Enterprise Resource Planning (ERP) refers to a set of activities that businesses adopt to enable them manage their most important operations effectively. ERP systems serve as the key performance indicators which enable a business to meet its corporate responsibilities. ERP systems comprise of software applications which are used to manage inventories and products, provide services to the customers, track orders, and enhance effective interactions with the suppliers of a company (E-Resource Infotech, 2010).
ERP systems are also adopted by the Human resources department and Finance department in order to ensure that employees relate with each other as expected and that the resources of the company are used efficiently.
Many businesses that make use of ERP systems today do so because the systems facilitate effective flow of information between all the operations of the organizations. The goal of this paper therefore is to discuss the value that ERP systems bring to organizations and analyze the important elements which make ERP systems successful.
With the rate at which competition is growing in the global and local business environments, many businesses have adopted ERP systems in order to remain valuable to their customers and the societies where they operate. They do this to ensure that they remain productive, competitive, and continue to attract a large number of customers (Sysoptima, 2005).
Any company that is able to manage these issues successfully is said to have added value. ERP systems have been very effective in enabling businesses to achieve these objectives. The various ways that businesses have realized value addition include increase in operational efficiency, enhanced productivity of employees, extension of businesses with new process functionalities, and enabling the management to make better, timely and informed decisions (E-Resource Infotech, 2010).
For a business enterprise to add value to its customers and owners, it should be able to see what is going on in the organization as it happens. This way, the business is able to ensure that it coordinates its activities to the expectations of its customers and its owners to a level that leaves them satisfied.
With the adoption of ERP systems therefore, businesses are able to manage high volumes of business processes (Davis, 2012). For example, E-resource ERP is a web-based company located in India which offers mobile competencies so that businesses can always be able to keep a close watch of the activities that they carry out (Sysoptima, 2005).
An ERP system acts as a firm operational backbone whereby it enables a business enterprise to control its manufacturing and distribution functions. Most companies that make use of this system have been able to improve their production volumes thereby making them fulfill their order requests and minimize their operating costs significantly. Since ERP systems enable a business to optimize its manufacturing and distribution processes, it becomes possible for companies to focus their attention on emerging business opportunities (Davis, 2012).
For example, the adoption of ERP systems by the Coca Cola Company, have made the company to be effective in managing its production and distribution processes in the various parts of the world where it operates. In addition, the company has been able to venture into production of new brands because the ERP systems have enabled it to reduce costs of production while at the same time increasing its production capacity (Sysoptima, 2005).
From this study therefore, it is true that ERP projects are very successful in enabling businesses to improve their efficiency, competitiveness, profitability and customer satisfaction. Companies should therefore make it their duty to ensure that the ERP systems that they adopt are always consistent with the business processes that they undertake. This way they will be able to add value to their customers and the society.
Davis, Z. (2012). ERP Benefits and Disadvantages. Retrieved February 26, 2012, from http://infor.ittoolbox.com/documents/erp-benefits-and-disadvantages-10508
E-ResourceInfotech. (2010). Gain Operational Excellence, Implement E-resource. Retrieved February 26, 2012, from http://www.eresourceerp.com/ERP-benefits.html
Sysoptima. (2005). ERP Benefits – Operational Control, Management Control and Strategic Planning. Retrieved February 26, 2012, from http://www.sysoptima.com/erp/erp_benefits.php