Enterprise resource planning – is your business up to speed?

Enterprise resource planning (ERP) has become the backbone of companies operating in many sectors of commerce. Traditionally only large companies could afford to implement such solutions because a major investment was required in terms of computer hardware, software and IT support. However, advances in technology at all levels have made ERP far more accessible for smaller businesses.

The Internet allows ERP service providers to connect even small businesses to cloud based software solutions. Huge economies of scale are now achievable that utilise state-of-the-art systems at a fraction of the cost of installing traditional versions.

The first ERP systems were built during the 1960s and 1970s, when they were known as Manufacturing Resources Planning. They were developed to help analyse linear production lines with the objective of identifying inefficiencies and bottlenecks so that procedural enhancements could be made to speed up processes.

Today, ERP provides a more complete method of reporting a company’s health so that management and decision makers are able to react quickly to the changing needs of the market.

Online and cloud technology

Until relatively recently any company intending to implement an enterprise resource planning solution was required to undertake major investments in computer hardware and IT. Complex systems had to be installed and connected via an Intranet to each location. ERP developed a reputation for being an expensive solution that often ran over budget. Sometimes businesses failed to successfully implement the solution due to irreconcilable conflicts with legacy systems and in-house procedures.

However, the emergence of super-fast Internet and large, secure cloud based networks has allowed a new breed of enterprise resource planning software to be developed. These modern systems require no new computer hardware because any standard computer with a web browser and Internet connection can access them. This massively reduces cost and risk to a business because rather than buying and installing computer systems and hiring dedicated IT support staff to maintain them, it is now possible to lease fully managed cloud based services.

Improve efficiency

One of the most important benefits of implementing ERP is the improvement in production and service efficiency that can be attained. Senior management used to rely heavily on monthly management reports to assess the health of the business and to make decisions on future direction. Today, an effectively managed ERP solution provides real-time reports generated from data that is being constantly updated by each business function.

Managers are able to identify unexpected changes in market conditions and to react by altering production or deploying human resources to areas experiencing greatest demand. Failure to react quickly will often result in a business failing to meet customer expectations and the customer seeking an alternative supplier.

Modern cloud based ERP systems are even more advantageous because information is shared over the Internet; managers are therefore able to read reports and make rapid decisions from any location.

Modular systems

Another huge advantage is that ERP systems are built in a modular format that enables companies to add new services after the initial system has been launched. This allows them to choose which parts of the system they can take advantage of and ignore solutions that are either not relevant or incompatible with their business model.

In the near future it is predicted that ERP will become more accessible, more affordable and deliver greater functionality to mobile devices, which will allow decision makers to use these services across a wider range of functions. Businesses that stay up to date with the latest solutions will continue to identify new market opportunities before their competitors.

Posted by on Jun 18 2014. Filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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