Tuesday, February 25, 2014

What is ERP? How has it improved efficiency of small businesses?

There are a growing number of software suites that can help companies maximize efficiencies in their supply chain. There are specific software packages that can be implemented for purchasing or planning, but there is a software product, called Enterprise resource planning, that can be implemented across the company incorporating all aspects of the enterprise.

Enterprise resource planning (ERP) is business process management software that allows an organization to use a system of integrated applications to manage the business and automate back office functions. ERP software integrates all facets of an operation, including product planning, development, manufacturing processes, sales and marketing. Enterprise resource planning (ERP) software has been implemented by a large number of Fortune 500 companies in the last twenty years. The common database and real-time processing has allowed companies to benefit from reacting to situations in the supply chain that would not have been possible without ERP software. The basic goal is to provide one central repository for all information that is shared by all the various ERP facets in order to smooth the flow of data across the organization.

A business can use ERP software to manage back-office activities and tasks including the following: Distribution process management, supply chain management, services knowledge base, configure, prices, improve accuracy of financial data, facilitate better project planning, automate employee life-cycle, standardize critical business procedures, reduce redundant tasks, assess business needs, accounting and financial applications, lower purchasing costs, manage human resources and payroll. As the ERP methodology has become more popular, software applications have emerged to help business managers implement ERP into other business activities and may also incorporate modules for CRM and present them as a single unified package. CRM is the abbreviation for customer relationship management. It entails all aspects of interaction that a company has with its customer, whether it is sales or service-related. Depending on your organization's size and needs there are a number of enterprise resource planning software vendors to choose from. Three companies dominate the ERP market for large enterprises: SAP, Oracle and Microsoft. 

Chobani Yogurt Company has experienced tremendous success, growing from five people in upstate New York to a global organization of more than 2,200 employees in fewer than 10 years. As a start-up, the company had limited IT resources, but as growth accelerated the company turned to Microsoft Dynamics for help managing change. It uses Microsoft Dynamics CRM to manage its relationships, whether business-to-business, business-to-consumer, or even business-to-employee. The real-time availability of data across these systems has enabled the rapidly evolving company to collaborate across organizational boundaries; in addition to geographic boundaries, ensuring that everyone remains in touch with the principles on which Chobani was founded.

One question that comes to my mind while reading these articles is how crucial is this data across the ERP systems for the successful running of the companies? I am curious to know more how does ERP increase the profitability or the turn over rate of the companies?

Sources:
http://logistics.about.com/od/supplychainsoftware/a/SAP.htm
http://www.microsoft.com/en-us/dynamics/customer-success-stories-detail.aspx?casestudyid=710000002204
http://www.webopedia.com/TERM/E/ERP.html
http://www.webopedia.com/TERM/C/CRM.html


6 comments:

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    ERP systems integrate all business management functions, including planning.ERP system provides the solid operational backbone.
    Thanks for sharing such a nice post on Benifts of ERP...



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