Page 14 - DCAP302_ENTERPRISE_RESOURCE_PLANNING

Enterprise Resource Planning

notes 1.5 reasons for growth of erp

There are some reasons for the explosive growth of ERP market and ERP vendors. Following are
some tangible benefits of ERP which have participated in its rapid growth.
1. Reduction of lead time
2. Cycle time cut
3. On time shipment

4. Increase of inventory
5. Doubled business
6. Eliminates limitations in legacy system (Century dating, inflexibility to change, etc).
Apart from the above tangible benefits there are some intangible benefits that cause the growth
of ERP systems. They are:
1. Customer satisfaction
2. Increase flexibility
3. Better analysis and planning capabilities (decision making).

4. Reduce quality cost by implementing latest technology
5. Proper utility of resources
6. Improved information accuracy
The latest technologies like client server architecture, open system technology provides
integration capabilities to entire enterprise system. It brings supplier and customers together
by ensuring smoother flow of information at all levels and parts of organization. ERP helps to
make the decision at the right time and by the right person as entire organization shows the same
information and views. This provides powerful support to the decision making.
This provide powerful support to the decision making. The Customer is the ultimate winner as
he could get better product and quality alongwith better service at affordable prices.

1.6 Benefits of ERP

The ERP packages promise the seamless integration of all information flowing through an
organization; they are becoming the fastest growing softwares in the world. The ERP vendors
like SAP, Oracle, Baan, QAD, J.D.Edwards, Peoplesoft are in demand for their packages. The
main task of the ERP system is to deliver products to the companies to manage their internal and
external functions efficiently. There are several other advantages of adopting the ERP system,
few of them are as follows:

1. Improved efficiency: This is achieved by reduction of cycle time, inventory reduction, order
fulfillment, improving support to supply chain, management, etc.
2. Business integration: ERP packages are integrated, i.e. Exchange of data among related
business components is possible. In the large companies timing of system constructions,
directive differs for each product and department function.
3. Better decision making: The decision making procedure become easier because of
highly structured programmed process. These processes governs days to day operations
and produces reports in structured form, which are further used by top management
of organization to meet with its basic goals and objectives and to monitor the whole
organization.

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