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How does Enterprise Resource Planning software help a business or organization meets its strategic objective?

In all organizations, it is normal for managers to use a big part of their energy and time in dealing with a crisis. This is because someone from the staff is not doing the job in the way it should be done. There could be a lot of instances like tax payment which is not done accurately, a shipment to a customer not made on time, bills uncollected, and the production department unable to meet the deadlines and a whole lot more. This does not mean that all these would be handled by an Enterprise Resource Planning (ERP) system the moment it is implemented. Naturally, people have to do all those things, but the advantage of the software is that it enables them to do all this in a planned, timely and process-driven manner.


Effective software frees up different management levels from a huge number of operational concerns. The managers would be able to get enough period to determine what is going on. For years, the system has been sold to CEOs on two major promises. One, it would help the company become an integrated whole, in contrast to being a collection of individual functions, locations or departments. Two, that the program would bring the best practices embedded in a way that it operates to the company and the practices would be the basis for future organization growth.

By definition, the system provides automation for all functions/departments of an enterprise. Therefore, sales and marketing could run their operations on the framework and so would finance and accounts, material managing, retail, and distribution, production and more. It is not as though the functions did not have any automation before the implementation of the framework, it is just that after implementing, they share similar data seamlessly, the flow of information across locations and functions is enabled and process driven. So it benefits businesses through enabling integration.

Moreover, it benefits the finance department by allowing them to have the information necessary to relate to cash flow administration. Moreover, the Chief Executive Officer has ready ability for figuring out what is happening exactly in all parts of the company. In general, app software includes an ERP. It may enforce an operation rule which says that purchases above $10,000 should be approved by two persons that include the senior manager. The program is forcing the best practices into the business. The best practices are part of the software. Moreover, adoption makes the firm more process oriented, stronger and in line with the best in the globe. Thus, it comes as no wonder that by the time a system is implemented, the whole organization benefits by being more streamlined and in tune with the best. An efficient program frees up different levels of management from a huge number of operational issues. 

A meticulously implemented software benefits a business on two fronts, operational and strategic. Enterprise Resource Planning apps streamline processes to boost a competitive edge. Other advantages of the framework include the following:

COST ADVANTAGE

One o f the many reasons why the applications are being implemented is to achieve savings on the expenses. Most savings are achieved through overall efficiencies put in place, reducing inventory levels, better resources management and via strategic alignment achieved by the inherent nature of the system. Some savings are hard to measure and intangible, but could play a major role to have a competitive edge. 

EMPOWERS USERS

It offers responsibility and accountability to users in ways that are not available before. With the data flow and integration, more info is available to end users. User screens could provide info that allows them to make informed decisions. 

STANDARDIZED PROCESSES

The applications, in general, are designed for the best business process applicable all over the world. When focusing on certain procedures to be streamlined by the program, the business is forced to assess its present methods and standardize as needed for all the points of implementing it. Re-engineering of procedures could be the result of the requirement to standardize. Standardization, as a result of packaged apps, offers the benefit that 'as the state of the art moves, the venture moves with it.

OPEN AND MODULAR

The systems are designed with an open architecture. Meaning that a module could be detached or interfaced as per requirement without affecting the performance of other modules. Moreover, they could support numerous hardware platforms for those firms that have a heterogeneous collection of systems. Moreover, it should support some third party add-ons.

INTERNAL MANAGEMENT

It could boost analytical and plan capacities for management through storing content in a consistent, common format that could be accessed rapidly. As a result of the process of implementation, a lot of organizations processes and data needs were standardized. This enables the ability to extract, manipulate and analyze info at a more extensive level. Governance is provided valuable information for making the right decisions. A word of caution however that if an aspect of the info value could be in danger if users are not trained properly in the procedure requirements are not explored thoroughly in the course of the implementation.

STRATEGIC PLACEMENT

Most businesses are moving toward intranet, the internet, and extranets. The software lays the back end groundwork for supporting venture on the web. This is most evident with the inventory/material procedures. A lot of firms are online with suppliers wherein the materials tracking becomes a vital procedure as items often are in 'virtual warehouses. The program provides the flow of content between the sales department, purchasing, inventory on to outside suppliers who have to know when to ship materials. Moreover, it also supports globalization and assists in transcending across language barriers or geographic hindrances.

FINANCIAL DATA IN REAL TIME

The apps facilitate real-time movement of financial info throughout the enterprise. General ledger interfaces between procedures like payroll, accounts payable and purchases enable ease in monitoring and recording these transactions. Furthermore, the interfaces enable consistency of reporting when tracking back source data. 

All the above-mentioned items offer reasons why a business opts to move from traditional, segmented functions to the integrated systems of an Enterprise Resource Planning Software.

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Hiren is an IT business consultant and blogger. His expertise includes diverse technology platforms, like Microsoft, Java, PHP, SharePoint, Open Source, Big Data, BI, and Mobile.