What is ERP?
ERP is an abbreviation for Enterprise Requirements Planning.
The term was first used by manufacturers to identify software that
encompassed the entire Enterprise, enabled the tracking and
forecasting of orders and the materials and logistics to
feed the manufacturing processes.
Small companies can keep on top of things through direct managerial
involvement and span of control. However, at some point in the
growth cycle visibility over an operation becomes unwieldy and
the left hand doesn't know what the right hand is doing.
Multiple locations and varied plant philosophies compound the
problem, and inefficiencies increase.
The term ERP is now being used to refer to any software that
allows tracking of all the details necessary to conduct business.
It implies that the processes are integrated so that the
system becomes the sole source of the information necessary
to conduct business. A good ERP system provides the visibility
and control over operations. It enhances customer support,
which is always the fount of revenue and growth.
ERP systems integrate financial, customer, manufacturing, shipping
and other functions so that a company can keep up with competitors.
If you want to play in the "big boys' arena" you need the information
necessary to be nimble and responsive to changing needs.
You are probably painfully aware that manual spreadsheets and paper
files don't hack it! Also a "good product or service" that made the
small company survive in the first place now needs to be marketed
in a more global environment -- again an environment where speed,
accuracy, quality and responsiveness are key. These are the essentials
of a good ERP system.
A note of caution may be in order. Just implementing a new system won't ensure
success. ERP is a tool that will be proven to be effective only when used
properly. Thus a trained work force will be required to use the new software
tools -- clerks and employees who resist change won't be able to grow the company.
So planning for the changes and training a willing and cooperative workforce using the new system is essential.
We have developed an article on Roadblocks to Successful ERP Implementation. See if you are ready.
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