Since the economic concept follows that the scarce resources should be used in fulfilling the infinite needs, many business ventures attempt to ensure that any resource they invest is used in the best way possible. Enterprise Resource Planning is an IT-enabled software that enables the organization make the best use the resources they have to achieve better results. The ERP system allows from easier data collection and subsequent better decision making by the high levels of management. The fact that the system employs an integrative approach in its functionality allows to generate results that are of a higher quality than the manual systems.
The ability of the Enterprise Resource Planning to support planning across all the relevant function is its most important role explaining why it even bears the word in its name. This is because it covers all aspects that he owners of a business require to plan for from the financial aspect human resource planning, procurement planning , inventory management planning, payroll management among many more. This enables the company to generate better results for the business because of the proactive nature that allows them to plan for things as opposed to reactive response of dealing with what emerges. Its architectural design allows it support other systems that the organization want to adapt.
Cost reduction is also successfully achieved by use of this system as it helps in accurate inventory management and manufacturing management which allows the organization to product the optimum quantities that will accrue the least cost, savings which in turn reflecting reduced unit cost and thereby increasing the profits through more sales. This system is able to achieve such benefits because of the platform it creates for different functions to collaborate and share information which in turn leads to increased visibility across the organization.
Since the system reduces the involvement of people in data process, it is able to generate information that is more accurate at a faster speed. With this system in place, the upper management is able to make decisions much faster because of the platform created within the system for data sharing and processing The ERP system tracts all process in the supply chain right from order receipt and processing to operations and then demand fulfillment ensuring that the least amount of time is taken. The systems increases visibility within the system allowing the customers to track the progress of their orders thereby making informed decisions such as when they are likely to receive these items. This visibility increase the level of customer service achieved as they have to deliver promptly considering that the customers can track progress.