What is ERP software?

Enterprise resource planning (ERP) is a software that automates or integrates core business values and business processes such as scheduling of the processes of the business, taking customer and suppliers orders and recording financial transactions of the business. Use of ERP in business drive huge improvements in the effectiveness of the organisation as well as in terms of technology advancement.

ERP system in the organisation can drive huge improvements and effectiveness in the following ways.

1) It assists the organisation management in defining business processes and ensure that their decisions comply with the supply chain throughout.

2) It protects the most critical business data through well-defined security roles of the ERP systems. This make it easy to refer to the data whenever need arise.

3) It enables manufacturing, processing and sales departments of the organisation to plan for work load which is based on the orders and forecasts made by the departments.

4) Organisations using ERP systems are provided with tools which enables them to give high level of services to customers. This has become on way to increase sales as well as market the organisation.

5) ERP systems translate business data in to decision making information. It analyses business data and give a feedback in terms or what should be undertaken. This has made management to be successful in their decisions.

What are the benefits of using ERP in your business?

1) Increase overall performance of the business. ERP systems integrate disparate business operations and ensure that the processes are coherent and are not duplicated. This is done in very short time making it a cumulative positive effect to the organisation. These business operations integrated make superior performance of the organisation, especially in the competitiveness in the market.

2) Automation of ERP ensures performance in the organisation. ERP makes automation of business processes more effective, less prone to errors and process them faster. This make it easier to reconcile data as well as balancing data of the organisation.

3) ERP can be integrated in all business processes and operations. For ERP systems to realise full benefits to the organisation, it should be fully integrated into all aspects taking place in the organisation. This include customer phase, scheduling and production and distribution of the products and services the organisation make.

4) Integrated across the entire supply chain. ERP system should extend to beyond your organisation. It should be integrated to both your suppliers and customer systems to ensure that full benefit is achieved. ERP systems also increase efficiency of the supply chain and make it meet its objectives and goals easily.

5) Provides quality reports and performance analysis. ERP systems analyses business data accordingly. The results are the used as evidence of financial and board quality reports. It also conduct analysis on performance of the organisation. This is used as a basis of management decisions to ensure that their decisions are positive and expect positive results in the long run.

Challenges faced by a European company when using ERP systems.

1) Technical issues.

When integrating an ERP system, new servers and workshop stations need to be revised to accommodate the new system. More and more modern ones need to be ordered, purchased and others are replaced. Internal network is to be analysed and modernised if required by the new system. This technical issues are the most challenge to European organisations since it requires a lot of resources.

2) Selection problem.

There are many ERP systems for each and every business operation and aspect. The company has to decide where to launch system first to make it successful. The question that management ask themselves is how to choose the suitable ERP system from among the hundreds of ERP systems in the market.

3) Data quality issues of the system.

There are many ERP systems that can do the same job as the other. The quality of data is what differentiate them. European organisations face a challenge to determine this due to advancement in technology.

4) Changes in business philosophy.

Businesses do change based on the level of economy in Europe. Such change has a create effect on the ERP system used by an organisation. This calls for ERP upgrading more often which is more expensive and increase cost.

5) Management difference issues.

Management might not in a position to decide on the best ERP system to adopt due to different personal views. This increase failure of the systems adopted if decisions were not-up-to-date.

Possible solutions to such problems faced.

1) Consultation with experts. Information technology experts have knowledge about ERP systems and therefore should be consulted. This ensure good adoption of the required ERP system by the organisation.

2) Involving employees. ERP system must not be introduced to uninformed employees. This might be reason for conflicts in the organisation. Management should inform its employees before adopting any ERP system.

3) Full integration of the system. European companies should ensure that ERP systems are integrated in the supply chain. This make it easier to work with suppliers and customers.