Benefits of ERP
Benefits of ERP
ERP, also known as Enterprise Resource Planning is a linked system which is computer-based and is widely used by businesses to manage their resources, both external and internal. The ERP system manages assets and resources like human resources, materials, financial resources and tangible assets. The purpose of the ERP system is to smooth the progress of the information flow between all the functions of a business which are inside the scope of an organization, and the ERP is responsible for managing the connections to end users. The ERP system is developed in a centralized system and it normally uses a common ground to link all the operations of a business into a standardized system.
1.The ERP system helps draw down operating expenses
The ERP systemâ€™s function is to integrate the process flow of the business in every department into a single network of information system. One of the vital benefits of this kind of system is that it improves the coordination of departments which in turn increase the companyâ€™s efficiency in operating the business. Because of these advantages, the ERP system reduces operating expenses which include lesser costs of managing inventories, lower costs of production, lesser advertising costs and lower costs when it comes to customer support.
2.The ERP system aids in the facilitation of daily operations
Another benefit of the ERP system is that it helps to facilitate the operations of a business. When a business implements the ERP system, they are provided with all the information they need which can be accessible anytime. This results to real-time data gathering and information dissemination which is very essential for management decision making and operational control. The ERP system can also help in tracking the actual activity costs and can perform costing based on these activities.
3.The ERP system aids in the strategic planning of a business
The strategic planning process involves taking planned steps which assesses resources and needs. It also helps defining a specific group of end users and sets of targets and objectives. Aside from this, the strategic planning process also designs and plans out synchronized techniques which have a high success rate and connects these techniques logically to the aspired result, needs and assets. Finally, strategic planning assesses the results and processes of the techniques applied. A part of the ERP system is programmed to aid the section of resource planning in the strategic planning process. The fact of the matter is, because of the intricacies of strategic planning, and its deficiency of sufficient integration with the DSS, the ERP application assesses resource planning as its weakest link.