Advantages of ERP

By Neil Zawacki
Updated: August 12, 2011

Enterprise Resource Planning (ERP) uses a software platform to link various business functions across an entire company. It can be used to track inventory, establish schedules, determine costs, and consolidate services.

Here are some of the potential advantages of ERP:

1) It’s a single platform

ERP combines all the different functionalities of a company into a single unified database. This streamlines the management process by quite a bit and greatly reduces the amount of documentation and cycle time for the business. It also greatly lessens the possibility of data being entered into the system more the once.

2) Faster access to data

The ERP database can provide employees with the data they need when they need it. This can help them make information-based decisions and solve customer problems in a quick and efficient manner. It also makes project management much easier and speeds the time it takes to create reports.

3) Automated ordering and payments

You can set up the ERP platform to automate work orders and payments. This can free up your employees for other tasks, and improves the overall efficiency of the organization. It also allows work orders and payments to be made 24 hours a day since you need someone at the company to deal with them.

4) Superior inventory handling

ERP can greatly improve how inventory is handled at a company. The platform can provide ABC analysis, a type of selective inventory control that identifies which items need specialized management rules and which items have the most impact on inventory cost within an organization.

5) Organizational transparency

Companies that adopt ERP have a much greater degree of organizational transparency.
The accounting department, human resources, customer support, and manufacturing are all linked together through the software. You can thus see how each employee deals to an issue and who is truly responsible for a problem.

6) Reduced costs

ERP can potentially save your company a great deal of money. It lowers the cost of products and services, in particular those that are used on a regular basis. It also significantly reduces the amount of paper and postage required by your organization since the functions which required them have now been automated.

7) Greater access to vendors

ERP systems can stay connected to a huge number of vendors. This can help you to make competitive bids when dealing with a customer since you have many different sources to obtain a necessary part from. Most customers go with the lowest price, so there’s a good chance you can offer it to them.

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