Need of ERP System - ERP

Need of ERP

ERP is an enterprise-wide information system that facilitates the flow of information and coordinates all resources and activities within the business organization. Here are few points which describes why an organization need an ERP system:

  • Of all the software an organization can deploy, ERP has potentially the most direct impact on reducing costs. 
  • ERP solutions are effective for reducing costs through improving efficiencies and decision-making. 
  • Competitive advantages arise to firms that can contain costs so that increased revenues translate into higher profits. 
  • Effective solutions open to door to vast business process improvements as indicated by better customer service, smoother functioning business, decision support, eliminating IT barriers to growth, and the coordination of various business activities. 

Lacking an ERP solution, firms, especially manufacturers, find themselves struggling to compete and grow using applications that are functionally deficient, obsolete, and isolated from other applications and data. These shortcomings manifest themselves in many ways that adversely affect the organization, some include: 

  • Inaccurate forecasts play havoc with inventory levels, 
  • Insight into innovative design engineering is clouded, 
  • Order tracking from acceptance through fulfilment is cumbersome or non-existent, 
  • The revenue cycle is obscured, 
  • Capacity is underutilized or overstrained, 
  • Cost overruns and missed deadlines taint customer relations.


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