Question

If you were presenting the strategic benefits of an ERP system and how it might improve supply chain and working capital efficiency, what 3 features would you point to (and provide examples) in order to get your project approved?

Answer 1

ENTERPRISE RESOURCE PLANNING (ERP)

Enterprise resource planning (ERP) is management software that allows an enterprise to use a series of applications to manage the business and automate many functions related to Procurement, technology, human resources etc.

ERP uses a centralized database for all the business processes which aims to reduce manual labor and to simplify the business workflows. ERP systems allow users to look at real-time data collected from all across the business to measure productivity and profitability of business.

FEATURES OF ERP

1) AUTUMATION OF BUSINESS PROCESSES

One of the most important functions performed by ERP is that it automates common routinely performed tasks such as order entry, payroll, accounting, invoicing etc. Automation cuts down the time which your emoloyee would typically spend on these processes, allowing them to focus on more important assignments.

Automating the processes also reduces human error. When an employee is spending majority of their time repeating the same task over and over, they’re bound to make a mistake. Automation allows data to be sent from one part of the system to another, without any chance of error.

For example:- In Amazon the entire process of order placing by buyer to sending that order to the seller is automated. This has resulted in huge saving in time which the employees would have spent on these orders.

2. REPORTING

Reporting refers to the tools that include customizable dashboards, pie charts, bar graphs and other visual representations which are provided by the ERP on real time basis. Many systems also allow users to restrict access to reports, protecting valuable company information.

For example:- All the enterprise have theire data stored on its Intranet where they can view the daily reporting of the organisation such as the total number of units manufactured, total time taken, Raw materials consumed etc. These reportings are simplified and facilitates comparision between records of different periods.

3. DATA ANALYSIS

As discussed in point 1 and 2 above, ERP is already collecting and processing data from all your business functions, Under data analysis, the information obtained above is capitalized through analysis. This ERP function helpsa in finding trends and patterns in the processes. This enables users to forecast for future business decisions.

For example:- Analysing the present quarter/year data will help us in forecasting the future production requirement and demand, which helps us in preparing the budget for the coming quarter/year.

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