ERP Systems

During the class discussion this week, we realized that how ERP system is helping business process integration.

Business process goes cross different department, and ERP system record business process. Without ERP system, a simple sales order needs all different departments to communicate constantly. ERP system help enterprise to save a lot of money and improve collaboration around varies departments while running business. Most importantly, ERP system stores a lot of important financial data and will help better decision making.

In managerial accounting, ERP system will help management to access reports more quickly and make a sufficient budgeting. ERP system can also help avoid repetitive communication and redundant operation.

Especially in the production industry, ERP system will help keep a better inventory control and production. We can minimize our inventory cost and production cost base on the sales orders we received.

In all, ERP system is helping managing operation in every aspect in the organization.

During the first week of our ERP course I heard this question that why we need an ERP system while we can call or send email for communication at work. To respond comprehensively to this question I found some articles and summarised them to share with all of you.

Every company is unique and there’s no single solution for their problems. However, many companies deploy ERP system to respond similar problems and frustrations:

1. Having many different software dealing with different processes. ERP software integrates these systems so that every business function relies on a single database.
2. Having easy access to the information about our business; Because all of the data is compiled, stored, shared and accessed through a single system, there is no concern about how accurate, complete or secure the data files are, so ERP improve collaboration.
3. All the activities are related to accounting. Without an ERP system Accounting would be difficult and takes longer. It also simplified regulatory compliance.
4. Integrating sale, customer, marketing and inventory data together: ERP makes it simple and easy to optimize your efforts rather than to create an informed guess about volumes, processes and more, which finally can help you to better communicate with your customers and clients through all stages of the process.
5. Giving agility to respond to IT system complexity and save time.

References:

1. 7 Reasons Why ERP Systems are Important, NETSUITE

http://www.netsuite.com/portal/resource/articles/erp/business-erp-system.shtml

2- Top Five Signs Your Business Is Ready for An ERP System, SelectHub:

https://selecthub.com/enterprise-resource-planning/why-erp-systems-are-important/

I did not have any professional experience with ERP and that was one of the reasons I wanted to understand the necessity of the ERP system especially in large organizations, but the simulation of a simple pen manufacturing company performed this week helped a lot to realize the value and need of an ERP system in any organization. The simulation helped to know in advance of the problems I am to address and resolve by studying and working on ERP systems. In simulation we observed how necessary it is to have an efficient ERP system to support range of fundamental business issues such as availability of real-time information for decisions, operational efficiency and better management of supply and demand. How implementation of efficient ERP systems can lead to success of organization can be realized by looking at LG Electronics successful ERP implementation. LG’s case story demonstrates many crucial issues faced by a multi-national company, many of which we came across in our pen manufacturing simulation such as, unclear top-level reporting, lacking transparency, internal data sharing, disengaged employees. Implementation of appropriate ERP solutions helped LG to overcome existing challenges and also achieve many other benefits and further growth of the company.

(link: http://www.investopedia.com/articles/investing/111214/lg-case-study-successful-enterprise-resource-planning-system.asp)

During week one we discussed about various departments present in an organization, their activities, their core data and data these departments require from one another for the continuation of business. Coming to the link between topics covered in class and my professional experience, I have worked in the domains of Product Life-cycle Management and Project systems. I have also worked as UNIX system administrator where I had to coordinate with other departments. I was responsible for UNIX jobs and had to communicate with other organizations e.g. change management for completion of projects. Though the topics covered in the class were more related to business and terms used were different, the underlying concept was same i.e.  “Silo-effect” develops the expertise (UNIX in my case) of an employee in a particular field but it’s important that they understand how other departments work and learn how to coordinate effectively and efficiently with them .I was recently introduced to sales and marketing during my internship and had relatively less knowledge of how they work. The activity conducted by professor helped me to understand how these departments coordinate with each other and different documents that are required to ease the process of communication between them.