ERP Application for Business

 Disclaimer: This article is originally mine, I wrote it as a sample test for one Michael Hazard on UPWORK, turns out he asked many other writers for different topics and now he is unavailable.

Importance of ERP/Photo/http://erp-software-india.yolasite.com/

 Enterprise resource planning (ERP) application refers to software for business management processes that facilitates the use of integrated applications for management and automates other office functions related to human resource, technology and services. The software consists of all the faces of an operation such as development, planning, manufacturing, sales and marketing.

ERP gives a real time view of the most vital business processes using databases. It tracks all the business resources such as raw materials, production capacity and even cash. It also checks the state of business commitments such as payroll and orders. This means that the ERP application erases departments by storing company data in one database that employees add data to and access through a module that is specifically designed for each area of function.

ERP modules

In software language, a module is part of a program. Programs are made up of one or several modules developed independently which are only combined once the program has been linked. ERP software consists of several enterprise modules that are bought separately depending on what works best for an organization. Each module addresses a particular business process for example material purchasing.

Examples of ERP modules

·         Manufacturing

·         Supply chain management

·         Project management

·         Purchasing

·         Accounting/finance

Characteristics of a an effective ERP system

1.      Flexibility

With the changes in technology, the traditional way of doing business has changed so as to catch up with the new standards. This means that any business process that is managed via ERP systems should be flexible to allow changes as per what is required.

2.      Comprehensive

If a business has a certain number of its activities being done through the ERP system while the rest are done manually then something is definitely wrong. It means that the ERP system does not have the capacity to cover all the functions of that organization hence the need for comprehensiveness.

3.      Automated functions

The quality of an ERP application is measured by how it does automated functions. This is because the system was first bought because of automation which saves a business time and money.

4.      Project management

Every detail of a project is tracked through the system since it collaborates everything in real time to a team working on the project.

5.      Best business practices

There are lots of business standards to adhere to for instance ISO certification. A good ERP system will be updated on all the required standards.

6.      Data optimization

The system should be able to optimize data to ensure that the limited resources of a business are utilized effectively. Data is also optimized to minimize risk and cost.

7.      Strategic planning

The main function before a business sets on other activities is strategic planning. This should be done through the ERP system since it integrates all its sub parts.

8.      Multi facilitation

This means that an effective ERP application can work in a multi-platform. It should work in multi currencies or even a multi-mode of manufacturing.

9.      Has an online connection with other systems

A good ERP system has the capacity to connect with other ERP online. This is because many businesses today interact with other millions of different businesses.

10.  Open and modular

A good ERP system’s architecture is open moduled. If an error occurs in one module it can be handled separately without affecting other modules.

Benefits and drawbacks of ERP

·         Improved internal business processes.

·         Automation of manufacturing processes allowing introduction of standards to improve quality, productivity, time and staffing.

·         Efficient business operations as a result of integrated systems from different areas of function.

·         Businesses can purchase EPR packages that are tailored made to meet their business needs.

·         Improved visibility.

·         Easy management of employee information across different units

Drawbacks

·         ERP systems do not come cheap.

·         There is need to train staff on how to use the system.

·         The systems take a lot of time and work to be implemented. They normally take a period of one to three years.

Is ERP for my business?

ERP software does not come cheap and you will need to train your staff to be able to implement it effectively. However before purchasing it, there is need to verify if your business does need the upgrade.

Signs that your business is ripe for ERP

1.      You have lots of different software that handle different functions. The ERP software will integrate all your systems so that they are all based in a single database. This translates to spending less time in acquiring needed information hence quick decision making.

2.      You cannot easily access your business information. Business needs to move at a faster pace. ERP solutions allow you to get a whole view of your business operations in real time at any time. This ensures a high level of effectiveness and productivity.

3.       Customer experience and sales are doing badly. When inventories and customer data are separate then problems will occur with how you deliver to customers. With ERP all staff no matter the department will be able to access the same information thus being able to answer all customer queries satisfactorily.

4.      Complex IT.IT management can become a night terror when you have several systems in your business. This  is because upgrading and customizing the systems can be costly , complicated and also consume a lot of time and resources

5.      There is a problem in the accounting department. This is the first sign that you need an ERP system. It takes ages to come up with a financial report. Your accounting staff are still relying on paper based orders and invoices and then have to spend hours entering the information manually in different sales and accounts systems. Too much drama yet ERP can handle all that instantly.