What is Enterprise Resources Planning? Explain its advantages and limitations.
Answers
Advantages of ERP (Enterprise Resource Planning) System:
1. Complete visibility into all the important processes, across various departments of an organization (especially for senior management personnel).
2. Automatic and coherent workflow from one department/function to another, to ensure a smooth transition and quicker completion of processes. This also ensures that all the inter-departmental activities are properly tracked and none of them is ‘missed out’.
3. A unified and single reporting system to analyze the statistics/status etc. in real-time, across all functions/departments.
4. Since same (ERP) software is now used across all departments, individual departments having to buy and maintain their own software systems is no longer necessary.
5. Certain ERP vendors can extend their ERP systems to provide Business Intelligence functionalities, that can give overall insights on business processes and identify potential areas of problems/improvements.
6. Advanced e-commerce integration is possible with ERP systems – most of them can handle web-based order tracking/ processing.
7. There are various modules in an ERP system like Finance/Accounts, Human Resource Management, Manufacturing, Marketing/Sales, Supply Chain/Warehouse Management, CRM, Project Management, etc.