Essay: Advantages of ERP
Essay: Advantages of ERP
This essay discusses advantages of ERP.
ERP systems are changing the way organisations do business. They can be considered indispensable tools which create a huge impact on both the business and information technology worlds.
ERP Affects All Businesses
The use of ERP affects all business organisations regardless of the size, nature of business as well as industry. ERP brings in change to the way organisations do business. It has increased the efficiencies as well as the competitiveness of numerous organisations. It has automated many business processes, has streamlined everyday activities and has helped organisation in serving customers better. Today, many of the business including large multinationals and small and medium enterprises have begun to use one ERP software or another and soon those organisations which have not implemented an ERP till now will find it difficult to compete (Leon 2007).
Competition to Change
The adoption of ERP by an organisation enforces its rival to change their strategies as well as business processes. This is because a properly and successfully implemented ERP can be used as strategic weapon to beat the competition and get ahead of others, as enable the organisation to react to changes quickly by making necessary tools available. This implies that if an organisation goes ahead with the implementation of ERP, then its competitors have no choice but to implement one in their business as well. Failing o do so, would result in them loosing the competitive edge and falling well behind in the race to lead a market segment (Leon 2007).
An Important Tool for Business Process Re-Engineering
Business Process Re-Engineering (BPR) is the activity of analyzing and re-designing the workflow within and between enterprises. The idea of BPR was promoted by Michael Hammer and James Champy in their book “Reengineering the Corporation” which emphasized that sometimes an extreme re-design as well as re-organisation of an enterprise was necessity to lower costs and to enhance the quality of service. In this regard, the book highlighted the role of information technology as the key enabler for that radical change. The author suggested seven rules to streamline the work process which would enable an organisation to achieve remarkable improvement in quality, time management as well as cost. These principles were”
– Organize around outcomes, not tasks.
– Recognize all the process in the organisation and set their priority of their re-design urgency.
– Combine activities related to information processing with those related to information production.
– Treat resources that are geographically dispersed as if they were in one location.
– Connect different parallel activities in the workflow rather than only connecting their results.
– Incorporate control into the process and place decision point where the work is performed.
– Capture the needed information only once at the source.