Enterprise Resource Planning

Benefis of ERP systems by Applied Technology Research Center.

What is ERP?

An ERP system is an integrated solution, sharing a centralized database, with all ‘users’…. Human Resources/Payroll/Benefits, E-procurement, Accounting, Budgets, etc …. being served by the same database through one point of entry.

Data need only be entered or updated once, reducing errors, time and labor for reports, analysis, planning and program management.
Ultimately, time and resources are shifted to innovating,problem solving and direct service to customers rather than inputting, processing, organizing, verifying and related “busy work” that burns through time and money.

Enterprise resource planning software attempts to integrate all departments and functions across a company onto a single computer system that can serve all those departments’ particular needs.

   1. Real time information throughout all entire company
   2. Better visibility into the performance of operational areas
   3. Data standardization and accuracy across the enterprise. Single version of “The Truth!”
   4. Best-practices or proven methodologies are included in the applications
   5. Creates organizational efficiencies.
   6. Allows for analysis and reporting for long-term planning

Significant Features on an ERP System

   1. Information entered once into system
   2. Can allow for the use of the best practices
   3. Can be further developed
   4. Based on reliable file structure
   5. Provides functionality to interact with other elements in the process
   6. Provides report writers and other tools for data inquiries

ROI and Cost Savings
Here are some areas to look for possible ROI:

   1. Reduce Inventory through better visibility and efficiency
   2. Savings through the reduction in duplicated efforts
   3. More efficient operations allowing for increase in ability to process transactions (added capacity)
   4. Reduction in non-value added activities (lean processing)
   5. Higher utilization of employees (less transactional, more analytical)
   6. Improvement in decision making through more accurate and real-time data


General Services/E-Procurement
Benefits of an ERP system:

Management/Budget
An ERP system in the Department of Management would:
Building a single software program that serves the needs of people in finance and human resoures is a large task.

Each department has its own computer system optimized for the particular ways that the department does its work.

But ERP combines them all together into a single, integrated software program that runs off a single database so that the various departments can more easily share information and communicate with each other.

That integrated approach can have a tremendous payback if companies install the software correctly.

For example : Take a customer order.

When a customer places an order, that order begins a mostly paper-based journey from inbox to inbox throughout the company, often being keyed and rekeyed into different departments’ computer systems along the way.

All that time wasted in the inbox causes delays and lost orders, and all the keying into different computer systems invites errors.

Meanwhile, no one in the company truly knows what the status of the order is at any given point because there is no way for the finance department, for example, to get into the warehouse’s computer system to see whether the item has been shipped. "You will have to call the warehouse" is the familiar statement heard by frustrated customers.

ERP eliminates the old standalone computer systems in finance, HR, manufacturing and the warehouse, and replaces them with a single unified software program divided into software modules that roughly approximate the old standalone systems.

Finance, manufacturing and the warehouse all still get their own software, except now the software is linked together so that someone in finance can look into the warehouse software to see if an order has been shipped.

Early in the 1990s ERP was developed as a tightly integrated monolith, but most vendors’ software has since become flexible enough that you can install some modules without installing the whole package.

How can ERP improve a company's business performance?

ERP’s best hope for demonstrating value is as a sort of battering ram for improving the way your company takes a customer order and processes that into an invoice and revenue—otherwise known as the order fulfillment process.

ERP is often referred to as back-office software. It doesn’t handle the up-front selling process (although most ERP vendors have recently developed CRM software to do this); rather, ERP takes a customer order and provides a software road map for automating the different steps along the path to fulfilling the order.

When a customer service representative enters a customer order into an ERP system, he has all the information necessary to complete the order (the customer’s credit rating and order history from the finance module, the company’s inventory levels from the warehouse module and the shipping dock’s trucking schedule from the logistics module, for example).

People in these different departments all see the same information and can update it.

When one department finishes with the order it is automatically routed via the ERP system to the next department. To find out where the order is at any point, you need only log in to the ERP system to track it down. The order process moves like a bolt of lightning through the organization, and customers get their orders faster and with fewer errors than before. ERP can apply that same magic to the other major business processes, such as employee benefits or financial reporting.

Let’s go back to those inboxes for a minute. That process may not have been efficient, but it was simple. Finance did its job, the warehouse did its job, and if anything went wrong outside of the department’s walls, it was somebody else’s problem. Not anymore. With ERP, the customer service representatives are no longer just typists entering someone’s name into a computer and hitting the return key. The ERP screen makes them businesspeople. It flickers with the customer’s credit rating from the finance department and the product inventory levels from the warehouse. Did the customer pay for the last order yet? Will we be able to ship the new order on time? These are decisions that customer service representatives have never had to make before, and the answers affect the customer and every other department in the company. But it’s not just the customer service representatives who have to wake up. People in the warehouse who used to keep inventory in their heads or on scraps of paper now need to put that information online. If they don’t, customer service reps’ screens will show low inventory levels and reps will tell customers that the requested item is not in stock. Accountability, responsibility and communication have never been tested like this before.

People don’t like to change, and ERP asks them to change how they do their jobs. That is why the value of ERP is so hard to pin down. The software is less important than the changes companies make in the ways they do business. If you use ERP to improve the ways your people take orders and manufacture, ship and bill for goods, you will see value from the software. If you simply install the software without trying to improve the ways people do their jobs, you may not see any value at all—indeed, the new software could slow you down by simply replacing the old software that everyone knew with new software that no one does. Using an opensource ERP like the one ATRC implements, allows a company to change the ERP in the future to meet changing operational procedures and policies.

How long will an ERP project take?

An ERP project done well takes many months and can take years for large companies. To reduce time and complexity ATRC recommends a longer analysis and training period. This allows a faster implementation based on the requirements. We do not rush companies, so the backlash of fast internal change is avoided. If a company needs a revolution in the operations and is willing to commit to it along with all of the employees, then ATRC can also provide implementations as fast as the companies can cope. To do ERP right, the ways you do business will need to change and the ways people do their jobs will need to change too. And that kind of change doesn’t come without effort and commitment. The payoffs are huge compared to the pain.

The important thing is not to focus on how long it will take—real transformational ERP efforts usually run between one and three years, on average—but rather to understand why you need it and how you will use it to improve your business.

Will ERP fix my integration problems?

For companies who run purely on paper, it very likely.

Can the ERP be connected to other softwares ?

With the open design used by ATRC, it is the easiest and most flexible route to a business oriented system deployment which can be modified and integrated most easily to other softwares. ATRC would need to build glue software which shall provide the link between the ERP and other systems or softwares.


ERP Benefits - Operational Control, Management Control and Strategic Planning

Organizational processes fall into three levels - strategic planning, management control and operational control.

ERP systems facilitating operational coordination across functional departments.
ERP systems also benefit strategic planning and manegment control one way or other.

Help reduce operating costs

ERP software attempts to integrate business processes across departments onto a single enterprise-wide information system.

The major benefits of ERP are improved coordination across functinal departments and increased efficiencies of doing business.

The immediate benefit from implementing ERP systems we can expect is reduced operating costs, such as lower inventory control cost, lower production costs, lower marketing costs and lower help desk support costs.

Facilitate Day-to-Day Management

ERP systems facilitate day-to-day management.

The implementations of ERP systems nurture the establishment of backbone data warehouses.

ERP systems offer better accessibility to data so that management can have up-to-the-minute access to information for decision making and managerial control.

ERP software helps track actual costs of activities and perform activity based costing.

Support Strategic Planning

Strategic Planning is "a deliberate set of steps that assess needs and resources; define a target audience and a set of goals and objectives; plan and design coordinated strategies with evidence of success; logically connect these strategies to needs, assets, and desired outcomes; and measure and evaluate the process and outcomes."

Part of ERP software systems is designed to support resource planning portion of strategic planning.