Enterprise Resource Planning, Its Use and Benefits
As is evident, this assimilation would result in cost and effort savings while rendering the company more efficient and streamlined. In every organisation, there are certain key functional areas like finance, personnel, production, warehousing, etc. Through ERP, it is possible to link all these separate departments into an ERP is a combined data system that produces one standardised compilation of data that the departments included in it can understand and use. Maintaining one system may make it easier for the company since it will be required to run a single IT system instead of numerous ones. IT systems require specialised personnel and infrastructural demands. ERP would minimise these needs, and this will make the company run its business more economically.
Actual or potential benefits of ERP could be seen in the following aspects:
- There is a distinct reduction in the efforts required for the collection and entry of data, in that inputs get automatically recorded at the very time of the transaction and therefore, the ERP manager need not have to perform a set of separate actions to record transactions.
- It is possible to raise clarifications by management during the virtual time and also at far distances regarding the combination of integrated information from various functions.
- There is a standardised and homogeneous procedure for working practices of ERP, which removes ambiguity and doubts.
- Geographical distances and multifarious functional differences cease to be relevant since ERP is able to overcome such constraints effortlessly.
- The benefits that could be derived from ERP could be seen in the context of greater transparency, visibility and expediency in effecting transactions, especially in inventories, debtors, creditors, etc.
- By far, the greatest benefit could be seen in terms of complete assimilation of transactions from order booking, dispatching, invoicing and payment at one stroke, thus eliminating efforts and wasted time. Thus it may be seen that ERP renders management processes simpler, more transparent and easily useable.