The Enterprise Resource Planning Advantages to a Business
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The Enterprise Resource Planning Advantages to a Business

The business world becomes more competitive each waking day and a lag in in any of the wheels in the business process ultimately leads to the entire business suffering. Smooth running is key and seamless collaboration of one process to the other is the only sure recipe of creating a niche for a business and making sure that the only worthy competitor is your own business. But just how do you change your business into a profitable model that never slows down? To better understand this, it is best to first look at different business processes and establish the disconnect between them and then look at a solution that cuts across the board.

A company is only as good as its customers, they makes up the revenue stream and it is only fitting that they be the most important part of the business; ensuring that they feel important and can access what they want, when they want it means that a business has to invest time, money and energy into satisfactory customer relations.

Enterprise Resource Planning

Communication is integral in this step and accurate record keeping is a prerequisite. Each process is a stepping stone to the next and record keeping i.e. inventory, sales, orders and forecasts facilitates, planning for the manufacturing and distribution process. A break down in any of the processes means a company suffers in terms of numbers and this is not good for business. Connection of all this bits and pieces often results in a plethora of issues and this is why most businesses fail or remain stagnant. Let's take a look at some of the issues that bring about problems in a business as a result of this.

Time wastage: this spells doom especially in larger corporations where it is easy to find loopholes. Time wastage comes about because of lack of proper planning and communication between departments. The production, or manufacturing department, depends wholly on the financial department for numbers in terms of units or volumes to be produced. Production cannot commence without proper inventory management to ensure that there is no surplus that hurts the business' numbers or lack of inventory that may lead to losing of or disappointment of clients. Crunching of numbers in one department and then counter checking of the same numbers in another is time consuming and there is a lot of room for error in between.

Waiting for Sales orders and invoices from the financial department should not slow down the business or make it suffer. This issue spills over onto the distribution, or sales and marketing department, as there are deadlines that need to be met and it is important for products to be at the right place at the right time, failure to which will cause problems that might go far and beyond the departments but also affect branches and even chains in the case of company to company interactions.

ERP Company Benefits

Cost implications: business process connectivity can be an expensive affair if not well managed and this all boils down to proper planning in a business. Several redundant processes emerge in the quest for merging inter-departmental processes, these processes lead to unnecessary spending and or wasteful spending. This greatly affects a company's margins and can lead to stagnation in a company. These are just some of the issues, tip of the ice berg, that emerge in the search of business process' efficiency, but luckily there is a way to ensure that a business does not become a statistic that falls under this bracket.

ERP (Enterprise resource planning) is a system that started out, in 1960, as a way for businesses to manage inventory and plan on manufacturing accordingly all in real time hence making it easier to reconcile balances. With time, the system's capability has grown and company's now use it for MRP (Material Requirements Planning) especially in today's volatile market where raw materials cost can change on a whim making it difficult to plan ahead and can disrupt the production process. The system encompasses all the business process including HR (Human Resource), which also caters for customer relations, and also accounting.

The management level of businesses also benefits from Enterprise Resource Planning as ERP has not been left behind in technological advancements and cloud computing coupled with ERP is the latest advancement and this helps off site executives, managers and CEO's track business processes in real time.

The use of ERP is in company's has consistently risen and adoption of the system is at a steady rise of 19 % annually. Company's, both large and small have posted better numbers after adopting the system which only goes to show why its popularity only seems to be growing thanks to its efficiency, if integrated well enough, into business processes. But just how does ERP help business processes improve and excel? Let's take a look at some of the ways below.

Business ERP System

ERP helps a business save time and resources by simply using a plan production schedule with suitable resource allocation hence efficiency in the two most important departments is catered to and this ripple continues onto other parts of the business. Centralised data entry, edit and management in a business mitigates errors and down time associated with inter departmental clashes. Production schedules, for example, will not rely on inventory checks when the data is centralised neither will purchase of raw materials. Automation in business processes is mostly associated with efficiency but this may not be the case if each department uses different software's. Consolidating of data is not seamless and can prove daunting and lead to total breakdown within departments.

ERP solves this issue with the added advantage of not having to worry about a system breakdown in one department crippling the entire company operations or costly upgrades of individual systems. Accounting is made easier regardless of the size of the company and customer satisfaction is improved drastically because everything needed is a click away be it customer information, transaction data, orders or even marketing information. Recording, tracking and processing information does not require an entire department after ERP is integrated into a business hence saving both time and money and improving numbers in a business.
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