ERP is a software architecture that facilitates the flow of information among the different functions within an enterprise. Similarly, ERP facilitates information sharing across organizational units and geographical location.
- It enables decision-makers to have an enterprise-wide view of the information they need in a timely, reliable and consistent fashion. ERP provides the backbone for an enterprise-wide information system.
- At the core of this enterprise software is a central database which draws data from and feeds data into modular applications that operate on a common computing platform.
- In recent years, ERP system started supporting inter-organizational linkages as well standardizing business processes and data definitions into a unified environment.
- With an ERP system, data needs to be entered only once. The system provides consistency and visibility or transparency across the entire enterprise.
- A primary benefit of ERP is easier access to reliable, integrated information.
- A related benefit is the elimination of redundant data and the rationalization of processes, which result in substantial cost savings.
Element of ERP architecture
- Financial Accounting and Controlling FICO
- Material Management MM
- Sales and Distribution SD
- Production Planning PP
- Plant Maintenance PM
- Human Resource HR
- Project System PS
- Quality Management QM
Tangible benefits are those measured in monetary terms and intangible benefits cannot be measured in monetary terms but they do have a very significant business impact.
Improves the productivity of process and personnel
- Lowering the cost of products and services purchased
- Paper and postage cost reductions
- Inventory reduction
- Lead time reduction
- Reduced stock obsolescence
- Faster product / service look-up and ordering saving time and money
- Automated ordering and payment, lowering payment processing and paper costs
- Increases organizational transparency and responsibility
- Accurate and faster access to data for timely decisions
- Can reach more vendors, producing more competitive bids
- Improved customer response
- Saves enormous time and effort in data entry ;
- More controls thereby lowering the risk of mis-utilization of resources
- Facilitates strategic planning
- Uniform reporting according to global standard