The Benefits of ERP Software

Enterprise Resource Planning (ERP) software products give companies a way to integrate and to manage information from multiple business processes. Many companies these days use ERP software tools to tie together data from financial and accounting systems, manufacturing systems, inventory planning, purchasing and order entry systems, and also supply chain, customer relationship management, marketing and HR systems. ERP products are basically designed to help companies run their businesses more efficiently by giving them a single, centralised view of all the data in their enterprise.

ERP products are typically sold in modular fashion with each module designed for a specific application need. For example, an ERP finance and accounting module will typically include functions that allow companies to capture and manage all kinds of financial information such as general ledger, accounts receivable/payable, tax accounting and bill discounting. A sales, purchase, and inventory management ERP module can capture data related to purchase invoices, purchase orders, goods receipts, sales booking and sales invoices. A HR module might offer support for functions such as personnel management, payroll systems and time management applications.

Each ERP application module can run independently if needed. Each module also supports features that allow them to be easily connected or integrated with other modules. This sort of integration allows easy information sharing between the different modules and enables better operational and process efficiencies.

Large companies can derive substantial benefits from implementing ERP software across their enterprise. One of the biggest benefits of using ERP tools is that they can help companies reduce operational costs. A well-deployed ERP system enables companies to get an integrated view of their manufacturing, inventory, purchase and sales systems. This sort of an integrated view can enable companies to optimise inventory levels and production schedules and make smarter decisions relating to the manner in which they market and distribute their products. From an operational standpoint, ERP systems also enable better product and process standardisation as well.

ERP systems can also help companies better align their operational activities with their strategic goals. Because ERP systems enable better access to enterprise information, organizational planners can ensure that the business is being run in accordance with strategic plans and objectives. The broader information access allows companies to identify concerns and opportunities more quickly and gives them a way to utilize their workforce and other resources more effectively.

Importantly, ERP systems can help companies establish greater control over financial management and governance functions. The systems allow financial planners to gain deep visibility into operational and process-related costs. The technology helps them identify and weed out costly inefficiencies, improve profitability and manage risk better. Over the long term, an ERP software system can help support an organization's strategic planning ability by giving managers a historic, current and forward-looking view of their operational and process-related data.

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