ERP Software System

Usually, an organization thinks to implement ERP (enterprise resource planning) software to align business objective with latest technology solutions, to enhance customer confidence and stakeholder commitment, to optimum utilization of organization’s resources and assets. Typically, an organization is looking for good enterprise resource planning software with advance features and functions. Benefits of ERP Software ERP system introduces efficiency and improvement of its business processes. Good enterprise software helps you to achieve transparency and availability of data across all business functions. It gives right information at the right time to the right people for effective decision making. This decision would be based on accurate information, which will give positive result and increase productivity. ERP software helps you to optimize your human resource management and asset management. It also improves financial management. Trail balance, balance sheet, cash in hand, cash in bank, top supplier, top customer, ABC analysis, dead stock, WIP (work in progress) and other important reports are ready at any point of time. It helps in achieving better efficiency in organization reporting. ERP software streamlines the supply chain management and improves customer relationship management. Enterprise resource planning software ensures data security and data scalability: organization can customize the enterprise software according to their requirements. It adopts systems that address changing technologies. It gives better ROI (return on investment). Organization can increase turnover with same human resource. There is a misconception that, ERP is for IT department and they will get more benefits, but it is not true. During implementation and after go-live, IT department responsibility is higher than other department. Proper training gives better output from the new system. Lack of proper training to user results wrong entry and create problem. Top management should understand the need of detailed user training. Ultimately, user is going to use this enterprise resource planning software. Read information on How to Select ERP Software for your organization for successful implementation.

The opening up of the global economy has led to a significant development of the small and mid market segment. This growth has been across industry verticals in the manufacturing, retail, services, pharma, telecommunication and information technology sectors. This growth and along with that the new competition and quest for enhancing total market share has led the companies to re-look at its processes and procedures. Now, companies are trying to utilize their all resources effectively to make business more efficient and effective. In this case, companies are looking for enterprise software and other quality techniques. Companies are implementing different practices to utilize their resource effectively viz. business process re-engineering (BPR), six sigma, enterprise resource planning (ERP), just in time (JIT), Kanban and other quality improvement systems. All these techniques are good and helping companies to provide better quality and lower cost, which is the key factor to sustain a business in this competitive environment. The implementation of ERP systems has helped small and mid sized companies, significantly improve their business metrics by process optimization, improving the entire supply chain process, better inventory control, better reporting to take decisions, integration across functionalities and increasing transparency across the company. Purchase department can see the sales department data, Sales department can see inventory data, and top management can see any data on a click of single button. The introduction of ERP in any company has also helped it move up the value chain in term of market credibility and building the confidence of its customer, stakeholders and vendors. Most of the small and mid sized companies were living with in-house developed applications which are non-integrated and on disparate technology architectures. This has resulted in running with redundant technology, loss of support, non availability or less availability of critical information at the right time resulting in overall business loss. The key drivers of introducing an ERP system in a small and midsized company are introduction of industry standard processes which are already embedded in the application, adopting integration across business functions leading to better transparency, access to real time information, analytical reporting for business decisions and adopting state of the art technology. Another key reason for implementing an ERP vis-à-vis a tailor-made development is the speed of implementation resulting in achieving a quicker return on investment (ROI). Read Benefits and Definition of ERP – Enterprise Resource Planning system.

ERP (Enterprise Resource Planning) is a system which integrates various business data in a single database and provides cross function reporting on click of a single button. Earlier ERP was made for large organizations but, now it is made for medium and even for small organizations. In this global competitive market, organizations need to upgrade with latest technologies. Most of the large organizations are using enterprise resource planning system. To deal with those large organization SMEs (Small and Medium Enterprises) need to work on a similar type of technologies. In this case, importance of ERP system for SMEs increases. Of course, there are lots of business benefits of enterprise software. Apart from all other basic benefits, enterprise software gives an information system with three important capabilities i.e. 1. Consistency and reliability of business data across the organization 2. Streamlined transaction processing within and outside organization 3. Provides operations level reporting on a click of a button These capabilities, basic and important as they are, ensure that organizations are ready for specific solutions that improve overall performance. The areas that will increase the basic ERP requirements are like supply chain management (SCM) with electronic collaboration between supplier and customer, customer relationship management (CRM), business intelligence (BI), product data management, complete product life cycle (PLC) management, inventory and warehouse management using RFID tools. For these applications, ERP system becomes the substratum, a kind of gateway to expert functions. That is, enterprise software is a sine qua non for other applications. In fact, the latest trend is that with basic enterprise resource planning software, tailor-made system is given by ERP companies. ERP vendors are speeding-up to integrate most of these additional capabilities. This type of customized or tailor-made enterprise system is easy to install and implement for SMEs. It also takes less time to implement and chances of implementation failure are lesser. Read Benefits of ERP and definition – Enterprise Resource Planning system.

ERP implementation is always a tough job for the organizations. To get successful implementation organizations need to be very careful. When SMEs think about ERP implementation, they identify the need of an ERP system. They prepare pre-implementation strategy for enterprise software. This strategy involves identification of business needs, budgeting for the procurement of ERP software and services, evaluation of various ERP software to suite its business process. After finalizing the enterprise software they start the implementation and finally adopt the ERP system as an organization wide solution. The major challenges of an ERP implementation for an organization are Selection of ERP software This is a very critical decision that an organization needs to take. However it is vital to consider the size of the business operations, the projected growth in the years to come, geographical spread, nature of business and investment figures as key factors in determining the selection of ERP software. The key considerations evaluation and selection of ERP Software are scalability, vendor management, functionality, reliable service and support. ERP systems are designed to grow with the organization. Unlike some stand-alone systems, they do not succumb to volume and change pressures, leaving you to start from scratch. Managing excess of vendors for customer service is not easy. An integrated ERP system gives you one solution supplier to work with. Organization needs to access the software functionality which is necessary to run the business over time at an affordable cost. It may not be cost effective choice at first, but it will usually be the most cost effective and economical in the long run as your business needs grow and change. It gives better ROI. Reliable service and support at affordable cost is critical. It is easier to support an integrated ERP system environment than a mixture of different stand alone applications.

Enterprise resource planning software requires full support from top management at the time of implementation, selection, customization etc. During implementation, organization may require to change some business processes to meet the software standards, which are industry specific standards. Business process can not be change without top management support. It is quite necessary to change some of the business process. It helps in implementation. If you are not willing to change any business process you may go for customization. But, customization is costly and not good for any ERP project. Little bit customization is ok, but too much customization will affect your ERP project. It will increase your project duration, budget, and increase the risk of implementation failure. It will be better to change some business process if possible, rather than customizing. When an organization changes their some business processes, change management expert is required. People resist change. Change management expert will guide how to change, and explain the benefits of changes to the employees. ERP system helps in changing the process; it is designed and developed by adopting best practices of specific industries. Internal Change Management: An ERP implementation entails changes in business processes and reporting structure. Addressing this paradigm move is a process that the organization has to go through. This will help in achieving the acceptability of the ERP users. Change Management Drivers Employees: Employees are the key players in any ERP implementation. The employees of the organization will be in the capacity of process owners, software users and administrators of the ERP software. The main challenge of an ERP implementation is to achieve the acceptability of the system to the employees and for them to perceive the benefits to the organization and to their way of working. Process: One of the returns on investment (ROI) is adopting business best practices by virtue of an ERP system. Little change in the business process will reduce the chance of implementation failure. Minimum or no customization is very good for any ERP implementation. These processes impact the effectiveness levels to be attained by the organization. Technology: Implementation of ERP system automatically entails adopting technology that will address easy scalability, eradication of distance and upgradeability to latest technologies. Organization Commitment: ERP system has to be viewed as a process enabler rather than a software package to be installed and run. The implementation process is a journey towards achieving organizational effectiveness. This demands a very strong commitment of the top management throughout the entire process. Read information on ERP Implementation Strategy and fundamentals of ERP.