Enterprise Resource Planning is commonly used to improve the integration within companies and organizations, and instead of focusing on individual parts, the operations of the company are viewed as a whole. Software infrastructure plays an important role in this process. In addition to this, software infrastructure plays an important role in the external processes of the organization.
Enterprise Resource Planning will focus on business processes, and they must be modular. In addition to this, the business processes must also be integrated. When companies deal with ERP, many of them make the mistake of focusing on the company.
Enterprise Resource Planning is a concept that extends beyond the company. An organization that wants to use it successfully must also look at the impact on the customers, partners, and suppliers. The ERP software will be responsible for dealing with a number of the company's business functions. There are five important issues that an ERP system must be capable of addressing. A business process will be responsible for dealing with multiple functions within a company. For instance, most companies have an accounting department, which they may also call the payroll. Even though individual functions will deal with business processes, the functions may not be based on a process.
The term "business process" is used to mean something that is much broader. Many people have wandered if modular applications are truly different from the stand-alone tools that exist today. Enterprise Resource Planning is much different than these tools. Because stand-alone tools are limited in their capability, companies are limited in what they can do with them. In contrast, Enterprise Resource Planning will allow a company to become more efficient because the various processes of the organization will be integrated. Without ERP, it will be very difficult to make the processes within your company seamless.
Modularity becomes an issue when a company is getting ready to purchase and utilize an ERP system. Some companies may not need to use all the applications at one time, or they may simply wish to use applications at specific times. Some ERP systems may be able to fit their applications together like Lego blocks. Some companies have analyzed the importance of having an integrated system, and many have wandered how such a system could help their companies become more productive. While stand-alone applications have their benefits, there are a number of limitations to them. A company that does not have an ERP system will spend a great deal of time repeating the same tasks over and over again.
They will place the same information in different applications, and the process can be tedious and time consuming. As you would expect, there are a number of problems with this approach. The most obvious problem is that entering the same information into a system is a waste of time. In addition to this, there is a much higher chance that the information will not be processed correctly when it is entered into the system many times over. Many companies have found that the data will not look the same on different applications once it has been entered into the system. This can cause a great deal of confusion, and this confusion will ultimately lead to a loss of productivity and profits.
Perhaps one of the biggest problems with stand-alone programs is that the information is not consistent. When employees get ready to analyze the information, they will often run into difficulties, and some will become confused. When an ERP system is used, the information and processes will be comprised in a "single version." The data only needs to be placed in the system once, and everyone who views the data will be able to see the same thing. This dramatically reduces the chances of errors and other problems. Most importantly, the data will be presented in a real time format. It is important for companies to make sure their ERP systems extend beyond their internal processes. If a company wants to succeed, they must be able to maintain their purchase of goods, and they must also be capable of maintaining strong relationships with their business partners. As you can see, these are issues that are external to the organization, and they must be taken into consideration.
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