How Enterprise Resource Planning Improves Business Processes

This article discusses the benefits of Enterprise Resource Planning (ERP) systems in improving business processes in areas such as purchasing, finance, human resources, CRM, and time/project management. It covers how ERP systems automate processes, provide more accurate and accessible financial information, attract and track an effective workforce, increase visibility, and improve scheduling processes. The article also emphasizes the importance of clear business implications and top management support in the implementation of ERP systems.

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ENTERPRISE RESOURCE PLANNING
AUTHORS NAME
UNIVERSITY OF AFFILIATION

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Enterprise resource planning systems is a business management software which helps in the
coordination and management of the business activities in a single central location, making the
data at all level of the firm available. ERP can be used in an organization to perform various
information technology issues and improve the performance of the information availability with
a faster and real-time response. They increase the internal and external organization interaction
hence streamlining the workflow of the organization. The ERP systems are usually customized
based on the client requirements. They are recommended greatly for both large and small
corporations. They give a chance to the small companies to appear, act and operate like the large
corporations.an example of the ERP system that has gained multinational recognition is
SAP.SAP projects ERP systems for both the big, small and midsize companies .The ERP system
comprises a number of the fully integrated modules which will cover major or all aspects of the
business management (Guerrieri, 2018).
The implementation of the ERP system in an organization affects the entire organization,
comprising of the processes the people and culture. For the implementation of an ERP system to
be correctly done, the business implication and the requirements have to be clear and the top
management support is very crucial in the implementation. Review of the existing business is
very crucial before any implementation of the ERP systems. The business process and the
procedure have to be critically reviewed and new ones have to be developed based on the new
systems. Employees have to be trained as part of the ERP implementation process, which will
help them take advantage of the system benefits ("Benefits of Financial Management Software",
2018). Through the right use of the system, the employees are able to perform efficiently and
improve their performance.

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How enterprise resource planning system improves the following area in the company.
Purchasing
Distributors and busy manufacturers rely on the purchasing department to ensure that the
inventory of the firm is well stocked. Operations of the manufacturing department can be
brought to a halt when there is lack of the raw materials for the production process, this often
causes frustration to the consumers when they experience backorders. With a fast-paced
environment in the marketplace, systems that are disconnected with the manual processes bring
havoc when it comes to making the purchase decisions that are strategic ("Top 5 Ways ERP Can
Improve Procurement Operations", 2018).
The ERP system improves the purchasing of the company in the following ways; First, the ERP
automate the processes of the procurement. Many tasks in the procurement department are
automated leading to a valuable time saving and task consistency improvement. The purchase
orders created can be automatically sent to the vendor with a quote for the request. Secondly, the
ERP has made it possible for the purchase planning process (Inc., 2018). The intelligent features
that are built in th purchasing system can highlight the information about inventory that is
trending such as the safety stock, the control stock levels, the increase or decrease of a product.
With the ability to produce a report on the stock, the department can make a decision on the
products to be purchased and the products to shun away from purchasing. Lastly, the ERP
enables the profit margins to boost. Through the connection of the business processes with the
accounting processes and gaining visibility throughout the warehouse and the center distribution,
one can shun from purchasing stock that is plenty and not in demand and pay close attention to
the safety inventory levels to cut the transit costs. Lastly, the ERP in purchasing helps in the
improvement of the customer satisfaction. Through the use of ERP, one can avoid the loss of

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customers to the issues of the backorders. Strengthen the procurement insight and the inventory
management so as to ensure the products that the consumer wants are available when the
consumer wants them.
Finance
A financial management system that has been well implemented provides the organization with
an extensive view of the how the income, expense, and profit of the organization are from a
standpoint. The management and stakeholders can view the complete details of the firm accounts
and how business analytics have been integrated ("ERP Finance: 3 Ways ERP Improves Financial
Management", 2018).
The ERP stem helps improve the organization finance in the following way; First, the ERP
provides more accurate and accessible financial information. The organization financial
information normally reside in the various database that are scattered across various virtual
locations in the business. This can make it hard to monitor the company overall view of the
firm’s financial status and how does enterprise resource planning systems improves purchasing
in a company manage the activities that are related ("ERP Finance: 3 Ways ERP Improves Financial
Management", 2018). With a software that manages the financials of the organization, the firm
can create a consistency across the enterprise, implanting the formal procedures for how the
transaction of the financials and activities related should be handled. Secondly, ERP ensures
there is better strategic analysis and planning. Through the use of the ERP, the firm can be able
to provide answers to some questions such as the financial events that the organization
anticipates in the coming year, how the emerging markets conditions will have an impact on the
firm business. To provide answers to such questions in an accurate manner, the financial
software provides the foundation for the strategies in business that are successful through

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allowing the financial executives to forecast the events in the future and identify the new
business opportunities.
Human resource planning
Erp in the human resource not only reduces the amount of time spent on the task relating to the
human resource but makes the process more efficient. The benefit of the integration of the erp in
human resource involves the attracting and tracking of an effective workforce. Erp make it
possible for the organization to share applications across various departments. The candidates
can be mapped to certain job specification as well and creation of various compensation plan be
created to encourage the performance ("Benefit of HR modules for ERP", 2018). Erp, automate the
process that frees up the management. Human resource larger function includes the data entry
and reports generation. Developing reports without the use of the integrated ERP system will
require the human resource manager to pull data from various sources which can take time. The
time spent on reports generation can be used on another task of significance. An erp module one
has been set up will make the process more efficient and save time since the date required to
generate reports can be easily accessible (Ross, 2018). Lastly, erp module ensures that data is kept
accurate and up to date. Since the human resource systems involve obtaining data from various
locations, there is a high possibility of data duplication or incorrect information. The human
resource erp module ensures that there is no data duplication or information generated in the
reports is accurate.
CRM
The customer relationship management system helps the organization in the handling and
management of the front end business handling of the customer service information, sales, and

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marketing. On the other hand, the ERP solutions integrated with CRM help s the organization in
the back end process and the internal information such as accounting, inventory, and shipping.
The erp systems integration with the customer relationship management have the following
benefits: first, there is an increase in the visibility (Watanabe, 2018). Complete view of the
customer needs, order history and account standing can be delivered in a complete way through
the integration of the CRM and the ERP. Provision of the real-time visibility into the business
information which offers team empowerment to deliver the customer service that is superior and
build the stronger relationship with the clients.( Venkatesh, & Bala,2008).
Time and project
The enterprise resource systems are designed to help in the analysis and data management, they
are excellent in the improvement of the scheduling process. The reports generated by the ERP
systems will allow the managers in the breakdown of the task, and the timetable history broken
up the department. The ERP systems help the project leaders in the allocation of the appropriate
task to people with the right skills and competencies and help in the future operations
streamlining ("3 reasons to implement an ERP system", 2018).
Previously the organization had its employees responsible for the manual work. A lot of time
was spent on this jobs such as data backup, different forms submission to various departments,
and the software maintenance to manage data. Time spent on all these activities could have been
used in the designing of the business strategies. Through the integration of the business erp
solutions, the task has been automated. This has saved a lot of time. The employees can then
utilize the saved time to work on other task and hence boost the productivity of the organization.

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