ERP Systems

ERP systems are packaged software systems that

• Automates and integrates business processes
• Shares common data and practices across the entire enterprise
• Produces and accesses information in a realtime environment
  

(Deloitte Consulting 1999)

What is ERP?
ERP (Enterprise resource planning) represents an expanded effort to integrate standardized recordkeeping that will permit information sharing among different areas of an organization in order to manage the system more effectively.

Why ERP Systems?
Organizations today confront new markets, new competition and increasing customer expectations. Along with those scenarios, organizations have moved into a time of slow growth and smaller profit margins. This has put a tremendous demand on organizations to:
• Lower total costs in the complete supply chain
• Shorten throughput times
• Reduce stock to a minimum
• Improve Product quality
• Provide more reliable delivery dates and better service to the customer
• Efficiently coordinate demand, supply and production

Advantages of using ERP
• Reduced redundancy in entering data
• Allow everyone to share same source of info
• Allow everyone to access same source info
• Allow everyone to see and update instantly
• Identify problem more quickly
• Create single version about financial, revenue and sales numbers to CEO and BOD
• Allow standardization of business processes
• Allow standardization of enterprise's info

Disadvantages of ERP
• Takes a lot of effort and time
• Difficult to implement the system
• Very expensive
• Requires a lot of training