Enterprise Resource Planning: Transforming the Enterprise

By: Lavena Ang

Enterprise Resource Planning (ERP) is an integrated suite of information technology applications that support the operations of an enterprise. It provides organisation with transaction processing models that are integrated with other activities of the organisation and coordinate complicated, multifaceted operations.

The main value ERP systems provide is the opportunity to integrate an entire organisation. ERP systems promise to solve the problem of fragmented information in organisations by providing seamless integration of all the information flowing through the organisation across the different functional and business units across the world. End to end business processes that were traditionally disjointed, now share information through a common database.

ERP systems work in real-time, meaning that the exact status of everything is always available. When data such as a sale becomes available at one point in the business, it courses its way through the software, which automatically calculates the effects of the transaction on other areas, such as manufacturing, inventory, procurement, invoicing, and booking the actual sale to the financial ledger. The information flow is much more efficient as there are clear lines of business processes across the enterprise.

The basic modules and their brief features of ERP systems are as follows:

Finance - This module tracks financial information such as revenue and cost data through various areas within the company.

Logistics - This module is often broken into several sub-modules that cover different logistics functions: Transportation, Stock Management, and Warehouse management.

Manufacturing - This module tracks the flow of products through the manufacturing process, coordinating what is done to what part at what time.

Order Fulfilment - This module monitors the entire order fulfilment cycle, keeping track of the progress the company has made in satisfying demand.

Human Resources - This module handles all sorts of human resources tasks, such as scheduling workers.

Supplier Management - This module monitors supplier performance and tracks the delivery of suppliers' products.

Besides the above-mentioned standard features, ERP vendors are offering several "bolt-on" products that provide specialised functionality to augment the core, such as Customer Relationship Management (CRM).

CRM is a strategy used to learn more about customers' needs and behaviours in order to develop stronger relationships with them. These relationships are critical to business and mission success. The more useful way to think about CRM: Processes that will help bring together pieces of information about customers, sales, marketing effectiveness, responsiveness, and market trends.

The logic behind the idea of CRM is that it helps businesses use technology and human resources to gain insight into the behaviour of customers and the value of those customers. Organisations effectively implementing CRM will be able to: provide better customer service, make call centres more efficient, simplify marketing and sales processes, and discover new customers.

Do you need ERP? The answer is yes if you want to stay at the leading edge and competitive in this fast-moving and dynamic environment. ERP is able to contribute to your organisation's general pursuit of internal visibility, flexibility, excellence in quality, and the capacity for inter-organisational extension.

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