Skip to main content

What is ERP

ERP (Enterprise Resource Planning) is a software system that allows companies to integrate their internal functions, such as Manufacturing, Production Planning, Finance, Sales, Service, Engineering, HR etc, around a common corporate database. In many companies, all these departments run their own software applications that are not properly integrated.

When you hear that a company is correcting financial statements because of accounting irregularities in previous years, reason could be that there were integration issues between company’s accounting application and Sales/Manufacturing applications. There can be others reasons too such as Company executives manipulated earnings to meet Wall Street Expectations (and maybe ended up going to jail). Did you ever updated your address online and started getting all your monthly bills at your new address, but continued to get all the sales promotion on your old address? You could not figure out what was wrong with the company. Now you know. Billing department and Marketing department of company were not properly integrated. You can pick up the phone and advice the company to implement an ERP package.

Is ERP really this great?

Short answer is "Yes". But ERP implementations are full of challenges.



  • ERP packages are extremely complex and companies might choose to implement only few modules like only Finance and HR. This will again leave integration issues.

  • ERP changes the way people do their jobs and these changes affect practically everybody in the organization. People are reluctant to change. Proper communication is the key.

  • Employees must be trained on the new system and on the new ways of doing the job. If Executives are reluctant to spend on trainings, it could lead to uncompleted or poorly completed jobs and frustrated employees.

The list can go on. But it revolves around the fact that ERP implementation is very costly and very complex change. It drastically changes the way company does business.

Comments

Post a Comment

Leave a reply

Popular posts from this blog

Enterprise Digital Transformation: Top 10 Posts from Month Ending 7-Jan-2018

Is Bitcoin revolution real or fad? What did 2017 brought to India in terms of Bitcoin and Blockchain adoption? How did Air Canada analyze and revamped customer service? What is growth rate of digital transformation spending? What can companies learn from GE’s digital transformation journey? – We look at answers to these questions and much more in the monthly coverage of enterprise digital transformation posts.

26 Proven Work at Home Business Ideas You Can Run Part Time

If you are looking for work at home business ideas, then this list can help you. All of these can be done as part-time business, so you don’t have to leave your job until you are confident of making full time income from your Work at home business.

Enterprise Digital Transformation: Top 10 Posts from Month Ending 12-Nov-2017

What are some of the key trends to watch out for in automotive industry? Will fake news increase or decrease in future? Can AI replace humans in running governments? Can Disney disrupt itself and compete with Netflix and Amazon? – We look at answers to these questions and much more in this week’s coverage of digital transformation posts.