ERP Impact in Organizations
Nowadays, with the fast developing of industries and the need for managing procedures and resources, it has become very important to have a tool which can help you coordinate several activities, and the best one is ERP. The advantages of having ERP are many. It gives you the opportunity of integrating every procedure of your business while improving the quality of several areas simultaneously. These areas include human resources, accounting and operations. In addition, ERP helps to increase your production levels and to control your costs more efficiently, and this means that you will be able to control the whole enterprise more efficiently.
A very important facility of the ERP systems is that they increase the availability of the information, helping companies to have information in real time to make decisions and accurate prognostics regarding the organization. It is important to mention that ERP systems are a very powerful tool when it comes to processing and organizing financial data. It improves the development of the commercial activity in the short and long term.
In the enterprise management module you can perform integral strategic planning, keeping an eye on the daily activities and having fluent communication with the investors. The human resources module allows you to make decisions and optimize the company’s investments regarding employees. With all of this we can see that an ERP system brings visible advantages. You might find that implementing an ERP could be expensive, or that only big organizations can reach it.
Another important consideration to make is that the implementation of ERP takes time and generates deep changes in the way you do business. But the important thing to remember is that every enterprise can see the benefits of the ERP systems, although for the first period it may only seem like an investment. The benefits indeed are really bigger than the costs, and it is very valuable l to invest in an ERP system.
ERP For a Competitive World
These days we are living in a globalized world, where competition is not absent. This is why it is essential for managers of the enterprise to develop different strategies to satisfy client needs, many of which have become hard to see. They are trying to anticipate what clients will want or need, and in that way they work to offer customized products.
Companies are looking for a software that can be capable of administrating every aspect of their business integrally. Many of them have been seeking new technological tools that can optimize their internal procedures and make them more efficient. The main consequence of this is the consolidation of the company and the satisfaction of their clients.
ERP systems are a fundamental element for organizations these days. Companies must identify their needs in order to know which system can fit better with their inquiries. In this way you will avoid choosing a software that is too sophisticated for the regular activities of the enterprise. Or you might choose a very simple system that will not satisfy your needs, making you lose money through too many updates.
The chances of success when implementing ERP lay in the ability of the organization to integrate and consolidate the functionality of the system. If the enterprise has a defined structure and the methods are well defined, they can get to progress from the selection phase to the operational one and reduce the risk, increasing the probability of success. Recent studies in Israel show that many companies have achieved important benefits when implementing ERPs, although being different between each other.
The Success of ERP Implementation is the Success of ERP Integration
Packaged ERP software might have many different modules. It is very probable that the first time you purchase ERP you will want to get all the modules from the same vendor, but companies don’t always buy all the modules to the same vendor. As the implementation of an ERP system could last many years, the integration could be either the integration of modules from different vendors or the different versions of a sole vendor.
Business practice combines strategies, technologies and processes to electronically coordinate both internal and external business activities and the management of resources. To get the most out of an ERP system it has to be tightly integrated with the remaining software of the enterprise. Over the years systems have accumulated vast amounts of data that is vital to the survival, operations and expansion of every organization.
The integration of ERP systems with legacy systems is more complex than the integration of ERP modules and e-business applications. It usually requires the installation of a third party interface software to establish communication between ERP software systems and legacy systems.
The second generation ERP systems use relational database management to store enterprise data. Data conversion for this case is often a time consuming and tedious process. This is why while most interface software providers offer typical solutions, others are being very successful by offering integration modules that automates or accelerates the transformation of legacy application logic and data into reusable components through several different interfaces.
Impact and Profits
When directors decide to implement ERP a big change takes place in the operational level of the enterprise. This is especially true when compared to the traditional way. Organizations that get a complete adaptation to the new system are able to use one hundred per cent of the software benefits and applications, giving them a competitive advantage over other enterprises.
A frequent problem in enterprises that have been expanding for years is that they have probably acquired other companies, whether they were competitors or not, and these new companies were using a different software system. In this way expanded enterprises could be using smaller systems together with the ERP, and in many occasions it may be designed according to the company’s needs. In this case integration can take time, and though it is probable the results can be very expensive. The key to making a good investment at this point with no regrets is to work as a team, and this includes professionals, managers from the different enterprises, employees and providers.
In a globalized economy success depends on the investments made in technology. The implementation of ERP is actually a challenge for many organizations, and their chances for success are greater if they get to implement it properly. ERP providers are reducing their prices nowadays, and they are making their products more accessible to many sectors. They are focusing their efforts in making the implementation immediately, and by using the least amount of money. Another concern for providers is the wrong generalized idea that the implementation of ERP is painful and infinite. This is why they are trying to show results in a short time period.
Priorities are changing these days regarding ERP. Many enterprises are initiating new projects to use ERP in their sales activities, customer service and commercial planning instead of using it for back- office functions. For some companies it means a huge effort to use their ERP systems for new e- business applications, while others are taking several actions in order to use a software that can facilitate client- vendor relationships. Most users think that it was a good decisions to move into ERP technology, but it is really important to understand that the system as a basic software. There are many modules and additional functions that can be added to the basic ERP according to your needs, and additional functions are coming from all over.
Another important area that will probably ask for additional functions is commercial analysis. Here you should use applications that allow you to measure benefits directly. These kind of applications need a well designed backbone ERP to make them work, and in this way it is certain there are a number of reasons to install an ERP system. However, it is highly recommendable to make a technology investment in hardware to make it work even better.
Companies must work hard with the objective of integration for their software with web based applications, because in this way clients will be able to make a unique configuration of products and planning reparations through web sites. In addition, many enterprises use ERP systems to introduce commercial analysis software because these two elements can help managers to have a constant look at the operations. It can detect if a change on planning is necessary. Information technology planning experts established that these new processes will not generate a big impact on the staff of the organizations, although in commercial areas you will probably need to make few changes.
The increasing desire of users to obtain more benefits from ERP together with the impossibility of some enterprises to accede to this technology are generating doubts about the potential value of the system. Specialists comment regarding this matter that ERP has to be seen as an information backbone, and in that way investments are very convenient because of the cost of information, which sometimes happens to be priceless.