Importance and Benefits of ERP System in SME Segment
Nick Mutt
August 26, 2009
ERP (Enterprise Resource Planning) is a system which integrates various business data in a single database and provides cross function reporting on click of a single button. Earlier ERP was made for large organizations but, now it is made for medium and even for small organizations. In this global competitive market, organizations need to upgrade with latest technologies. Most of the large organizations are using enterprise resource planning system. To deal with those large organization SMEs (Small and Medium Enterprises) need to work on a similar type of technologies. In this case, importance of ERP system for SMEs increases.
Of course, there are lots of business benefits of enterprise software. Apart from all other basic benefits, enterprise software gives an information system with three important capabilities i.e.
1. Consistency and reliability of business data across the organization
2. Streamlined transaction processing within and outside organization
3. Provides operations level reporting on a click of a button
These capabilities, basic and important as they are, ensure that organizations are ready for specific solutions that improve overall performance. The areas that will increase the basic ERP requirements are like supply chain management (SCM) with electronic collaboration between supplier and customer, customer relationship management (CRM), business intelligence (BI), product data management, complete product life cycle (PLC) management, inventory and warehouse management using RFID tools. For these applications, ERP system becomes the substratum, a kind of gateway to expert functions. That is, enterprise software is a sine qua non for other applications.
In fact, the latest trend is that with basic enterprise resource planning software, tailor-made system is given by ERP companies. ERP vendors are speeding-up to integrate most of these additional capabilities. This type of customized or tailor-made enterprise system is easy to install and implement for SMEs. It also takes less time to implement and chances of implementation failure are lesser.
Read Benefits of ERP and Definition of ERP – Enterprise Resource Planning system.
Of course, there are lots of business benefits of enterprise software. Apart from all other basic benefits, enterprise software gives an information system with three important capabilities i.e.
1. Consistency and reliability of business data across the organization
2. Streamlined transaction processing within and outside organization
3. Provides operations level reporting on a click of a button
These capabilities, basic and important as they are, ensure that organizations are ready for specific solutions that improve overall performance. The areas that will increase the basic ERP requirements are like supply chain management (SCM) with electronic collaboration between supplier and customer, customer relationship management (CRM), business intelligence (BI), product data management, complete product life cycle (PLC) management, inventory and warehouse management using RFID tools. For these applications, ERP system becomes the substratum, a kind of gateway to expert functions. That is, enterprise software is a sine qua non for other applications.
In fact, the latest trend is that with basic enterprise resource planning software, tailor-made system is given by ERP companies. ERP vendors are speeding-up to integrate most of these additional capabilities. This type of customized or tailor-made enterprise system is easy to install and implement for SMEs. It also takes less time to implement and chances of implementation failure are lesser.
Read Benefits of ERP and Definition of ERP – Enterprise Resource Planning system.
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