Enterprise Resource Planning

Any organisation needs a system to manage its daily operations, efficiency and effectiveness being key to running a business. This is where an Enterprise Resource Planning or ERP system comes in place. ERP software is basically a software that allows all the different departments of any organisation to share a common database, in order to properly utilise and record all of the business’s resources through computerised planning. According to our lecture notes, “The objective of an ERP system is to co-ordinate an entire business” (Laureate Online Education, Lecture 8, 2010). ERP basically orchestrates all the activities and transactions within a business.

Implementing an ERP system in an organisation of any size should be viewed as an important decision on management’s part. In my opinion, it is a strategical choice which has to be the result of the evaluation and identification of the organisation’s needs. Management should have recognised the need to literally systemise the company’s resources and activities. In this angle, some organisations might benefit from an ERP system more than others, especially organisations with a wide spread of activities ranging from purchasing raw material, to producing products, to distribution, to sales ...

Moreover, implementing an ERP system is costly. Hence, the management strategy should also evaluate the benefits of such an investment, especially in the case of Small to Medium Enterprises (SMEs).

What are the benefits of such a system?

The most obvious benefit of an ERP system is the coordination of all the activities included in one company through the same software. For example, lets consider a supermarket with an ERP system. The system will allow to record an item’s purchase, print its invoice, give the invoice a number, record the transaction for the financial department to view, deduct the item from the inventory from within the category of this item, and therefore update the inventories’ levels in the category...