Advantages of ERP for Implementation Projects | Advantages of ERP for organisation

Companies implement ERP systems for various reasons.

The reasons could be tangible, intangible, or strategic. 

Due to these intangible and strategic benefits most companies do not even try to calculate a total

 return on investment from an ERP system. 

An ERP system could result in following benefits:  

A. Reduce the amount invested in inventory. 

B. Improve worker productivity. 

C. Reduce processing costs per business transaction. 

D. Reduce the time it takes to perform a financial close and prepare financial statements. 

E. Reduce procurement costs. 

F. Install systems with vendor-supported maintenance. 

E. Improve the scalability of business systems to support future growth. 

G. Upgrade systems to support global accounting transactions 

     (for example, Euro currency requirements). 

H. Obtain better reporting and information about your business. 

I. Get rid of troubles of old systems, and install new or improved business processes. 

J.  Improve fiscal controls. 

K. Integrate and standardize processes among your business units and trading partners in your 

supply chain. 

L. Improve system performance, reliability, and fault tolerance. 

M. Reduce the costs of Information Technology. 

N. Improve order management, customer service, and on-time delivery.

Advantages
  

In the absence of an ERP system, a large manufacturer may find itself with many software applications that cannot communicate or interface effectively with one another. Tasks that need to interface with one another may involve:

• Integration among different functional areas to ensure proper communication, productivity and efficiency
• Design engineering (how to best make the product)
• Order tracking, from acceptance through fulfillment
• The revenue cycle, from invoice through cash receipt
• Managing inter-dependencies of complex processes bill of materials
• Tracking the three-way match between purchase orders (what was ordered), inventory receipts (what arrived), and costing (what the vendor invoiced)
• The accounting for all of these tasks: tracking the revenue, cost and profit at a granular level.

ERP Systems centralize the data in one place. Benefits of this include:

• Eliminates the problem of synchronizing changes between multiple systems
• Permits control of business processes that cross functional boundaries
• Provides top-down view of the enterprise (no "islands of information")
• Reduces the risk of loss of sensitive data by consolidating multiple permissions and security models into a single structure.

Some security features are included within an ERP system to protect against both outsider crime, such as industrial espionage, and insider crime, such as embezzlement. A data-tampering scenario, for example, might involve a disgruntled employee intentionally modifying prices to below-the-breakeven point in order to attempt to interfere with the company's profit or other sabotage. ERP systems typically provide functionality for implementing internal controls to prevent actions of this kind. ERP vendors are also moving toward better integration with other kinds of information security tools.

Next:

10. Maintenance and support services of ERP System


12. ERP Disadvantages for organisation or company

13. ASP - Application Service Provider