How Enterprise Resource Planning Improves Business Processes

Running Head: ENTERPRISE RESOURCE PLANNING 1
ENTERPRISE RESOURCE PLANNING
AUTHORS NAME
UNIVERSITY OF AFFILIATION

ENTERPRISE RESOURCE PLANNING 2
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.

ENTERPRISE RESOURCE PLANNING 3
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