Page 115 - DCAP302_ENTERPRISE_RESOURCE_PLANNING

Unit 6: ERP Benefits

There are some tangible and intangible benefits of EPR systems and these are: notes
1. Information integration

2. Reduction of lead time
3. On time shipment
4. Cycle time reduction
5. Better customer satisfaction
6. Improved supplier performance

7. Increased flexibility
8. Reduced quality costs
9. Improved resource utilization
10. Better analysis and planning capabilities

11. Improved information accuracy and decision-making capability
12. Use of latest technology
ERP systems are integrated, enterprise-wide, packaged software applications that impound
deep knowledge of business practices accumulated from vendor implementations in many
organizations. ERP systems are evolving to incorporate new technologies, such as E-commerce,
data warehousing, and customer relationship management. ERP software is a semi-finished
product with tables and parameters that user organizations and their implementation partners
configure to their business needs. Implementation of ERP systems therefore involves both business
and IT managers who work together to define new operational and managerial processes.
table 6.1: advantages of erp

in What? How?
Reliable information access Common database, consistent and accurate data,
improved reports
Avoid data and operation redundancy Avoids multiple data input to the central database
Delivery and cycle time reduction Minimizing retrieving and reporting delays
Cost reduction Time saving in decision making
Easy adaptation Changes in business processes easy to adapt and
restructure
Improve scalability Structured and modular design
Improve maintenance Vendor supported long term contracts as a part of
procurement
Global outreach Extended modules like CRM and SCM
e-commerce, e-business Collaborative culture

ERP software attempts to integrate business processes across departments into a single enterprise-
wide information system. The major benefits of ERP are improved coordination across functional
departments and increased efficiencies of doing business. The implementations of ERP systems
help to facilitate day-to-day management as well. ERP software systems are originally and
ambitiously designed to support resource planning portion of strategic planning. In reality,
resource planning has been the weakest link in ERP practice due to the complexity of strategic
planning and lack of adequate integration of ERP with Decision Support Systems (DSS).

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