What do sales executives consider while implementing erp system?
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MRN29,4186the last several decades, to synchronize the information flow with the physical flow ofgoods.The first step was taken in the early 1960s when manufacturers began to use MRPsoftware to organize information flow around the manufacturing processes. In the late1970s the scope of MRP was expanded to include resources and MRP II softwarebecame available. The focus of MRP II is on internal operations and provides insightinto the implications of the master production schedule and materials plan. Finally,since the 1990s, software developers created ERP/ERP II software, a fuller suite ofapplications cap able of linking all internal processes as well as interorganizationalprocesses such as supplier and customer relations management.ERP modules are integrated through a set of common definitions and a commondatabase. When data such as an o rder from the customer becomes available at on epoint in the business, the impact of this information is immediately reflected in allother areas, such as accounting, production schedu ling, purchasing, and logistics.Employees are able to view the order, locate the required items, dec ide on shippingdetails and review the cus tomer’s credit information on the same computer screen.ERP systems are based on a value chain view of the business where functionaldepartments coordinate their work, focus on value-adding activities and eliminateredundancy. In order to implement an ERP system, a company may need to makechanges to organizational structure, corporate culture, and business processes. ERPcan be a valuable tool for managers to improve operational as well as financialperfo rmance of the firm. Long-term financial gains can be realized only when acompany delivers increased customer value while simultaneously lowering the cost ofdelivering that value.ERP benefitsBenefits derived from ERP system implementation varies from one company toanother. However, there are some common benefits that all companies can receive fromthe system. It is important that these benefits outweigh the costs of the system andthey should as long as the correct system for the organization is chosen and the systemis implemented properly. These systems can, in the long run, save millions of dollars,an enormous amount of pap erwork, and considerable hours of work.Many organizations have several different legacy systems that have developed overthe years to meet their information needs for planning and decision making. Often,there is little or no integration among departments and application programs used bysep arate departments donot communicate with eac h other. This means that data has tobe entered into each separate department of the organization resulting in dataredundancy and at times inaccuracy. The same data is available but in a differentformat making it difficult and time consuming to collect information and present acoherent picture of what is happening in the business. ERP systems can virtuallyeliminate the redundancies that occur from these outdated and separate systems. ERPsystems integrate various systems into one and data is entered into the system onlyonce. Because data is entered once, there are greater chances that it is accurate. Ifinaccurate data is discovered, it can be corrected once instead of going through eachdepartment for every change. Different employees can access data simultaneously inERP systems, whereas in sep arate legacy systems this is much less likely.Process improvements are another important benefit of ERP. The commondenominator in every business is the processes performed to produce a product orservice. ERP systems require firms to examine their internal processes in order to
What managersshould know187increase business effic iency and profitability. Firms manufacture their products o rprovide their services by performing a set of processes that create value. Theseprocesses form a value chain. A firm is profitable if the outcome of the value chainprovides a service or product that can be sold for more than the producer spent inproduct creation and delivery. By improving or reengineering business processes, poorquality and the most costly areas of the operation can be identified and improved oreliminated, thus increasing the value of the processes in the value chain. ERP/ERP IIimplementation enables the organization to analyze the value chain as a system, fromsupplier to firm to customer
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☑ This will vary according to your industry sector but consider the following in your business case: Refined billing processes for the finance team. Streamlined logistics and production for the operations team. Enhanced procurement processes for better purchasing power.