast
usage and with this there was a need a system like ERP. In last couple of years
the ERP has shown tremendous growth and mostly SAAS and HRM companies are
accepting it widely. About 61% market accepted the basic ERP software with 2.2
% yearly growth (“Columbus”, 2013).

Benefits of ERP:

In the current era there is a
shortage of food, water and life necessities in this world and the supply chain
is becoming thin and more complex with each day passing. ERP can ensure the
monitoring of process and data all over the world. People sitting here can
monitor the progress and working of a factory in different country. Any
business in this world has many attributes in itself from getting raw material,
synthesizing, cleaning, packaging, delivering and balancing the cost of product
this lengthy process requires different kind of data bases and functions. If
ERP is not there than it all comes back to Stone Age time which is manual work.
Taking notes and balancing everything takes days while ERP is an automatic
system doing it without your instructions.

ERP enhances the interaction between
employers and managers and between company and customers. It has operational
benefit, managerial benefit, strategic benefit and organizational benefit.  The collaboration between companies and
departments of same companies becomes simpler, the mobility of goods and
material becomes streamline and forecasting of future economy can be predicted
using this solution.

While the main thing in any
organization is making profit and maintaining good quality. With 1 data base
and a lot of high profile people looking at it increases the probability of
success and lower the cost of using different data bases which sometime hard to
integrate with each other.

 

Advantages of ERP system

 

Data Sharing occurs in real time:

While processing any data if the
process is completed immediately then it is called as real time. The data
sharing occurs in ERP really fast and we have a great example like Bloomberg.
All over the world Bloomberg synchronize at the same time keeping update to its
customers about business and share process. This ERP solution is the base root
which created Global Village. We can see online data sharing of factory
material while we are on a different shore.

Implement Industry best Process that
is industry best practices:

In today’s industry the pre
configure ERP system is gaining its ground. For Example in the department of
accounts and finance the ledgers usually do not provide a competitive
advantage. And wasting time and man resources on it takes big hole in
companies. The pre configure ERP knows exactly what it has to do 65-70%. The
rest can be configured to do its work.

 

 

 

More Managers see more data, leading
to better oversight:

Now suppose you are working in
multinational company as manager in DAMAM and your company has integrated ERP
which takes data from 4 different branches in city. If there are 4 different
managers and 4 different databases to match and see what company has gain or
lost will it take more time or less? Or take another view, with 1 database and
4 managers to give their opinion on how to make progress and make the work flow
more flexible is much better than the first scenario. Hence if you have
different eyes and minds working on 1 single thing then you will see the change
in progress in real time. (“David Hwang”, 2013)

 

How ERP is improving the company’s performance

 

The information silo problem is
solved:

The silo is a problem which comes
from the variety of data. You can assume it is a different department which has
the data from other departments and it operates in isolation. When a company is
not able to unify its data in easy way then emerges the silo problem. ERP is
the best answer to this problem eliminating the varieties of data and creating
one unified database. In every department they have different styles, names and
values for one thing which creates confusion when compile in a single file but
ERP can bring everyone to stay on 1 single style and name.

 

 

Better Integration with supply chain
partners:

We already talk about Bloomberg and
different chains of stores that uses the same database to unify their work to
make drive towards progress. Now take an example of fast food chain, a
fast-food may have 50 branches in a city and ERP enables their high management
to see how much raw material came and how much sales went high or low in one
single day. This can give time and idea to make preparation for tomorrow.

Expanding company:

While the company has total control
and sight over finances coming in and going out of company. It will become easy
for drawing future plans and expanding the company into chain all over the
world. (“Peter Ekman”, 2013)

Conclusion:

In the ERA of technology and science there
are many Gigabytes of data which has different values and different attributes
and to save them we need a database and to analyze it properly by everyone we
need a system which we called as Enterprise Resource Management. ERP can solve
the problem of summarizing the opinion of different people into 1 style and 1
language that can be understood by everyone. It can save time, money, human
resource and best of all it can gives you more opportunity and customers trust
to expand your business. In the market a company will find a healthy
competition and rivalry and a lot of other companies may have equal or better
resources then yours but ERP gives you more control and more flexibility in
terms of analyzing the data.

 

References:

Huang, T., & Yasuda, K. (2016).
Comprehensive review of literature survey articles on ERP. Business Process
Management Journal, 22(1), 2-32. doi:10.1108/bpmj-12-2014-0122

 

https://surface.syr.edu/cgi/viewcontent.cgi?article=1007&context=mae

Hwang, D., & Min, H. (2015).
Identifying the drivers of enterprise resource planning and assessing its
impacts on supply chain performances. Industrial Management & Data
Systems, 115(3), 541-569. doi:10.1108/imds-10-2014-0284

 

Ekman, P., Thilenius, P., &
Windahl, T. (2014). Extending the ERP system: considering the business
relationship portfolio. Business Process Management Journal, 20(3),
480-501. doi:10.1108/bpmj-08-2012-0085

 

Shatat, A. S., & Udin, Z. M.
(2012). The relationship between ERP system and supply chain management
performance in Malaysian manufacturing companies. Journal of Enterprise
Information Management, 25(6), 576-604.
doi:10.1108/17410391211272847

 

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