ERP software implementation integrates all divisions in an organization into a single system. Every division has its own module under the enterprise resource planning system. Each module is then customized and links added to other modules in a bid to replicate the company’s business process data flow.
For example, consider the processes required when a vendor delivers goods. The new entry in the inventory module is propagated in real-time to other modules which need to know. The production division may be waiting for the goods and will now initiate production processes that need the newly delivered goods.
The entry also reaches the accounting and finance divisions at the same time. They compare the inventory update against the vendor’s invoice and documents from the procurement division, and issue payments as necessary. The system updates all this in real-time and any desk in any division causing a delay can be identified by managers keeping track of process updates.
This sudden new clarity about each process is a considerable benefit for the company, and one of the main reasons why ERP software is so popular these days. It fosters accountability and transparency, and increases both efficiency and quality. The system optimizes everything from inventory to order tracking and costing.
With no paperwork required, every byte of data in the company can be centralized. It’s a tough job to get the system operational, since the implementation team has to replicate the entire company’s business processes on the system. The customization of each module has to be perfect, and so does the data flow between the modules.
But once it is done, everything that was being done physically with papers, files and phone calls can be done faster and better with ERP software. More importantly, the company’s staff, management and even vendors need to be trained to use the system. It’s vital to ensure that staff are not ignoring the system and doing things the old way.
Implementing ERP software is costly and time-consuming. Existing databases need to be migrated and it takes a combined team of the company’s senior divisional managers and expensive outside consultants many months and sometimes more than a year to complete the customization. Then there are more delays for staff training and the actual move from testing to live servers.
On balance, it’s fair to say that ERP software is well worth the trouble and the investment. With the system live, efficiency and accountability shoots up. Managers are able to pick out bottlenecks holding back a process and resolve the issue. Company-wide reporting and analytics based on the centralized data becomes easier.
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